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ROSEVILLE, Calif., April 30, 2020 (GLOBE NEWSWIRE) -- Sunworks, Inc., (SUNW) a provider of solar power solutions for agriculture, commercial, and industrial (ACI), public works and residential markets, today announced that it received a $2.8 million loan under the Paycheck Protection Program (PPP), a provision within the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, signed into law on March 27, 2020. The PPP allows businesses with fewer than 500 employees to obtain a loan of up to $10 million, incentivizing companies to maintain consistent headcount as they manage through the operational disruptions caused by the COVID-19 pandemic. As a U.S. Small Business, Sunworks qualifies for the PPP and is confident the loan will allow the Company to continue steady operations. The loan was obtained from Tri Counties Bank, one of Sunworks longtime banking partners.
The unsecured loan has a term of two years, bears interest at a fixed rate of one percent per annum, and is guaranteed by the Small Business Administration (SBA). The SBA has agreed to forgive a portion or all of the loan if, among other criteria, at least 75% of the proceeds are used for payroll costs, the Company maintains its average headcount and compensation levels from February 2020 and June 2020, and the forgiven payroll expenses are incurred within the eight-week period following the loan funding date. The portion of the loan that is not forgiven, including interest, will be deferred six months after the funding date. Earning this loan enables the company to continue operations, benefiting its employees, customers, and stakeholders.
Chuck Cargile, Sunworks Chief Executive Officer and Chairman of the Board said, “Over the past year, we have reduced Sunworks quarterly operating expenses by more than 20%. In response to the current environment, the entire Board of Directors and I have relinquished our full compensation; 11 members of our executive team have accepted salary reductions of at least 50%; 42 people have been placed on temporary leave of absence; and 21 people have changed from full-time employment to part-time. These actions have impacted 42% of our workforce, and although they have resulted in incremental savings of approximately $400,000 per month, this loan gives us financial flexibility to better support our employees and restructure the organization for longterm sustainability. We continue to focus on rigid cost control and effective management of our cash position and expect to emerge from this crisis with a leaner, more efficient and nimble organization, well prepared to respond to pent-up customer demand.”
Safe Harbor Statement
Matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "anticipate," "believe," "estimate," “will,” "may," "intend," "expect" and similar expressions identify such forward-looking statements. Forward-looking statements include all statements other than statements of historical fact contained in this press release, including statements regarding the Company’s future revenue and operating income. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These risks include, but are not limited to, risks and uncertainties associated with: the impact of economic, competitive, regulatory, environmental and other factors affecting the Company and its operations, markets and products; the prospects for sales, lower revenues, failure to earn profit, higher costs than expected, potential operating losses, ownership dilution, inability to repay debt, the inability to complete projects within anticipated timeframes and costs, the impact of tariffs imposed by governmental bodies, the impact on the national and local economies resulting from terrorist actions; and other factors detailed in reports filed by the Company. You should also review the risks described in “Risk Factors” in Part I, Item 1A of Sunworks, Inc.’s Annual Report on Form 10-K and in the other reports and documents Sunworks file with the Securities and Exchange Commission from time to time.
Any forward-looking statement made by us in this press release is based only on information currently available to us and reflects only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
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