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The Peck Company Holdings, Inc. Reclassifies Certain Items and Simplifies Third Quarter 2019 Financial Statements Included In Its November 12, 2019 Press Release

ISUNQ | November 22, 2019

SOUTH BURLINGTON, Vt.

The Peck Company Holdings, Inc. (NASDAQ:PECK), a leading commercial solar engineering, procurement and construction (“EPC”) company (the “Company”), decided upon the recommendation of its auditor to reclassify certain due to/due from stockholder agreements to present the net financial balances at September 30, 2019. In addition, the Company modified its Condensed Statement of Changes in Stockholders’ Equity (unaudited) for simplification purposes. Such information has been included in the Company’s Quarterly Report for the third quarter ended September 30, 2019 (the “Form 10-Q”), but was not reflected in the financial statements included in the press release dated November 12, 2019, which reported the Company’s third quarter 2019 results.

There were no changes to the revenue or income previously reported in such press release.

The Peck Company Holdings, Inc. Condensed Balance Sheets (Unaudited) September 30, 2019 and December 31, 2018

	September 30, 2019			December 31, 2018
Assets
Current Assets:
Cash	$	28,700		$	313,217
Accounts receivable, net of allowance		7,157,760			2,054,413
Costs and estimated earnings in excess of billings		3,427,990			718,984
Due from stockholders		0			2,858
Other current assets		210,852			0
Total current assets		10,825,302			3,089,472

Property and equipment:
Building and improvements		672,727			666,157
Vehicles		1,283,364			1,147,371
Tools and equipment		517,601			493,760
Solar arrays		6,386,025			6,386,025
		8,859,717			8,693,313
Less accumulated depreciation		(2,037,996	)		(1,571,774	)
		6,821,721			7,121,539
Other Assets:
Captive insurance investment		140,875			80,823
Due from stockholders		0			250,000
Cash surrender value - life insurance		279,219			224,530
		420,094			555,353
Total assets	$	18,067,117		$	10,766,364

Liabilities and Stockholders’ Equity

Current Liabilities:
Accounts payable	$	3,580,982		$	1,495,785
Accrued expenses		289,002			236,460
Billings in excess of costs and estimated earnings on uncompleted contracts		826,012			180,627
Accrued losses on contract in progress		0			9,128
Due to stockholders		442,489			33,463
Line of credit		5,000,000			972,524
Current portion of deferred compensation		27,057			27,057
Current portion of long-term debt		443,453			410,686
Total current liabilities		10,608,995			3,365,730

Long-term liabilities:
Deferred compensation, net of current portion		96,546			116,711
Deferred tax liability		1,527,311			0
Long-term debt, net of current portion		2,076,750			2,212,885
		3,700,507			2,329,596
Commitments and contingencies

Stockholders’ equity:
Preferred stock - $0.0001 par value 1,000,000 shares authorized, 0 issued and outstanding		0			0
Common stock - $0.0001 par value 49,000,000 shares authorized, 5,474,695 shares issued and outstanding and 3,234,301 shares issued and outstanding as of September 30, 2019 and December 31, 2018		547			323
Additional paid-in capital		423,306			552,630
Retained earnings		3,333,762			4,518,085
		3,757,615			5,071,038
	$	18,067,117		$	10,766,364

The Peck Company Holdings, Inc. Condensed Statements of Operations (Unaudited) For the three months and nine months ended September 30, 2019 and 2018

	Three Months ended September 30,						Nine Months ended September 30,
	2019			2018			2019			2018

Earned revenue	$	11,749,580		$	3,991,209			21,878,170		$	13,023,359
Cost of earned revenue		10,308,936			2,885,146			17,846,681			9,882,268
Gross profit		1,440,644			1,106,063			4,031,489			3,141,091

Warehousing and other operating expenses		294,154			182,193			1,034,965			534,279
General and administrative expenses		967,196			380,153			1,980,886			1,225,948
Total operating expenses		1,261,350			562,346			3,015,851			1,760,227
Operating income		179,294			543,717			1,015,638			1,380,864

Other expenses
Interest expense		(54,671	)		(49,785	)		(158,217	)		(91,639	)

Income before income taxes		124,623			496,932			857,421			1,289,225
Provision for income taxes		48,468			0			1,555,330			250

Net income (loss)	$	76,155		$	496,932		$	(697,909	)	$	1,288,975

Weighted average shares outstanding:
Basic		5,474,695			3,234,501			4,071,497			3,234,501
Diluted		5,474,695			3,234,501			4,071,497			3,234,501

Income (loss) per common share:
Basic	$	0.01		$	0.15		$	(0.17	)	$	0.40
Diluted	$	0.01		$	0.15		$	(0.17	)	$	0.40

PRO FORMA (C-corporation basis) (Note 1m)
Income tax expense	$	48,468		$	137,750		$	237,677		$	357,373
Net Income		76,155			359,182			619,744			931,852

Weighted average shares outstanding
Basic		5,474,695			3,234,501			4,071,497			3,234,501
Diluted		5,474,695			3,234,501			4,071,497			3,234,501

Income (loss) per common share:
Basic	$	0.01		$	0.11		$	0.15		$	0.29
Diluted	$	0.01		$	0.11		$	0.15		$	0.29

The Peck Company Holdings, Inc. Condensed Statement of Changes in Stockholders’ Equity (Unaudited) September 30, 2019

					Additional
	Common Stock				Paid-In			Retained
	Shares		Amounts		Capital			Earnings			Total

Balance as of January 1, 2019		3,234,501	$	323	$	552,630		$	4,518,085		$	5,071,038

Cash distributions to stockholders in 2019 prior to June 20		0		0		0			(486,414	)		(486,414	)

Conversion of Rights to common shares		420,712		42		0			0			42

Combination with Peck Electric Co.		1,819,482		182		(182	)		0			0

Recapitalization costs		0		0		(128,918	)		0			(128,918	)

Net (loss)		0		0		0			(774,064	)		(774,064	)

Ending Balance, June 30, 2019		5,474,695		547		423,530			3,257,607			3,681,684

Recapitalization costs		0		0		(224	)

Net Income									76,155			76,155
Ending Balance, September 30, 2019		5,474,695	$	547	$	423,306		$	3,333,762		$	3,757,615

The Peck Company Holdings, Inc. Condensed Statement of Changes in Stockholders’ Equity (Unaudited) September 30, 2018

					Additional
	Common Stock				Paid-In		Retained
	Shares		Amounts		Capital		Earnings		Total

Balance as of January 1, 2018		200	$	6,000	$	546,953	$	3,955,942	$	4,508,895

Net income		0		0		0		787,793		793,793

Ending Balance, June 30, 2018		200		6,000		546,953		4,743,735		5,296,688

Net Income								496,932		496,932
Ending Balance, September 30, 2018		200	$	6,000	$	546,953	$	5,240,667	$	5,793,620

The Peck Company Holdings, Inc. Condensed Statements of Cash Flows (Unaudited) For the Nine Months Ended September 30, 2019 and 2018

	September 30, 2019			September 30, 2018
Cash flows from operating activities
Net (loss) income	$	(697,909	)	$	1,288,975

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation		466,222			296,125
Provision for deferred income taxes		1,527,311			0

Changes in operating assets and liabilities:
Accounts receivable		(5,103,347	)		391,852
Prepaid expenses		(210,852	)		(63,340	)
Costs and estimated earnings in excess of billings		(2,709,006	)		404,099
Cash surrender value - life insurance		(54,689	)		0
Accounts payable		2,085,197			(1,290,484	)
Accrued expenses		52,542			(176,957	)
Billings in excess of costs and estimated earnings on uncompleted contracts		645,385			(254,183	)
Accrued losses on contract in progress		(9,128	)		0
Due to stockholders		438,070			0
Deferred compensation		(20,165	)		0
Net cash (used in) provided by operating activities		(3,590,369	)		596,087

Cash flows from investing activities:
Purchase of solar arrays and equipment		(39,243	)		(2,587,041	)
Loan to stockholder		(43,000	)		(250,000	)
Investment in captive insurance		(60,063	)		(43,340	)
Net cash used in investing activities		(142,295	)		(2,880,381	)

Cash flows from financing activities:
Net borrowings on line of credit		4,027,476			1,233,836
Proceeds from long-term debt		0			645,525
Payments of long-term debt		(230,629	)		0
Recapitalization costs paid		(129,100	)		0
Stockholder distributions paid		(219,600	)		(137,494	)
Net cash provided by financing activities		3,448,147			1,741,867
Net decrease in cash		(284,517	)		(542,427	)
Cash, beginning of period		313,217			760,781
Cash, end of period	$	28,700		$	218,354

Supplemental disclosure of cash flow information

Cash paid during the year for:
Interest	$	158,217		$	91,639
Income taxes		5,859			250
Supplemental disclosure of non-cash investing and financing activities

2019
Four vehicles were purchased and financed for $127,161.
The Company accrued S-corporation distributions which have not been paid of $266,814.

2018
One vehicle was purchased and financed for $39,790

The accompanying notes found in the recently filed Form10-Q are an integral part of these unaudited condensed consolidated financial statements.

About The Peck Company Holdings, Inc.

Headquartered in South Burlington, VT, The Peck Company Holdings, Inc. is a 2nd-generation family business founded in 1972 and rooted in values that align people, purpose, and profitability. Ranked by Solar Power World as one of the leading commercial solar contractors in the Northeastern United States, the Company provides EPC services to solar energy customers for projects ranging in size from several kilowatts for residential properties to multi-megawatt systems for large commercial and utility scale projects. The Company has installed over 125 megawatts worth of solar systems since it started installing solar in 2012 and continues its focus on profitable growth opportunities. Please visit www.peckcompany.com for additional information.