Item
1.01 Entry into a Material Definitive Agreement
Sales
Agreement
On February 10, 2021, Sunworks, Inc. (the “Company”) entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital
Partners, LLC (the “Agent”), pursuant to which the Company may offer and sell from time to time up to an aggregate
of $50,000,000 of shares of the Company’s common stock, par value $0.001 per share (the “Placement Shares”),
through the Agent.
The
Placement Shares have been registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant
to the Registration Statement on Form S-3 (File No. 333-252475) (the “Registration Statement”), which was originally
filed with the Securities and Exchange Commission (“SEC”) on January 27, 2021 and declared effective by the SEC on
February 3, 2021, the base prospectus contained within the Registration Statement, and a prospectus supplement that was filed
with the SEC on February 10, 2021.
Sales of the Placement
Shares, if any, pursuant to the Sales Agreement, may be made in sales deemed to be “at the market offerings” as defined
in Rule 415 promulgated under the Securities Act. The Agent will act as sales agent and will use commercially
reasonable efforts to sell on the Company’s behalf all of the Placement Shares requested to be sold by the Company, consistent
with its normal trading and sales practices, on mutually agreed terms between the Agent and the Company.
The
Company has no obligation to sell any of the Placement Shares under the Sales Agreement, and may at any time suspend offers under
the Sales Agreement or terminate the Sales Agreement. The Company intends to use the net proceeds from this offering for general
corporate purposes, including, without limitation, sales and marketing activities, product development, making acquisitions of
assets, businesses, companies or securities, capital expenditures, repayment of indebtedness, and for working capital needs.
The
Sales Agreement contains customary representations, warranties and agreements by the Company, as well as indemnification obligations
of the Company for certain liabilities under the Securities Act.
Under the terms of
the Sales Agreement, the Company will pay the Agent a commission equal to up to 3.0% of the gross proceeds from each sale
of Placement Shares sold through it under the Sales Agreement. In addition, the Company has agreed to pay certain expenses incurred
by the Agent in connection with the offering.
This
Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall
there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such state or other jurisdiction.
The
description of the material terms of the Sales Agreement is not intended to be complete and is qualified in its entirety by reference
to the Sales Agreement, which is filed as Exhibit 1.1 to this Current Report on Form 8-K and incorporated herein by reference.
Stradling
Yocca Carlson & Rauth, P.C., counsel to the Company, has issued an opinion to the Company, dated February 10, 2021,
regarding the validity of the Placement Shares. A copy of the opinion is filed as Exhibit 5.1 to this Current Report on Form 8-K.