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Section 1: PREM14A

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

 

Filed by the Registrant [X]

Filed by a Party other than the Registrant [  ]

 

Check the appropriate box

 

[X] Preliminary Proxy Statement
   
[  ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
   
[  ] Definitive Proxy Statement
   
[  ] Definitive Additional Materials
   
[  ] Soliciting Material Pursuant to § 240.14a-12

 

Jensyn Acquisition Corp.

(Name of Registrant as Specified In Its Charter)

 

 

 

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

 

Payment of Filing Fee (Check the appropriate box):

 

[  ] No fee required.
   
[X] Fee computed on table below per Exchange Act Rules 14a(6)(i)(1) and 0-11.
   
1) Title of each class of securities to which transaction applies: Not Applicable
   
   
   
2) Aggregate number of securities to which transaction applies: Not Applicable
   
   
   
3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
   
  Not Applicable
   
4) Proposed maximum aggregate value of transaction:
   
  $5,071,038
   
5) Total Fee Paid:
   
  $614.61
   
[  ] Fee paid previously with preliminary materials.
   
[  ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
   
1) Amount Previously Paid:
   
   
   
2) Form, Schedule or Registration Statement No.:
   
   
   
3) Filing Party:
   
   
   
4) Date Filed:
   
   

 

 

 

   

 

 

JENSYN ACQUISITION CORP.

800 WEST MAIN STREET, SUITE 204

FREEHOLD, NJ 077728

 

Dear Jensyn Acquisition Corp. Stockholders:

 

You are cordially invited to attend the special meeting in lieu of the 2019 annual meeting of stockholders of Jensyn Acquisition Corp., which we refer to as “we,” “us,” “our,” “Jensyn” or the “Company,” on ______________ __, 2019, at 10:00 A.M., Eastern Time, at the offices of Giordano Halleran & Ciesla, P.C., 125 Half Mile Road, Suite 300, Red Bank, New Jersey 07701.

 

At the special meeting, our stockholders will be asked to consider and vote upon a proposal, which we refer to as the “Business Combination Proposal,” to approve a share exchange agreement (the “Exchange Agreement”) with Peck Electric Co. (“Peck Electric”), a Vermont corporation, and its stockholders, (the “Stockholders.”) pursuant to which the Stockholders of Peck Electric will exchange their shares of capital stock in Peck Electric for 3,234,501 shares of our common stock (the “Share Exchange”) representing approximately 59% of our outstanding shares of capital stock after giving effect to the business combination but without giving effect to the potential conversion of our outstanding public shares to cash. A copy of the Exchange Agreement is attached to the accompanying proxy statement as Annex A. We refer to the transactions contemplated by the Exchange Agreement as the “Business Combination.”

 

In the event that Peck Electric’s Adjusted EBITDA (as defined in the Exchange Agreement) for the twelve month period commencing on the first day of the first full calendar quarter following the closing of the Share Exchange (the “Earnout Period”) is $5,000,000 or more (the “Adjusted EBITDA Target”) or the closing price of the Company’s common stock is $12.00 or more per share at any time during the Earnout Period (the “Stock Price Target”), then the Company will issue an additional 898,473 shares of the Company’s common stock to the Stockholders and issue to certain of the initial stockholders of the Company, their transferees and an advisor that introduced Peck Electric to the Company a number of shares of the Company’s common stock equal to the number of shares of the Company’s common stock forfeited by such stockholders as described below. As a result of the Share Exchange, Peck Electric will become a wholly owned subsidiary of Jensyn.

 

By separate agreement, certain of the initial stockholders of the Company and their transferees (the “Sponsors”) have agreed to forfeit (i) up to 200,000 shares of the Company’s common stock at the closing of the Share Exchange to the extent that such shares are used to satisfy Company obligations or to induce investors to make an equity investment in the Company at or prior to the Closing and (ii) 200,000 shares of the Company’s common stock if neither the Adjusted EBITDA Target or the Stock Price Target is achieved during the Earnout Period.

 

Our stockholders will also be asked to consider and vote upon proposals (a) to approve and adopt the Company’s second amended and restated certificate of incorporation, which we refer to as the “Certificate Proposals;” (b) to elect five directors to serve on our board of directors; and (c) to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve the Business Combination Proposal or the Certificate Proposals. A copy of our proposed second amended and restated certificate of incorporation incorporating the Certificate Proposals is attached as Annex B to the accompanying proxy statement.

 

Each of these proposals is more fully described in the accompanying proxy statement, which each stockholder is encouraged to review carefully.

 

   

 

 

Our units, Common Stock, warrants and rights are currently listed on the Nasdaq Capital Market under the symbols “JSYNU”, “JSYN,” “JSYNW” and “JSYNR,” respectively.

 

Pursuant to our amended and restated certificate of incorporation, we are providing our public stockholders with the opportunity to convert, upon the closing of the Share Exchange, shares of Jensyn Common Stock held by them into cash in an amount equal to their pro rata share of the funds held in the Trust Account that holds the proceeds of Jensyn’s initial public offering as provided by its amended and restated certificate of incorporation. For illustrative purposes, based on funds in the Trust Account of approximately $6,160,100 on March 28, 2019, the estimated per share redemption price would have been approximately $11.20. Public stockholders may elect to convert their shares even if they vote for the Business Combination Proposal. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from converting in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the outstanding public shares (the “20% threshold”). Holders of our outstanding public warrants and rights do not have conversion rights in connection with the Business Combination. The holders of shares of Jensyn Common Stock issued prior to our IPO, which we refer to as “founder shares,” have waived their conversion rights with respect to any shares of our capital stock they may hold in connection with the consummation of the Business Combination, and the founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Currently, the founder shares represent approximately 54% of our issued and outstanding shares of Common Stock. The holders of our founder shares have agreed to vote any shares of Jensyn Common Stock owned by them in favor of the Business Combination Proposal.

 

We are providing this proxy statement and accompanying proxy card to our stockholders in connection with the solicitation of proxies to be voted at the special meeting and at any adjournments or postponements of the special meeting. Whether or not you plan to attend the special meeting, we urge you to read this proxy statement (and any documents incorporated into this proxy statement by reference) carefully. Please pay particular attention to the section entitled “Risk Factors.”

 

After careful consideration, our board of directors has unanimously approved and adopted the Exchange Agreement and unanimously recommends that our stockholders vote FOR adoption and approval of the Business Combination Proposal, FOR approval of the Certificate Proposals and FOR all other proposals presented to our stockholders in the accompanying proxy statement. When you consider the board recommendation of these proposals, you should keep in mind that our directors and officers have interests in the Business Combination that may conflict with your interests as a stockholder. See the section entitled “Proposal No. 1—Approval of the Business Combination—Certain Benefits of Jensyn’s Directors and Officers and Others in the Business Combination.”

 

Approval of the Business Combination Proposal, and Adjournment Proposal requires the affirmative vote of holders of a majority of the shares of our Common Stock represented in person or by proxy and entitled to vote thereon at the special meeting. Approval of the Certificate Proposals requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock. Approval of the Director Election Proposal requires the affirmative vote of the holders of a plurality of the shares of our Common Stock represented in person or by proxy and entitled to vote thereon at the special meeting. The directors of Peck Electric and the Stockholders have already approved the Business Combination.

 

Your vote is very important. If you are a registered stockholder, please vote your shares as soon as possible using one of the following methods to ensure that your vote is counted, regardless of whether you expect to attend the special meeting in person: (1) call the toll-free number specified on the enclosed proxy card and follow the instructions when prompted, (2) access the Internet website specified on the enclosed proxy card and follow the instructions provided to you, or (3) complete, sign, date and return the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the special meeting. A failure to vote your shares or an abstention is the equivalent of a vote “AGAINST” the Certificate Proposals but, assuming a quorum is otherwise validly established, only an abstention (and not a failure to vote) is the equivalent of a vote “AGAINST” the other proposals, except the Director Election Proposal, to be considered at the special meeting of stockholders. A failure to vote or an abstention will have no effect on the Director Election Proposal. Unless waived by the parties to the Exchange Agreement, the closing of the Business Combination is conditioned upon the adoption and approval of the Business Combination Proposal and the Certificate Proposals.

 

   

 

 

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the special meeting. If you fail to return your proxy card or fail to submit your proxy by telephone or over the Internet, or fail to instruct your bank, broker or other nominee how to vote, and do not attend the special meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and, if a quorum is present, will have the same effect as a vote AGAINST the Certificate Proposals but will have no effect on the other proposals (but, in the case of the Certificate Proposals, is the practical equivalent to a vote AGAINST the Business Combination Proposal). If you are a stockholder of record and you attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

 

TO EXERCISE YOUR CONVERSION RIGHTS, YOU MUST AFFIRMATIVELY VOTE EITHER FOR OR AGAINST THE BUSINESS COMBINATION PROPOSAL AND DEMAND THAT JENSYN CONVERT YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO JENSYN’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT SUCH MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE CONVERTED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

 

On behalf of our board of directors, I thank you for your support and look forward to the successful completion of the Business Combination.

 

  Sincerely,
   
March __, 2019 /s/ Jeffrey J. Raymond
  Jeffrey J. Raymond
  President, Chief Executive Officer, Director

 

This proxy statement is dated March __, 2019, and is first being mailed to stockholders of the Company on or about _______________ __, 2019.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

 

   

 

 

JENSYN ACQUISITION CORP.

800 West Main Street, Suite 204,

Freehold, NJ 07728

 

NOTICE OF SPECIAL MEETING IN LIEU OF 2019 ANNUAL MEETING

OF STOCKHOLDERS OF JENSYN ACQUISITION CORP.

 

To Be Held on _______________ _, 2019

 

To the Stockholders of Jensyn Acquisition Corp.:

 

NOTICE IS HEREBY GIVEN that a special meeting in lieu of the 2019 annual meeting of stockholders (the “special meeting”) of Jensyn Acquisition Corp., a Delaware corporation (“we,” “us,” “our,” “Jensyn” or the “Company”), will be held on ____________ ___, 2019, at 10:00 A.M., Eastern Time, at the offices of Giordano, Halleran & Ciesla, P.C., 125 Half Mile Road, Suite 300, Red Bank, NJ 07701. You are cordially invited to attend the special meeting for the following purposes:

 

  (1) The Business Combination Proposal—to consider and vote upon a proposal to approve and adopt the Exchange Agreement, dated as of February 26, 2019, as it may be amended (the “Exchange Agreement”), by and among Jensyn, Peck Electric Co., a Vermont corporation (“Peck Electric”), and its stockholders (the “Stockholders”) and the transactions contemplated thereby (the “Business Combination Proposal”), which provides for the Stockholders of Peck Electric to exchange their shares of capital stock in Peck Electric for shares of Jensyn’s common stock (the “Business Combination”);
     
  (2) The Certificate Proposals—to consider and vote upon ten proposals consisting of the following amendments to our amended and restated certificate of incorporation:

 

  to change our name to “The Peck Company, Inc.” and remove certain provisions related to our status as a blank check company, among other things;
     
  to increase the number of authorized shares from 16,000,000 to 50,000,000 of which 49,000,000 will be common stock, par value $0.0001 per share, and 1,000,000 will be preferred stock, par value $0.0001 per share;
     
  authorize the board of directors, or any authorized committee of the board of directors, to issue shares of preferred stock;
     
  to specify that the number of directors of Jensyn will be fixed by resolution of the board of directors acting by not less than a majority vote of the directors then in office;
     
  to provide that the Company’s directors may only be removed for cause by a vote of the majority of the then outstanding shares of the Company;
     
  to provide that if rights to elect directors are granted to the holders of preferred stock, the terms of such directors’ terms in office are separately governed by the terms of such preferred stock;
     
  to provide that stockholders may not act by written consent;
     
  to provide that special meetings of the stockholders may be called only by or at the direction of the Chairman of the Board, the Chief Executive Officer of Jensyn or the board pursuant to a resolution adopted by the board;
     
  to elect for the Company to not be subject to Section 203 of the DGCL;

 

   

 

 

  to adopt Delaware as the exclusive forum for certain stockholder litigation;
     
  to provide that the corporate opportunity doctrine will apply to Jensyn’s officers or directors and their affiliates; and
     
  to provide that a minimum of 2/3 of the outstanding shares of capital stock of Jensyn will be required to amend the proposed second amended and restated certificate of incorporation.

 

  (3) The Director Election Proposal—to consider and vote upon a proposal to elect five directors upon consummation of the Business Combination to serve on the Company’s board of directors (the “Director Election Proposal”);
     
  (4) The Adjournment Proposal—to consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve the Business Combination Proposal or the Certificate Proposals (the “Adjournment Proposal”).

 

Only holders of record of our Common Stock at the close of business on ________________ __, 2019 are entitled to notice of the special meeting and to vote at the special meeting and any adjournments or postponements of the special meeting. A complete list of our stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting.

 

Pursuant to our amended and restated certificate of incorporation, we will provide our public stockholders with the opportunity to convert, upon the closing of the transactions contemplated by the Exchange Agreement, their shares of the Company’s Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the consummation of the transactions contemplated by the Exchange Agreement) in the Trust Account that holds the proceeds (less taxes payable and any interest that we may withdraw to pay tax obligations) of our initial public offering closed on March 7, 2016 (the “IPO”). For illustrative purposes, based on funds in the Trust Account of approximately $6,160,100 on March 28, 2019, the estimated per share conversion price would have been approximately $11.20. Public stockholders may elect to convert their shares even if they vote for the Business Combination Proposal. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the outstanding public shares (the “20% threshold”). Each conversion of shares of our outstanding Common Stock by our public stockholders will decrease the amount in our Trust Account, which holds approximately $6,160,100. In no event, however, will we permit conversion of shares of our outstanding Common Stock in an amount that would cause our net tangible assets to be less than $5,000,001 upon the completion of the Business Combination. The holders of shares of the Company’s Common Stock issued prior to our IPO (“founder shares”) have agreed to waive their conversion rights with respect to any shares of our capital stock they may hold in connection with the consummation of the Business Combination, and the founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Currently, founder shares represent approximately 54% of our issued and outstanding shares of Common Stock.

 

The transactions contemplated by the Exchange Agreement will be consummated only if the Business Combination Proposal and the Certificate Proposals are approved at the special meeting. In addition, (i) the Director Election Proposal is conditioned on the approval of the Certificate Proposals and the Business Combination Proposal, and (ii) the Certificate Proposals are conditioned on the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth on the proxy statement.

 

Your attention is directed to the proxy statement accompanying this notice (including the annexes thereto) for a more complete description of the proposed business combination and related transactions and each of our proposals. We encourage you to read this proxy statement carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, Advantage Proxy, Inc. at (877) 870-8565 (banks and brokers call collect at (206) 870-8565.

 

  By Order of the Board of Directors,
   
March __, 2019 /s/ Jeffrey J. Raymond
  Jeffrey J. Raymond
  President and Chief Executive Officer

 

   

 

 

TABLE OF CONTENTS

 

  Page
summary term sheet 1
frequently used terms 4
questions and answers about the proposals for stockholders 6
summary of the proxy statement 18
selected historical financial information of jensyn 25
selected historical financial information of PECK ELECTRIC 26
cautionary note regarding forward-looking statements 27
risk factors 28
unaudited pro forma condensed combined financial information 50
notes to unaudited pro forma condensed combined financial information 53
comparative share information 55
special meeting in lieu of 2019 annual meeting of jensyn stockholders 56
proposal no. 1—approval of the business combination 61
proposals no. 2a-2L—the certificate proposals 91
proposal no. 3—election of directors to the board 98
proposal no. 4—the adjournment proposal 99
information about jensyn 100
jensyn management’s discussion and analysis of financial condition and results of operations 111
information about PECK ELECTRIC 117
executive compensation 122
Peck electric management’s discussion and analysis of financial condition and results of operations 123
management after the business combination 126
description of jensyn securities 130
beneficial ownership of securities 137
certain relationships and related transactions 139
price range of securities and dividends 142
independent registered public accounting firm 143
appraisal rights 143
delivery of documents to stockholders 143
transfer agent and registrar 143
submission of stockholder proposals 143
future stockholder proposals 143
where you can find more information 144
Index to PECK ELECTRIC Financial Statements F-1
Index to Jensyn Financial Statements F-20
Annexes  
Annex A -Share Exchange Agreement A-1
Annex A-1 - First Amendment to Share Exchange Agreement A-1-1
Annex B - Second Amended Restated Certificate of Incorporation of Jensyn B-1
Annex C - Fairness Opinion of C-1

 

   

 

 

SUMMARY TERM SHEET

 

This Summary Term Sheet, together with the sections entitled “Questions and Answers About the Proposals for Stockholders” and “Summary of the Proxy Statement,” summarize certain information contained in this proxy statement, but do not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the attached Annexes, for a more complete understanding of the matters to be considered at the special meeting. In addition, for definitions of terms commonly used throughout this proxy statement, including this Summary Term Sheet, see the section entitled “Frequently Used Terms.”

 

Parties to the Business Combination

 

The Company is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. There currently are 1,819,482 shares of our Common Stock issued and outstanding, consisting of 549,982 shares originally sold as part of units in our IPO, 975,000 founder shares that were issued to our initial stockholders, and 294,500 shares were sold as part of units issued in a private sale simultaneously with the consummation of our IPO. In addition, there currently are 4,194,500 warrants of the Company outstanding, consisting of 3,900,000 public warrants originally sold as part of units in the Company’s IPO and 294,500 private warrants sold as part of the units issued in a private placement simultaneously with the consummation of the Company’s IPO, and 3,900,000 rights to receive one-tenth (1/10) of one share of Common Stock automatically upon the consummation of an initial business combination. Each warrant entitles its holder to purchase one share of our Common Stock at an exercise price of $11.50 per share. The public warrants will become exercisable on the later of 30 days after the completion of the Company’s initial business combination or 12 months from the consummation of the Company’s IPO, and expire at 5:00 p.m., New York time, five years after the completion of the Company’s initial business combination or earlier upon redemption or liquidation. Once the warrants become exercisable, the Company may redeem the outstanding warrants at a price of $0.01 per warrant, if the last sale price of the Company’s Common Stock equals or exceeds $15.00 per share for any 20 trading days within a 30 trading day period ending on the third business day before the Company sends the notice of redemption to the warrant holders. The private warrants, however, are non-redeemable so long as they are held by the initial purchaser of the private warrants or their permitted transferees. For more information about the Company and its securities, see the sections entitled “Information About Jensyn,” “Jensyn Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Description of Securities.”
   
Peck Electric is the largest commercial solar engineering, procurement and construction (“EPC”) company in the Northeast and ranked 60th in the US by Solar Power World. Peck Electric, based in Burlington, Vermont, is a 2nd-generation family business founded in 1972 and rooted in values that align people, purpose, and profitability. Peck Electric provides services to solar energy customers for projects ranging in size from several kilowatts for residential loads to multi-megawatt systems for large commercial and utility projects. Peck Electric has installed over 100MW of solar systems since inception and believes a focus on profitable growth opportunities is the most sustainable method to reduce carbon emissions through the expansion of clean, renewable solar energy production.

 

 1 
 

 

Material Terms. The material terms of the Business Combination are as follows:

 

  Exchange and Issuance of Shares to Peck Electric Stockholders. Upon the closing (the “Closing”) of the transactions contemplated by the Exchange Agreement, the Stockholders of Peck Electric will exchange their shares of capital stock in Peck Electric for 3,234,501 shares of the Company’s common stock (the “Share Exchange”) representing approximately 59% of Jensyn’s outstanding shares after giving effect to the business combination but without giving effect to the potential conversion of our outstanding public shares to cash. As a result of the Share Exchange, Peck Electric will become a wholly owned subsidiary of the Company.
     
  Earnout. In the event that Peck Electric’s Adjusted EBITDA (as defined in the Exchange Agreement) for the twelve month period commencing on the first day of the first full calendar quarter following the Closing (the “Earnout Period”) is $5,000,000 or more (the “Adjusted EBITDA Target) or the closing price of the Company’s common stock is $12.00 or more per share at any time during the Earnout Period (the “Stock Price Target”), then the Company shall issue 898,473 shares of the Company’s common stock to the Stockholders (the “Earnout”) and 11,231 shares of the Company’s common stock to Exit Strategy Partners, LLC, an advisor that introduced Peck Electric to the Company and issue to certain of the initial stockholders of the Company and their transferees a number of shares of the Company’s common stock equal to the number of shares of the Company’s common stock forfeited by such stockholders as described below under “Forfeiture of Sponsor Shares” less the number of shares issued to the advisor.
     
  Forfeiture of Sponsor Shares. Certain of the initial stockholders of the Company and their transferees (the “Sponsors”) have agreed to forfeit (i) up to 200,000 shares of the Company’s common stock at the Closing to the extent that such shares are used to satisfy Company obligations or to induce investors to make an equity investment in the Company at or prior to the Closing and (ii) 200,000 shares of the Company’s common stock if either the Adjusted EBITDA Target or the Stock Price Target is achieved during the Earnout Period.
     
  Satisfaction of Company Liabilities. The Company shall satisfy its outstanding liabilities from cash on hand or by reissuing shares forfeited by the Sponsors at the Closing as described above under “Forfeiture of Sponsor Shares”; provided, however, that in no event shall the Company satisfy such obligations in cash to the extent that payments of such obligations in cash would exceed $2,500,000.
     
  Conditions to Closing. The closing of the Share Exchange is subject to a number of conditions, including the approval of the Share Exchange by the Company’s stockholders, the receipt by the Company of an opinion from an investment banking firm that the transaction is fair, from a financial point of view, to the Company’s stockholders. In addition, the Company and Peck Electric must have at least $5,000,001 of combined net tangible assets after the Closing.
     
  Termination. The Exchange Agreement may be terminated under certain limited circumstances at any time prior to the consummation of the business combination (whether before or after the required stockholder vote of the Company has been obtained). If the Exchange Agreement is terminated pursuant to the provisions of the Exchange Agreement, all further obligations of the parties thereunder will terminate without any liability of any party thereto, other than any obligation or liability arising from any prior willful and material breach of any covenants and agreements in the Exchange Agreement by such party and as described under the caption “Termination Payment” below.
     
  Termination Payment. Peck Electric is required to pay the Company a $300,000 termination fee in the event that the Exchange Agreement is terminated (i) by the Company by reason of the breach by Peck Electric or the Stockholders of their representations and warranties set forth in the Exchange Agreement or (ii) by the Company or Peck Electric as a result of the Closing not having occurred by May 31, 2019 solely by reason of a delay caused solely by Peck Electric.
     
    The Company is required to pay Peck Electric a $300,000 termination fee in the event that Peck Electric terminates the Exchange Agreement by reason of the breach by the Company of its representations and warranties set forth in the Exchange Agreement or if the Exchange Agreement is terminated by the Company or Peck Electric as a result of the Closing not having occurred by July 2, 2019 as a result of a delay solely caused by the Company. The Company is also required to pay Peck Electric a $300,000 termination fee if the Exchange Agreement is terminated by the Company as a result of the Closing not having occurred by July 2, 2019 for a reason other than a delay caused solely by Peck Electric, and the Company initiates an alternate business combination within six months of such termination.

 

Conversion Rights

 

  Pursuant to our amended and restated certificate of incorporation, in connection with the Business Combination, holders of our public shares may elect to have their shares converted into a pro rata share of the aggregate amount on deposit in the Trust Account, including interest on the funds held in the Trust Account and not previously released to the Company to pay its franchise and income taxes. As of March 28, 2019, this would have amounted to approximately $11.20 per share. If a holder exercises its conversion rights, then such holder will be exchanging its shares of our Common Stock for cash and will no longer own shares of the Company and will not participate in the future growth of the Company, if any. Such a holder will be entitled to receive cash for its public shares only if it (i) affirmatively votes for or against the Business Combination Proposal and (ii) properly demands conversion or redemption by means of a tender offer and delivers its shares (either physically or electronically) to our transfer agent at least two business days prior to the special meeting. See the section entitled “Special Meeting of Jensyn Stockholders—Conversion Rights.”

 

Other Proposals

 

  In addition to voting on the proposal to approve and adopt the Exchange Agreement and the Business Combination contemplated thereby at the special meeting, the stockholders of the Company will be asked to vote on (a) ten separate proposals to amend the Company’s amended and restated certificate of incorporation, including proposals to (i) increase the Company’s authorized Common Stock and preferred stock, and (ii) for certain additional changes, including changing the Company’s corporate name from “Jensyn Acquisition Corp.” to “The Peck Company, Inc.” and remove certain provisions related to our status as a blank check company, among other things, which our board of directors believes are necessary to adequately address the post-Business Combination needs of the Company, (b) a proposal to elect five directors to the board of the Company, and (c) a proposal to postpone or adjourn the special meeting, if necessary, to permit further solicitation of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination or the Certificate Proposals. See the sections entitled “Proposal No. 2—The Certificate Proposals,” “Proposal No. 3—Election of Directors to the Board,” “Proposal No. 4—The Adjournment Proposal” and “Special Meeting of Jensyn Stockholders.” The Director Election Proposal is conditioned on the approval of the Certificate Proposals and the Business Combination Proposal. The Business Combination Proposal is conditioned on the approval of the Certificates Proposals. Each of the Certificate Proposals is conditioned on the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth on this proxy statement.

 

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Post Closing Board

 

  Upon the closing of the Business Combination, we anticipate the size of our board of directors will be five directors, all of whom will be voted upon by our stockholders at the special meeting. Three of the nominees are deemed “independent” under the rules of the Securities and Exchange Commission and the Nasdaq Stock Market. Our board of directors is divided into three classes with only one class of directors being elected in each year and each class serving a three-year term. Two directors will be elected to the class of directors which expires at our first annual meeting of stockholders following the consummation of the Business Combination, one director will be elected to the class of directors which expires at our second annual meeting following the consummation of the Business Combination and two directors will be elected to the class of directors which expires at our third annual meeting of stockholders following the consummation of the Business Combination. See the sections entitled “Proposal No. 3—Election of Directors to the Board” and “Management After the Business Combination.”

 

Risk Factors

 

  The proposed Business Combination involves numerous risks. For more information about these risks, see the section entitled “Risk Factors.”

 

Interests of Jensyn Management Team and Initial Stockholders

 

  In considering the recommendation of the Company’s board of directors to vote FOR the proposals presented at the special meeting, you should be aware that our executive officers and members of our board of directors have interests in the Business Combination that are different from, or in addition to, the interests of our stockholders generally. The members of our board of directors were aware of these differing interests and considered them, among other matters, in evaluating and negotiating the transaction agreements and in recommending to our stockholders that they vote in favor of the proposals presented at the special meeting. These interests include, among other things:

 

    the fact that initial stockholders paid an aggregate of $25,029 for their founder shares, and such securities should have a significantly higher value at the time of the Business Combination;
       
    if Jensyn is unable to complete a business combination within the required time period, our officers and directors will not have redemption rights with respect to the founder shares that they own;
       
    if Jensyn is unable to complete a business combination within the required time period, the initial stockholders will be personally liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by the Company for services rendered or contracted for or products sold to the Company, but only if such a vendor or target business has not executed such a waiver;
       
    the fact that upon consummation of the Business Combination, our initial stockholders will be repaid approximately $2,100,000 of loans that they made to us and Jensyn Integration Services, LLC, a company controlled by certain of our initial stockholders, will be paid an administrative fee of up to $340,000;
       
    the fact that certain of our initial stockholders and special advisors may be required to forfeit shares of the Company’s Common Stock if neither the Adjusted EBITDA Target nor the Stock Price Target is achieved or if the Company uses shares to satisfy its obligations to induce investors to make an equity investment in the Company, and may be issued additional shares of the Company’s common stock if either the Adjusted EBITDA Target or Stock Price Target is achieved; and
       
    the continued indemnification of current directors and officers of the Company and the continuation of directors’ and officers’ liability insurance after the Business Combination.

 

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FREQUENTLY USED TERMS

 

Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” the “Company” “JAC” and “Jensyn” refer to Jensyn Acquisition Corp., and the terms “combined company” and “post-combination company” refers to Jensyn following the consummation of the Business Combination.

 

“current certificate” means our amended and restated certificate of incorporation filed with the Secretary of State of the State of Delaware on October 8, 2014, as amended.

 

“Certificate Proposals” means the ten proposals to amend Jensyn’s amended and restated certificate of incorporation.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Exchange Agreement” means the Share Exchange Agreement, dated as of February 26, 2019, as it may be amended, by and among the Company, Peck Electric and the Stockholders.

 

“founder shares” means the 1,437,500 shares of Jensyn Common Stock issued prior to the Jensyn IPO, 462,500 of which have been forfeited.

 

“DGCL” means the Delaware General Corporation Law, as amended.

 

“Director Election Proposal” means the proposal to elect five directors to serve on Jensyn’s board of directors, subject to the consummation of the Business Combination.

 

“Peck Electric” means Peck Electric Co., a Vermont corporation.

 

“initial stockholders” means Jensyn Capital, LLC, our Chief Executive Officer, our former Chief Financial Officer and two of our special advisors, Joseph Raymond and Peter Underwood.

 

“IPO” means our initial public offering, consummated on March 7, 2016 through the sale of 3,900,000 public units at $10.00 per share.

 

“Jensyn” means Jensyn Acquisition Corp., a Delaware corporation.

 

“Jensyn Common Stock” or “our Common Stock” means common stock, par value $0.0001 per share, of Jensyn.

 

“private placement” means the private sale of 294,500 units purchased by Jensyn Capital, LLC and Chardan Capital Markets, LLC that occurred simultaneously with the consummation of our IPO for a purchase price of $10.00 per private placement unit for a total purchase price of $2,945,000.

 

“private placement rights” means 294,500 rights included within the private placement units purchased by investors in the private placement, each of which will immediately convert into one-tenth of a share of Jensyn Common Stock upon completion of the Business Combination.

 

“private placement shares” means 294,500 shares of Jensyn Common Stock included within the private placement units purchased separately in the private placement by our Sponsor and initial stockholders.

 

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“private placement units” means 294,500 units purchased separately by Jensyn Capital, LLC and Chardan Capital Markets, LLC in the private placement, each private placement unit consisting of one private placement share, one private placement warrant and one private placement right.

 

“private placement warrants” means the 294,500 warrants included within the private placement units purchased by investors in the private placement, each of which is exercisable for one half of one share of Jensyn Common Stock, in accordance with its terms.

 

“proposed certificate” means the proposed second amended and restated certificate of incorporation of Jensyn, which will become the Company’s certificate of incorporation upon the approval of the Certificate Proposals and the Business Combination Proposal and the consummation of the Business Combination. A copy of the proposed certificate is attached hereto as Annex B.

 

“public rights” means the 3,900,000 rights issued in Jensyn’s IPO, each of which will immediately convert into one-tenth of a share of Jensyn Common Stock upon completion of the Business Combination.

 

“public shares” means shares of Jensyn Common Stock issued in Jensyn’s IPO.

 

“public stockholders” means holders of public shares, including the initial stockholders to the extent the initial stockholders hold public shares, provided that the initial stockholders will be considered a “public stockholder” only with respect to any public shares held by them.

 

“public warrants” means the warrants issued in Jensyn’s IPO, each of which is exercisable for one share of Jensyn Common Stock, in accordance with its terms.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“special meeting” means the special meeting in lieu of the 2019 annual meeting of stockholders of Jensyn that is the subject of this proxy statement.

 

“Stockholders” means the stockholders of Peck Electric, namely, Jeffrey Peck, Frederick Myrick, Diane Cone and Neil Cone, Mooers Partners, LLC, Branton Partners, LLC, Veroma, LLC, Corundum AB and Joseph Bobier.

 

“Trust Account” means the trust account established by Jensyn with Continental Stock Transfer & Trust Co., as Trustee, in connection with Jensyn’s IPO.

 

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR STOCKHOLDERS

 

The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the special meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to our stockholders. We urge stockholders to read carefully this entire proxy statement, including the annexes and the other documents referred to herein.

 

Q: Why am I receiving this proxy statement?
   
A: Our stockholders are being asked to consider and vote upon a proposal to approve and adopt the Exchange Agreement, among other proposals. The Exchange Agreement provides that the Stockholders of Peck Electric will exchange their shares of capital stock in Peck Electric for 3,234,501 shares of the Company’s common stock (the “Share Exchange”) representing approximately 59% of Jensyn’s outstanding shares after giving effect to the business combination but without giving effect to the potential conversion of our outstanding public shares to cash. As a result of the Share Exchange, Peck Electric will become a wholly owned subsidiary of the Company. A copy of the Exchange Agreement is attached to this proxy statement as Annex A.

 

Our Common Stock, units, warrants and rights are currently listed on The Nasdaq Stock Market under the symbol “JSYN,” “JSYNU,” “JSYNW” and “JSYNR,” respectively.

 

This proxy statement and its annexes contain important information about the Business Combination Proposal and the other matters to be acted upon at the special meeting. You should read this proxy statement and its annexes carefully and in their entirety.

 

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement and its annexes.

 

Q: What is being voted on at the special meeting?
   
A: Below are proposals on which our stockholders are being asked to vote.

 

1. To approve and adopt the Business Combination and the other transactions contemplated by the Exchange Agreement, including the approval for purposes of Nasdaq Listing Rule 5635 of the issuance pursuant to the Exchange Agreement of a number of shares of Jensyn common stock that exceeds 20% of the number of shares of Jensyn common stock currently outstanding (this proposal is referred to herein as the “Business Combination Proposal”);

 

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2. To consider and vote upon ten proposals consisting of the following amendments to Jensyn’s amended and restated certificate of incorporation (the “Certificate Proposals”):

 

  to change our name to “The Peck Company, Inc.” and remove certain provisions related to our status as a blank check company, among other things;
     
  to increase the number of authorized shares from 16,000,000 to 50,000,000, of which 49,000,000 will be common stock, par value $0.0001 per share, and 1,000,000 will be preferred stock, par value $0.0001 per share;
     
  authorize the board of directors, or any authorized committee of the board of directors, to issue shares of preferred stock;
     
 

to specify that the number of directors of Jensyn will be fixed by resolution of the board of directors acting by not less than a majority vote of the directors then in office;

     
  to provide that the Company’s directors may only be removed for cause by a vote of the majority of then outstanding shares of the Company;
     
 

to provide that if rights to elect directors are granted to the holders of preferred stock, the terms of such directors’ terms in office are separately governed by the terms of such preferred stock;

     
  to provide that stockholders may not act by written consent;
     
  to provide that special meetings of the stockholders may be called only by or at the direction of the Chairman of the Board, the Chief Executive Officer of Jensyn or the board pursuant to a resolution adopted by the board;
     
  to elect for the Company to not be subject to Section 203 of the DGCL;
     
  to adopt Delaware as the exclusive forum for certain stockholder litigation;
     
  to provide that the corporate opportunity doctrine will apply to Jensyn’s officers or directors and their affiliates; and
     
  to provide that a minimum of 2/3 of the outstanding shares of capital stock of Jensyn will be required to amend the proposed certificate.

 

3. To elect five directors to our board of directors to serve on our board of directors upon the consummation of the Business Combination (this proposal is referred to herein as the “Director Election Proposal”);
   
4. To approve the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve the Business Combination Proposal or the Certificate Proposals (this proposal is referred to herein as the “Adjournment Proposal”). This proposal will only be presented at the special meeting if there are not sufficient votes to approve the Business Combination Proposal or the Certificate Proposals

 

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Q: Are the proposals conditioned on one another?
   
A: The Business Combination Proposal is conditioned on the approval of the Certificate Proposals. In addition, (i) each of the Certificate Proposals and the Director Election Proposal is conditioned on the approval of the Business Combination Proposal. The Adjournment Proposal does not require the approval of any other proposal to be effective. It is important for you to note that in the event that the Certificate Proposals do not receive the requisite vote for approval, then we will not consummate the Business Combination. If we do not consummate the Business Combination and fail to complete an initial business combination by July 2, 2019, we will be required to dissolve and liquidate our Trust Account by returning the then remaining funds in such account to the public stockholders.
   
Q: What will happen in the Business Combination?
   
A: Upon the closing (the “Closing”) of the transactions contemplated by the Exchange Agreement, the Stockholders of Peck Electric will exchange their shares of capital stock in Peck Electric for 3,234,501 shares of the Company’s common stock (the “Share Exchange”) representing approximately 59% of Jensyn’s outstanding shares after giving effect to the business combination but without giving effect to the potential conversion of our outstanding public shares to cash. As a result of the Share Exchange, Peck Electric will become a wholly owned subsidiary of the Company.

 

Q: What equity stake will current Jensyn stockholders and the Stockholders of Peck Electric hold in Jensyn after the closing?
   
A: Upon completion of the Business Combination, the Stockholders of Peck Electric will have a 59% ownership interest in Jensyn and Jensyn’s stockholders (other than public stockholders) will have an 18% ownership interest in Jensyn before giving effect to the potential conversion of our outstanding public shares to cash. The percentage interest in Jensyn that will be owned by all stockholders will depend on the number of public shares with respect to which conversion rights are exercised in connection with the Business Combination.
   
  See “Summary of the Proxy Statement—Impact of the Business Combination on Jensyn’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

 

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Q: Will Jensyn obtain new financing in connection with the Business Combination?
   
A: No. Jensyn is not seeking financing in connection with the Business Combination.
   
Q: What conditions must be satisfied to complete the Business Combination?
   
A: There are a number of closing conditions in the Exchange Agreement, including that our stockholders have approved and adopted the Exchange Agreement. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, see the section entitled “Proposal No. 1—Approval of the Business Combination.”
   
Q: Why is Jensyn proposing the Certificate Proposals?
   
A: The proposed certificate that we are asking our stockholders to approve in connection with the Business Combination provides an increase in the number of authorized shares of our Common Stock, the change of the Company’s name to “The Peck Company, Inc.” and certain additional changes which our board of directors believes are necessary to adequately address the post-Business Combination needs of the Company. Approval of the Certificate Proposals is a condition to consummation of the Business Combination pursuant to the Exchange Agreement.
   
Q: What happens if I sell my shares of Jensyn Common Stock before the special meeting?
   
A: The record date for the special meeting is earlier than the date that the Business Combination is expected to be completed. If you transfer your shares of Jensyn Common Stock after the record date, but before the special meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting. However, you will not be able to seek conversion of your shares because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination. If you transfer your shares of Jensyn Common Stock prior to the record date, you will have no right to vote those shares at the special meeting or convert those shares into a pro rata portion of the proceeds held in our Trust Account.

 

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Q: What vote is required to approve the proposals presented at the special meeting?
   
A:

Approval of the Business Combination Proposal and Adjournment Proposal requires the affirmative vote of holders of a majority of the shares of our Common Stock represented in person or by proxy and entitled to vote thereon at the special meeting. Approval of each of the Certificate Proposals requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock. Approval of the Director Election Proposal requires the affirmative vote of the holders of a plurality of the shares of our Common Stock represented in person or by proxy and entitled to vote thereon at the special meeting. The Stockholders of Peck Electric have already approved the Business Combination. A failure to vote your shares is the equivalent of a vote “AGAINST” the Certificate Proposals but, assuming a quorum is otherwise validly established, will have no effect on the other proposals to be considered at the special meeting of stockholders. An abstention will have the same effect as a vote “AGAINST” the Business Combination Proposal and the Adjournment Proposal. Unless waived by the parties to the Exchange Agreement, the closing of the Business Combination is conditioned upon the adoption and approval of the Business Combination Proposal and the Certificate Proposals.

 

The approval of each of the Certificate Proposals requires the affirmative vote of the holders of a majority of the outstanding shares of our Common Stock. Accordingly, a Jensyn stockholder’s failure to vote by proxy or to vote in person at the special meeting, an abstention from voting or a broker non-vote with regard to any such proposal will have the same effect as a vote “AGAINST” each such proposal. As of March 28, 2019, holders of approximately 1,269,500 shares of our Common Stock, representing approximately seventy percent (70%) of our outstanding shares, have committed to vote in favor of the Business Combination.

 

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the special meeting. If you fail to return your proxy card or fail to submit your proxy by telephone or over the Internet, or fail to instruct your bank, broker or other nominee how to vote (and your broker is not permitted to vote on your behalf on such proposal), and do not attend the special meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and, if a quorum is present, will have the same effect as a vote AGAINST each of the Certificate Proposals but will have no effect on the other proposals (but, in the case of each of the Certificate Proposals, is the practical equivalent to a vote AGAINST the Business Combination Proposal). Abstentions will have the same effect as a vote against any proposal except in connection with the election of directors. If you are a stockholder of record and you attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

 

Directors are elected by a plurality of all of the votes cast by holders of shares of our Common Stock represented in person or by proxy and entitled to vote thereon at the special meeting. This means that the five nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors. Broker non-votes will have no effect on the election of directors. The nominees are Philip Politiziner, Richard C. Cook, Stewart Martin, Jeffrey Peck and Fredrick Myrick.

   
Q: May Jensyn, Jensyn’s directors, officers, advisors or their affiliates purchase shares in connection with the Business Combination?
   
A: In connection with the stockholder vote to approve the proposed Business Combination our directors, officers, or advisors or their respective affiliates may privately negotiate transactions to purchase shares from stockholders who would have otherwise elected to have their shares converted into cash in conjunction with a proxy solicitation pursuant to the proxy rules for a per-share pro rata portion of the Trust Account. None of our directors, officers or advisors or their respective affiliates will make any such purchases when they are in possession of any material non-public information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act. Such a purchase would include a contractual acknowledgement that such stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights, and could include a contractual provision that directs such stockholder to vote such shares in a manner directed by the purchaser. In the event that the Sponsor, our directors, officers or advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their conversion rights, such selling stockholders would be required to revoke their prior elections to convert their shares. Any such privately negotiated purchases may be effected at purchase prices that are in excess of the per-share pro rata portion of the Trust Account.

 

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Q: How many votes do I have at the special meeting?
   
A: Our stockholders are entitled to one vote at the special meeting for each share of Jensyn Common Stock held of record as of ________________, 2019, the record date for the special meeting. As of the close of business on the record date, there were 1,819,482 outstanding shares of our Common Stock.
   
Q: What constitutes a quorum at the special meeting?
   
A: Holders of a majority in voting power of the Company’s Common Stock issued and outstanding and entitled to vote at the special meeting, present in person or represented by proxy, constitute a quorum. In the absence of a quorum, a majority of our stockholders, present in person or represented by proxy, will have power to adjourn the special meeting. As of the record date for the special meeting 909,742 shares of our Common Stock would be required to achieve a quorum.
   
Q: How will Jensyn’s directors and officers vote?
   
A: In connection with our IPO, we entered into agreements with each of our initial stockholders, including our executive officers, pursuant to which each agreed to vote any shares of Jensyn’s Common Stock owned by them in favor of the Business Combination Proposal. Our initial stockholders transferred some of such shares to our independent directors and other parties and each of such transferees has agreed to vote in favor of the Business Combination. Except for the acquisition of shares by our independent directors from our initial stockholders, none of our directors or executive officers has purchased any shares during or after our IPO and neither we nor our directors or officers have entered into agreements, and are not currently in negotiations, to purchase shares. Currently, our directors and officers own approximately 8% of our issued and outstanding shares of Common Stock.
   
Q: What interests do Jensyn’s current officers and directors have in the Business Combination?
   
A: Our directors and executive officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interest. These interests include:

 

  the fact that our initial stockholders paid an aggregate of $25,029 for their founder shares, and such shares should have a significantly higher value at the time of the Business Combination;
     
  if Jensyn is unable to complete a business combination within the required time period, our officers and directors will not have redemption rights with respect to the founder shares that they own;
     
  if Jensyn is unable to complete a business combination within the required time period, our initial stockholders, including our Chief Executive Officer, will be personally liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Jensyn for services rendered or contracted for or products sold to Jensyn, but only if such a vendor or target business has not executed such a waiver;
     
 

the fact that certain of our initial stockholders and special advisors may be required to forfeit shares of the Company’s Common Stock if neither the Adjusted EBITDA Target nor the Stock Price Target is achieved or if the Company uses shares to satisfy its obligations to induce investors to make an equity investment in the Company, and may be issued additional shares of the Company’s common stock if either the Adjusted EBITDA Target or Stock Price Target is achieved; and

     
  the continued indemnification of current directors and officers of the Company and the continuation of directors’ and officers’ liability insurance after the Business Combination.

 

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These interests may influence our directors in making their recommendation that you vote in favor of the approval of the Business Combination.

 

Q: What happens if I vote against the Business Combination Proposal?
   
A: If the Business Combination Proposal is not approved and we do not otherwise consummate an alternative business combination by July 2, 2019, we will be required to dissolve and liquidate our Trust Account by returning the then remaining funds in such account to the public stockholders.
   
Q: Do I have conversion rights?
   
A: If you are a holder of public shares, you may convert your public shares into cash equal to a pro rata share of the aggregate amount on deposit in the Trust Account which holds the proceeds of our IPO as of two business days prior to the consummation of the Business Combination, less franchise and income taxes payable, upon the consummation of the Business Combination. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the outstanding public shares. Our initial stockholders have agreed to waive their redemption rights with respect to any shares of our capital stock they may hold in connection with the consummation of the Business Combination, and the founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Additionally, shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account (including interest but net of franchise and income taxes payable and dissolution expenses) in connection with the liquidation of the Trust Account.
   
Q: Will how I vote affect my ability to exercise conversion rights?
   
A: No. You may exercise your conversion rights whether you vote your shares of Jensyn Common Stock for or against the Business Combination Proposal or any other proposal described by this proxy statement. As a result, the Exchange Agreement can be approved by stockholders who exercise their conversion rights and no longer remain stockholders, leaving stockholders who choose not to exercise their conversion holding shares in a company with a less liquid trading market, fewer stockholders, less cash and the potential inability to meet the listing standards of Nasdaq.
   
Q: How do I exercise my conversion rights?
   
A: In order to exercise your conversion rights, you must (i) affirmatively vote either for or against the Business Combination Proposal and, (ii) prior to 4:30 p.m., Eastern Time on __________________ __, 2019 (two business days before the special meeting), (x) submit a written request to our transfer agent that we convert your public shares into cash, and (y) deliver your stock to our transfer agent physically or electronically through the Depository Trust Company’s DWAC (Deposit Withdrawal at Custodian) System. The address of Continental Stock Transfer & Trust Company, our transfer agent, is listed under the question “Who can help answer my questions?”

 

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Any demand for conversion, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the vote is taken with respect to the Business Combination. If you delivered your shares for redemption to our transfer agent and decide within the required timeframe not to exercise your conversion rights, you may request that our transfer agent return the shares (physically or electronically). You may make such request by contacting our transfer agent at the phone number or address listed under the question “Who can help answer my questions?” below.

 

Q: What are the federal income tax consequences of exercising my conversion rights?
   
A: Jensyn stockholders who exercise their redemption rights to receive cash from the Trust Account in exchange for their shares of Jensyn Common Stock generally will be required to treat the transaction as a sale of such shares and recognize gain or loss upon the conversion in an amount equal to the difference, if any, between the amount of cash received and the tax basis of the shares of Jensyn Common Stock redeemed. Such gain or loss should be treated as capital gain or loss if such shares were held as a capital asset on the date of the redemption. The conversion, however, may be treated as a distribution if it does not affect a meaningful reduction in the redeeming stockholder’s percentage ownership in Jensyn. Any such distribution will be treated as dividend income to the extent of our current or accumulated earnings and profits. Any distribution in excess of our earnings and profits will reduce the redeeming stockholder’s basis in the Jensyn Common Stock, and any remaining excess will be treated as gain realized on the sale or other disposition of the Jensyn Common Stock. See the section entitled “Material U.S. Federal Income Tax Considerations for Stockholders Exercising Conversion Rights.
   
Q: If I am a Jensyn warrant holder, can I exercise conversion rights with respect to my warrants?
   
A: No. The holders of our warrants have no conversion rights with respect to our warrants.
   
Q: If I am a holder of Jensyn rights, can I exercise conversion rights with respect to my rights?
   
A: No. The holders of our rights have no conversion rights. With respect to our rights, each of our rights will convert into one-tenth (1/10) of a share of our Common Stock upon the consummation of the Business Combination.
   
Q: Is there a limit on the number of public shares which will be accepted for conversion?
   
A: No, we do not have a specified maximum percentage conversion threshold. The absence of such a conversion threshold would make it easier for us to consummate a business combination with which a substantial number of our stockholders do not agree.
   
  Since we have no specified percentage threshold for conversions in our amended and restated certificate of incorporation other than the 20% threshold, our structure is different in this respect from the structure that has been used by many blank check companies. Many blank check companies would not be able to consummate a business combination if the holders of the company’s public shares voted against a proposed business combination and elected to redeem or convert more than a specified percentage of the shares sold in such company’s initial public offering, which percentage threshold has typically been between 19.99% and 39.99%. Each conversion of our public shares into cash by our public stockholders will decrease the amount in our Trust Account, which holds approximately $6,160,000 as of March 28, 2019.
   
  However, we are limited by the need to have at least $5,000,001 in net tangible assets. At December 31, 2018 our net tangible assets were approximately $4,636,000. We expect that as a result of: (a) the net tangible assets acquired as part of a Business Combination, (b) Company liabilities converted to equity, (c) new equity capital raised, or a combination thereof, will result in the net tangible assets of the Company being greater than $5,000,001. Therefore, we could still consummate a proposed Business Combination regardless of the number of common shares redeemed so long as a majority of shares voted at the meeting are voted in favor of the proposed Business Combination. This is different than other similarly structured blank check companies where stockholders are offered the right to convert their shares only when they vote against a proposed Business Combination.
   
  To reduce the number of potential conversions of the public shares, Jensyn may enter into agreements with certain registered broker-dealers which will provide that if the broker-dealer introduces an investor who acquires public shares, votes in favor of the Business Combination and elects not to exercise conversion rights with respect to the public shares, Jensyn will pay the broker-dealer a fee equal to 5% of the amount determined by multiplying the number of public shares acquired by the investor by the per share amount payable to holders of public shares who exercise conversion rights.
   
Q: Do I have appraisal rights if I object to the proposed Business Combination?
   
A: No. There are no appraisal rights available to holders of Jensyn Common Stock in connection with the Business Combination.
   
Q: What happens to the funds held in the Trust Account upon consummation of the Business Combination?
   
A: If the Business Combination is consummated, the funds held in the Trust Account will be released to pay (i) Jensyn stockholders who properly exercise their conversion rights, (ii) $780,000 in deferred underwriting compensation to the underwriters of our IPO (iii) all fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees, and other professional fees) that were incurred by the Company, in connection with the transactions contemplated by the Business Combination, (iv) other pre-closing obligations of the Company, including approximately $2,100,000 to repay loans made to the Company by its initial stockholders and affiliates, as more fully described in section “Certain Relationships and Related Transactions—Jensyn Related Person Transactions,” and (v) unpaid franchise and income taxes of the Company.

 

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Q: What happens if the Business Combination is not consummated?
   
A: There are certain circumstances under which the Exchange Agreement may be terminated. See the section entitled “Proposal No. 1—Approval of the Business Combination—The Exchange Agreement” for information regarding the parties’ specific termination rights.
   
  If, as a result of the termination of the Exchange Agreement or otherwise, we are unable to complete the Business Combination or another business combination transaction by July 2, 2019, our amended and restated certificate of incorporation, as amended, provides that we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, subject to lawfully available funds therefor, redeem 100% of the public shares in consideration of a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest but net of franchise and income taxes payable and dissolution expenses, by (B) the total number of then outstanding public shares, which redemption will completely extinguish rights of the public stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemptions, subject to the approval of the remaining stockholders and the board of directors in accordance with applicable law, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to Jensyn’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable law.
   
  We expect that the amount of any distribution our public stockholders will be entitled to receive upon our dissolution will be approximately the same as the amount they would have received if they had exercised conversion rights with respect to their shares in connection with the Business Combination, subject in each case to Jensyn’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable law. Holders of our founder shares have waived any right to any liquidation distribution with respect to those shares.
   
  In the event of liquidation, there will be no distribution with respect to Jensyn’s outstanding warrants. Accordingly, the warrants will expire worthless.
   
Q: When is the Business Combination expected to be completed?
   
A: It is currently anticipated that the Business Combination will be consummated promptly following the special meeting, provided that all other conditions to the consummation of the Business Combination have been satisfied or waived. In any event, we expect the closing of the Business Combination to occur on or prior to July 2, 2019.

 

For a description of the conditions to the completion of the Business Combination, see the section entitled “Proposal No. 1—Approval of the Business Combination.”

 

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Q: What do I need to do now?
   
A: You are urged to read carefully and consider the information contained in this proxy statement, including the annexes, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.
   
Q: How do I vote?
   
A: If you were a holder of record of our Common Stock on _____________ ___, 2019, the record date for the special meeting, you may vote with respect to the proposals in person at the special meeting, or by (1) calling the toll-free number specified on the enclosed proxy card and following the instructions when prompted, (2) accessing the Internet website specified on the enclosed proxy card and following the instructions provided to you, or (3) completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the special meeting and vote in person, obtain a proxy from your broker, bank or nominee.
   
Q: What will happen if I abstain from voting or fail to vote at the special meeting?
   
A: At the special meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, failure to vote will have no effect on the Director Election Proposal. A failure to vote or an abstention will have the same effect as a vote “AGAINST” a Certificate Proposal, while only an abstention (and not a failure to vote) will have the same effect as a vote “AGAINST” the Business Combination Proposal and the Adjournment Proposal.
   
Q: What will happen if I sign and return my proxy card without indicating how I wish to vote?
   
A: If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the special meeting.
   
Q: If I am not going to attend the special meeting in person, should I return my proxy card instead?
   
A: Yes. Whether you plan to attend the special meeting or not, please read the enclosed proxy statement carefully, and vote your shares by one of the following methods: (1) call the toll-free number specified on the enclosed proxy card and follow the instructions when prompted, (2) access the Internet website specified on the enclosed proxy card and follow the instructions provided to you, or (3) complete, sign, date and return the enclosed proxy card in the postage-paid envelope provided.
   
Q: If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?
   
A: No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe the proposals presented to the stockholders will be considered non-discretionary and therefore your broker, bank, or nominee cannot vote your shares without your instruction. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

 

 15 
 

 

Q: May I change my vote after I have mailed my signed proxy card?
   
A: Yes. You may change your vote by sending a later-dated, signed proxy card to our secretary at the address listed below so that it is received by our secretary prior to the special meeting or attend the special meeting in person and vote. You also may revoke your proxy by sending a notice of revocation to our secretary, which must be received by our secretary prior to the special meeting.
   
Q: What should I do if I receive more than one set of voting materials?
   
A: You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.
   
Q: Who will solicit and pay the cost of soliciting proxies?
   
A: Jensyn will pay the cost of soliciting proxies for the special meeting. Jensyn has engaged Advantage Proxy, Inc. to assist in the solicitation of proxies for the special meeting. Jensyn has agreed to pay Advantage Proxy, Inc. a fee of $7,500 plus a per call fee for any incoming or outgoing stockholder calls for such services, which fee also includes Advantage Proxy, Inc. acting as the inspector of elections at the special meeting, if requested. Jensyn will reimburse Advantage Proxy, Inc. for reasonable out-of-pocket expenses and will indemnify Advantage Proxy, Inc. and its affiliates against certain claims, liabilities, losses, damages and expenses. Jensyn will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of Jensyn’s Common Stock for their expenses in forwarding soliciting materials to beneficial owners of the Jensyn’s Common Stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.
   
Q: Who can help answer my questions?
   
A: If you have questions about the proposals or if you need additional copies of the proxy statement or the enclosed proxy card you should contact:

 

Lynne Radwanski, Secretary

Jensyn Acquisition Corp.

800 West Main Street, Suite 204

Freehold, NJ 07728

(888) 536-7965

 

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You may also contact our proxy solicitor at:

Advantage Proxy, Inc.

Individuals call toll-free: (877) 870-8565

Banks and brokerages, please call (206) 870-8565

 

To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the special meeting.

 

You may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”

 

If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to our transfer agent prior to the special meeting. If you have questions regarding the certification of your position or delivery of your stock, please contact:

 

Continental Stock Transfer & Trust Company

1 State Street – 30th Floor

New York, New York 10004

Attn: Mark Zimkind

E-mail: mzimkind@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT

 

This summary highlights selected information from this proxy statement and does not contain all of the information that is important to you. To better understand the Business Combination and the proposals to be considered at the special meeting, you should read this entire proxy statement carefully, including the annexes. See also the section entitled “Where You Can Find More Information.”

 

Unless otherwise specified, all share calculations (i) assume no exercise of redemption rights by Jensyn’s public stockholders and (ii) do not include any shares of Jensyn Common Stock issuable upon exercise of Jensyn’s warrants.

 

Parties to the Business Combination

 

Jensyn Acquisition Corp.

 

Jensyn is a Delaware special purpose acquisition company formed in October 2014 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving Jensyn and one or more businesses.

 

Jensyn’s units, Common Stock, warrants and rights are traded on the Nasdaq Capital Market under the ticker symbols “JSYNU,” “JSYN,” “JSYNW” and “JSYNR,” respectively.

 

The mailing address of Jensyn’s principal executive office is 800 West Main Street, Suite 204 Freehold, NJ 07728.

 

Peck Electric Co.

 

Peck Electric is the largest commercial solar engineering, procurement and construction (“EPC”) company in the Northeast and one of the largest in the US. Peck Electric, based in Burlington, Vermont, is a 2nd-generation family business founded in 1972 and rooted in values that align people, purpose, and profitability. Peck Electric provides engineering, procurement and construction services to solar energy customers for projects ranging in size from several kilowatts for residential loads to multi-megawatt systems for large commercial and utility projects. Peck Electric has installed over 100MW of solar systems since inception and is focused on profitable growth opportunities.

 

For the year ended December 31, 2018 and year ended December 31, 2017, Peck Electric generated total revenues of $15,956,097 and $22,762,230, respectively, and net income of $1,055,972 and $2,922,693, respectively. For additional information regarding Peck Electric’s business, see “Information About Peck Electric”.

 

The mailing address of Peck Electric’s principal executive office is 4050 Williston Road Suite 511 South Burlington, Vermont 05403.

 

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Consideration to Peck Electric’s Stockholders upon the Closing of the Business Combination

 

Pursuant to the Exchange Agreement, upon the closing (the “Closing”) of the transactions contemplated by the Exchange Agreement, the Stockholders of Peck Electric will exchange their shares of capital stock in Peck Electric for 3,234,501 shares of the Company’s common stock (the “Share Exchange”) representing approximately 59% of Jensyn’s outstanding shares after giving effect to the business combination but without giving effect to the potential conversion of our outstanding public shares to cash. As a result of the Share Exchange, Peck Electric will become a wholly owned subsidiary of the Company.

 

Earnout

 

In the event that Peck Electric’s Adjusted EBITDA (as defined in the Exchange Agreement) for the twelve month period commencing on the first day of the first full calendar quarter following the Closing (the “Earnout Period”) is $5,000,000 or more (the “Adjusted EBITDA Target) or the closing price of the Company’s common stock is $12.00 or more per share for ten (10) consecutive days during the Earnout Period (the “Stock Price Target”), then the Company shall issue an additional 898,473 shares of the Company’s common stock to the Stockholders, 11,321 shares of the Company’s common stock to Exit Strategy Partners, LLC, an advisor that introduced Peck Electric to the Company and issue to the Sponsors a number of shares of the Company’s common stock equal to the number of shares of the Company’s common stock forfeited by such stockholders as described below under “Forfeiture of Sponsor Shares” less the number of shares issued to the advisor.

 

Forfeiture of Sponsors Shares

 

The Sponsors (Jeffrey Raymond, Joseph Raymond, Peter Underwood, Demetrios Mallios, Brendan Rempel and a transferee of shares previously owned by the Company’s former Chief Financial Officer) have agreed to forfeit (i) up to 200,000 shares of the Company’s common stock at the Closing to the extent that such shares are used to satisfy Company obligations or to induce investors to make an equity investment in the Company at or prior to the Closing and (ii) 200,000 shares of the Company’s common stock if neither the Adjusted EBITDA Target nor the Stock Price Target is achieved during the Earnout Period.

 

Satisfaction and Funding of Certain Jensyn Obligations and Transaction Expenses

 

The Company shall satisfy its outstanding liabilities from cash on hand or by reissuing shares forfeited by the Sponsors at the Closing as described above under “Forfeiture of Sponsor Shares”; provided, however, that in no event shall the Company satisfy such obligations in cash to the extent that payments of such obligations in cash would exceed $2,500,000.

 

Opinion of Primary Capital to Jensyn’s Board of Directors

 

In connection with the Business Combination, Primary Capital a New York based investment banking firm, delivered a written opinion, dated March 26, 2019 to our board of directors that, as of March 26, 2019, and subject to and based on the assumptions made, procedures followed, matters considered, limitations of the review undertaken and qualifications contained in such opinion, (i) the consideration payable by Jensyn pursuant to the Exchange Agreement is fair, from a financial point of view to Jensyn’s stockholders. Primary Capital also verbally advised the Board that fair market value of Peck Electric (measured by the enterprise value implied by the various financial analyses Primary Capital conducted in connection with its opinion) equaled or exceeded 80% of the amount held by the Company in trust for the benefit of its public stockholders.

 

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The full text of the written opinion, which describes the assumptions made, procedures followed, matters considered, limitations on the review undertaken and qualifications contained in such opinion, is attached to this proxy statement as Annex C and is incorporated herein by reference. You should read the opinion carefully in its entirety. Primary Capital’s opinion does not constitute a recommendation to any holder of shares of Jensyn Common Stock as to how such holder should vote or act with respect to the Exchange Agreement or the Business Combination Proposal, whether such holder should exercise its conversion rights with respect to its shares of Jensyn Common Stock or any other matter.

 

Conversion Rights

 

Pursuant to our amended and restated certificate of incorporation, in connection with the Business Combination holders of our public shares may elect to have their shares converted into cash at the applicable conversion price per share calculated in accordance with our amended and restated certificate of incorporation. As of March 28, 2019 this would have amounted to approximately $11.20 per share. If a holder exercises its conversion rights, then such holder will be exchanging its shares of our Common Stock for cash and will no longer own shares of the Company and will not participate in the future growth of the Company, if any. Such a holder will be entitled to receive cash for its public shares only if it (i) affirmatively votes for or against the Business Combination Proposal and (ii) properly demands conversion and delivers its shares (either physically or electronically) to our transfer agent in accordance with the procedures described herein. See the section entitled “Special Meeting in Lieu of 2019 Annual Meeting of Jensyn Stockholders—Conversion Rights” for the procedures to be followed if you wish to convert your shares for cash.

 

In March 2018, holders of 1,825,506 public shares exercised conversion rights in connection with the approval of an amendment to our amended and restated certificate of incorporation which extended the date by which we must complete our initial business combination from March 7, 2018 to June 5, 2018.

 

In connection with the vote to extend the date by which we must complete a business combination from June 5, 2018 to September 3, 2018, holders of 1,244,227 of our public shares exercised conversion rights with respect to such shares and such shares were redeemed for approximately $10.66 per share. Approximately $13,264,985 was disbursed from the Trust Account to fund the redemptions.

 

On August 29, 2018, the Company held a special meeting of stockholders at which the Company’s stockholders approved an amendment to the Company’s amended and restated certificate of incorporation which extended the date by which the Company must complete its initial business combination from September 3, 2018 to January 3, 2019. Stockholders holding an aggregate of 94,200 of shares of common stock exercised their right to convert shares into cash in connection with the extension and approximately $1,019,791 was disbursed from the Trust Account to fund the redemptions. Jensyn Capital, LLC agreed to contributed $.042 per month for a period of four months for each public share that was not converted into cash in connection with the August 29, 2018 special meeting of stockholders. A total of $122,684 ($0.168 per share) was deposited into the Trust Account for the four-month period ending January 3, 2019, which increased the funds in the Trust Account to approximately $11.00 per share at January 3, 2019.

 

On January 2, 2019, the Company held a special meeting of stockholders at which the Company’s stockholders approved an amendment to the Company’s amended and restated certificate of incorporation which extended the date by which the Company must complete its initial business combination from January 3, 2019 to July 2, 2019. Stockholders holding an aggregate of 186,085 of shares of common stock exercised their right to convert their shares into cash in connection with the extension and such shares were redeemed for approximately $11.01 per share. Approximately $$2,049,380 was disbursed from the Trust Account to fund the redemptions. Jensyn Capital, LLC agreed to deposit into the Trust Account $0.05 for each 30 day period during the period beginning on January 4, 2019 and ending on the earlier of July 2, 2019 or the date that the Company completes its initial business combination for each public share that was not converted into cash at the January 3, 2019 special meeting of stockholders. As of March 28, 2019, approximately $82,500 of this amount has been deposited into the Trust Account increasing the per share redemption price to approximately $11.20. Additional deposits will increase the funds available in the Trust Account to approximately $11.25, $11.30, and $11.35 per share as of May 3, June 3 and July 3, 2019, respectively, assuming a Business Combination is not completed before any of such dates.

 

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Impact of the Business Combination on Jensyn’s Public Float

 

It is anticipated that, upon completion of the Business Combination, the Peck Electric Stockholders will have an ownership interest of approximately 59% in the Company, Jensyn’s public stockholders will retain an ownership interest of approximately 17% in the Company, our private placement holders and their transferees will retain an ownership interest of approximately 6% in the Company, and holders of our founder shares will retain an ownership interest of approximately 18% in the Company. If any of Jensyn’s stockholders exercise their conversion rights, the ownership interest in the Company of the Company’s public stockholders will decrease and the ownership interest in the Company of our private placement holders will increase.

 

The following table illustrates varying ownership levels in Jensyn assuming varying levels of conversion by Jensyn’s public stockholders and without giving effect to the potential issuance of shares of Jensyn Common Stock to the Peck Electric Stockholders in connection with the Earnout:

 

   Scenario 1   Scenario 2   Scenario 3 
Public Stockholders   939,982    17.2%   664,991    12.8%   623,013    12.1%
Holders of Founder Shares and Sponsor Shares   975,000    17.8%   975,000    18.8%   975,000    18.9%
Private placement holders and transferees   323,950    5.9%   323,950    6.2%   323,950    6.3%
Peck Electric Stockholders   3,234,501    59.1%   3,234,501    62.2%   3,234,501    62.7%
                               
    5,473,433    100%   5,198,442    100%   

5,156,464

    

100

%

 

(1) Scenario 1 – Reflects ownership percentages if no public shares are converted.
   
(2) Scenario 2 – Reflects ownership percentages if 50% of Jensyn’s outstanding public shares are converted.
   
(3) Scenario 3 – Reflects ownership percentages if the estimated maximum number of allowable shares which could be converted under Jensyn’s amended and restated certificate of incorporation are converted and assumes that the Company raises $2,500,000 of equity prior to the completion of the Business Combination and the Sponsors forfeit 167,072 shares which are re-issued to satisfy approximately $1,900,000 of the Company’s obligations upon the completion of the Business Combination.

 

The following table illustrates varying ownership levels in Jensyn assuming varying levels of conversion by Jensyn’s public stockholders assuming the issuance of 898,473 shares of Jensyn Common Stock to the Peck Electric Stockholders in connection with the Earnout:

 

    Scenario 1     Scenario 2     Scenario 3  
Public Stockholders     939,982       14.4 %     664,991       10.6 %     623,013       10.0 %
Holders of Founder Shares and Sponsor Shares     1,130,859       17.3 %     1,130,859       18.1 %     1,130,859       18.2 %
Private placement holders and transferees     323,950       5.0 %     323,950       5.2 %     323,950       5.2 %
Peck Electric Stockholders     4,132,974       63.3 %     4,132,974       66.1 %     4,132,974       66.5 %
                                                 
      6,527,765       100 %     6,252,774       100 %     6,210,796              100 %

 

(1) Scenario 1 – Reflects ownership percentages if no public shares are converted.
   
(2) Scenario 2 – Reflects ownership percentages if 50% of Jensyn’s outstanding public shares are converted.
   
(3) Scenario 3 – Reflects ownership percentages if  the estimated maximum number of  the allowable number of shares which could be converted under Jensyn’s amended and restated certificate of incorporation are converted and assumes that the Company raises $2,500,000 of equity prior to the completion of the Business Combination and the Sponsors forfeit 167,072 shares which are re-issued to satisfy approximately $1,900,000 of the Company’s obligations upon the completion of the Business Combination.

 

The above ownership percentages with respect to Jensyn following the Business Combination do not take into account the potential exercise of warrants to purchase Jensyn’s Common Stock that may remain outstanding following the Business Combination. See “Summary—Impact of the Business Combination on Jensyn’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

 

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Board of Directors of Jensyn Following the Business Combination

 

Upon consummation of the Business Combination, our Board of Directors anticipates increasing its size from four to five directors, all of whom will be voted upon by our stockholders at the special meeting. If all director nominees are elected and the Business Combination is consummated, our Board of Directors will consist of four newly appointed directors and one director who currently serves on our Board. See sections entitled “Proposal No. 3 - Election of Directors to the Board” and “Management After the Business Combination” for additional information.

 

Approval and Adoption of Certificate Proposals

 

Upon the closing of the Business Combination, Jensyn’s amended and restated certificate of incorporation will be amended promptly to:

 

  to change our name to “The Peck Company, Inc.” and remove certain provisions related to our status as a blank check company, among other things;
     
  to increase the number of authorized shares from 16,000,000 to 50,000,000, of which 49,000,000 will be common stock, par value $0.0001 per share, and 1,000,000 will be preferred stock, par value $0.0001 per share;
     
  authorize the board of directors, or any authorized committee of the board of directors, to issue shares of preferred stock;
     
  to specify that the number of directors of Jensyn will be fixed by resolution of the board of directors acting by not less than a majority vote of the directors then in office;
     
  to provide that the Company’s directors may only be removed for cause by a vote of the majority of then outstanding shares of the Company;
     
  to provide that if rights to elect directors are granted to the holders of preferred stock, the terms of such directors’ terms in office are separately governed by the terms of such preferred stock;
     
  to provide that stockholders may not act by written consent;
     
  to provide that special meetings of the stockholders may be called only by or at the direction of the Chairman of the Board, the Chief Executive Officer of Jensyn or the board pursuant to a resolution adopted by the board;
     
  to elect for the Company to not be subject to Section 203 of the DGCL;
     
  to adopt Delaware as the exclusive forum for certain stockholder litigation;
     
  to provide that the corporate opportunity doctrine will apply to Jensyn’s officers or directors and their affiliates; and
     
  to provide that a minimum of 2/3 of the outstanding shares of capital stock of Jensyn will be required to amend the proposed certificate.

 

See the section entitled “Proposals No. 2A – 2L — The Certificate Proposals.”

 

Quorum and Required Vote for Proposals for the Special Meeting

 

A quorum of Jensyn stockholders is necessary to hold a valid meeting. Holders of a majority in voting power of the Jensyn’s Common Stock issued and outstanding and entitled to vote at the special meeting, present in person or represented by proxy, constitute a quorum. As of the record date for the special meeting, 909,742 shares of our Common Stock would be required to achieve a quorum.

 

 22 
 

 

Approval of the Business Combination Proposal and the Adjournment Proposal requires the affirmative vote of holders of a majority of the shares of our Common Stock represented in person or by proxy and entitled to vote thereon at the special meeting. Approval of each of the Certificate Proposals requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock. Approval of the Director Election Proposal requires the affirmative vote of the holders of a plurality of the shares of our Common Stock represented in person or by proxy and entitled to vote thereon at the special meeting. A failure to vote your shares is the equivalent of a vote “AGAINST” the Certificate Proposals but, assuming a quorum is otherwise validly established, will have no effect on the other proposals to be considered at the special meeting of stockholders. Unless waived by the parties to the Exchange Agreement, the closing of the Business Combination is conditioned upon the adoption and approval of the Business Combination Proposal and the Certificate Proposals.

 

The approval of each of the Certificate Proposals each require the affirmative vote of the holders of a majority of the outstanding shares of our Common Stock. Accordingly, a Jensyn stockholder’s failure to vote by proxy or to vote in person at the special meeting, an abstention from voting or a broker non-vote with regard to any such proposal will have the same effect as a vote “AGAINST” such proposal.

 

Abstentions will count as present for the purposes of establishing a quorum. Broker non-votes will not be counted for purposes of establishing a quorum. For purposes of approval, failure to vote will have no effect on the Director Election Proposal. A failure to vote or an abstention will have the same effect as a vote “AGAINST” a Certificate Proposal, while only an abstention (and not a failure to vote) will have the same effect as a vote “AGAINST” the Business Combination Proposal and the Adjournment Proposal A broker non-vote will have no effect on the outcome of the vote on the Business Combination Proposal, the Director Election Proposal or the Adjournment Proposal.

 

Directors are elected by a plurality of all of the votes cast by holders of shares of our Common Stock represented in person or by proxy and entitled to vote thereon at the special meeting. This means that the five nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, broker non-votes will have no effect on the election of directors.

 

The transactions contemplated by the Exchange Agreement will be consummated only if the Business Combination Proposal and the Certificate Proposals are approved at the special meeting. In addition, (i) the Director Election Proposal is conditioned on the approval of the Certificate Proposals and the Business Combination Proposal, and (ii) each of the Certificate Proposals is conditioned on the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth on the proxy statement.

 

It is important for you to note that in the event each of the Certificate Proposals does not receive the requisite vote for approval, then we will not consummate the Business Combination. If we do not consummate the Business Combination and fail to complete an initial business combination by July 2, 2019, we will be required to dissolve and liquidate our Trust Account by returning the then remaining funds in such account to the public stockholders.

 

Recommendation to Jensyn Stockholders

 

Our board of directors believes that each of the Business Combination Proposal, the Certificate Proposals, the Director Election Proposal and the Adjournment Proposal to be presented at the special meeting is in the best interests of the Company and our stockholders and unanimously recommends that our stockholders vote “FOR” each of the proposals.

 

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When you consider the recommendation of our board of directors in favor of approval of these proposals, you should keep in mind that our directors and officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests as a stockholder. These interests include, among other things:

 

  the fact that initial stockholders paid an aggregate of $25,029 for their founder shares, and such securities should have a significantly higher value at the time of the Business Combination;
     
  if Jensyn is unable to complete a business combination within the required time period, our officers and directors will not have redemption rights with respect to the founder shares that they own;
     
  if the Company is unable to complete a business combination within the required time period, our initial stockholders will be personally liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by the Company for services rendered or contracted for or products sold to the Company, but only if such a vendor or target business has not executed such a waiver; and
     
  The fact that upon the consummation of the Business Combination, our initial stockholders will be repaid approximately $2,100,000 of loans that they made to us and Jensyn Integration Services, LLC, a company controlled by certain of our initial stockholders, will be paid an administrative fee of up to $340,000;
     
 

the fact that certain of our initial stockholders and special advisors may be required to forfeit shares of the Company’s Common Stock if neither the Adjusted EBITDA Target nor the Stock Price Target is achieved or if the Company uses shares to satisfy its obligations to induce investors to make an equity investment in the Company, and may be issued additional shares of the Company’s common stock if either the Adjusted EBITDA Target or Stock Price Target is achieved; and

     
  the continued indemnification of current directors and officers of the Company and the continuation of directors’ and officers’ liability insurance after the Business Combination.

 

Risk Factors

 

In evaluating the proposals set forth in this proxy statement, you should carefully read this proxy statement, including the annexes, and especially consider the factors discussed in the section entitled “Risk Factors.”

 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF JENSYN

 

The following table sets forth selected historical financial information derived from Jensyn’s audited financial statements as of and for the years ended December 31, 2018 and 2017 included elsewhere in this proxy statement. You should read the following selected historical financial information in conjunction with the section entitled “Jensyn Management’s Discussion and Analysis of Financial Condition and Results of Operations of Jensyn and Jensyn’s financial statements and the related notes appearing elsewhere in this proxy statement.

 

Selected Historical Financial Information of Jensyn Acquisition Corp

 

   As of   As of 
   December 31, 2018   December 31, 2017 
         
Balance Sheet Data:          
           
Cash  $30,929   $25,432 
Prepaid insurance and other   18,115    14,457 
Restricted cash and Investments held in trust account   8,101,595    41,019,387 
Total Assets  $8,150,639   $41,059,276 
           
Accounts payable and accrued expenses  $678,421   $609,719 
Notes and advances related parties   2,056,220    1,536,549 
Deferred underwriting commission   780,000    780,000 
Common stock subject to possible redemption: 0 shares and 3,149,524 shares (at redemption value of $10.52 per share ) at December 31, 2018 and December 31, 2017, respectively.   -    33,132,988 
           
Total stockholders’ equity  $4,635,998   $5,000,020 
           
Common shares outstanding at end of period   2,005,567    5,169,500 

 

   For the year   For the year 
   ended   ended 
   December 31, 2018   December 31, 2017 
         
Cash Flow Data:          
           
Net cash used in operating activites  $(73,471)  $(399,588)
Net cash provided by investing activites   228,888    216,657 
Net cash provided by (used in) financing activities   (33,067,712)   752,890 
           
Statement of Operations Data:          
           
Operating expenses   839,061    746,563 
           
Loss from operations   (839,061)   (746,563)
Other income and (expense):          
Interest income   228,888    216,657 
Interest expense   (121,194)   (54,371)
Other income   700,000    - 
Net Loss  $(31,367)  $(584,277)
Weighted average common shares outstanding - basic and diluted   2,042,348    1,939,175 
Net loss per common share - basic and diluted  $(0.02)  $(0.30)

 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF PECK ELECTRIC

 

The following table sets forth selected historical financial information derived from Peck Electric’s audited financial statements as of and for the years ended December 31, 2018 and 2017 have been derived from Peck Electric’s audited financial statements included elsewhere in this proxy statement. You should read the following selected historical financial information in conjunction with the section entitled “Peck Electric Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Peck Electric’s financial statements and the related notes appearing elsewhere in this proxy statement.

 

Peck Electric Co. is the largest commercial solar engineering, procurement and construction (“EPC”) company in the Northeast and ranked 60th in the US by Solar Power World. Peck Electric, based in Burlington, Vermont, is a 2nd-generation family business founded in 1972 and rooted in values that align people, purpose, and profitability. It provides engineering, procurement and construction services to solar energy customers for projects ranging in size from several kilowatts for residential loads to multi-megawatt systems for large commercial and utility projects. Peck Electric has installed over 100MW of solar systems since inception and believes a focus on profitable growth opportunities is the most sustainable method to reduce carbon emissions through the expansion of clean, renewable solar energy production.

 

Selected Historical Financial Information of Peck Electric

 

   As of   As of 
   December 31, 2018   December 31, 2017 
         
Balance Sheet Data:          
           
ASSETS          
Current Assets          
Cash and cash equivalents  $313,217   $760,781 
Accounts receivable   2,054,413    3,126,358 
Costs and estimated earnings in excess of billings   718,984    404,099 
Other current assets   2,858    680 
           
Total Current Assets   3,089,472    4,291,918 
           
Property, Equipment and Leasehold Improvements (net)   7,121,539    4,740,371 
           
Other Assets   555,353    176,633 
           
Total Assets   10,766,364    9,208,922 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current Liabilities          
Accounts payable and accrued liabilities   1,732,245    2,527,609 
Billings in excess of costs and estimated earnings on uncompleted contracts   180,627    254,183 
Other current liabilities   69,648    27,000 
Line of credit   972,524    - 
Current portion of long term debt   410,686    301,087 
           
Total Current Liabilities   3,365,730    3,109,879 
           
Long-Term Debt-net of current portion   2,212,885    1,590,148 
Other long term assets   116,711    - 
           
Stockholders’ Equity   5,071,038    4,508,895 
           
Total Liabilities and Stockholders’ Equity  $10,766,364   $9,208,922 

 

   For the year   For the year 
   ended   ended 
   December 31, 2018   December 31, 2017 
         
Cash Flow Data:          
           

Net cash provided by operating activities

  $1,304,880   $1,796,033 

Net cash used in investing activities

   (2,773,912)   (1,239,511)

Net cash provided by (used in) financing activities

  $1,021,468   $(575,917)
           
Statement of Operations Data:          
           
Revenue  $15,956,097   $22,762,230 
Cost of revenue   11,586,496    16,583,510 
Gross profit   4,369,601    6,178,720 
Operating costs and expenses:          
Indirect expenses   1,344,115    1,172,807 
Selling, General and Administrative Expenses   1,834,704    2,016,787 
Total operating costs and expenses   3,178,819    3,189,594 
           
Income from operations   1,190,782    2,989,126 
           
Other income and (expense), net   (134,810)   (66,433)
           
Net income  $1,055,972   $2,922,693 

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

We make forward-looking statements in this proxy statement. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business, and the timing and ability for us to complete the Business Combination. Specifically, forward-looking statements may include statements relating to:

 

  the benefits of the Business Combination;
     
  the future financial performance of the Company following the Business Combination;
     
 

pro forma financial information giving effect to the Business Combination;

     
  changes in the market for Peck Electric services;
     
  expansion plans and opportunities; and
     
  other statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions.

 

These forward-looking statements are based on information available as of the date of this proxy statement, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

You should not place undue reliance on these forward-looking statements in deciding how to grant your proxy or instruct how your vote should be cast or vote your shares on the proposals set forth in this proxy statement. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

 

  the occurrence of any event, change or other circumstances that could give rise to the termination of the Exchange Agreement;
     
  the outcome of any legal proceedings that may be instituted against Peck Electric or Jensyn following announcement of the proposed Business Combination and transactions contemplated thereby;
     
  the inability to complete the transactions contemplated by the proposed Business Combination due to the failure to obtain approval of the stockholders of Jensyn, or other conditions to closing in the Exchange Agreement;
     
  the inability to obtain or maintain the listing of the Company’s Common Stock on Nasdaq Capital Market following the Business Combination;
     
  the risk that the proposed Business Combination disrupts current plans and operations as a result of the announcement and consummation of the transactions described herein;
     
  the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability to integrate Peck Electric and Jensyn businesses, and the ability of the combined business to grow and manage growth profitably;
     
  costs related to the Business Combination;
     
  changes in applicable laws or regulations;
     
  the possibility that Peck Electric or Jensyn may be adversely affected by other economic, business, and/or competitive factors; and
     
  other risks and uncertainties indicated in this proxy statement, including those under “Risk Factors.”

 

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RISK FACTORS

 

The following risk factors apply to the business and operations of Peck Electric and will also apply to the combined business and operations of the Company and Peck Electric following the completion of the Business Combination. These risk factors are not exhaustive and investors are encouraged to perform their own investigation with respect to the business, financial condition and prospects of the Company following the Business Combination. You should carefully consider the following risk factors in addition to the other information included in this proxy statement, including matters addressed in the section entitled “Cautionary Statement Regarding Forward-Looking Statement.” We may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial, which may also impair our business. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included herein.

 

Risks Related to Financial Position and Capital Requirements Following the Business Combination

 

Peck Electric has had an extensive and profitable operating history, but it may be difficult to accurately evaluate its future business and prospects.

 

Although Peck Electric was founded in 1972, it did not begin selling solar systems until 2013 when management believed that solar asset investment was profitable. Peck Electric’s management believes that Peck Electric’s success will depend in large part on its ability to continue to successfully sell solar systems in the northeast and in other states against determined competition, and to consummate synergistic acquisitions. No assurance can be given that Peck Electric it will operate profitably after the Business Combination or that it will have adequate working capital to meet its obligations as they become due.

 

Management discovered a material weakness in Peck Electric’s disclosure controls and procedures and internal control over financial reporting.

 

Management identified control deficiencies and the need for a stronger internal controls environment relating to revenue activities. The ineffectiveness of the design, implementation and operation of the controls surrounding these matters creates a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis. Accordingly, Peck Electric’s management concluded that this deficiency represents a material weakness in its internal control over financial reporting as of December 31, 2018. Although management has taken significant steps to remediate this weakness, management can give no assurance yet that all the measures it has taken will on a permanent and sustainable basis remediate the material weaknesses in Peck Electric’s disclosure controls and procedures and internal control over financial reporting or that any other material weaknesses or restatements of financial results will not arise in the future.

 

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Peck Electric may require substantial additional funding which may not be available to it on acceptable terms, or at all. If it fails to raise the necessary additional capital, Peck Electric may be unable to achieve growth of its operations.

 

Peck Electric’s historical operation has been profitable. However, in order to grow its operations, Peck Electric may increase its spending to fund its operating expenses and capital expenditures.

 

Peck Electric cannot be certain that additional funding will be available on acceptable terms, or at all. If it is unable to raise additional capital in sufficient amounts or on terms acceptable to us Peck Electric may have to significantly delay, scale back or discontinue its organic growth or corporate acquisitions. Any of these events could significantly harm its business, financial condition, and strategy.

 

In order to carry out its business plan and implement its strategy, Peck Electric anticipates that it will need to obtain additional financing from time to time and following the Business Combination, the Company may choose to raise additional funds through strategic collaborations, public or private equity or debt financing, bank lines of credit, asset sales, government grants, or other arrangements. Management cannot be sure that any additional funding, if needed, will be available on favorable terms or at all. Furthermore, any additional equity or equity-related financing obtained after the Business Combination may be dilutive to the Company’s shareholders, and debt or equity financing, if available, may subject the Company and Peck Electric to restrictive covenants and significant interest costs.

 

An inability to raise capital when needed could harm the business, financial condition and results of operations of the Company after the Business Combination, and could cause its stock price to decline or require that it cease operations.

 

Risks Related to Peck Electric’s Business and Industry

 

A material reduction in the retail price of traditional utility generated electricity or electricity from other sources could harm our business, financial condition, results of operations and prospects.

 

Management of Peck Electric believes that a significant number of its customers decide to buy solar energy because they want to pay less for electricity than what is offered by the traditional utilities. However, distributed residential solar energy has yet to achieve broad market adoption as evidenced by the fact that distributed solar has penetrated less than 3% of its total addressable market in the U.S. residential sector.

 

The customer’s decision to choose solar energy may also be affected by the cost of other renewable energy sources. Decreases in the retail prices of electricity from the traditional utilities or from other renewable energy sources would harm Peck Electric’s ability to offer competitive pricing and could harm its business. The price of electricity from traditional utilities could decrease as a result of:

 

● construction of a significant number of new power generation plants, including plants utilizing natural gas, nuclear, coal, renewable energy or other generation technologies;

 

● relief of transmission constraints that enable local centers to generate energy less expensively;

 

● reductions in the price of natural gas;

 

● utility rate adjustment and customer class cost reallocation;

 

● energy conservation technologies and public initiatives to reduce electricity consumption;

  

● development of new or lower-cost energy storage technologies that have the ability to reduce a customer’s average cost of electricity by shifting load to off-peak times; or

 

● development of new energy generation technologies that provide less expensive energy.

 

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A reduction in utility electricity prices would make the purchase or the lease of its solar energy systems less economically attractive. If the retail price of energy available from traditional utilities were to decrease due to any of these reasons, or other reasons, Peck Electric would be at a competitive disadvantage, may be unable to attract new customers and its growth would be limited.

 

Existing electric utility industry regulations, and changes to regulations, may present technical, regulatory and economic barriers to the purchase and use of solar energy systems that may significantly reduce demand for Peck Electric’s solar energy systems.

 

Federal, state and local government regulations and policies concerning the electric utility industry, and internal policies and regulations promulgated by electric utilities, heavily influence the market for electricity generation products and services. These regulations and policies often relate to electricity pricing and the interconnection of customer-owned electricity generation. In the United States, governments and utilities continuously modify these regulations and policies. These regulations and policies could deter customers from purchasing renewable energy, including solar energy systems. This could result in a significant reduction in the potential demand for Peck Electric’s solar energy systems. For example, utilities commonly charge fees to larger, industrial customers for disconnecting from the electric grid or for having the capacity to use power from the electric grid for back-up purposes. These fees could increase Peck Electric’s customers’ cost to use its systems and make them less desirable, thereby harming our business, prospects, financial condition and results of operations. In addition, depending on the region, electricity generated by solar energy systems competes most effectively with expensive peak-hour electricity from the electric grid, rather than the less expensive average price of electricity. Modifications to the utilities’ peak hour pricing policies or rate design, such as to a flat rate, would require Peck Electric to lower the price of its solar energy systems to compete with the price of electricity from the electric grid.

 

In addition, any changes to government or internal utility regulations and policies that favor electric utilities could reduce Peck Electric’s competitiveness and cause a significant reduction in demand for its products and services. For example, certain jurisdictions have proposed assessing fees on customers purchasing energy from solar energy systems or imposing a new charge that would disproportionately impact solar energy system customers who utilize net metering, either of which would increase the cost of energy to those customers and could reduce demand for Peck Electric’s solar energy systems. It is possible charges could be imposed on not just future customers but Peck Electric’s existing customers, causing a potentially significant consumer relations problem and harming its reputation and business. Due to the current concentration of Peck Electric’s business in Vermont, any such changes in these markets would be particularly harmful to its business, results of operations, and future growth.

 

Peck Electric’s growth strategy depends on the widespread adoption of solar power technology.

 

The market for solar power products is emerging and rapidly evolving, and its future success is uncertain. If solar power technology proves unsuitable for widespread commercial deployment or if demand for solar power products fails to develop sufficiently, Peck Electric would be unable to generate enough revenues to achieve and sustain profitability and positive cash flow. The factors influencing the widespread adoption of solar power technology include but are not limited to:

 

● cost-effectiveness of solar power technologies as compared with conventional and non-solar alternative energy technologies;

 

● performance and reliability of solar power products as compared with conventional and non-solar alternative energy products;

   

● fluctuations in economic and market conditions which impact the viability of conventional and non-solar alternative energy sources, such as increases or decreases in the prices of oil and other fossil fuels;

   

● continued deregulation of the electric power industry and broader energy industry; and

   

● availability of governmental subsidies and incentives.

 

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Peck Electric’s business currently depends on the availability of rebates, tax credits and other financial incentives. The expiration, elimination or reduction of these rebates, credits and incentives would adversely impact its business.

 

U.S. federal, state and local government bodies provide incentives to end users, distributors, system integrators and manufacturers of solar energy systems to promote solar electricity in the form of rebates, tax credits and other financial incentives such as system performance payments and payments for renewable energy credits associated with renewable energy generation. These governmental rebates, tax credits and other financial incentives enhance the return on investment for our customers and incent them to purchase solar systems. These incentives enables Peck Electric to lower the price it charges customers for energy and for solar energy systems. However, these incentives may expire on a particular date, end when the allocated funding is exhausted, or be reduced or terminated as solar energy adoption rates increase. These reductions or terminations often occur without warning.

 

Reductions in, or eliminations or expirations of, governmental incentives could adversely impact Peck Electric’s results of operations and its ability to compete in its industry, causing Peck Electric to increase the prices of its solar energy systems, and reducing the size of its addressable market. In addition, this would adversely impact its ability to attract investment partners and to form new financing funds and its ability to offer attractive financing to prospective customers.

 

Peck Electric’s business depends in part on the regulatory treatment of third-party owned solar energy systems.

 

Peck Electric’s leases and any power purchase agreements are third-party ownership arrangements. Sales of electricity by third parties face regulatory challenges in some states and jurisdictions. Other challenges pertain to whether third-party owned systems qualify for the same levels of rebates or other non-tax incentives available for customer-owned solar energy systems, whether third-party owned systems are eligible at all for these incentives, and whether third-party owned systems are eligible for net metering and the associated significant cost savings. Reductions in, or eliminations of, this treatment of these third-party arrangements could reduce demand for Peck Electric’s systems, adversely impact its access to capital and could cause it to increase the price it charges its customers for energy.

 

Peck Electric’s ability to provide solar energy systems to customers on an economically viable basis depends on its ability to help customers arrange financing for such systems.

 

Peck Electric’s solar energy systems have been eligible for Federal ITCs or U.S. Treasury grants, as well as depreciation benefits. Peck Electric has relied on, and will continue to rely on, financing structures that monetize a substantial portion of those benefits and provide financing for its solar energy systems. With the lapse of the U.S. Treasury grant program, Peck Electric anticipates that its customers’ reliance on these tax-advantaged financing structures will increase substantially. If, for any reason, our customers were unable to continue to monetize those benefits through these arrangements, Peck Electric may be unable to provide and maintain solar energy systems for new customers on an economically viable basis.

 

The availability of this tax-advantaged financing depends upon many factors, including, but not limited to:

 

the state of financial and credit markets;
   
changes in the legal or tax risks associated with these financings; and
   
non-renewal of these incentives or decreases in the associated benefits.

 

U.S. Treasury grants are no longer available for new solar energy systems. Changes in existing law and interpretations by the Internal Revenue Service and the courts could reduce the willingness of funding sources to provide funds to customers of these solar energy systems. Peck Electric cannot assure you that this type of financing will be available to its customers. If, for any reason, Peck Electric is unable to find financing for solar energy systems, it may no longer be able to provide solar energy systems to new customers on an economically viable basis. This would have a material adverse effect on Peck Electric’s business, financial condition, and results of operations.

 

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Rising interest rates could adversely impact Peck Electric’s business.

 

Increases in interest rates could have an adverse impact on Peck Electric’s business by increasing its cost of capital, which would increase its interest expense and make acquisitions more expensive to undertake.

 

Further, rising interest rates may negatively impact Peck Electric’s ability to arrange financing for its customers on favorable terms to facilitate its customers’ purchases of our solar energy systems. The majority of Peck Electric’s cash flows to date have been from the sales of solar energy systems. Rising interest rates may have the effect of depressing the sales of solar energy systems because many consumers finance their purchases.

 

As a result, an increase in interest rates may negatively affect Peck Electric’s costs and reduce its revenues, which would have an adverse effect on its business, financial condition, and results of operations.

 

If Peck Electric cannot compete successfully against other solar and energy companies, it may not be successful in developing its operations and its business may suffer.

 

The solar and energy industries are characterized by intense competition and rapid technological advances, both in the United States and internationally. Peck Electric competes with solar companies with business models that are similar to ours. In addition, Peck Electric competes with solar companies in the downstream value chain of solar energy. For example, Peck Electric faces competition from purely finance driven organizations that acquire customers and then subcontract out the installation of solar energy systems, from installation businesses that seek financing from external parties, from large construction companies and utilities, and increasingly from sophisticated electrical and roofing companies. Some of these competitors specialize in the residential solar energy market, and some may provide energy at lower costs than Peck Electric does. Further, some competitors are integrating vertically in order to ensure supply and to control costs. Many of Peck Electric’s competitors also have significant brand name recognition and have extensive knowledge of Peck Electric’s target markets.

 

If Peck Electric is unable to complete in the market, it will have an adverse effect on its business, financial condition, and results of operations.

 

Adverse economic conditions may have material adverse consequences on Peck Electric’s business, results of operations and financial condition.

 

Unpredictable and unstable changes in economic conditions, including recession, inflation, increased government intervention, or other changes, may adversely affect Peck Electric’s general business strategy. Peck Electric relies upon its ability to generate additional sources of liquidity and it may need to raise additional funds through public or private debt or equity financings in order to fund existing operations or to take advantage of opportunities, including acquisitions of complementary businesses or technologies. Any adverse event would have a material adverse impact on its business, results of operations and financial condition.

 

Peck Electric’s business is concentrated in certain markets, putting it at risk of region-specific disruptions.

 

As of December 31, 2018, a vast majority of Peck Electric’s total installations were in Vermont. Peck Electric maintains offices in Vermont. Management expects its near-term future growth to occur throughout the northeast, and to further expand its customer base and operational infrastructure. Accordingly, Peck Electric’s business and results of operations are particularly susceptible to adverse economic, regulatory, political, weather and other conditions in such markets and in other markets that may become similarly concentrated.

 

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If Peck Electric is unable to retain and recruit qualified technicians and advisors, or if its key executives, key employees or consultants discontinue their employment or consulting relationship with it, it may delay its development efforts or otherwise harm its business.

 

Peck Electric may not be able to attract or retain qualified management or technical personnel in the future due to the intense competition for qualified personnel among solar, energy, and other businesses. Peck Electric’s industry has experienced a high rate of turnover of management personnel in recent years. If Peck Electric is not able to attract, retain, and motivate necessary personnel to accomplish its business objectives, it may experience constraints that will significantly impede the successful development of any product candidates, its ability to raise additional capital, and its ability to implement its overall business strategy.

 

Peck Electric is highly dependent on members of its management and technical staff. Its success also depends on its ability to continue to attract, retain and motivate highly skilled junior, mid-level, and senior managers as well as junior, mid-level, and senior technical personnel. The loss of any of its executive officers, key employees, or consultants and our inability to find suitable replacements could potentially harm its business, financial condition, and prospects. Peck Electric may be unable to attract and retain personnel on acceptable terms given the competition among solar and energy companies. Certain of Peck Electric’s current officers, directors, and/or consultants hereafter appointed may from time to time serve as officers, directors, scientific advisors, and/or consultants of other solar and energy companies. Peck Electric does not maintain “key man” insurance policies on any of its officers or employees. Other than certain members of its senior management team, all of Peck Electric’s employees are employed “at will” and, therefore, each employee may leave its employment and join a competitor at any time.

 

Peck Electric plans to grant stock options, restricted stock grants, or other forms of equity awards in the future as a method of attracting and retaining employees, motivating performance, and aligning the interests of employees with those of Peck Electric shareholders. If it is unable to implement and maintain equity compensation arrangements that provide sufficient incentives, it may be unable to retain its existing employees and attract additional qualified candidates. If it is unable to retain its existing employees and attract additional qualified candidates, Peck Electric’s business and results of operations could be adversely affected.

 

The execution of Peck Electric’s business plan and development strategy may be seriously harmed if integration of its senior management team is not successful.

 

As Peck Electric continues to grow and acquire new businesses, it may experience significant changes in its senior management team. Failure to integrate the Board and senior management teams may negatively affect the operations of Peck Electric’s business.

 

Peck Electric may not successfully implement its business model.

 

Peck Electric’s business model is predicated on its ability to provide solar systems at a profit, and through organic growth, geographic expansion, and strategic acquisitions. Management intends to continue to operate as it has have previously with sourcing and marketing methods that it has used successfully in the past. However, management cannot assure that its methods will continue to attract new customers nor that it can maintain the same profitability in the very competitive solar systems marketplace.

 

In the event customers resist paying the prices projected in its business plan to purchase solar installations, Peck Electric’s business, financial condition, and results of operations will be materially and adversely affected.

 

Peck Electric may not be able to effectively manage its growth.

 

Peck Electric’s future growth, if any, may cause a significant strain on its management and its operational, financial, and other resources. Peck Electric’s ability to manage its growth effectively will require it to implement and improve its operational, financial, and management systems and to expand, train, manage, and motivate its employees. These demands may require the hiring of additional management personnel and the development of additional expertise by management. Any increase in resources used without a corresponding increase in its operational, financial, and management systems could have a material adverse effect on its business, financial condition, and results of operations.

 

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Peck Electric may not realize the anticipated benefits of future acquisitions, and integration of these acquisitions may disrupt its business and management.

 

In the future, Peck Electric may acquire companies, project pipelines, products or technologies or enter into joint ventures or other strategic initiatives. It may not realize the anticipated benefits of this acquisition or any other future acquisition, and any acquisition has numerous risks. These risks include the following:

 

● difficulty in assimilating the operations and personnel of the acquired company;

 

● difficulty in effectively integrating the acquired technologies or products with its current technologies;

 

● difficulty in maintaining controls, procedures and policies during the transition and integration;

 

● disruption of its ongoing business and distraction of management and employees from other opportunities and challenges due to integration issues;

 

● difficulty integrating the acquired company’s accounting, management information, and other administrative systems;

 

● inability to retain key technical and managerial personnel of the acquired business;

 

● inability to retain key customers, vendors, and other business partners of the acquired business;

 

● inability to achieve the financial and strategic goals for the acquired and combined businesses;

 

● incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact operating results;

 

● potential failure of the due diligence processes to identify significant issues with product quality, intellectual property infringement, and other legal and financial liabilities, among other things;

 

● potential inability to assert that internal controls over financial reporting are effective; and

 

● potential inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay or prevent such acquisitions.

 

Mergers and acquisitions of companies are inherently risky and, if Peck Electric does not complete the integration of acquired businesses successfully and in a timely manner, it may not realize the anticipated benefits of the acquisitions to the extent anticipated, which could adversely affect its business, financial condition, or results of operations.

 

With respect to providing electricity on a price-competitive basis, solar systems face competition from traditional regulated electric utilities, from less-regulated third party energy service providers and from new renewable energy companies.

 

The solar energy and renewable energy industries are both highly competitive and continually evolving as participants strive to distinguish themselves within their markets and compete with large traditional utilities. Peck Electric believes that its primary competitors are the traditional utilities that supply electricity to its potential customers. Traditional utilities generally have substantially greater financial, technical, operational and other resources than it does. As a result, these competitors may be able to devote more resources to the research, development, promotion, and sale of their products or respond more quickly to evolving industry standards and changes in market conditions than Peck Electric can. Traditional utilities could also offer other value-added products or services that could help them to compete with Peck Electric even if the cost of electricity they offer is higher than that of Peck Electric. In addition, a majority of utilities’ sources of electricity is non-solar, which may allow utilities to sell electricity more cheaply than electricity generated by Peck Electric’s solar energy systems.

 

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Peck Electric also competes with companies that are not regulated like traditional utilities but that have access to the traditional utility electricity transmission and distribution infrastructure pursuant to state and local pro-competitive and consumer choice policies. These energy service companies are able to offer customers electricity supply-only solutions that are competitive with Peck Electric’s solar energy system options on both price and usage of renewable energy technology while avoiding the long-term agreements and physical installations that Peck Electric’s current fund-financed business model requires. This may limit Peck Electric’s ability to attract new customers; particularly those who wish to avoid long-term contracts or have an aesthetic or other objection to putting solar panels on their roofs.

 

As the solar industry grows and evolves, Peck Electric will also face new competitors who are not currently in the market. Low technological barriers to entry characterize Peck Electric’s industry and well-capitalized companies could choose to enter the market and compete with it. Peck Electric’s failure to adapt to changing market conditions and to compete successfully with existing or new competitors will limit its growth and will have a material adverse effect on its business and prospects.

 

Developments in alternative technologies or improvements in distributed solar energy generation may materially adversely affect demand for Peck Electric’s offerings.

 

Significant developments in alternative technologies, such as advances in other forms of distributed solar power generation, storage solutions such as batteries, the widespread use or adoption of fuel cells for residential or commercial properties or improvements in other forms of centralized power production may materially and adversely affect Peck Electric’s business and prospects in ways management does not currently anticipate. Any failure by Peck Electric to adopt new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay deployment of its solar energy systems, which could result in product obsolescence, the loss of competitiveness of our systems, decreased revenue and a loss of market share to competitors.

 

Due to the limited number of suppliers in Peck Electric’s industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, price change, imposition of tariffs or duties or other limitation in its ability to obtain components or technologies it uses could result in sales and installation delays, cancellations, and loss of market share.

 

While Peck Electric purchases its products from several different suppliers, if one or more of the suppliers that it relies upon to meet anticipated demand ceases or reduces production due to its financial condition, acquisition by a competitor or otherwise, is unable to increase production as industry demand increases or is otherwise unable to allocate sufficient production to Peck Electric, it may be difficult to quickly identify alternate suppliers or to qualify alternative products on commercially reasonable terms, and Peck Electric’s ability to satisfy this demand may be adversely affected. There are a limited number of suppliers of solar energy system components and technologies. While Peck Electric believes there are other sources of supply for these products available, transitioning to a new supplier may result in additional costs and delays in acquiring its solar products and deploying its systems. These issues could harm its business or financial performance.

 

In addition, the acquisition of a component supplier or technology provider by one of Peck Electric’s competitors could limit its access to such components or technologies and require significant redesigns of its solar energy systems or installation procedures and have a material adverse effect on its business.

 

There have also been periods of industry-wide shortages of key components, including solar panels, in times of industry disruption. The manufacturing infrastructure for some of these components has a long lead-time, requires significant capital investment and relies on the continued availability of key commodity materials, potentially resulting in an inability to meet demand for these components. The solar industry is frequently experiencing significant disruption and, as a result, shortages of key components, including solar panels, may be more likely to occur, which in turn may result in price increases for such components. Even if industry-wide shortages do not occur, suppliers may decide to allocate key components with high demand or insufficient production capacity to more profitable customers, customers with long-term supply agreements or customers other than Peck Electric and its supply of such components may be reduced as a result.

 

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Typically, Peck Electric purchases the components for its solar energy systems on an as-needed basis and does not operate under long-term supply agreements. The vast majority of its purchases are denominated in U.S. dollars. Since its revenue is also generated in U.S. dollars, Peck Electric is mostly insulated from currency fluctuations. However, since its suppliers often incur a significant amount of their costs by purchasing raw materials and generating operating expenses in foreign currencies, if the value of the U.S. dollar depreciates significantly or for a prolonged period of time against these other currencies this may cause its suppliers to raise the prices they charge it, which could harm its financial results. Since Peck Electric purchases most of the solar photovoltaic modules it uses from China, it is particularly exposed to exchange rate risk from increases in the value of the Chinese Renminbi. Any supply shortages, delays, price changes or other limitation in its ability to obtain components or technologies it uses could limit its growth, cause cancellations or adversely affect its profitability, and result in loss of market share and damage to its brand.

 

Peck Electric acts as the licensed general contractor for its customers and is subject to risks associated with construction, cost overruns, delays, regulatory compliance and other contingencies, any of which could have a material adverse effect on its business and results of operations.

 

Peck Electric is a licensed contractor. It is normally the general contractor, electrician, construction manager, and installer for it solar energy systems. Peck Electric may be liable to customers for any damage it causes to their home, belongings or property during the installation of its systems. For example, Peck Electric penetrates its customers’ roofs during the installation process and may incur liability for the failure to adequately weatherproof such penetrations following the completion of installation of solar energy systems. In addition, because the solar energy systems Peck Electric deploys are high-voltage energy systems, Peck Electric may incur liability for the failure to comply with electrical standards and manufacturer recommendations. Because Peck Electric’s profit on a particular installation is based in part on assumptions as to the cost of such project, cost overruns, delays, or other execution issues may cause it to not achieve its expected results or cover its costs for that project.

 

In addition, the installation of solar energy systems is subject to oversight and regulation in accordance with national, state, and local laws and ordinances relating to building, fire and electrical codes, safety, environmental protection, utility interconnection and metering, and related matters. Peck Electric also relies on certain employees to maintain professional licenses in many of the jurisdictions in which it operates, and its failure to employ properly licensed personnel could adversely affect its licensing status in those jurisdictions. It is difficult and costly to track the requirements of every authority having jurisdiction over its operations and its solar energy systems. Any new government regulations or utility policies pertaining to its systems, or changes to existing government regulations or utility policies pertaining to its systems, may result in significant additional expenses to its customers and, as a result, could cause a significant reduction in demand for its systems.

 

Compliance with occupational safety and health requirements and best practices can be costly, and noncompliance with such requirements may result in potentially significant monetary penalties, operational delays, and adverse publicity.

 

The installation of solar energy systems requires Peck Electric’s employees to work at heights with complicated and potentially dangerous electrical systems. The evaluation and modification of buildings as part of the installation process requires Peck Electric’s employees to work in locations that may contain potentially dangerous levels of asbestos, lead, mold or other materials known or believed to be hazardous to human health. Peck Electric also maintains a fleet of trucks and other vehicles to support its installers and operations. There is substantial risk of serious injury or death if proper safety procedures are not followed. Peck Electric’s operations are subject to regulation under the U.S. Occupational Safety and Health Act, or OSHA, the U.S. Department of Transportation, or DOT, and equivalent state laws. Changes to OSHA or DOT requirements, or stricter interpretation or enforcement of existing laws or regulations, could result in increased costs. If Peck Electric fails to comply with applicable OSHA regulations, even if no work-related serious injury or death occurs, it may be subject to civil or criminal enforcement and be required to pay substantial penalties, incur significant capital expenditures or suspend or limit operations. While Peck Electric has not experienced a high level of injuries to date, high injury rates could expose it to increased liability. In the past, Peck Electric has had workplace accidents and received citations from OSHA regulators for alleged safety violations, resulting in fines. Any such accidents, citations, violations, injuries or failure to comply with industry best practices may subject it to adverse publicity, damage its reputation and competitive position and adversely affect its business.

 

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Problems with product quality or performance may cause Peck Electric to incur warranty expenses, damage its market reputation, and prevent it from maintaining or increasing its market share.

 

If Peck Electric’s products fail to perform as expected while under warranty, or if Peck Electric is unable to support the warranties, sales of its products may be adversely affected, or its costs may increase, and its business, results of operations, and financial condition could be materially and adversely affected.

 

Peck Electric may also be subject to warranty or product liability claims against it that are not covered by insurance or are in excess of its available insurance limits. In addition, quality issues can have various other ramifications, including delays in the recognition of revenue, loss of revenue, loss of future sales opportunities, increased costs associated with repairing or replacing products, and a negative impact on its goodwill and reputation. The possibility of future product failures could cause us to incur substantial expenses to repair or replace defective products. Furthermore, widespread product failures may damage its market reputation and reduce our market share causing sales to decline.

 

A failure to comply with laws and regulations relating to Peck Electric’s interactions with current or prospective commercial or residential customers could result in negative publicity, claims, investigations, and litigation, and adversely affect its financial performance.

 

Peck Electric’s business includes contracts and transactions with commercial and residential customers. It must comply with numerous federal, state, and local laws and regulations that govern matters relating to its interactions with residential consumers, including those pertaining to privacy and data security, consumer financial and credit transactions, home improvement contracts, warranties, and door-to-door solicitation. These laws and regulations are dynamic and subject to potentially differing interpretations, and various federal, state and local legislative and regulatory bodies may expand current laws or regulations, or enact new laws and regulations, regarding these matters. Changes in these laws or regulations or their interpretation could dramatically affect how Peck Electric does business, acquire customers, and manage and use information it collects from and about current and prospective customers and the costs associated therewith. Peck Electric strives to comply with all applicable laws and regulations relating to its interactions with residential customers. It is possible, however, that these requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or Peck Electric’s practices. Non-compliance with any such law or regulations could also expose Peck Electric to claims, proceedings, litigation and investigations by private parties and regulatory authorities, as well as substantial fines and negative publicity, each of which may materially and adversely affect Peck Electric’s business.

 

If Peck Electric experiences a significant disruption in its information technology systems or if Peck Electric fails to implement new systems and software successfully, its business could be adversely affected.

 

Peck Electric depends on information systems throughout its company to process orders, manage inventory, process and bill shipments and collect cash from its customers, respond to customer inquiries, contribute to its overall internal control processes, maintain records of its property, plant and equipment, and record and pay amounts due vendors and other creditors. If Peck Electric were to experience a prolonged disruption in its information systems that involve interactions with customers and suppliers, it could result in the loss of sales and customers and/or increased costs, which could adversely affect its overall business operation.

 

Seasonality may cause fluctuations in Peck Electric’s financial results.

 

Peck Electric often finds that some customers tend to book projects by the end of a calendar year to realize the benefits of available subsidy programs prior to year-end. This results in third and fourth quarter sales being more robust usually at the expense of the first quarter. In the future this seasonality may cause fluctuations in financial results. In addition, other seasonality trends may develop and the existing seasonality that Peck Electric experiences may change.

 

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Risk Factors Relating to Jensyn and the Business Combination

 

Following the consummation of the Business Combination, our only significant asset will be our ownership of Peck Electric and such ownership may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our Common Stock or satisfy our other financial obligations.

 

Following the consummation of the Business Combination, we will have no direct operations and no significant assets other than the ownership of Peck Electric. We will depend on Peck Electric for distributions, loans and other payments to generate the funds necessary to meet our financial obligations, including our expenses as a publicly traded company, and to pay any dividends with respect to our preferred stock and Common Stock. Legal and contractual restrictions in agreements governing the indebtedness of Peck Electric, as well as the financial condition and operating requirements of Peck Electric, may limit our ability to obtain cash from Peck Electric. The earnings from, or other available assets of, Peck Electric may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our Common Stock or satisfy its other financial obligations.

 

We may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002 that will be applicable to us after the Business Combination.

 

Peck Electric is not currently subject to Section 404 of the Sarbanes-Oxley Act of 2002. However, following the Business Combination, the combined company will be required to provide management’s attestation on internal controls commencing with the Company’s annual report for the year ending December 31, 2019. The standards required for a public company under Section 404 of the Sarbanes-Oxley Act of 2002 are significantly more stringent than those required of Peck Electric as a privately-held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to the Company after the Business Combination. If we are not able to implement the additional requirements of Section 404 in a timely manner or with adequate compliance, we may not be able to assess whether our internal controls over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of our Common Stock.

 

Nasdaq may delist our securities from its exchange which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

 

Our securities are currently listed on Nasdaq. We cannot assure you that our securities will continue to be listed on Nasdaq in the future or after the Business Combination. We intend to apply to continue to list our Common Stock on Nasdaq under the symbol “PECK” upon the closing of the Business Combination. In order to continue listing our securities on Nasdaq, we must maintain certain financial, distribution and stock price levels. We must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). We cannot assure you that we will be able to continue to meet these listing requirements.

 

Subsequent to the consummation of the Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.

 

Although we have conducted due diligence on Peck Electric, we cannot assure you that this diligence revealed all material issues that may be present in Peck Electric’s business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of our and Peck Electric’s control will not later arise. As a result, we may be forced to later write-down or write-off assets, restructure its operations, or incur impairment or other charges that could result in losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about the combined company or its securities. In addition, charges of this nature may cause us to be unable to obtain future financing on favorable terms or at all.

 

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Our initial stockholders have agreed to vote in favor of our initial business combination, regardless of how our public stockholders vote.

 

Unlike many other blank check companies in which the founders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, our initial stockholders and their transferees have agreed to vote any shares of Jensyn Common Stock owned by them in favor of our initial business combination. As of the date hereof, our initial stockholders and their transferees own shares equal to 54% of our issued and outstanding shares of Common Stock (which does not include private placement shares). Accordingly, it is more likely that the necessary stockholder approval will be received for the Business Combination than would be the case if our initial stockholders and their transferees agreed to vote any shares of Jensyn Common Stock owned by them in accordance with the majority of the votes cast by our public stockholders.

 

We will incur significant transaction and transition costs in connection with the Business Combination.

 

We expect to incur significant, non-recurring costs in connection with consummating the Business Combination and Peck Electric operating as a public company. All expenses incurred in connection with the Exchange Agreement and the transactions contemplated thereby (including the Business Combination), including all legal, accounting, investment banking and other fees, expenses and costs, will be paid by the party incurring such fees, expenses and costs.

 

Jensyn’s transaction expenses as a result of the Business Combination are currently estimated at approximately $1,724,000, which is comprised of (i) a $780,000 deferred underwriting commissions to the underwriters of our IPO, (ii) an estimated $530,000 to investment bankers and consultants, (iii) an estimated $250,000 for legal and accounting services, in professional fees and expenses, (iv) $70,000 payable to Primary Capital, LLC in consideration of the issuance of its fairness opinion; (v) approximately $94,000 relating to other fees and expenses incurred relating to the Business Combination and (v) approximately $0 in fees and expenses associated with the exploration of potential business combinations not related to the Business Combination. This amount includes the expenses incurred in connection with the filing, printing and mailing of this proxy statement and the solicitation of the approval of our stockholders, and all filing and other fees paid to the SEC, which is estimated at approximately $74,000.

 

The unaudited pro forma financial information included in this document may not be indicative of what our actual financial position or results of operations would have been.

 

The unaudited pro forma financial information in this proxy statement is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the Business Combination been completed on the dates indicated. See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for more information.

 

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We may waive one or more of the conditions to the Business Combination.

 

We may agree to waive, in whole or in part, some of the conditions to our obligations to complete the Business Combination, to the extent permitted by our amended and restated certificate of incorporation and applicable laws. For example, it is a condition to our obligations to close the Business Combination that there be no breach of Peck Electric’s representations and warranties as of the closing date. However, if our board of directors determines that any such breach is not material to the business of Peck Electric, then the board may elect to waive that condition and close the Business Combination. We are not able to waive the condition that our stockholders approve the Business Combination.

 

Even if we consummate the Business Combination, there is no guarantee that the public warrants will ever be “in the money”, and they may expire worthless and the terms of our warrants may be amended.

 

The exercise price for our warrants is $11.50 per share. There is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless.

 

In addition, the warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders. Accordingly, we may amend the terms of the warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the warrants with the consent of at least 65% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of our Common Stock purchasable upon exercise of a warrant.

 

Our directors and officers have a conflict of interest in determining to pursue the acquisition of Peck Electric, since certain of their interests, and certain interests of their affiliates and associates, are different from or in addition to (and which may conflict with) the interests of our stockholders.

 

Our initial stockholders, including our officers and directors, have interests in and arising from the Business Combination that are different from or in addition to (and which may conflict with) the interests of our public stockholders, which may result in a conflict of interest. These interests include:

 

  the fact that our initial stockholders paid an aggregate of $25,029 for their founder shares, and such shares should have a significantly higher value at the time of the Business Combination;
     
  if Jensyn is unable to complete a business combination within the required time period, our officers and directors will not have redemption rights with respect to the founder shares that they own;
     
  if Jensyn is unable to complete a business combination within the required time period, our initial stockholders will be personally liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Jensyn for services rendered or contracted for or products sold to Jensyn, but only if such a vendor or target business has not executed such a waiver;
     
  the fact that upon consummation of the Business Combination, our initial stockholders will be repaid approximately $2,100,000 of loans that they made to us and Jensyn Integration Services, LLC, a company controlled by certain of our initial stockholders, will be paid an administrative fee of up to $340,000.
     
  the fact that certain of our initial stockholders and special advisors may be required to forfeit shares of the Company’s common stock if neither the Adjusted EBITDA Target nor the Stock Price Target is achieved or if the Company uses shares to satisfy its obligations to induce investors to make an equity investment in the Company, and may be issued additional shares of the Company’s common stock if either the Adjusted EBITDA Target or Stock Price Target is achieved.
     
  the continued indemnification of current directors and officers of the Company and the continuation of directors’ and officers’ liability insurance after the Business Combination.

 

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These interests may influence our directors in making their recommendation that you vote in favor of the Business Combination Proposal, and the transactions contemplated thereby.

 

Our ability to successfully effect the Business Combination and successfully operate the business thereafter will be largely dependent upon the efforts of certain key personnel, including the key personnel of Peck Electric, all of whom we expect to stay with Peck Electric following the Business Combination. The loss of such key personnel could negatively impact the operations and profitability of the post-combination business.

 

Our ability to successfully effect the Business Combination and successfully operate the business is dependent upon the efforts of certain key personnel, including the key personnel of Peck Electric. Although we expect all of such key personnel to remain with Peck Electric following the Business Combination, it is possible that we will lose some key personnel, the loss of which could negatively impact the operations and profitability of our post-combination business. Furthermore, while we have scrutinized individuals we intend to engage to stay with Peck Electric following the Business Combination, our assessment of these individuals may not prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.

 

A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.

 

Following the Business Combination, the price of our securities may fluctuate significantly due to the market’s reaction to the Business Combination and general market and economic conditions. An active trading market for our securities following the Business Combination may never develop or, if developed, it may not be sustained. In addition, the price of our securities after the Business Combination can vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports. Additionally, if our securities are not listed on, or become delisted from, the Nasdaq Capital Market for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on the Nasdaq Capital Market or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

 

Pursuant to the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act for so long as we are an “emerging growth company.”

 

Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting, and generally requires in the same report a report by our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. Following the Business Combination, the combined company will be required to provide management’s attestation on internal controls effective December 31, 2019. However, under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until we are no longer an “emerging growth company.” We could be an “emerging growth company” until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of our IPO, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

 

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In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. An “emerging growth company” can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have chosen to “opt out” of such extended transition period and, as a result, we must comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

 

If the Business Combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of our securities may decline.

 

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of the Company’s securities prior to the closing of the Business Combination may decline. The market values of our securities at the time of the Business Combination may vary significantly from their prices on the date the Exchange Agreement was executed, the date of this proxy statement, or the date on which our stockholders vote on the Business Combination.

 

In addition, following the Business Combination, fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Prior to the Business Combination, there has not been a public market for Peck Electric’s stock and trading in the shares of the Company’s Common Stock has not been active. Accordingly, the valuation ascribed to Peck Electric and our Common Stock in the Business Combination may not be indicative of the price that will prevail in the trading market following the Business Combination. If an active market for our securities develops and continues, the trading price of our securities following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our securities and our securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities may not recover and may experience a further decline.

 

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Factors affecting the trading price of the Company’s securities following the Business Combination may include:

 

  actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;
     
  changes in the market’s expectations about our operating results;
     
  success of competitors;
     
  our operating results failing to meet the expectation of securities analysts or investors in a particular period;
     
  changes in financial estimates and recommendations by securities analysts concerning the Company or the consumer goods and services market in general;
     
  operating and stock price performance of other companies that investors deem comparable to the Company;
     
  our ability to market new and enhanced products on a timely basis;
     
  changes in laws and regulations affecting our business;
     
  commencement of, or involvement in, litigation involving the Company;
     
  changes in the Company’s capital structure, such as future issuances of securities or the incurrence of additional debt;
     
  the volume of shares of our Common Stock available for public sale;
     
  any major change in our board or management;
     
  sales of substantial amounts of Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and
     
  general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

 

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general, and Nasdaq have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to the Company could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

 

Following the Business Combination, if securities or industry analysts do not publish or cease publishing research or reports about the Company, its business, or its market, or if they change their recommendations regarding our Common Stock adversely, the price and trading volume of our Common Stock could decline.

 

The trading market for our Common Stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors. Securities and industry analysts do not currently, and may never, publish research on the Company. If no securities or industry analysts commence coverage of the Company, our stock price and trading volume would likely be negatively impacted. If any of the analysts who may cover the Company change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our Common Stock would likely decline. If any analyst who may cover the Company were to cease coverage of the Company or fail to regularly publish reports on it, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

 

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We have not registered the shares of our Common Stock issuable upon exercise of the warrants under the Securities Act or states securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants and causing such warrants to expire worthless.

 

We have not registered the public shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis under certain circumstances specified in the warrant agreement. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, unless an exemption is available. In no event will we be required to issue cash, securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state securities laws. If the issuance of the shares upon exercise of the warrants is not so registered or qualified, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Common Stock included in the units.

 

The grant of registration rights to our initial stockholders may make it more difficult to complete our initial business combination, including the Business Combination, and the future exercise of such rights may adversely affect the market price of our Common Stock.

 

Pursuant to the registration rights agreement entered into concurrently with the closing of our IPO, our initial stockholders and their permitted transferees can demand that we register the founder shares, private placement units, private placement shares and private placement warrants, and the shares of Common Stock issuable upon exercise of the private placement warrants, as the case may be. The registration rights will be exercisable with respect to the founder shares, the private placement units, private placement shares and the private placement warrants and the shares of Common Stock issuable upon exercise of such private placement warrants, as the case may be, at any time after the Company consummates the Business Combination and such holders are no longer subject to applicable lock-up periods, as further described under “Description of Securities—Authorized and Outstanding Stock—Founder Shares and Private Placement Shares.” We will bear the cost of registering these securities. If such persons exercise their registration rights in full, there will be an additional 1,269,500 shares of Common Stock and up to 147,250 shares of Common Stock issuable on exercise of the private placement warrants eligible for trading in the public market. Jensyn and the Peck Electric Stockholders will also enter into a registration rights agreement upon the closing of the Business Combination that provides for the registration of our Common Stock issued to the Peck Electric Stockholders pursuant to the Share Exchange Agreement.

 

Warrants will become exercisable for our Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

 

Outstanding warrants to purchase an aggregate of 4,194,500 shares of our Common Stock will become exercisable for a like number of shares of our Common Stock in accordance with the terms of the warrant agreement governing those securities. These warrants consist of 3,900,000 warrants originally sold as part of units in our IPO and 294,500 private warrants sold as part of the units issued in a private placement simultaneously with the consummation of the Company’s IPO. Each warrant entitles its holder to purchase one-half of one share of Jensyn’s Common Stock at an exercise price of $11.50 per full share. The warrants will become exercisable on the later of 30 days after the completion of Jensyn’s initial business combination or 12 months from the consummation of Jensyn’s IPO, and expire at 5:00 p.m., New York time, five years after the completion of Jensyn’s initial business combination or earlier upon redemption or liquidation. To the extent such warrants are exercised, additional shares of our Common Stock will be issued, which will result in dilution to the then existing holders of Common Stock of the Company and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our Common Stock.

 

 44 
 

 

Our public stockholders may experience dilution as a consequence of, among other transactions, the exchange by the Stockholders of Peck Electric of their stock in Peck Electric for Jensyn Common Stock after the Business Combination. Having a minority share position may reduce the influence that our current stockholders have on the management of the Company.

 

It is anticipated that, upon completion of the Business Combination, Jensyn’s public stockholders will retain an ownership interest of approximately 17% in the Company, our private placement holders and their transferees will retain an ownership interest of approximately 6% in the Company, and our initial stockholders and Sponsors and their transferees will retain an ownership interest of approximately 18% in the Company. If any of Jensyn’s stockholders exercise their conversion rights, the ownership interest in the Company of the Company’s public stockholders will decrease and the ownership interest in the Company of our private placement holders will increase. Upon the closing of the transactions contemplated by the Exchange Agreement, the Stockholders of Peck Electric will exchange their shares of capital stock in Peck Electric for 3,234,501 shares of the Company’s common stock representing approximately 59% of our outstanding shares of capital stock after giving effect to the business combination.

 

Additionally, in the event that Peck Electric’s Adjusted EBITDA (as defined in the Exchange Agreement) for the twelve month period commencing on the first day of the first full calendar quarter following the Closing (the “Earnout Period”) is $5,000,000 or more (the “Adjusted EBITDA Target”) or the closing price of the Company’s common stock is $12.00 or more per share at any time during the Earnout Period (the “Stock Price Target”), then the Company will issue 898,473 shares of the Company’s common stock to the Stockholders and 11,231 shares of the Company’s common stock to Exit Strategy Partners, LLC, an advisor that introduced Peck Electric to the Company and issue to the Sponsors a number of shares of the Company’s common stock equal to the number of shares of the Company’s common stock forfeited by such stockholders less the number of shares issued to the advisor. As a result of the Share Exchange, Peck Electric will become a wholly owned subsidiary of Jensyn.

 

We may redeem the public warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their warrants worthless.

 

We will have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration at a price of $0.01 per warrant, provided that (i) the last reported sale price of our Common Stock equals or exceeds $15.00 per share for any 20 trading days within the 30 trading-day period ending on the third business day before we send the notice of such redemption and (ii) on the date we give notice of redemption and during the entire period thereafter until the time the warrants are redeemed, there is an effective registration statement under the Securities Act covering the shares of our Common Stock issuable upon exercise of the public warrants and a current prospectus relating to them is available. Redemption of the outstanding public warrants could force holders of public warrants:

 

  to exercise their warrants and pay the exercise price therefor at a time when it may be disadvantageous for them to do so;
     
  to sell their warrants at the then-current market price when they might otherwise wish to hold their warrants; or
     
  to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of their warrants.

 

 45 
 

 

Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

 

The Company’s certificate of incorporation and bylaws contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors. These provisions include:

 

  A classified board of directors with three-year staggered terms, which may delay the ability of stockholders to the change the membership of a majority of our board of directors;
     
  no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
     
  the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
     
  the ability of our board of directors to determine whether to issue shares of our preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
     
  a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
     
  the requirement that an annual meeting of stockholders may be called only by the chairman of the board of directors, the chief executive officer, or the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;
     
  limiting the liability of, and providing indemnification to, our directors and officers;
     
  controlling the procedures for the conduct and scheduling of stockholder meetings;
     
  providing that directors may be removed prior to the expiration of their terms by stockholders only for cause; and
     
  advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.

 

 46 
 

 

These provisions, alone or together, could delay hostile takeovers and changes in control of the Company or changes in our board of directors and management.

 

As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the DGCL, which prevents some stockholders holding more than 15% of our outstanding Common Stock from engaging in certain business combinations without approval of the holders of substantially all of Jensyn’s outstanding Common Stock. Any provision of our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Common Stock and could also affect the price that some investors are willing to pay for our Common Stock.

 

Activities taken by affiliates of the Company to purchase, directly or indirectly, public shares will increase the likelihood of approval of the Business Combination Proposal and other proposals and may affect the market price of the Company’s securities during the buyback period.

 

Our directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions either prior to or following the consummation of the Business Combination. None of our directors, officers, advisors or their affiliates will make any such purchases when such parties are in possession of any material non-public information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act. Although none of our directors, officers, advisors or their affiliates currently anticipate paying any premium purchase price for such public shares, in the event such parties do, the payment of a premium may not be in the best interest of those stockholders not receiving any such additional consideration. There is no limit on the number of shares that could be acquired by our directors, officers, advisors or their affiliates, or the price such parties may pay.

 

If such transactions are effected, the consequence could be to cause the Business Combination to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the Business Combination Proposal and other proposals and would likely increase the chances that such proposals would be approved. If the market does not view the Business Combination positively, purchases of public shares may have the effect of counteracting the market’s view, which would otherwise be reflected in a decline in the market price of our securities. In addition, the termination of the support provided by these purchases may materially adversely affect the market price of our securities.

 

As of the date of this proxy statement, no agreements with respect to the private purchase of public shares by the Company or the persons described above have been entered into with any such investor or holder. We will file a Current Report on Form 8-K with the SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or other proposals.

 

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.

 

We are subject to laws and regulations enacted by national, regional and local governments, including non-U.S. governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations.

 

 47 
 

 

The independent registered public accounting firm for Jensyn has identified certain control deficiencies that constitute a material weakness in internal control over financial reporting of each entity.

 

In connection with its audits of Jensyn’s financial statements for the years ended December 31, 2018 and 2017, Jensyn’s independent registered public accounting firm identified that it had inadequate control procedures and a lack of supervisory review over the closing process. This control deficiency constitutes a material weakness in internal control over financial reporting. As a result, Jensyn’s principal executive officer and principal financial and accounting officer have concluded that during the years ended December 31, 2018 and 2017, Jensyn’s disclosure controls and procedures and internal control over financial reporting were not effective. Jensyn plans to take steps to remedy this material weakness in conjunction with the Business Combination that will provide additional resources.

 

Risk Factors Relating to Conversion

 

Unlike many blank check companies, we do not have a specified maximum percentage redemption threshold. The absence of such a redemption threshold would make it easier for us to consummate a business combination with which a substantial number of our stockholders do not agree.

 

Since we have no specified percentage threshold for redemption in our amended and restated certificate of incorporation other than the 20% threshold, our structure is different in this respect from the structure that has been used by many blank check companies. Many blank check companies would not be able to consummate a business combination if the holders of the company’s public shares voted against a proposed business combination and elected to redeem or convert more than a specified percentage of the shares sold in such company’s initial public offering, which percentage threshold has typically been between 19.99% and 39.99%. Each conversion of our public shares into cash by our public stockholders will decrease the amount in our Trust Account, which holds approximately $6,160,100 as of March 28, 2019.

 

However, we are limited by the need to have at least $5,000,001 in net tangible assets. At December 31, 2018 our net tangible assets were approximately $4,636,000. We expect that as a result of: (a) the net tangible assets acquired as part of a Business Combination, (b) Company liabilities converted to equity, (c) new equity capital raised, or a combination thereof, will result in the net tangible assets of the Company being greater than $5,000,001. Therefore, we could still consummate a proposed Business Combination regardless of the number of common shares redeemed so long as a majority of shares voted at the meeting are voted in favor of the proposed Business Combination. This is different than other similarly structured blank check companies where stockholders are offered the right to convert their shares only when they vote against a proposed Business Combination.

 

To reduce the number of potential conversions of our public shares, we may enter into agreements with certain registered broker-dealers which will provide that if the broker-dealer introduces an investor who acquires public shares, votes in favor of the Business Combination and elects not to exercise conversion rights with respect to the public shares, we will pay the broker-dealer a fee equal to 5% of the amount determined by multiplying the number of public shares acquired by the investor by the per share amount payable to holders of public shares who exercise conversion rights.

 

If you or a “group” of stockholders of which you are a part are deemed to hold an aggregate of 20.0% or more of our Common Stock issued in the IPO, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 20.0% of our Common Stock issued in the IPO.

 

A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the outstanding public shares. We refer to such shares aggregating 20% or more of the shares sold in the offering as “Excess Shares”. In order to determine whether a stockholder is acting in concert or as a group with another stockholder, the Company will require each public stockholder seeking to exercise redemption rights to certify to the Company whether such stockholder is acting in concert or as a group with any other stockholder. Such certifications, together with other public information relating to stock ownership available to the Company at that time, such as Section 13D, Section 13G and Section 16 filings under the Exchange Act, will be the sole basis on which the Company makes the above-referenced determination. Your inability to redeem any Excess Shares will reduce your influence over our ability to consummate the Business Combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we consummate the Business Combination. And as a result, you will continue to hold that number of shares aggregating to 20.0% or more of the shares sold in our IPO and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a loss. Notwithstanding the foregoing, stockholders may challenge the Company’s determination as to whether a stockholder is acting in concert or as a group with another stockholder in a court of competent jurisdiction.

 

 48 
 

 

There is no guarantee that a stockholder’s decision whether to convert their shares for a pro rata portion of the Trust Account will put the stockholder in a better future economic position.

 

We can give no assurance as to the price at which a stockholder may be able to sell its public shares in the future following the completion of the Business Combination or any alternative business combination. Certain events following the consummation of any business combination, including the Business Combination, may cause an increase in our share price, and may result in a lower value realized now than a stockholder of Jensyn might realize in the future had the stockholder exercised their conversion rights. Similarly, if a stockholder does not convert their shares, the stockholder will bear the risk of ownership of the public shares after the consummation of any business combination, and there can be no assurance that a stockholder can sell its shares in the future for a greater amount than the conversion price set forth in this proxy statement. A stockholder should consult the stockholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

 

If our stockholders fail to comply with the conversion requirements specified in this proxy statement, they will not be entitled to convert their shares of our Common Stock for a pro rata portion of the funds held in our Trust Account.

 

Holders of public shares are required to affirmatively vote either for or against the Business Combination Proposal in order to exercise their rights to convert their shares for a pro rata portion of the Trust Account. In addition, in order to exercise their conversion rights, they are required to submit a request in writing and deliver their stock (either physically or electronically) to our transfer agent at least two business days prior to the special meeting. Stockholders electing to convert their shares will receive their pro rata portion of the Trust Account less franchise and income taxes payable, calculated as of two business days prior to the anticipated consummation of the Business Combination. See the section entitled “Special Meeting in Lieu of 2019 Annual Meeting of Jensyn Stockholders—Conversion Rights” for additional information on how to exercise your conversion rights.

 

 49 
 

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

The following unaudited pro forma condensed combined balance sheet as of December 31, 2018 and unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018 are based on the historical financial statements of Peck Electric and JAC after giving effect to the Business Combination. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018 was derived from Peck Electric’s audited statement of operations and JAC’s audited statement of operations, in each case, for the year ended December 31, 2018 and gives pro forma effect to the Business Combination as if it has been completed on January 1, 2018. The unaudited pro forma condensed combined balance sheet as of December 31, 2018 was derived from Peck Electric’s audited balance sheet and JAC’s audited balance sheet as of December 31, 2018 and gives pro forma effect to the Business Combination as if it had been completed on December 31, 2018.

 

The pro forma adjustments are based on information currently available. The unaudited pro forma condensed combined statement of operations does not purport to represent, and is not necessarily indicative of, what the actual results of operations of the combined company would have been had the Business Combination taken place on the dates indicated, nor is it indicative of the consolidated results of operations of the combined company for any future period. The unaudited pro forma condensed combined balance sheet does not purport to represent, and is not necessarily indicative of, what the actual financial condition of the combined company would have been had the Business Combination taken place on the date indicated, nor is it indicative of the consolidated financial condition of the combined company as of any future date. The unaudited pro forma condensed combined financial information should be read in conjunction with the sections entitled “Jensyn Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Peck Electric Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and notes thereto of JAC and Peck Electric included herein.

 

Peck Electric is considered to be the acquirer for accounting purposes because JAC is a non-operating public shell company; Peck Electric is a private operating company; all operations of the combined entity will be Peck Electric’s operations and will be managed and executed by Peck Electric’ officers and employees; and the principals of Peck Electric will become majority owners of the equity capital of the combined entity. Given the foregoing, the Business Combination is a capital transaction in substance and does not constitute the acquisition of a business for purposes of Financial Accounting Standards Board’s Accounting Standards Codification Topic 805, “Business Combinations,” or ASC 805. As a result, the assets and liabilities of Peck Electric and JAC will be carried at historical cost and there will be no step-up in basis or goodwill or other intangible assets recorded as a result of the Business Combination. All direct costs of the Business Combination will be accounted for as a charge to additional paid-in capital.

 

The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination. It has been prepared for informational purposes only and is subject to a number of uncertainties and assumptions. The historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give effect to pro forma events that are (1) directly attributable to the Business Combination, (2) factually supportable and (3) with respect to the statement of operations, expected to have a continuing impact on the results of the combined company.

 

The unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of redemptions of JAC common stock:

 

Assuming No Redemption: This presentation assumes that no JAC stockholders exercise redemption rights with respect to their public shares for a pro rata portion of the trust account; and
   
Assuming Maximum Redemption: This presentation assumes that the maximum number of JAC stockholders exercise their redemption rights such that the Trust Account, after giving effect to the JAC Obligations and the cash amounts necessary for the share redemptions and that JAC must retain at least $5,000,001 of net tangible book value upon completion of the Business Combination.

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The Peck Company, Inc.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of December 31, 2018

 

   Peck Electric   Jensyn Acquisition Corp   Pro Forma       Combined Pro Forma (assuming no   Additional Pro Forma Adjustments (assuming maximum     Combined Pro Forma (assuming maximum 
   Historical   Historical   Adjustments       redemption)   redemption)     redemption) 
ASSETS                                    
Current Assets                                     
Cash  $313,217   $30,929   $6,134,711   F    $3,896,360   $(3,583,143)  J   $313,217 
              (2,500,000)  G                    
              248,000   L                    
              (248,000)  L                    
              (82,497)  A                    
Accounts receivable   2,054,413    -    -        2,054,413    -       2,054,413 
Inventory   -    -    -        -    -       - 
Costs and estimated earnings in excess of  billings   718,984    -    -        718,984    -       718,984 
Other current assets   2,858    18,115    -        20,973    -       20,973 
Total Current Assets   3,089,472    49,044    3,552,214        6,690,730    (3,583,143)      3,107,587 
                                      
Cash and investments held in trust account   -    8,101,595    (2,049,381)  A    -    -       - 
              (6,134,711)  F                    
              82,497   A                    
Property and equipment (net)   7,121,539    -    -        7,121,539    -       7,121,539 
Other Assets   555,353    -    -        555,353    -       555,353 
                                      
Total Assets  $10,766,364   $8,150,639   $(4,549,381)      $14,367,622   $(3,583,143)     $10,784,479 
                                      
LIABILITIES AND STOCKHOLDERS’ EQUITY                                     
                                      
Current liabilities                                     
Accounts payable and accrued liabilities  $1,732,245   $678,421   $874,000   C    $1,732,245   $-      $1,732,245 
              (897,421)  E                    
              (655,000)  G                    
Billings in excess of costs and estimated earnings on uncompleted contracts   180,627    -    -        180,627    -       180,627 
Other current liabilities   69,648    -    -        69,648    -       69,648 
Line of credit   972,524    -    -        972,524    -       972,524 
Current portion of long term debt