Item
1.01. Entry into a Material Definitive Agreement.
Agreement
and Plan of Merger and Reorganization
On
January 19, 2021, the Registrant (“we,” “our” or the “Company”) entered into an Agreement
and Plan of Merger and Reorganization (the “Merger Agreement”) by and among the Company, Peck Mercury, Inc., a Delaware
corporation and wholly-owned subsidiary of the Company (the “Merger Sub”), iSun Energy LLC, a Delaware limited liability
company (“iSun Energy, LLC”), the sole member of which was Sassoon M. Peress (“Peress”), and Peress,
pursuant to which the Merger Sub merged with and into iSun Energy LLC (the “Merger”) with iSun Energy LLC as the surviving
company in the Merger and iSun Energy LLC becoming a wholly-owned subsidiary of the Company. In connection with Merger, Peress
will receive 400,000 shares of the Company’s Common Stock over five years, 200,000 shares of which were issued
at the closing, warrants to purchase up 200,000 shares of the Company’s Common Stock, and up to 240,000 shares of the Company’s
Common Stock based on certain performance milestones. The shares of the Company’s
Common Stock to be issued in connection with the Merger will be listed on the NASDAQ Capital Market. The Merger is intended to
qualify as a reorganization for U.S. federal income tax purposes.
Pursuant
to the terms of the Merger Agreement, the Company entered into a Stockholder Lockup Agreement with Peress, which restricts the
ability of Peress to dispose of 160,000 shares of Common Stock for a period of 365 days after the Merger and 200,000 shares of
Common Stock for a period of 365 days after the issuance of such shares of Common Stock without the prior written consent of the
Company (subject to certain exceptions set forth in the Lockup Agreement). The foregoing description of the Lockup Agreement does
not purport to be complete, and is qualified in its entirety by reference to the full text of the Lockup Agreement, which is attached
hereto as Exhibit 10.1.
The
Merger Agreement was unanimously approved by the Board of Directors of the Company.
The
foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to
the full text of the Merger Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
Officer
Agreement
On
January 19, 2021, in connection with the Merger, the Company entered into an Officer Agreement with Peress (the “Officer
Agreement”).
The
Officer Agreement provides that Peress will serve the Company in the position of Chief Innovation and Experience Officer, which
position does not constitute employment by the Company. The Officer Agreement also provides that, if the Company’s Board
of Directors is expanded to seven or more members and the Consulting Agreement (described below) is then in effect, the Company
will nominate Peress for election to the Board of Directors.
The
foregoing description of the Officer Agreement is not meant to be complete and is qualified in its entirety by reference to the
Officer Agreement, which is included as Exhibit 10.2 to this report and incorporated herein by reference.
Consulting
Agreement
In
connection with the Merger, on January 19, 2021, the Company entered into a Consulting Agreement (the “Consulting Agreement”)
with Renewz Sustainable Solutions, Inc., a Canadian corporation (“Renewz”), of which Peress is the sole stockholder,
pursuant to which Renewz will provide certain services to the Company. In consideration of these services, the Company will pay
Renewz an annual consulting fee in the amount of $175,000, plus additional compensation set out forth n Schedule 2 to the Consulting
Agreement. The foregoing description of the Consulting Agreement is qualified in its entirety by the Consulting Agreement which
is attached hereto as Exhibit 10.3 and is incorporated herein by reference.
Irrevocable
Proxy
On
January 19, 2021,Peress delivered to the Company an Irrevocable Proxy designating the Company’s President, Jeffrey Peck,
as Peress’s proxy for purposes of voting all of the Company’s shares owned by Peress. Peress granted this irrevocable
proxy in connection with the Merger. The foregoing description of the Irrevocable Proxy is qualified in its entirety by the Irrevocable
Proxy, which is attached hereto as Exhibit 10.4 and is incorporated herein by reference.