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As filed with the U.S. Securities and Exchange Commission on February 2,September 16, 2022

Registration No. 333-259069

No. 333-          

UNITED STATES


SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


AMENDMENT NO. 2

TO

FORM S-1


REGISTRATION STATEMENT


UNDER


THE SECURITIES ACT OF 1933

ROTH CH ACQUISITION III CO.*QUALTEK SERVICES Inc.


Additional Registrants Listed on Schedule A Hereto
(Exact Namename of Registrantregistrant as Specifiedspecified in its Charter)charter)

Delaware

67701623

83-3584928

(State or other jurisdiction of

(Primary Standard Industrial

(I.R.S. Employer

incorporation or organization)

Classification Code Number)

Identification No.)

888 San Clemente Drive,475 Sentry Parkway E, Suite 400200
Blue Bell, PA 19422
(484) 804-4585
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Christopher S. Hisey
Chief Executive Officer
475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422
(484) 804-4585

Newport Beach, CA 92660 (949) 720-5700

(Address, Including Zip Code,Name, address, including zip code, and Telephone Number, Including Area Code,telephone number, including area code, of Registrant’s Principal Executive Offices)

Gordon Roth

Chief Financial Officer

Roth CH Acquisition III Co.

888 San Clemente Drive, Suite 400

Newport Beach, CA 92660

(949) 720-5700

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agentagent for Service)service)

Copies to:

Mitchell Nussbaum, Esq.

TimTimothy Cruickshank, Esq.P.C.

Janeane R. Ferrari, Esq.

Kirkland & Ellis LLP

Loeb & Loeb LLP

601 Lexington Avenue

345 Park Avenue

New York, New York 10022

New York, NY 10154

(212) 446-4800

Phone: (212) 407-4000Erin Fogarty

K&L Gates LLP

Southeast Financial Center

200 S. Biscayne Boulevard, Suite 3900

Miami, Florida 33131

(305) 539-3385

Approximate date of commencement of proposed sale to the public:From time to time after the effective date hereof.this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. box:

If this Form is filed to registerregistered additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

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The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Sectionsection 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the SEC,Commission acting pursuant to Sectionsaid section 8(a) of the Securities Act,, may determine.

Schedule A

Exact Name of Additional Registrants

*

Jurisdiction of
Incorporation
or Formation

Upon the closing of the Business Combination, the name of Roth CH Acquisition III Co. is expected to change to

Principal Executive
Offices

Primary
Standard
Industrial
Classification
Code
Number

I.R.S.
Employer
Identification
No.

QualTek Services Inc.LLC

DE

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

46-0777008

QualTek Wireline LLC

DE

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

46-1348019

QualSat, LLC

DE

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

36-4768660

AdvanTek Electrical Construction, LLC

DE

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

82-4076159

QualTek Wireless LLC

DE

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

82-2496529

Site Safe, LLC

DE

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

82-2667698

QualTek Recovery Logistics LLC

DE

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

83-2037301

QualTek Fulfillment LLC

DE

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

83-2527795

QualTek Renewables LLC

TX

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

05-0529922

QualTek Buyer, LLC

DE

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

83-0962442

QualTek MidCo, LLC

DE

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

30-0834354

QualTek Management, LLC

DE

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

32-0443933

NX Utilities ULC

BC

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

98-1437498

Concurrent Group LLC

FL

475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422

1623

82-1840870

The information contained in this preliminary prospectus is not complete and may be changed. These securitiesWe may not be soldissue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any statejurisdiction where the offer or sale is not permitted.

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PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION

DATED FEBRUARY 2, 2022

SUBJECT TO COMPLETION, DATED SEPTEMBER 16, 2022

PRELIMINARY PROSPECTUS

QUALTEK SERVICES INC.

ROTH CH ACQUISITION III CO.

11,614,0003,589,000 Shares

of Class A Common Stock

306,000 warrants by the Selling Stockholders

Senior Convertible Notes due 2027 by the Selling Noteholders

Up to 31,104,034 Shares of Class A Common Stock Underlying 2027

Convertible Notes

This prospectus relates to (a) the resale from time to time of (i) up to 3,589,000 shares of our Class A common stock, $0.0001 par value of QualTek Services Inc. (“$0.0001 per share (the “Class A Common Stock”) (a) issuable upon the exchange of Common Units and shares of Class B Common Stock underlying the Pre-PIPE Notes issued to certain accredited investors in the Pre-PIPE Investment pursuant to the terms of those certain Note Purchase Agreements entered into by and among QualTek, ROCR and the Pre-PIPE Investors dated as of June 16, 2021, as amended on January 14, 2022 and further amended in connection with the closing of the Business Combination (the “Note Purchase Agreement”), pursuant to which QualTek issued to such subscribers $44.4 millionconsisting of Pre-PIPE Notes that were initially to automatically convert into the Class A Common Stock at $8.00 per share upon consummation of the Business Combination, but following amendments to the Note Purchase Agreement and the Pre-PIPE Note dated January 14, 2022 and further amended in connection with the closing of the Business Combination, are to be converted at a price of $6.40 per Common Unit (along with a corresponding number of shares of Class B Common Stock), and (b) issued pursuant to the terms of the subscription agreements with the PIPE Subscribers dated as of June 16, 2021, as amended on January 14, 2022 (the “Subscription Agreements”) pursuant to which, among other things, ROCR agreed to issue and sell, in a private placement to close immediately prior to the Closing, initially an aggregate of 6,610,000 shares of ROCR Common Stock for $10.00 per share for a total of $66.1 million (the “PIPE Investment”). Following the amendment to the Subscription Agreements on January 14, 2022, the per share price under the Subscription Agreements is now $8.00 per share of Class A Common Stock upon consummation of the Business Combination. Additionally, pursuant to the amendment, Subscribers could elect to participate in a Convertible Note Investment (the “Convertible Note Investment”) in lieu of purchasing3,283,000 shares of Class A Common Stock pursuant to the Subscription Agreements. A total of approximately $24.7 million of the PIPE Investment elected to invest in the Convertible Note Investment in lieu of the PIPE Investment. In connection with the amendment, QualTek, the Sponsor, Craig-Hallum, Roth, ROCR’s officers and directors and certain affiliates of ROCR’s management waived (i) the right to purchase Convertible Notes in lieu of the PIPE Investment, and (i) the reduced per share price, and accordingly will continue to pay $10.00 per share pursuant to the Subscription Agreements. Such shares in the aggregate are equal to 2,001,500 shares. Following the PIPE amendment, the aggregate number of shares to be issued pursuant to the Subscription Agreements is 4,676,500 shares of Class A Common Stock for gross proceeds of $41.4 million

As described herein, the selling securityholders named in this prospectus or their permitted transferees (collectively, the “Selling Stockholders”), may sell from time to time up to 11,614,000 shares of Class A Common Stock, including 6,937,500306,000 shares of Class A Common Stock issuable upon the exchangeexercise of Common Units and shares of Class B Common Stock underlying the Pre-PIPE Notes issued to certain accredited investors in the Pre-PIPE Investment and 4,676,500 sharesPrivate Placement Warrants (as defined below), each exercisable for one share of Class A Common Stock issuedat a price of $11.50 per share (“warrants”) and (ii) 306,000 warrants by the selling security holders named in this prospectus (each a “Selling Stockholder,” and, collectively, the “Selling Stockholders”), (b) the resale from time to certain accredited investorstime of up to $124,685,000 in aggregate principal amount of senior convertible notes due 2027 (the “2027 Convertible Notes”) by the PIPE Investmentselling holders named in this prospectus (the “Selling Noteholders” and, together with the Selling Stockholders, the “Selling Securityholders”) and (c) the resale from time to time of up to 31,104,034 shares of our Class A Common Stock issuable upon the Closingconversion of the Business Combination.2027 Convertible Notes by the Selling Noteholders.

The Pre-PIPE Investment and PIPE Investment are being conducted in connection with a On February 14, 2022, we consummated the business combination (the “Business Combination”) pursuant to that certain business combination agreement dated as of June 16, 2021 (as amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among (i) Roth CH Acquisition III Co., a Delaware corporation (“ROCR”), (ii) Roth CH III Blocker Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of ROCR (“Blocker Merger Sub”), (iii) BCP QualTek Investors, LLC, a Delaware limited liability company (the “Blocker”), (iv) Roth CH Acquisition III Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the BuyerROCR (“Company Merger Sub, and together with ROCR and the Blocker Merger Sub, the “Buyer Parties), (v) QualTek HoldCo, LLC (f/k/a BCP QualTek HoldCo, LLC,LLC), a Delaware limited liability company ( “(“QualTek” or the “Company HoldCo”), and (vi) BCP QualTek, LLC, a Delaware limited liability, company, solely in its capacity as representative of the Blocker’s equityholders and QualTek’sQualTek HoldCo’s equityholders (the “Equityholder Representative(“BCP QualTek”), pursuant to which (i) the Blocker Merger Sub will bewas merged with and into the Blocker, with the Blocker as the surviving company (the “Blocker Merger”), (ii) immediately after the Blocker Merger, the Blocker will bewas merged with and into ROCR, with ROCR as the surviving company (the ��Buyer Merger”), and (iii) immediately after the Buyer Merger, the Company Merger Sub will bewas merged with and into the Company,ROCR, with the CompanyROCR as the surviving company (the “QualTek Merger”) and (b) such mergers and the other transactions contemplated by the Business Combination Agreement (the “Business Combination”). It is anticipated thatIn connection with the Business Combination will be consummated on or about the date of effectiveness of the registration statement of which this prospectus forms a part. Upon consummationclosing of the Business Combination, described herein,on February 14, 2022, ROCR will be renamedchanged its name from Roth CH Acquisition III Co. to QualTek Services Inc. (“(the “QSICompany” or “QualTek”).

We will bear all costs, expenses and fees in connection with the registration of the Class A Common Stock, warrants and 2027 Convertible Notes and will not receive any proceeds from the sale of Class A Common Stock.such securities. The Selling StockholdersNoteholders will bear all commissions and discounts, if any, attributable to their respective sales of the 2027 Convertible Notes and Class A Common Stock.

UponStock underlying the consummation of the Business Combination, our2027 Convertible Notes.

Our Class A Common Stock and warrants will begin tradingare listed on The Nasdaq Capital Market (“Nasdaq”) under the proposed symbols “QTEK” and “QTEKW,” respectively.

We are an “emerging growth company” as defined under The 2027 Convertible Notes will not be listed on any securities exchange. On September 15, 2022, the federal securities lawsclosing sale price of our Class A Common Stock and as such, have elected to comply with certain reduced public company reporting requirements.warrants were $1.50 and $0.29, respectively.

Investing in our Class A Common Stock, is highly speculativewarrants and 2027 Convertible Notes involves a high degreerisks that are described in the “Risk Factors” section beginning on page 17 of risk. See “Risk Factors.”this prospectus.

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of Class A Common Stockthe securities to be issued under this prospectus or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The information in this prospectus is not complete and may be changed. We may not issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

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The date of this prospectus is                     , 20222022.

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ABOUT THIS PROSPECTUS

Pageii

About This ProspectusFREQUENTLY USED TERMS

iiiii

Frequently Used TermsSUMMARY OF THE PROSPECTUS

1

Cautionary Note Regarding Forward-Looking StatementsTHE OFFERING

3

Prospectus Summary

5

Selected Consolidated Financial and Other Data of Qualtek

12

Risk Factors

14

Use of ProceedsCAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

3715

Unaudited Pro Forma Condensed Combined Financial InformationRISK FACTORS

4317

Management’s Discussion and Analysis of Financial Condition and Results of Operations of QualTekUSE OF PROCEEDS

5244

Description of QualTek’s BusinessDETERMINATION OF OFFERING PRICE

6845

Management of the Combined CompanyUNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

8046

Executive CompensationBUSINESS

8754

Principal StockholdersEXECUTIVE COMPENSATION

9966

Certain Relationships and Related Party TransactionsMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF QUALTEK

10277

Description of Capital StockMANAGEMENT

108100

Material U.S. Federal Income Tax Consequences for Non U.S. Holders of Class A Common StockSELLING STOCKHOLDERS

112106

Selling StockholdersSELLING NOTEHOLDERS

115110

Plan of DistributionDESCRIPTION OF SECURITIES

119116

ExpertsPLAN OF DISTRIBUTION

121146

Legal MattersBENEFICIAL OWNERSHIP OF SECURITIES

121148

Where You Can Find More InformationCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

121151

Index to Financial StatementsLEGAL MATTERS

157

EXPERTS

157

WHERE YOU CAN FIND MORE INFORMATION

157

INDEX TO CONSOLIDATED FINANCIAL INFORMATION

F-1

F-1

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ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement on Form S-1 that we filed with the Securities and Exchange Commission (the “SEC”) using athe “shelf” registration process. By using aUnder this shelf registration statement,process, the Selling StockholdersSecurityholders may, sell up to 11,614,000 shares of Class A Common Stock from time to time, in one or more offerings assell the securities offered by them described in this prospectus. We will not receive any proceeds from the sale by such Selling Securityholders of the securities offered by them described in this prospectus. This prospectus also relates to the issuance by us of the shares of Class A Common Stock issuable upon the exercise of any warrants and the conversion of 2027 Convertible Notes. We will not receive any proceeds from the sale of shares of Class A Common Stock underlying the warrants or 2027 Convertible Notes pursuant to this prospectus, except with respect to amounts received by us upon the exercise of the warrants for cash.

Neither we nor the Selling Stockholders.Securityholders have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus or any applicable prospectus supplement or any free writing prospectus prepared by or on behalf of us or to which we have referred you. Neither we nor the Selling Securityholders take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. Neither we nor the Selling Securityholders will make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.

We may also fileprovide a prospectus supplement or post-effective amendment to the registration statement of which this prospectus forms a part that may contain materialto add information relating to, these offerings. The prospectus supplement or post-effective amendment, as the case may be, may add, update or change information contained in, this prospectus with respect to such offering. If there is any inconsistency between the information inprospectus. You should read both this prospectus and theany applicable prospectus supplement or post-effective amendment you should rely onto the prospectus supplement or post-effective amendment, as applicable. Before purchasing any of the Class A Common Stock, you should carefully read this prospectus and any prospectus supplement and/or post-effective amendment, as applicable,registration statement together with the additional information described underto which we refer you in the sections of this prospectus entitledWhere You Can Find More Information.”

NeitherOn February 14, 2022, we norconsummated the Selling Stockholders, have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectusBusiness Combination contemplated by the Business Combination Agreement, by and any prospectus supplement and/or post-effective amendment, as applicable, prepared by or on behalf of us oramong ROCR, Blocker Merger Sub, Blocker, Company Merger Sub, QualTek HoldCo and BCP QualTek, pursuant to which we have referred you. We(i) the Blocker Merger Sub was merged with and into the Selling Stockholders take no responsibility for,Blocker, with the Blocker as the surviving company in the Blocker Merger, (ii) immediately after the Blocker Merger, the Blocker was merged with and can provide no assuranceinto ROCR, with ROCR as to the reliability of, any other information that others may give you. Wesurviving company in the Buyer Merger, and (iii) immediately after the Selling Stockholders will not make an offer to sellBuyer Merger, the Class A Common StockCompany Merger Sub was merged with and into ROCR, with ROCR as the surviving company in any jurisdiction where the offer or sale is not permitted. You should assume thatQualTek Merger. In connection with the information appearing in this prospectus and any prospectus supplement and/or post-effective amendment, as applicable, is accurate only asclosing of the dateBusiness Combination, on the respective cover. Our business, prospects, financial condition or results of operations may haveFebruary 14, 2022, ROCR changed since those dates. This prospectus contains, and any prospectus supplement or post-effective amendment may contain, market data and industry statistics and forecasts that are based on independent industry publications and other publicly available information. Although we believe these sources are reliable, we do not guarantee the accuracy or completeness of this information and we have not independently verified this information. In addition, the market and industry data and forecasts that may be included in this prospectus and any prospectus supplement and/or post-effective amendment, as applicable, may involve estimates, assumptions and other risks and uncertainties and are subjectits name from Roth CH Acquisition III Co. to change based on various factors, including those discussed under “Risk Factors” in this prospectus and any prospectus supplement and/or post-effective amendment, as applicable. Accordingly, investors should not place undue reliance on this information.

QualTek Services Inc.

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FREQUENTLY USED TERMS

Unless otherwise stated in this prospectus, the terms “we,” “us,” “our” or “ROCRQualTek” refer to Roth CH Acquisition III Co.QualTek Services Inc., a Delaware corporation. In addition, in this prospectus:

Amended and Restated Bylaws” means the Amended and Restated Bylaws of the Combined Company.

Blocker” refersQualTek, as amended, supplemented and otherwise modified from time to BCP QualTek Investors, LLC, a Delaware limited liability company.time.

Board” means the board of directors of ROCR prior to the Business Combination,QualTek.

Brightstar” means Brightstar Capital Partners, L.P. and following the Business Combination, of the Combined Company.its affiliates.

Business Combination” means the business combination pursuant to the Business Combination Agreement.Agreement, which was consummated on February 14, 2022.

Class A Common Stock” means the Class A common stock, $0.0001 par value, of the Combined Company.QualTek.

Class B Common Stock” means the Class B common stock, $0.0001 par value, of the Combined Company.QualTek.

ClosingCommon Stock” means the closingClass A Common Stock and Class B Common Stock of the Business Combination.QualTek.

CharterCertificate of Incorporation” means the Second Amended and Restated Certificate of Incorporation of the Combined Company.QualTek, as amended, restated and otherwise modified from time to time.

Code” means the Internal Revenue Code of 1986, as amended.

Combined Company” or “QSI” means ROCR after the Business Combination, renamed QualTek Services Inc., and, as the context requires, its consolidated subsidiaries.

Combined Company’s Common Stock” means the Class A Common Stock and the Class B Common Stock.

Convertible Note Investment” means the private placement pursuant to which the Convertible Note Investors intend to subscribe for2027 Convertible Notes in an aggregate principal amount of up to $125,000,000 at a purchase price of 98.00% of the principal amount, which purchase price may be amended in connection with the negotiation of the definitive documentation for the Convertible Notes.

Convertible Note Investors” means certain institutional investors that will invest in the Convertible Note Investment.

Convertible Notes” means the Convertible Senior Notes due 2027 that are convertible into shares of Class A Common Stock at an initial conversion price of $10.00 per share (subject to adjustment).

Convertible Note Investment” means the private placement pursuant to which the Convertible Note Investors subscribed for 2027 Convertible Notes.

Convertible Note Investors” means certain institutional investors that invested in the Convertible Note Investment.

Convertible Note Shares” means the shares of Class A Common Stock to be issued upon conversion of the 2027 Convertible Notes, in accordance with the terms and subject to the conditions of the Convertible Note Subscription Agreements and the Indenture.

Convertible Note Subscription Agreements” means, collectively, those certain subscription agreements to be entered into between the IssuerQualTek and the Convertible Note Investors, pursuant to which such Convertible Note Investors will agreeagreed to purchase up to $125,000,000$124,685,000 in aggregate principal amount of 2027 Convertible Notes in the Convertible Note Investment.

Craig-Hallum” means Craig-Hallum Capital Group LLC.

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

Effective Time” means the time at which the Business Combination became effective pursuant to its terms.

Founder Shares” means the outstanding shares of our Common Stock held by the Sponsor, our directors and affiliates of our management team since February 13, 2019.

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Indenture” means the indenture to be entered into in connection with the Closing between ROCRclosing of the Business Combination, dated as of February 14, 2022, by and among QualTek, the guarantors party thereto and the Indenture Trustee, in its capacity as trustee thereunder.thereunder, as amended, supplemented and otherwise modified from time to time.

Indenture Trustee” means Wilmington Trust, National Association, a national banking association.

Initial Stockholdersor ‘ROCR’s Initial Stockholders’ means the holders of ROCR shares prior to the ROCR IPO.

Investor Rights Agreement” means the investor rights agreement to be entered at Closingin connection with the closing of the Business Combination, dated as of February 14, 2022, by and between ROCR (and subsequent to the Business Combination, the Combined Company),QualTek, certain Sellers as set forth therein, the Equity Representative,BCP QualTek, the Sponsors, Sponsor Representative, and certain Other Holders (all as defined therein), a form of which is attached hereto as Exhibit 10.11.amended, supplemented and otherwise modified from time to time.

Nasdaq” refers to the Nasdaq Capital Market.

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Notes Issuer” refers to BCP QualTek Holdco, LLC.

Note Purchase AgreementsPrivate Placement Shares” means the Note Purchase Agreements, dated June 16, 2021, as amended on January 14, 2022, among the Notes Issuer, ROCR and the Pre-PIPE Investors.

PIPE Investment” has the meaning ascribed to such term in the Business Combination Agreement.

PIPE Registration Rights Agreement” means the registration rights agreement, dated June 16, 2021, between ROCR and the PIPE Investors.

Pre-PIPE Investment” refers to the private placementshares of convertible notes of QualTek, as Notes Issuer, in an aggregate principal amount of $44.4 million (“Pre-PIPE Notes”), issuable pursuant to the Note Purchase Agreement.

Pre-PIPE Registration Rights Agreement” means the registration rights agreement, dated June 16, 2021, between ROCR and the Pre-PIPE Investors.

Private Placement” refers to the private placements described in ROCR’s Registration Statement on Form S-1 (as amended) (SEC File No. 333-252044), initially filed by ROCR with the SEC on January 12, 2021.

Private Units” refers to the 408,000 units sold by ROCR at a price of $10.00 per unit,our Class A Common Stock included in the Private Placement.

Public Shares” means Common Stock underlyingPlacement Units issued to the Units soldInitial Stockholders in a private placement that closed prior to the ROCR IPO.

public stockholdersPrivate Placement Units” means the public stockholdersunits, consisting of one share of Class A Common Stock and one-quarter of one warrant to purchase one share of Class A Common Stock, issued to the Initial Stockholders in a private placement that closed prior to the ROCR IPO.

QualTekPrivate Placement Warrants” means BCP QualTek HoldCo, LLC,the warrants included in the Private Placement Units issued to the Initial Stockholders in a Delaware limited liability company, and, asprivate placement that closed prior to the context requires,ROCR IPO, each of which is exercisable for one share of Class A Common Stock, in accordance with its consolidated subsidiaries.terms.

QualTek Equityholders” refers to the Company Equityholders (as defined in the Business Combination Agreement).

QualTek Common Units” refers to the Common Units as defined in the Third Amended and Restated LLCA.

Redemption” means the right of the holders of Public Shares to have their shares redeemed in accordance with the procedures set forth in this prospectus.

Reorganization Transactions” refers to the Reorganization Transactions as defined in the Tax Receivable Agreement.

ROCR” means Roth CH Acquisition III Co.

ROCR Common Stock” or “Common Stock” means, prior to the Business Combination, the common stock of ROCR, $0.0001 par value per share, and following the Business Combination, Combined Company’s Common Stock.

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ROCR IPO” or IPO” means ROCR’sthe initial public offering registeredof ROCR, consummated on ROCR’s Form S-1 (as amended) (SEC File No. 333-252044), initially filed by ROCR with the SEC on January 12,March 5, 2021.

Roth” means Roth Capital Partners, LLC.

SEC” means the United States Securities and Exchange Commission.

Sponsor” means CR Financial Holdings, Inc., an entity affiliated with Roth Capital Partners, LLC.

Subscription Agreements” means the subscription agreements, dated June 16, 2021, as amended on January 14, 2022, by and between certain accredited investors and ROCR.

Tax Receivable Agreement” refers to that certain Tax Receivable Agreement to be entered into atin connection with the Closingclosing of the Business Combination.Combination, dated as of February 14, 2022.

Third Amended and Restated LLCA” refers to that certain Third Amended and Restated Limited Liability Company Operating Agreement of QualTek.

TRA Holder Representative” refers to the TRA Holder Representative as defined in the Tax Receivable Agreement.

TRA Holders” refers to the TRA Holders as defined in the Tax Receivable Agreement.

Trust Account” means the Trust Account of ROCR, which held the net proceeds of the ROCR IPO and the sale of the Private Units, together with interest earned thereon, less amounts released to pay franchise and income tax obligations.

Unit” means a unit consisting of one share of Common Stock and one-quarter of one redeemable warrant.

Warrant” means a warrant to purchase one share of Common Stock at a price of $11.50 per whole share, (subject to adjustment).

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements about the anticipated benefits of the Business Combination and the financial condition, results of operations, earnings outlook and prospects of QualTek and may include statements for the period following the consummation of the Business Combination. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of the management of ROCR and QualTek, as applicable and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those discussed and identified in public filings made with the SEC by ROCR and include, but are not limited to, the following:

expectations regarding QualTek’s strategies and future financial performance, including its future business plans or objectives, prospective performance and opportunities and competitors, revenues, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures, and QualTek’s ability to invest in growth initiatives and pursue acquisition opportunities;
the highly competitive industries that QualTek serves, which are also subject to rapid technological and regulatory changes, as well as customer consolidation;

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unfavorable market conditions, market uncertainty, public health outbreaks such as the COVID-19 pandemic and/or economic downturns;
failure to properly manage projects, or project delays;
failure to recover adequately on charges against project owners, subcontractors or suppliers for payment or performance;
the loss of one or more key customers, or a reduction in their demand for QualTek’s services;
QualTek’s backlog being subject to cancellation and unexpected adjustments;
the seasonality of QualTek’s business, which is affected by the spending patterns of QualTek’s customers and timing of governmental permitting, as well as weather conditions and natural catastrophes;
system and information technology interruptions and/or data security breaches;
failure to comply with environmental laws;
QualTek’s significant amount of debt, which could adversely affect its business, financial condition and results of operations or could affect its ability to access capital markets in the future, and may prevent QualTek from engaging in transactions that might benefit it due to its debt’s restrictive covenants;
QualTek’s status as a “controlled company” within the meaning of the Nasdaq rules and, as a result, qualifying for exemptions from certain corporate governance requirements, as a result of which you will not have the same protections afforded to stockholders of companies that are subject to such requirements; and
other factors described under “Risk Factors.”

Should one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of ROCR and QualTek prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

All subsequent written and oral forward-looking statements concerning the Business Combination or other matters addressed in this prospectus and attributable to ROCR, QualTek or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this prospectus. Except to the extent required by applicable law or regulation, ROCR and QualTek undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this prospectus to reflect the occurrence of unanticipated events.

In addition, statements that ROCR or QualTek “believes” and similar statements reflect such party’s beliefs and opinions on the relevant subject. These statements are based upon information available to such party as of the date of this prospectus, and while such party believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that either ROCR or QualTek has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

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SUMMARY OF THE PROSPECTUS SUMMARY

This summary highlights certainselected information appearing elsewhere infrom this prospectus. Because it is only a summary, it doesprospectus and may not contain all of the information that is important to you in making an investment decision. Before investing in our securities, you should consider before investing in shares of Class A Common Stockcarefully read this entire prospectus, including our consolidated financial statements and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhererelated notes included in this prospectus. Before you decide to invest in Class A Common Stock , you should read the entire prospectus carefully, including “Risk Factors” and the financial statements of ROCR and QualTek and related notes thereto included elsewhere in this prospectus.

Parties to the Business Combination

Roth CH Acquisition III Co.

ROCR is a blank check company formedinformation set forth under the laws of the State of Delaware on February 13, 2019 for the purpose of effectingheading “Risk Factors.”

Company Overview

We are a merger, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses. Although our efforts to identify a prospective target business are not limited to a particular geographic region or industry, we have focused on the business services, consumer, healthcare, technology, wellness and sustainability sectors. ROCR has until March 5, 2023 to consummate a business combination.

On March 5, 2021, ROCR consummated the IPO of 11,500,000 Units at a price of $10.00 per Unit, generating gross proceeds of $115,000,000, which included the full exercise by the underwriters of their over- allotment option in the amount of 1,500,000 units. Simultaneously with the closing of the IPO, ROCR consummated the sale of 408,000 units (the “Private Units”) at a price of $10.00 per Private Unit in a private placement to its stockholders, generating gross proceeds of $4,080,000.

After deducting the underwriting discounts, offering expenses, and commissions from the ROCR IPO and the sale of the Placement Warrants, a total of $115,000,000 was deposited into the Trust Account established for the benefit of ROCR’s public stockholders, and the remaining proceeds became available to be used to provide for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses.

In accordance with ROCR’s amended and restated certificte of incorporation, the amounts held in the Trust Account may only be used by ROCR upon the consummation of a business combination, except that there can be released to ROCR, from time to time, any interest earned on the funds in the Trust Account that it may need to pay its tax obligations. The remaining interest earned on the funds in the Trust Account will not be released until the earlier of the completion of a business combination and ROCR’s liquidation. ROCR executed the Business Combination Agreement on June 16, 2021 and it must liquidate unless a business combination is consummated by March 5, 2023.

ROCR’s principal executive offices are located at 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660, and its telephone number is (949) 720-5700.

Blocker Merger Sub and Merger Subs

Blocker Merger Sub will be merged with and into Blocker, with Blocker surviving such merger as a wholly-owned subsidiary of ROCR, and Blocker thereafter will be merged into ROCR with ROCR surviving such merger. Company Merger Sub will be merged with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of ROCR.

QualTek

QualTek , through its subsidiaries, is atechnology-driven, leading provider of communicationcommunications infrastructure services including engineering, installation, fulfillmentservice, power grid modernization, and program management, renewable energyrenewables solutions and business continuity and disaster recovery support, delivering a full suite of critical services to the North American telecommunications and utilities industries. We provide a variety of mission-critical services across the telecom and renewable energy value chain, including wireline and fiber optic terminations, wireless, fiber-to-the-home (“FTTH”) and customer fulfillment activities. Our experienced management team has leveraged our technical expertise, rigorous quality and safety standards, and execution track record to establish and maintain long-standing relationships with blue-chip customers.

We operate out of two business segments: Telecom and Renewables & Recovery Logistics. Telecom consists of wireless, wireline, and power, sectors.which represents 81% of our revenues for the fiscal year ending December 31, 2021. We entered the renewable infrastructure sector with our acquisition of Fiber Network Solutions, LLC, now known as QualTek was formedRenewables LLC (“Renewables”) in January 2021, which represents 5% of our revenues for the fiscal year ending December 31, 2021. Recovery Logistics represents 14% of our revenues for the fiscal year ending December 31, 2021.

Telecommunications

We provide a full suite of services to the telecom sector across both the wireless and wireline markets, from site acquisition and permitting to initial engineering and design to installation, maintenance, program management and fulfillment. Our core offerings consist of:

Engineering and construction services including the design and construction of aerial and underground fiber optic and coaxial systems for homes, businesses, cell towers, and small cells.
Installation services including the placement and splicing of fiber and coaxial cable, in addition to upgrades and new site builds for cellular towers.
Site acquisition services to determine the location for new sites prior to new site builds.
We also provide cable and satellite fulfillment services for residential and commercial customers. These services are provided for telecom companies in connection with the maintenance or expansion of new and existing networks.

While the telecommunications industry is naturally concentrated, we maintain customer diversification across our business segments. We have numerous long-established relationships with telephone companies, wireless carriers, multiple cable system operators and electric utilities companies, which have been built upon and cultivated through numerous Master Service Agreements (“MSAs”) that extend for periods of one or more years (majority are for three or more years, some of which have auto-renewal provisions). Blue-chip, investment grade customers including AT&T, Verizon, COX Communications, T-Mobile, Spectrum, and Comcast comprise a substantial portion of our revenue.

Within our Telecommunications segment we also provide electrical contracting, and utility construction and maintenance services. We construct and maintain overhead and underground distribution systems for municipalities, electric membership cooperatives, and electric-utility companies.

Renewables and Recovery Logistics

We entered the renewable infrastructure sector with our acquisition of Renewables in January 2021. Renewables is a full-service provider of fiber optic and electrical services, focusing primarily on renewable energy projects. Our capabilities in the space include expertise in wind and solar farm fiber, installation, and testing, optical ground wire (“OPGW”) & all-dielectric self-supporting (“ADSS”) aerial transmission line installation, and large-scale data com solutions and installation.

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In serving our customers, we provide fiber optic terminations, optical time domain reflectometer (“OTDR”) and power meter testing, fusion splicing, fiber placement, extensive fiber optic and copper infrastructure installation, cable jetting, boring and trenching, industry specific maintenance and material procurement.

We also provide business continuity and disaster relief services to telecommunications and power utility companies, as well as business-as-usual (“BAU”) services such as generator storage and repair and cell maintenance services.

Geographic Presence

Our consolidated business has a national footprint with approximately 80 service locations across the U.S., strategically located in close proximity to major customers and growing markets. Our geographic footprint has grown to its present state both organically and through strategic acquisitions. QualTek serves markets locally through a dedicated in-house employee base of approximately 1,900 employees and a workforce of over 5,000 individuals (inclusive of in-house employees). Ultimately, we are a technology-driven provider of communications infrastructure services and solutions to the North American telecommunications and utilities industries, and we believe we are well-positioned for continued growth.

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Industry Overview

Telecommunications

Significant advances in technology and rapid innovation in service offerings to data consumers have substantially increased demand for faster and more reliable wireless and wireline/fiber communications network services. Cisco’s 2020 Annual Internet Report (the “2020 CISCO Report”) predicts that by 2023, North Americans will have 5 billion networked devices/connections, up from 3 billion in 2018, with a nearly tripling of broadband and wireless speeds (measured in Mbps) over the same time period.

With the proliferation of mobile devices, advancements in the “internet of things,” or IoT, and segments of the workforce permanently shifting to remote work post-COVID-19, network traffic is at an all-time high and is expected to continue to grow, generating demand for both wired and wireless connectivity. Increased data usage is driven by two key dynamics: i) an increase in the number of internet-enabled devices per capita and ii) an increase in connection speed. The 2020 Cisco Report provides that devices and connections are growing faster (10% CAGR) than both the population (1% CAGR) and internet users (6% CAGR). As a result, devices and connections per household and per capita in North America are expected to grow 63%, up from 8.2 in 2018 to 13.4 by 2023.

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COVID-19 has further catalyzed network traffic growth by creating permanent shifts away from the office and into the home. Per a 2020 Gartner report, 75% of companies are planning to permanently shift to remote work post COVID-19, which will continue to drive consumer demand for high-speed home office connectivity.

Graphic

Low levels of fiber penetration and the nascent state of North American 5G deployment currently present significant opportunities for sustained growth for businesses such as QualTek:

Wireless: Major carriers have continued to expand wireless network capacity and density with accelerated development and planned implementation of 5G wireless technologies. The increased speed and capacity that will result from deployment of 5G technology will require additional and improved tower capacity with higher data frequencies, as well as deployment of numerous higher bandwidth small cells to “densify” network performance. Wireless technology will need to be supported by fiber backbone and as a result, many carriers have committed to investing in the fiber infrastructure buildout.
Wired: Telecommunication companies have also deployed capital and initiatives to improve fiber connectivity. Only about 10-15% of total broadband connections in the U.S. are provisioned by fiber, as compared to over 50% in other developed countries such as South Korea, Sweden and Finland. Importantly, with only about 47 million U.S. homes (about 37% as per

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the Fiber Broadband Association) passed with fiber in 2019, over 100 million U.S. homes represent opportunities for fiber passing over the next several years, indicating a massive investment cycle that is still in early stages.

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Renewable and Recovery Logistics

In 2017 and 2018, solar PV and onshore wind consolidated their dominance in the renewable energy market, representing on average 77% of total finance commitments in renewable energy. The highly modular nature of these technologies, their short project development lead times, increasing competitiveness driven by technology and manufacturing improvements, and government regulations play an important role in explaining these technologies’ large share of global renewable energy investment.

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Investment in offshore wind has picked up, attracting, on average, $21 billion a year globally between 2013 and 2018, and representing 8% of the total renewable capacity addition in 2018. According to the International Renewable Energy Agency (“IRENA”), offshore wind holds considerable growth potential and will have a key role to play in achieving a level of deployment to support a decarbonized growth trajectory.

The Biden administration is expected to amplify this increase in spending for renewable power projects. For example, since his first day in office, President Biden has rejoined the 2015 Paris Agreement, committed to investing $400 billion in the next ten years in clean energy and innovation, and set a goal to achieve a carbon pollution-free power sector by 2035. We believe that this will translate into significant government spending in renewables to meet this goal, and also government regulations and policies that promote spending in the renewables space across various sectors of the economy. We believe that the Biden administration’s commitment to renewable energy will create ripple effects across the nation and ultimately lead to more opportunities for us to expand our business with customers.

Competitive Strengths

Culture of Operational Excellence that Resonates with Established Blue-Chip Customer Base

QualTek analyzes and evaluates key performance metrics, from customer satisfaction to technical issues in the field, hiring processes and working capital management. We have fostered a culture of continuous improvement and our operational excellence is reflected in our ability to take market share. Our decentralized operations create multiple points of contact with our customers, including Fortune 500 companies such as AT&T, Verizon, Comcast, Blattner Energy, Kiewit, and Dish thereby generating numerous individual relationships and contract opportunities per customer.

Highly Scalable Shared Services Platform Driven by Tech-Enabled Capabilities

QualTek provides full turnkey services to its customers. Our significant investment over the years to optimize our platform and technology has created a highly scalable business ready to support continued growth. For example, a centralized shared services system provides us with a competitive advantage for operational execution of customer services, process consistency and cross division sharing of “best practices,” resulting in enhanced efficiency and scalability. To maintain this operational excellence, we conduct disciplined measuring of key performance indicators (“KPIs”) with quality control for every division to ensure industry-leading execution capabilities.

Significant Revenue and Backlog Visibility

Our backlog consists of the estimated amount of revenue we expect to realize from future work on uncompleted contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options. A significant portion of our 24-month backlog is attributable to master service agreements and other service agreements, none of which require our customers to purchase a minimum amount of services and are cancelable on short or no advance notice. Backlog amounts are determined based on estimates that incorporate historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers.

Our long-standing relationships with blue-chip, investment grade customers enable us to understand our customers’ needs and expand our backlog. Our backlog provides long-term visibility into a recurring and growing revenue base. QualTek has significant revenue visibility given our estimated $2.1 billion two-year backlog of which $2.0 billion relates to our Telecom segment and $0.1 billion relates to our Renewables & Recovery Logistics segment.

Backlog is not a measure defined by United States generally accepted accounting principles (“GAAP”) and should be considered in addition to, but not as a Delaware limited liability company on May 15, 2018substitute for, GAAP results. Participants in connectionour industry often disclose a calculation of their backlog; however, our methodology for determining backlog may not be comparable to the methodologies used by others. There can be no assurance as to our customers’ requirements or if actual results will be consistent with the acquisition by Brightstar Capital Partnersestimates included in our forecasts. As a result, our backlog as of QualTek LLC.any particular date is an uncertain indicator of future revenue and earnings.

Proven Acquisition Strategy with Successful Integration Process

Our management team has demonstrated the success of its unique M&A strategy through the successful identification and integration of nine add-ons in the last three-and-a-half years, including four during 2021. QualTek’s principal executive offices are located at 475 Sentry Parkway E, Suite 200 Blue Bell, PA 19422 and the Company’s phone number is (484) 804-4500.successful M&A history

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The Business Combinationdemonstrates our extensive experience in identifying synergistic targets and successfully integrating them into our platform. QualTek enables a quick and seamless integration process by onboarding the target business onto QualTek’s supporting IT infrastructure, leveraging our QVision platform to standardize performance within the target business to meet the standard of quality that QualTek delivers.

On June 16, 2021, ROCROur M&A activity has also successfully diversified our revenue base across a number of high quality customers in both the telecommunication and renewable energy sectors, with continued emphasis on providing complementary service offerings to drive cross-sell and capture market share and we expect to continue acquiring target companies at accretive multiples.

World-Class Talent and Management Team

QualTek agreedis led by highly experienced management team that is positioned to drive market share capture and capitalize on sector momentum. Our senior management team has an average of 25+ years of individual industry experience and has worked together for a considerable period of time. Our team is well suited to establish and maintain long-standing relationships with blue-chip customers as a result of our technical expertise, rigorous quality and safety standards, and execution track record.

Strategic Regional Presence across the Business Combination underU.S.

QualTek has a national footprint with approximately 80 strategically located service locations across the termsU.S. in close proximity to our major customers, allowing us to respond to customer demand swiftly and efficiently. Our presence in multiple regions gives us valuable insight into local market drivers and customer demand, thereby enabling us to provide bespoke services in each market. Due to this presence, QualTek has also built deep relationships with local customers that help drive business development, project execution, and cross-sell opportunities. QualTek serves markets locally through a dedicated in-house employee base of approximately 1,900 employees and its activities provide work for over 5,000 people through the Business Combination Agreement. Pursuantuse of subcontracting firms to access a deeper and more flexible labor pool to efficiently deliver on engagements across the terms set forthregion.

Growth Strategy

Expand Service Offerings & Solutions while Leveraging Contract Opportunities

QualTek’s complementary service offering creates an opportunity for us to grow our business with customers in two core ways: by winning more contracts and cross-selling services. We anticipate growth in our Telecom business as spectrum continues to become available. Additionally, we plan to cross-sell our full-suite of wireless services to our existing customer base.

In our Renewables & Recovery Logistics segment, we see significant opportunity to leverage existing customers and footprint for incremental projects. We also expect the Biden administration to promote more spending in renewables, not only through government contracts, but also in other sectors and businesses that will in turn reinvest in renewable energy solutions.

Scaled Growth Leader in the Business Combination Agreement, (i)Early Stage of a direct, wholly owned subsidiaryMulti-Year Telecom and Renewables Infrastructure Spend Cycle

We believe that QualTek is poised to capitalize on attractive industry dynamics and tailwinds. Increasing data consumption across multiple platforms, continued growth of the Companymobile data demand, increasing popularity of video streaming services, and continued expansion of fiber networks are all drivers of carrier demand for network infrastructure. This exponential increase in data traffic will be merged withrequire an upgraded network infrastructure and into BCP QualTek Investors, LLC, a Delaware limited liability company (the “Blocker”), with the Blocker surviving as a wholly owned subsidiary of the Company (the “Blocker Merger”), (ii) immediately after the Blocker Merger, the Blocker will be merged with and into the Company, with the Companydeeper fiber penetration to serve as the surviving company (the “Buyer Merger”),foundation for 5G wireless technology moving forward. Every major carrier, including Verizon and (iii) immediately afterAT&T, has publicly committed to investing in the Buyer Merger,fiber and 5G build-out.

Continued Value Creation Through Strategic M&A

Since 2012, QualTek has successfully leveraged the experience and track record of our seasoned management team to identify and integrate tuck-in opportunities, which have aided in our growth both organically and inorganically. In the past three-and-a-half years, we have successfully acquired and integrated nine targets. Our origination process is largely centered on management’s deep relationships across the industry, which enable us to actively identify strategic targets in attractive markets or with complementary, value-added service capabilities. Thus, we have a direct, wholly owned subsidiarycontinually evolving platform of the Buyer will be merged withhigh quality potential targets.

QualTek also has a successful history of integrating tuck-ins and into BCP QualTek HoldCo, LLC,providing a Delaware limited liability company (“QualTek”), with QualTek as the surviving company (the “QualTek Merger”).

Business Combination Agreement

The Business Combination Agreement providesconducive environment for among other things, the following:target management to achieve earnouts. We are able to leverage our proprietary technology-driven and highly scalable shared services platform to

The cumulative value of the merger consideration is $306,888,378, assuming (x) QualTek issues $10,000,000 of Equity Interests as consideration for acquisitions by QualTek prior to the Closing and (y) $2,565,333 of interest accrues on the convertible promissory note issued by QualTek to BCP QualTek II, as further outlined below;
immediately following the Closing, on the Closing Date, ROCR will change its name to “QualTek Services Inc.”;
Blocker Merger Sub will merge with and into the Blocker (the “Blocker Merger”), resulting in the equity interests of the Blocker being converted into the right to receive 11,923,940 shares (as estimated as of the date hereof) of Class A Common Stock under the Business Combination Agreement (as further described below), and the owners of such equity interests in the Blocker (the “Blocker Owners”) being entitled to such shares of Class A Common Stock (as further described below) at the Closing, and thereafter, the surviving blocker will merge with and into ROCR, with ROCR as the surviving company (the “Buyer Merger”), resulting in the cancellation of the equity interests of the surviving blocker and ROCR directly owning all of the QualTek Units previously held by the Blocker;
immediately following the Buyer Merger, Company Merger Sub will be merged with and into QualTek, with QualTek as the surviving company (the “QualTek Merger,” and together with the Blocker Merger and the Buyer Merger, the “Mergers”), resulting in (i) QualTek becoming a subsidiary of ROCR, (ii) the QualTek Units (excluding those held by the Blocker and ROCR) being converted into the right to receive 18,764,898 shares (as estimated as of the date hereof) of Class B Common Stock under the Business Combination Agreement (as further described below) and the holders of QualTek Units being entitled to such shares of Class B Common Stock (as further described below) at the Closing, (iii) the QualTek Units held by ROCR being converted into the right to receive a number of Common Units (as defined herein) equal to the number of shares of Class A Common Stock issued and outstanding (i.e., 31,383,440 QualTek Units), less the number of Common Units received in connection with the contribution described immediately below (estimated as of the date of this prospectus to be approximately 15,805,750 QualTek Units);
with respect to the portion of merger consideration under the Business Combination Agreement at the Closing to which the Blocker Owners and holders of QualTek Units are entitled as described above, the cumulative value of merger consideration to which they are together entitled equals the Equity Value. The “Equity Value” is the sum of (i) $294,318,543.75, plus (ii) the value of any Equity Interests of the Company issued as consideration for any acquisitions by the Company prior to the Closing (which, as of the date hereof, is currently estimated to be an amount between $10,000,000) plus (iii) the amount of interest accrued on that certain convertible promissory note in an aggregate principal amount of $30,557,501.2 issued by the Company to BCP QualTek II in exchange for all of BCP QualTek II’s Class B Units. The exact amount allocated between the Blocker Owners and holders of QualTek Units is determined by their respective governing documents, and as of the date hereof is expected to be allocated as follows (i) 3,642,750 shares of Class A Common Stock to BCP AIV Investor Holdings-3, L.P., (ii) 4,184,290 shares of Class A Common Stock to BCP Strategic AIV Investor Holdings-2, L.P., (iii) 4,096,901 shares of Class A Common Stock to BCP QualTek Investor Holdings, L.P., (iv) 11,780,782 shares of Class B Common Stock and 11,780,782 Common Units to BCP QualTek, LLC, (v) 2,158,223 shares of Class B Common Stock and 2,158,223 Common Units to BCP QualTek II, LLC, and (vi) 4,825,893 shares of Class B Common Stock and 4,825,893 Common Units to BCP QualTek Management LLC. No portion of the merger consideration will be paid in cash. The foregoing represents the total consideration to be paid to the Blocker Owners and holders of QualTek Units in connection with the Business Combination;

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ROCR will contribute, as a capital contribution in exchange for a portion of the QualTek Units it acquired in the QualTek Merger (estimated as of the date of this prospectus to be approximately 15,805,750 QualTek Units), an amount of cash available after payment of the merger consideration under the Business Combination Agreement estimated as of the date of this prospectus to be approximately $158,057,500, assuming no public stockholders of ROCR exercise redemption rights with respect to their Public Shares for a pro rata share of the funds in the Trust Account, which will be used by QualTek or its Subsidiaries to pay the transaction expenses under the Business Combination Agreement;

seamlessly integrate and grow the acquisition targets. Over time, we often see a reduction in our acquisition multiple (between pre-acquisition EBITDA multiple and post-acquisition EBITDA multiple) as QualTek realizes significant growth synergies and expands its business with customers.

Our Services and Solutions

We are a leading, one-stop infrastructure solutions provider at the epicenter of the 5G and renewables buildout. To serve our customers, we operate in two distinct segments: Telecom, which includes our wireless and wireline engineering and construction services along with our electrical construction and maintenance services, and Renewables & Recovery Logistics.

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Telecommunications

Our Telecom segment helps our clients build and maintain better, more reliable networks across the United States. We are able to provide technology-driven, field-based critical services across every stage of the network life-cycle for the telecommunications industry and power utility industry. This segment is composed of three sub-segments of services: wireless, wireline and power.

Wireless

This sub-segment operates under the brand QualTek Wireless as a turnkey provider of installation, project management, maintenance, real estate, and site acquisition to major wireless carriers. Some other services offered include:

the amount of cash ROCR will contribute equals the sum (without duplication) of (i) the cash in the trust account ROCR established with Continental Stock Transfer & Trust (after reduction by any redemptions thereof by ROCR equity holders), plus (ii) the amount of Pre-PIPE ProceedsArchitecture and PIPE Proceeds;

the limited liability company agreement of QualTek will be amended and restated to, among other things, reflect the QualTek Merger and admit ROCR as the managing member of QualTek; andEngineering
following the completion of the Business Combination, as described above, our organizational structure will be what is commonly referred to as an umbrella partnership corporation (or Up-C) structure. This organizational structure will allow the former equityholders of QualTek (other than the Blocker) (the “Flow-Through Sellers”) to retain their equity ownership in QualTek, an entity that is classified as a partnership for U.S. federal income tax purposes, in the form of common units of QualTek issued pursuant to the Business Combination (“Common Units”). Each Flow-Through Seller will also hold a number of shares of Class B Common Stock equal to the number of Common Units held by such Flow-Through Seller, which have no economic value, but which will entitle the holder thereof to one (1) vote per share at any meeting of the shareholders of ROCR. The Blocker Owners, by contrast, hold their equity ownership in ROCR, a Delaware corporation that is a domestic corporation for U.S. federal income tax purposes. The parties agreed to structure the Business Combination in this manner for tax and other business purposes, and we do not believe that our Up-C organizational structure will give rise to any significant business or strategic benefit or detriment.Permitting

Organizational Structure

Prior to the Business Combination

The diagrams below depict simplified versions of the current organizational structures of ROCRProgram and QualTek, respectively.Construction Management
Construction and Integration
Site Acquisition
Real Estate

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GraphicWireline

This sub-segment provides fiber optic aerial and underground installation, fiber optic splicing, termination & testing, new installation, engineering, and fulfillment services to major telecommunication companies. Other wireline services include:

Fiber Backhaul
Aerial Installation
Pole Upgrades
Fiber / Copper Splicing
Direction Drilling
Missile Boring
Trenching
OTDR Test / Certification
MDU Retro-Fits
MTU Builds

QualTek’s ability to implement smarter designs, increase utilization rates, and improve network performance all help lower operating expenses and increase profits for our customers. In the Wireless and Wireline sub-segments, QualTek has long-standing relationships with AT&T, Verizon, T-Mobile, Dish, Comcast, Altice, amongst many other blue-chip names.

Power

This sub-segment provides electrical contracting, and utility construction and maintenance services to municipalities, electric membership cooperatives, and electric-utility companies, including the construction and maintenance of overhead and underground distribution systems. We provide comprehensive power line services including:

New-build Distribution Line Construction
Maintenance
Pole Replacements
Live-line Maintenance
Hardening and Reliability Services
Directional Boring
Underground Structures
Duct Bank Projects
Direct-Bury Conduit
Greenfield Residential Distribution

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The diagram below depictsQualTek has the steps involvedexperience and the resources necessary to reliably deliver quality work for even the most complex and demanding overhead and underground ventures.

Renewables & Recovery Logistics

Our Renewables & Recovery Logistics segment provides end-to-end services for clients in the Business Combination.renewable energy sector and supports business continuity and disaster relief for clients in the telecommunications, power utility, and renewable energy industries.

Renewables

GraphicThis sub-segment operates under the brand QualTek Renewables and provides installation, testing, and maintenance for wind farms, solar farms, and fiber optic grids. Other QualTek Renewables services include:

Fiber Optic Terminations
OTDR and Power Meter Testing
Fusion Splicing
Fiber Replacement
Fiber Optic and Copper Infrastructure Installation
Cable Jetting
Boring & Trenching
Wind and Solar Farm fiber, installation, and testing
Large scale data communications solutions and installation
OPGW & ADSS Aerial transmission line installation

Our wind business comprises a majority of the revenue for our Renewables sub-segment for the fiscal year ending December 31, 2021. Advanced wind turbines include a large number of sensors whose signals are prone to contamination from electrical interference from lightning strikes. It is increasingly common to use fiber optics to galvanically isolate such interfaces, which is more difficult and costly with copper wires. This not only limits the damage of any lightning strikes but also can help reduce the effects of power line noise on sensitive sensor readings. Fiber optics are used for both galvanic isolation purposes and data communications. In addition, offshore turbines are often situated five plus miles from the control center on land, making routine maintenance difficult and costly. As a result, wind turbine operators increasingly rely on complex sensors to monitor efficiently and schedule routine maintenance. Fiber optic cables are the preferred choice from a reliability and ease of maintenance perspective, especially at scale.

Our solar business services help support solar power generation by ensuring that our clients’ farms are running safely and efficiently. In a solar farm power generation system, large amounts of current are generated from the heat of the sun. In order to protect the equipment from current leakage, galvanic insulation becomes important to ensure the power system’s quality and reliability. Fiber optics offer insulation protection from high-voltage/current glitches and unwanted signals into power equipment controls and communication. In addition, fiber optic communication can cover longer link distance connections compared to copper wire. As the solar farms grow in size, monitoring and controlling all the solar panels requires long link distance connections, which is only possible with fiber optic cable.

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The diagrams below depictRecovery Logistics

This sub-segment operates under the brand QualTek Recovery Logistics and provides business continuity, restoration, and disaster relief services to its clients, including AT&T, Verizon, Duke Energy, Gulf Power, and Entergy, amongst others. QualTek Recovery Logistics is able to deploy recovery teams from any one of QualTek’s approximately 80 locations, enabling rapid responses across North America. Some other services offered include:

Recovery Management
Transport Logistics
Temporary Shelter
Network Recovery
Fleet Services
Energy Resources
Catering
Sanitation

Through our 2018 acquisition of Recovery Logistics, LLC (“RLI”), we transformed our recovery logistics sub-segment from a simplified version of our organizational structure immediately followingregional player with concentration in the completion of the Business Combination under both the minimum and maximum redemption scenarios.

Minimum Redemption Scenario

Graphic

(1)  For the purposes of this diagram, it is assumed that the Pre-PIPE Notes are amended and any other agreements deemed necessary are entered into such that upon the consummation of the Business Combination, the Pre-PIPE Notes automatically convert into Common Units (alongSoutheast to a fully national presence with a correspondingdiversified customer base which can be served out of approximately 80 locations. RLI is a leading provider of business continuity and disaster recovery operations for the telecommunications and power utility sectors. RLI helps businesses recover from unplanned events, including hurricanes, winter storms and floods.

QualTek’s recent entry into the renewable energy space positions it to capitalize on sector tailwinds. Within Renewables, there is also significant opportunity for the Company to leverage existing customer relationships, as well as its footprint, to gain traction and win incremental projects. This also applies to QualTek’s Recovery Logistics sub-segment, as the Company may be able to cross-sell recurring maintenance and recovery services to capture incremental revenue and deepen penetration with existing customer relationships. Providing recovery logistics capabilities offers another touchpoint for the Company to deliver high value-added services, underlining QualTek’s extensive repertoire of end-to-end services.

We believe that revenue will continue to be propelled by the government’s focus and spending in the Renewables space, as well as QualTek’s commitment to expanding its service offerings and customer base, specifically in its Recovery Logistics sub-segment.

Contract Overview

QualTek has numerous MSAs with blue chip customers that extend for periods of one or more years, with a majority for three or more years, some of which have automatic renewals, providing meaningful revenue visibility. Generally, the Company maintains multiple agreements with each customer as different geographies and scopes of work are individually priced. Pricing is generally based on a fixed price per unit basis with up to hundreds of units priced in a single contract. Many contracts specify discrete billing milestones for each job to be performed. As an agreed-upon milestone is achieved, QualTek may bill for the work performed. Purchase orders for discrete projects are generally issued under an MSA. This allows for quantity adjustments for the number of shares of Class B Common Stock)tasks/units that are performed with respect to a project. There are also other adjustments such as “rock adders” that accommodate changes in lieu of converting into Class A Common Stock.

(2)  1.30% ofscope versus original engineering plans. As these adjustments are billed continuously throughout the shares of Class A Common Stock heldjob, they are known and often accepted by the PIPE Subscribers will be held by an entity affiliated with Brightstar.

customer as the work proceeds, substantially reducing QualTek’s risk of having cost overruns. MSAs have historically been renewed creating sticky revenue.

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Maximum Redemption ScenarioQualTek utilizes a disciplined approach when bidding on new contracts and will decline to bid if management believes QualTek cannot deliver the quality that meets Company standards while achieving return targets. The Company’s approach in submitting a bid that meets target returns is based on a number of factors, including, but not limited to its:

Experience in understanding the true scope of the work and associated margin
Knowledge of local factors (i.e. resources, regional dynamics, work conditions, etc.) that will impact work performed
Ability to simultaneously “lock-in” labor rates with contracts for the work to be performed on fixed price per unit basis (“back-to-back” agreements with contractors)
Pass-through nature of material purchases

Due to the Company’s turnkey capabilities and high standard for quality control, QualTek often receives requests from customers to bid on new contract opportunities.

Backlog

Our backlog consists of the estimated amount of revenue we expect to realize from future work on uncompleted contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options. A significant portion of our 24-month backlog is attributable to MSAs and other service agreements, none of which require our customers to purchase a minimum amount of services and are cancelable on short or no advance notice. Backlog amounts are determined based on estimates that incorporate historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers.

QualTek maintains strong potential revenue visibility through its two-year estimated backlog. Consistent with standard practice across the industry, QualTek calculates its estimated backlog for work under MSAs and other service agreements (including issued purchase orders) based on historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers. We have a two-year aggregate backlog of $2.1 billion of which $2.0 billion relates to our Telecom segment and $0.1 billion relates to our Renewables & Recovery Logistics segment.

Backlog is not a measure defined by GAAP and should be considered in addition to, but not as a substitute for, GAAP results. Participants in our industry often disclose a calculation of their backlog; however, our methodology for determining backlog may not be comparable to the methodologies used by others. There can be no assurance as to our customers’ requirements or if actual results will be consistent with the estimates included in our forecasts. As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings.

For more information about QualTek, please see the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of QualTek” and “Management.”

Graphic

(1)  For the purposes of this diagram, it is assumed that the Pre-PIPE Notes are amended and any other agreements deemed necessary are entered into such that upon the consummation of the Business Combination, the Pre-PIPE Notes automatically convert into Common Units (along with a corresponding number of shares of Class B Common Stock) in lieu of converting into Class A Common Stock.

(2)  1.65% of the shares of Class A Common Stock held by the PIPE Subscribers will be held by an entity affiliated with Brightstar.

Pre-PIPE Convertible Notes Offering, PIPE Subscription Agreements and PIPE Registration Rights Agreement

Pre-PIPE Convertible Notes Offering and Pre-PIPE Registration Rights Agreement

In connection with the Business Combination, accredited investors (each a “Pre-PIPE Investor”) purchased convertible notes of QualTek, as issuer (the “Notes Issuer”), in an aggregate principal amount of $44.4 million (the “Pre-PIPE Notes”) in a private placement, issuable pursuant to Note Purchase Agreements (the “Note Purchase Agreements”), among the Notes Issuer, ROCR and the Pre-PIPE Investors (the “Pre-PIPE Investment”). The Pre-PIPE Notes are senior unsecured unsubordinated obligations of the Notes Issuer and are not transferable without the consent of the Notes Issuer (other than customary exceptions for transfers to affiliates). The Notes Issuer intends to use the proceeds from the sale of the Pre-PIPE Notes for general working capital or to fund acquisitions of accretive business targets.

Unless earlier converted or redeemed in accordance with the terms of the Pre-PIPE Notes, the Pre-PIPE Notes have a perpetual maturity. The Pre-PIPE Notes will not bear interest and are subject to certain customary information rights.

Under the initial terms, the Pre-PIPE Notes were to automatically convert into Class A Common Stock at $8.00 per share upon consummation of the Business Combination. Pursuant to an amendment to the Notes Purchase Agreement and Amendment No. 1 to the Note, each effective as of January 14, 2022, upon consummation of the Business Combination, the Pre-PIPE Notes would automatically convert into Class A Common Stock at $6.40 per share, subject to certain adjustments. However, the Note Purchase Agreements provide that the parties will use commercially reasonable efforts to amend the Pre-PIPE Notes and any other agreements deemed necessary such that upon the consummation of the Business Combination, the Pre-PIPE Notes automatically convert into Common Units (along with a corresponding number of shares of Class B Common Stock) in lieu of converting into Class A Common Stock. Accordingly, in connection with the close of the Business Combination, the Notes Purchase Agreement and the Note are being

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further amended such that the Pre-PIPE Notes automatically convert into Common Units (along withRisk Factor Summary

There are a corresponding number of shares of Class B Common Stock). The number of Common Unitsrisks related to our business and Class B Common Stock will be equal to the quotient that results from dividing the aggregate principal amount of the Note by $6.40, subject to certain adjustments.

In addition, the ROCR Common Stock was originally soldinvesting in the ROCR IPO as a component of the Units for $10.00 per Unit. The Units consist of one share of ROCR Common Stock and one-quarter of one Warrant. As of February 1, 2022, the closing price on Nasdaq of ROCR Common Stock was $9.97 per share, and the closing price of the Warrants was $0.64 per Warrant. The conversion price under the Pre-PIPE Notes was initially $8.00 per share ofour Class A Common Stock, upon consummation ofwarrants and 2027 Convertible Notes that you should consider before deciding to invest. You should carefully consider all the Business Combination, reflecting a $2.00 discount to the initial purchase price of $10.00 per share for the PIPE Shares, and a $2.00 discount to the price per Unit sold to investorsinformation presented in the ROCR IPO. Following the amendment to the terms of the Pre-PIPE Investment on January 14 ,2022, the conversion price under the Pre-PIPE Note became $6.40 per share of Class A Common Stock upon consummation of the Business Combination, reflecting a reduction of $1.60 per share from the initial conversion price prior to the amendment, a $1.60 discount to the current purchase price of $8.00 per share for the PIPE Shares, and a $3.60 discount to the price per Unit sold to investorssection entitled “Risk Factors in the ROCR IPO. As discussed above, the Pre-PIPE Notes are being amended in connection with the close of the Business Combination such that upon consummation of the Business Combination, the Pre-PIPE Notes automatically convert into Common Units (along with a corresponding number of shares of Class B Common Stock) in lieu of converting into Class A Common Stock, the conversion price will reflect a similar conversion price as described above, and the Common Units and Class B Common Stock will be identical to the Common Units and Class B Common Stock to be issued in connection with the Business Combination. None of the Sponsor or ROCR’s officers, directors or their affiliates, is a Pre-PIPE Investor in the Pre-PIPE Investment.

ROCR also entered into a registration rights agreement with the Pre-PIPE Investors (the “Pre-PIPE Registration Rights Agreement”). Pursuant to the Pre-PIPE Registration Rights Agreement, ROCR has agreed to file (at ROCR’s sole cost and expense) a registration statement registering the resale of the shares of Class A Common Stock to be received upon automatic conversion of the Pre-PIPE Notes (the “Pre- PIPE Resale Registration Statement”) with the SEC no later than the 10th business day following the date ROCR first filed the proxy statement with the SEC, or August 25, 2021. ROCR will use its commercially reasonable efforts to have the Pre-PIPE Resale Registration Statement declared effective no later than the 60th calendar day following the Closing Date (or, in the event the SEC notifies ROCR that it will “review” the PIPE Resale Registration Statement, the 90th calendar day following the Closing Date (as defined in the Pre-PIPE Registration Rights Agreement)).

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PIPE Subscription Agreements and PIPE Registration Rights Agreement

In connection with the proposed Business Combination, ROCR has obtained commitments from certain accredited investors (each a “Subscriber”), including BCP QualTek LLC, Roth, Craig-Hallum, and certain officers and directors of ROCR, to purchase shares of Class A Common Stock which will be issued in connection with the Closing (the “PIPE Shares”), for an aggregate cash amount of $66.1 million at a purchase price initially of $10.00 per share, in a private placement (the “PIPE Investment”). Such commitments were made by way of the subscription agreements, by and between each Subscriber and ROCR (collectively, the “Subscription Agreements”). The terms of the Subscription Agreements were amended on January 14, 2022, to adjust the cost basis of the per share price from $10.00 per share to $8.00 per share. Additionally, pursuant to the amendment, Subscribers could elect to participate in the Convertible Note Investment in lieu of purchasing shares of Class A Common Stock pursuant to the Subscription Agreements. A total of approximately $24.7 million of the PIPE Investment elected to invest in the Convertible Note Investment in lieu of the PIPE Investment. In connection with the amendment, QualTek, the Sponsor, Craig- Hallum, Roth, ROCR's officers and directors and certain affiliates of ROCR's management waived (i) the right to purchase Convertible Notes in lieu of the PIPE Investment, and (i) the reduced per share price, and accordingly will continue to pay $10.00 per share pursuant to the Subscription Agreements. Such shares in the aggregate are equal to 2,001,500 shares. Following the PIPE Amendment, the aggregate number of shares to be issued pursuant to the Subscription Agreements is 4,676,500 shares of Class A Common Stock for gross proceeds of $41.4 million (or 7,145,000 shares of Class A Common Stock for gross proceeds of $66.1 million including the impact from PIPE investors who elected to participate in the Convertible Note Investment in lieu of the PIPE Investment).

In addition, the ROCR Common Stock was originally sold in the ROCR IPO as a component of the Units for $10.00 per Unit. The Units consist of one share of ROCR Common Stock and one-quarter of one Warrant. As of February 1, 2022, the closing price on Nasdaq of ROCR Common Stock was $9.97 per share, and the closing price of the Warrants was $0.64 per Warrant. Following the amendment to the terms of the PIPE Investment, the per share price under the PIPE Subscription Agreements is now $8.00 per share of Class A Common Stock upon consummation of the Business Combination, reflecting a reduction of $2.00 per share from the initial per share price prior to the amendment and a $2.00 discount to the price per Unit sold to investors in the ROCR IPO.

Certain offering-related expenses are payable by ROCR, including customary fees payable to the placement agents, Roth and Craig- Hallum, aggregating $5,150,000. The purpose of the sale of the PIPE Shares was to raise additional capital for use in connection with the Business Combination and to meet the minimum cash requirements provided in the Business Combination Agreement.

The PIPE Shares are identical to the shares of Class A Common Stock that will be held by ROCR’s public stockholders at the time of the Closing, except that the PIPE Shares will not be entitled to any redemption rights and will not be registered with the SEC at Closing.

The closing of the sale of the PIPE Shares (the “PIPE Closing”) is contingent upon the substantially concurrent consummation of the Business Combination. It is anticipated that the PIPE Closing will occur immediately prior to the consummation of the Business Combination. The PIPE Closing is subject to customary conditions, including:

ROCR filing with Nasdaq an application for the listing of the PIPE Shares and Nasdaq having not raised objection with respect thereto;
all representations and warranties of ROCR and the Subscriber contained in the relevant Subscription Agreement must be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Material Adverse Effect (as defined in the Subscription Agreements), which representations and warranties must haver been true in all respects) at, and as of, the PIPE Closing (except that representations and warranties expressly made as of an earlier date shall be true and correct in all material respects as of such date); and
all conditions precedent to the Closing of the Business Combination, including the approval by ROCR’s stockholders, shall have been satisfied or waived.

Each Subscription Agreement will terminate upon the earliest to occur of (i) such date and time as the Business Combination Agreement is validly terminated in accordance with its terms, (ii) upon the mutual written agreement of each of the parties to the Subscription Agreement and QualTek, (iii) if the conditions to the PIPE Closing are not capable of being satisfied or waived on or prior to February 16, 2022 and, as a result thereof, the transactions contemplated by each Subscription Agreement are not consummated at the PIPE Closing or (iv) if the PIPE Closing does not occur by February 16, 2022.

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ROCR also entered into a registration rights agreement with the PIPE Investors (the “PIPE Registration Rights Agreement”). Pursuant to the PIPE Registration Rights Agreement, ROCR agreed to file (at ROCR’s sole cost and expense) a registration statement registering the resale of the shares of Class A Common Stock to be purchased in the private placement PIPE Investment (the “PIPE Resale Registration Statement”) with the SEC no later than the 10th business day following the date ROCR first filed the proxy statement with the SEC, or August 25, 2021. ROCR will use its commercially reasonable efforts to have the PIPE Resale Registration Statement declared effective no later than the 60th calendar day following the Closing Date (or, in the event the SEC notifies ROCR that it will “review” the PIPE Resale Registration Statement, the 90th calendar day following the Closing Date (as defined in the PIPE Registration Rights Agreement)).

Convertible Note Subscription Agreements

In connection with the Business Combination Agreement, the Issuer has signed the Convertible Note Letter of Intent and intends to enter into the Convertible Note Subscription Agreements with the Convertible Note Investors, pursuant to which, among other things, the Issuer will agree to issue and sell to the Convertible Note Investors, in private placements to close substantially concurrently with Closing, the Convertible Notes in an aggregate principal amount of up to $125,000,000 at a purchase price of 98.00%this prospectus. Some of the principal amount, which purchase price may be amended in connection withrisks related to our business include the negotiation of the definitive documentation for the Convertible Notes. The Convertible Note Investment will close substantially concurrently with Closing and is contingent upon, among other things, negotiation of the definitive documentation for the Convertible Notes, stockholder approval of the Business Combination Proposal, approval of the Convertible Note Investment from the Issuer's existing lenders and the Closing. The Convertible Notes will be guaranteed by ROCR and the Issuer's subsidiaries that guarantee its credit facilities. The Convertible Notes are initially convertible into upto 12,500,000 shares of Class A Common Stock at an initial conversion price of $10.00 (subject to adjustment). The Convertible Note Investors may convert their Convertible Notes into shares of Class A Common Stock at any time. The Convertible Note Letter of Intent provides for an interest rate that will be set quarterly based on gross last twelve months leverage with a minimum interest rate of 9.50% per annum and up to a maximum of 11.75% as follows: (i) a leverage ratio of less than 4.25x will equate to an interest rate of 9.50%; (ii) a leverage ratio of 4.25x or greater but less than 4.75x will equate to an interest rate of 10.00%; (iii) a leverage ratio of 4.75x or greater but less than 5.25x will equate to an interest rate of 10.75%; and (iv) a leverage ratio of 5.25x or greater will equate to an interest rate of 11.75%. The Issuer may agree to a different interest rate in connection with the negotiation of the definitive documentation, which interest rate may be higher. The initial and maximum Conversion Price shall be $10.00 per share. If ROCR's shares trade below the Conversion Price prior to the first anniversary of the Closing Date, then the Conversion Price will be reduced to the lowest of (i) $10.00, (ii) 115% of the arithmetic average of the daily VWAPs for the 10-trading day period commencing on the first trading day after the public release of ROCR's first quarterly earnings announcement following the Closing Date, (iii) 115% of the arithmetic average of the daily VWAPs for the 10-trading day period commencing on the first trading day after the public release of ROCR's second quarterly earnings announcement following the Closing Date, (iv) 115% of the arithmetic average of the daily VWAPs for the 10-trading day period commencing on the first trading day immediately following the first anniversary of the Closing Date and (v) 115% of the arithmetic average of the daily VWAPs for the 10-trading day period commencing on the first trading day after the closing date of the applicable conversion reset offering by ROCR; provided that the Conversion Price may not be less than $5.50 per share.

Emerging Growth Company Status

QualTek qualifies as an emerging growth company (“EGC”) pursuant to the provisions of the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”). For as long as QualTek is an EGC, it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in QualTek’s periodic reports and proxy statements, exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation and shareholder advisory votes on golden parachute compensation.

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In addition, under the JOBS Act, EGCs can delay adopting new or revised accounting standards until such time as those standards apply to private companies. QualTek intends to take advantage of the longer phase-in periods for the adoption of new or revised financial accounting standards under the JOBS Act until it is no longer an EGC. QualTek’s election to use the phase-in periods permitted by this election may make it difficult to compare its financial statements to those of non-EGCs and other EGCs that have opted out of the longer phase-in periods permitted under the JOBS Act and who will comply with new or revised financial accounting standards. If QualTek were to subsequently elect instead to comply with public company effective dates, such election would be irrevocable pursuant to the JOBS Act.

Risk Factor Summaryfollowing:

Risks Related to QualTekthe Company

Many of the industries QualTekthe Company serves are highly competitive and subject to rapid technological and regulatory changes, as well as customer consolidation, any of which could result in decreased demand for QualTek’sthe Company’s services and adversely affect its results of operations, cash flows and liquidity.
Unfavorable market conditions, market uncertainty, public health outbreaks such as the COVID-19 pandemic and/or economic downturns could reduce capital expenditures in the industries QualTekthe Company serves or could adversely affect its customers, which could result in decreased demand or impair its customers’ ability to pay for QualTek’sthe Company’s services.
QualTek’sThe Company’s failure to properly manage projects, or project delays, could result in additional costs or claims or failure to achieve actual revenue or profits when anticipated or at all, which could have a material adverse effect on QualTek’sthe Company’s operating results, cash flows and liquidity.
QualTek’sThe Company’s failure to recover adequately on charges against project owners, subcontractors or suppliers for payment or performance could have a material adverse effect on QualTek’sthe Company’s financial results.
QualTekThe Company derives a significant portion of its revenue from a few customers, and the loss of one or more of these customers, or a reduction in their demand for QualTek’sthe Company’s services, could impair QualTek’sthe Company’s financial performance. In addition, many of QualTek’sthe Company’s contracts, including its service agreements, do not obligate QualTek’sthe Company’s customers to undertake any infrastructure projects or other work with QualTek,the Company, and most of QualTek’sthe Company’s contracts may be canceled on short or no advance notice.
Amounts included in QualTek’sthe Company’s backlog may not result in actual revenue or translate into profits. QualTek’sThe Company’s backlog is subject to cancellation and unexpected adjustments and is, therefore, an uncertain indicator of future operating results.
QualTek’sThe Company’s business is seasonal and affected by the spending patterns of QualTek’sthe Company’s customers and timing of governmental permitting, as well as weather conditions and natural catastrophes, which exposes QualTekthe Company to variations in quarterly results.
QualTekThe Company relies on information, communications and data systems in its operations. System and information technology interruptions and/or data security breaches could adversely affect QualTek’sthe Company’s ability to operate and its operating results or could result in harm to its reputation.
A failure to comply with environmental laws could result in significant liabilities or harm QualTek’sthe Company’s reputation, and new environmental laws or regulations could adversely affect QualTek’sthe Company’s business.
QualTekThe Company has a significant amount of debt, which could adversely affect its business, financial condition and results of operations or could affect its ability to access capital markets in the future. In addition, QualTek’sthe Company’s debt contains restrictive covenants that may prevent it from engaging in transactions that might benefit the Company.

Risk Related to the Class A Common Stock

The market price of the Class A Common Stock is likely to be highly volatile, and you may lose some or all of your investment.

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The Combined Company’s business and operations could be negatively affected if it becomes subject to any securities litigation or shareholder activism, which could cause the Combined Company to incur significant expense, hinder execution of business and growth strategy and impact its stock price.
Following the Business Combination, we will beWe are a “controlled company” within the meaning of the applicable rules of Nasdaq and, as a result, may qualify for exemptions from certain corporate governance requirements. To the extent we rely on such exemptions, our shareholders willdo not have the same protections afforded to stockholders of companies that are not controlled companies.
QualTekThe Company is an emerging growth company within the meaning of the Securities Act, and QualTekthe Company has taken advantage of certain exemptions from disclosure requirements available to emerging growth companies; this could make QualTek’sthe Company’s securities less attractive to investors and may make it more difficult to compare QualTek’sthe Company’s performance with other public companies.

Risks Related to Tax

Our only principal asset following the Business Combination will beis our interest in QualTek HoldCo, and accordingly we will depend on distributions from QualTek HoldCo to pay dividends, taxes, other expenses, and make any payments required to be made under the Tax Receivable Agreement.
The Tax Receivable Agreement will require us to make cash payments to the TRA Holders in respect of certain tax benefits and such payments may be substantial. In certain cases, payments under the Tax Receivable Agreement may (i) exceed any actual tax benefits the Tax Group realizes or (ii) be accelerated.
We could be adversely affected by changes in applicable tax laws, regulations, or administrative interpretations thereof in the United States or other jurisdictions.

Emerging Growth Company

The Company is an “emerging growth company,” as defined under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”). As an emerging growth company, the Company is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These include, but are not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and the requirement to obtain stockholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

The Company will remain an emerging growth company until the earlier of (i) December 31, 2026 (the last day of the fiscal year following the fifth anniversary of the consummation of the ROCR IPO), (ii) the last day of the fiscal year in which the Company has total annual gross revenue of at least $1.07 billion, (iii) the last day of the fiscal year in which the Company is deemed to be a “large accelerated filer,” as defined in the Exchange Act, and (iv) the date on which the Company has issued more than $1.0 billion in nonconvertible debt during the prior three-year period.

Smaller Reporting Company

We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the last day of the second fiscal quarter of the prior fiscal year and our annual revenue exceeded $100 million during such completed fiscal year or (ii) the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the last day of the second fiscal quarter of the prior fiscal year.

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THE OFFERING

Issuer

Roth CH Acquisition III Co., to be renamed

QualTek Services Inc.

in connection with the Business Combination

Shares that may be offered and sold from time to time by the Selling Stockholders named herein

11,614,000 shares of Class A Common Stock.

ROCRShares of Class A Common Stock issued and outstanding priorOffered by the Selling Stockholders

Up to the consummation of the Business Combination and any3,589,000 shares (including 306,000 shares issuable upon exercise of warrants held by the Selling Stockholders).

14,783,000 shares of ROCR Common Stock

Class A Common Stock to be issued and outstanding followingWarrants offered by the consummation of the Business Combination (assuming no redemptions and excluding shares issuable upon exercise of outstanding warrants)(1)Selling Stockholders

31,383,439 shares of Class A Common Stock

306,000 warrants.

Shares of Class A Common Stock to be issued upon Conversion of the 2027 Convertible Notes

Up to 31,104,034 shares issuable upon the conversion of $124,685,000 in aggregate principal amount of outstanding 2027 Convertible Notes.

2027 Convertible Notes Offered by the Selling Noteholders

Up to $124,685,000 aggregate principal amount of 2027 Convertible Notes.

Outstanding Shares of Class A Common Stock

24,446,284 shares of Class A Common Stock (as of September 15, 2022).

Outstanding Shares of Class B Common Stock

26,663,575 shares of Class B Common Stock (as of September 15, 2022).

Outstanding Shares of Common Stock

51,109,859 shares of common stock (as of September 15, 2022).

Use of proceedsProceeds

All

We will not receive any proceeds from the sale of shares of Class A Common Stock by the Selling Securityholders. With respect to the shares of Class A Common Stock offeredunderlying the warrants, we will not receive any proceeds from such shares except with respect to amounts received by us upon exercise of such warrants to the Selling Stockholders pursuant to this prospectus will be sold by the Selling Stockholdersextent such warrants are exercised for their respective accounts.cash. We will not receive any of the proceeds from these sales.the sale of the shares of Class A Common Stock or 2027 Convertible Notes by the Selling Noteholders. We intend to use any such proceeds for general corporate purposes.

Proposed NASDAQ Capital Market symbolfor Class A Common Stock, warrants and 2027 Convertible Notes

“QTEK”

Our Class A Common Stock and warrants are currently traded on Nasdaq under the symbols “QTEK” and “QTEKW,” respectively. The 2027 Convertible Notes will not be listed on any securities exchange.

Risk Factors

Investing in Class A Common Stock involves a high degree of risk.

See “Risk Factors”Risk Factors and the other information included in this prospectus for a discussion of the factors you should consider carefully before you decide to investinvesting in Class A Common Stock.our securities.

(1)Represents the number of shares of Class A Common Stock outstanding at the Closing assuming that none of ROCR’s public stockholders exercise their redemption rights in connection with the special meeting of the ROCR’s stockholders.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements about the anticipated benefits of the Business Combination and the financial condition, results of operations, earnings outlook and prospects of QualTek. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of the management of the Company, as applicable and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those discussed and identified in public filings made with the SEC by the Company and include, but are not limited to, the following:

expectations regarding the Company’s strategies and future financial performance, including its future business plans or objectives, prospective performance and opportunities and competitors, revenues, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures, and the Company’s ability to invest in growth initiatives and pursue acquisition opportunities;
our limited operating history as a combined company makes it difficult to evaluate our current business and future prospects;
our management team’s limited experience managing a public company;
the highly competitive industries that the Company serves, which are also subject to rapid technological and regulatory changes, as well as customer consolidation;
unfavorable market conditions, market uncertainty, public health outbreaks such as the COVID-19 pandemic and/or economic downturns;
failure to properly manage projects, or project delays;
failure to recover adequately on charges against project owners, subcontractors or suppliers for payment or performance;
the loss of one or more key customers, or a reduction in their demand for the Company’s services;
The Company’s backlog being subject to cancellation and unexpected adjustments;
the seasonality of the Company’s business, which is affected by the spending patterns of the Company’s customers and timing of governmental permitting, as well as weather conditions and natural catastrophes;
system and information technology interruptions and/or data security breaches;
failure to comply with environmental laws;
the Company’s significant amount of debt, which could adversely affect its business, financial condition and results of operations or could affect its ability to access capital markets in the future, and may prevent the Company from engaging in transactions that might benefit it due to its debt’s restrictive covenants; and
the Company’s status as a “controlled company” within the meaning of the Nasdaq rules and, as a result, qualifying for exemptions from certain corporate governance requirements, as a result of which you will not have the same protections afforded to stockholders of companies that are subject to such requirements.

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Should one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of the Company prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

All subsequent written and oral forward-looking statements concerning the matters addressed in this prospectus and attributable to the Company or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this prospectus. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this prospectus to reflect the occurrence of unanticipated events.

In addition, statements that the Company “believes” and similar statements reflect the Company’s beliefs and opinions on the relevant subject. These statements are based upon information available to such party as of the date of this prospectus, and while the Company believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that the Company has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF QUALTEK

The selected historical financial data presented below is derived from our unaudited consolidated financial statements and audited consolidated financial statements as of and for the nine months ended October 2, 2021 and October 3, 2020 and as of and for the years ended December 31, 2020 and 2019 included elsewhere in this registration statement. The unaudited consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in our opinion, have included all adjustments necessary to present fairly in all material respects our financial position and results of operations.

The historical results presented below are not necessarily indicative of the results that may be expected in any future periods. You should read the following selected historical financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of QualTek” and our consolidated financial statements and accompanying footnotes included elsewhere in this registration statement.

    

For the Nine Months Ended

    

For the Years Ended

(in thousands except per unit data)

    

October 2, 2021

    

October 3, 2020

    

2020

    

2019

Statement of Operations and Comprehensive Loss Data

  

 

  

  

 

  

Revenue

465,184

 

524,080

656,524

 

599,268

Costs and expenses

  

 

  

  

 

  

Cost of revenues

372,496

 

462,760

597,583

 

525,403

General and administrative

37,962

 

35,660

47,049

 

42,665

Transaction expenses

2,875

 

567

988

 

4,257

Change in fair value of contingent consideration

(4,544)

 

(7,081)

 

6,149

Impairment of long-lived assets

 

 

840

Impairment of goodwill

 

28,802

 

8,132

Depreciation and amortization

39,136

 

34,761

46,475

 

40,103

Total costs and expenses

447,925

 

533,748

713,816

 

627,549

Income (loss) from operations

17,259

 

(9,668)

(57,292)

 

(28,281)

Other income (expense):

  

 

  

  

 

  

Gain on sale/disposal of property and equipment

514

 

576

729

 

129

Interest expense

(35,778)

 

(28,824)

(37,659)

 

(33,380)

Loss on extinguishment of convertible notes

(2,436)

 

 

Total other expense

(37,700)

 

(28,248)

(36,930)

 

(33,251)

Loss from continuing operations

(20,441)

 

(37,916)

(94,222)

 

(61,532)

Loss from discontinued operations

(8,114)

 

(1,708)

(3,865)

 

(6,262)

Net loss

(28,555)

 

(39,624)

(98,087)

 

(67,794)

Accrued preferred return

1,638

 

2,508

3,287

 

742

Net loss attributable to Class A units

(30,193)

 

(42,132)

(101,374)

 

(68,536)

Net loss per unit:

  

 

  

  

 

  

Basic and diluted net loss per unit from continuing operations

$

(10.21)

$

(20.15)

$

(48.61)

$

(31.74)

Basic and diluted net loss per unit from discontinued operations

 

(3.75)

 

(0.85)

 

(1.93)

 

(3.19)

Basic and diluted net loss per unit

$

(13.96)

$

(21.00)

$

(50.54)

$

(34.93)

Basic and diluted weighted average common units outstanding

 

2,161,951

 

2,005,824

 

2,005,824

 

1,962,115

Non-GAAP financial data:

 

  

 

  

 

  

 

  

Adjusted EBITDA(1)

 

55,991

 

26,627

 

13,139

 

31,870

As of October 2,

As of December 31,

(in thousands)

    

2021

    

2020

    

2019

Balance Sheet Data

    

  

    

  

    

  

Cash

$

5,405

$

76

$

91

Working capital(2)

 

199

 

15,775

 

71,316

Total assets

 

769,565

 

640,868

 

747,230

Total liabilities

 

758,708

 

611,234

 

613,072

Total equity

 

10,857

 

29,634

 

134,158

(1)Adjusted EBITDA is a non-GAAP measure. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations of QualTek — Key Financial and Operating Measures — Non-GAAP Financial Measures” for definitions, additional discussion of management’s use of non-GAAP measures as supplemental financial measures and reconciliations of net

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loss to Adjusted EBITDA. Adjusted EBITDA may not be comparable to similarly titled non-GAAP measures of other companies as other companies may have calculated the measures differently.
(2)QualTek defines working capital as total current assets minus total current liabilities.

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RISK FACTORS

You should carefully review and consider the following risk factors, andtogether with all of the other information containedincluded in this prospectus, including the consolidated financial statements and the accompanying notes and matters addressed in the section titled “Cautionary Note Regarding Forward-Looking Statements,” in evaluating an investment in Class A Common Stock. The following risk factors apply to the business and operations of QualTek and also apply to the business and operations of the Combined Company following the consummation of the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to realize the anticipated benefits of the Business Combination and may have an adverse effect on the business, cash flows, financial condition and results of operations of the Combined Company following the consummation of the Business Combination.prospectus. We may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included elsewhere in this prospectus. These risk factors are not exhaustive. You should carefully consider the following risk factors in addition to the other information included in this prospectus, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” QualTek may face additional risks and uncertainties that are not presently known to it, or that QualTek currently deems immaterial, which may also impair ourQualTek’s business cash flows,or financial conditioncondition. The following discussion should be read in conjunction with the consolidated financial statements and results of operations.

Risks Related to QualTek

Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refer to QualTek and its subsidiaries priornotes to the consummationfinancial statements included herein. Additional risks, beyond those summarized below, may apply to our activities or operations as currently conducted, or as we may conduct them in the future, or in the markets in which we operate or may in the future operate. Consistent with the foregoing, we are exposed to a variety of the Business Combination and the Combined Company and its subsidiaries after the consummation of the Business Combination.risks, including risks associated with:

Risks Related to the Industries We Serve

Changes to laws, governmental regulations and policies, including governmental permitting processes and tax incentives, could affect demand for our services. Additionally, demand for construction services depends on industry activity and expenditure levels, which can be affected by a variety of factors. Our inability or failure to adjust to such changes or activity could result in decreased demand for our services and adversely affect our results of operations, cash flows and liquidity.

The industries we serve are subject to effects of governmental regulation, climate change initiatives and political or social activism, any of which could result in reduced demand for our services, delays in timing of construction of projects or cancellations of current or planned future projects. Many of our customers face stringent regulatory and environmental requirements and permitting processes, including governmental regulations and policies. Most of our communications customers are regulated by the Federal Communications Commission,FCC, and our utility customers are regulated by state public utility commissions. These agencies or governments could change their interpretation of current regulations and/or may impose additional regulations, which could have an adverse effect on our customers, reduce demand for our services and adversely affect our results of operations, cash flows and liquidity. We build renewable energy infrastructure, including wind, solar and other renewable energy facilities, for which the development may be partially dependent upon federal tax credits, existing renewable portfolio standards and other tax or state incentives. Elimination of, or changes to, existing renewable portfolio standards, tax incentives or similar environmental policies could negatively affect demand for our services.

All of the above factors could result in fewer projects than anticipated or a delay in the timing of construction of these projects and the related infrastructure, which could negatively affect demand for our services, and have a material adverse effect on our results of operations, cash flows and liquidity.

Many of the industries we serve are highly competitive and subject to rapid technological and regulatory changes, as well as customer consolidation, any of which could result in decreased demand for our services and adversely affect our results of operations, cash flows and liquidity.

Our industry is highly fragmented, and we compete with other companies in most of the markets in which we operate, ranging from small independent firms servicing local markets to larger firms servicing regional and national markets. We also face competition from existing and prospective customers that employ in-house personnel to perform some of the services we provide. There are relatively few barriers to entry into certain of the markets in which we operate and, as a result, any organization that has adequate financial resources and access to technical expertise and skilled personnel may become a competitor. Most of our customers’ work is awarded through bid processes, and our project bids may not be successful. Our results of operations, cash flows and liquidity could be materially and adversely affected if we are unsuccessful in bidding for projects or renewing our master service agreements, or if our ability to win such projects or agreements requires that we accept lower margins.

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We derive a substantial portion of our revenue from customers in industries that are subject to rapid changes in technology, governmental regulation, changing consumer demands and consolidation, such as the telecommunications industry. Technological advances in the markets we serve could render existing projects or technologies uncompetitive or obsolete and/or could alter our customers’ existing operating models.

Our failure to rapidly adopt and master new technologies as they are developed or adapt to changing customer requirements could reduce demand for our services. Additionally, consolidation among our customers could result in the loss of customer revenue or

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could negatively affect customer demand for the services we provide and have a material adverse effect on our results of operations, cash flows and liquidity.

Unfavorable market conditions, market uncertainty, public health outbreaks such as the COVID-19 pandemic and/or economic downturns could reduce capital expenditures in the industries we serve or could adversely affect our customers, which could result in decreased demand or impair our customers’ ability to pay for our services.

Demand for our services has been, and will likely continue to be, cyclical in nature and vulnerable to general downturns in the U.S. and Canadian economies.economy. Unfavorable market conditions, market uncertainty, public health outbreaks such as the COVID-19 pandemic and/or economic downturns could have a negative effect on demand for our customers’ services or the profitability of their services. We continually monitor our customers’ industries and their relative health compared to the economy as a whole. Our customers may not have the ability to fund capital expenditures for infrastructure or may have difficulty obtaining financing for planned projects during economic downturns. Uncertain or adverse economic conditions or the lack of availability of debt or equity financing for our customers could reduce their capital spending and/or result in project cancellations or deferrals. Any of these conditions could materially and adversely affect our results of operations, cash flows and liquidity, and could add uncertainty to our backlog determinations. Other economic factors can also negatively affect demand for our services, including economic downturns affecting our communications and customer fulfillment customers, if services are ordered at a reduced rate, or not at all. A decrease in demand for the services we provide from any of the above factors, among others, could materially and adversely affect our results of operations, cash flows and liquidity.

An impairment of the financial condition of one or more of our customers due to economic downturns, or due to the potential adverse effects of the COVID-19 pandemic on economic activity, could hinder their ability to pay us on a timely basis. In difficult economic times, some of our clients may find it difficult to pay for our services on a timely basis, increasing the risk that our accounts receivable could become uncollectible and ultimately be written off. In certain cases, our clients are project-specific entities that do not have significant assets other than their interests in the project. From time to time, it may be difficult for us to collect payments owed to us by these clients. Delays in client payments may require us to make a working capital investment, which could negatively affect our cash flows and liquidity. Our results of operations, cash flows and liquidity could be materially and adversely affected if a client fails to pay us on a timely basis or defaults in making payments on a project for which we have devoted significant resources.

Risks Related to Our Business and Operations

Our failure to properly manage projects, or project delays, including those resulting from difficult work sites and environments or delays, could result in additional costs or claims or failure to achieve actual revenue or profits when anticipated or at all, which could have a material adverse effect on our operating results, cash flows and liquidity.

Certain of our engagements involve large-scale, complex projects that may occur over extended time periods. The quality of our performance on such a project depends in large part upon our ability to manage our client relationship and the project itself, such as the timely deployment of appropriate resources, including third-party contractors and our own personnel. Our results of operations, cash flows and liquidity could be adversely affected if we miscalculate the resources or time needed to complete a project with capped or fixed fees, or the resources or time needed to meet contractual milestones.

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We perform work under a variety of conditions, including, but not limited to, challenging and hard to reach terrain and difficult site conditions. Performing work under such conditions can result in project delays or cancellations, potentially causing us to incur unanticipated costs, reductions in revenue or the payment of liquidated damages. In addition, some of our contractsagreements require that we assume the risk should actual site conditions vary from those expected. Some of our projects involve challenging engineering, procurement and construction phases, which may occur over extended time periods. We may encounter difficulties in engineering, delays in designs or materials provided by the customer or a third party, equipment and material delivery delays, permitting delays, schedule changes, delays from customer failure to timely obtain rights-of- way,rights-of-way, weather-related delays, delays by subcontractors in completing their portion of projects and governmental, market and political or other factors, some of which are beyond our control and could affect our ability to complete a project as originally scheduled. For instance, in the second quarter of 2021, we experienced delays in certain renewables and recovery logistics projects in Texas because of heavy rains, which is expected to delay or reduce our anticipated revenue or profits from these projects. In the first half of 2021, we have also experienced delays in certain 5G rollout projects, including equipment delays, which isare expected to delay or reduce our anticipated revenue or profits from these projects. In some cases, delays and additional costs may be substantial, and/or we may be required to cancel or defer a project and/or compensate the customer for the delay. We may not be able to recover any of such costs. Any such delays, cancellations, errors or other failures to meet customer expectations could result in damage claims substantially in excess of the revenue associated with a project. Delays or cancellations could result in additional costs or claims or failure to achieve actual revenue or profits when anticipated or at all, which could have a material adverse effect on our operating results, cash flows and liquidity, and

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could also negatively affect our reputation or relationships with our customers, which could adversely affect our ability to secure new contracts.

We could also encounter project delays due to local opposition, including political and social activism, which could include injunctive actions or public protests related to the siting of our projects, and such delays could adversely affect our project margins. In addition, some of our agreements require that we pay liquidated damages or other charges if we do not meet project deadlines; therefore, any failure to properly estimate or manage cost, or delays in the completion of projects, could subject us to penalties, which could adversely affect our results of operations, cash flows and liquidity. Further, any defects or errors, or failures to meet our customers’ expectations, could result in large damage claims against us. Due to the substantial cost of, and potentially long lead-times necessary to acquire certain of the materials and equipment used in our complex projects, damage claims could substantially exceed the amount we can charge for our associated services.

Our failure to recover adequately on charges against project owners, subcontractors or suppliers for payment or performance could have a material adverse effect on our financial results.

We occasionally seek reimbursement from project owners for additional costs that exceed the contract price or for amounts not included in the original contract price. Similarly, we present change orders and charges to our subcontractors and suppliers. We could incur reduced profits, cost overruns or project losses if we fail to properly document the nature of change orders or charges or are otherwise unsuccessful in negotiating an expected settlement. These types of charges can often occur due to matters such as owner- causedowner-caused delays or changes from the initial project scope, which result in additional costs, both direct and indirect, or from project or contract terminations. From time to time, these charges can be the subject of lengthy and costly proceedings, and it is often difficult to accurately predict when these charges will be fully resolved. When these types of events occur and unresolved charges are pending, we may invest significant working capital in projects to cover cost overruns pending the resolution of the relevant charges. A failure to promptly recover on these types of charges could have a material adverse effect on our liquidity and financial results.

Additionally, we generally warrant the work we perform following substantial completion of a project. Warranty claims have historically not been material, but such claims could potentially increase. The costs associated with such warranties, including any warranty-related legal proceedings, could have a material adverse effect on our results of operations, cash flows and liquidity.

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We may not accurately estimate the costs associated with services provided under fixed price contracts, which could impair our financial performance. Additionally, we recognize revenue for certain projects using the cost-to- costcost-to-cost method of accounting; therefore, variations of actual results from our assumptions could reduce our profitability.

We derive a significant portion of our revenue from fixed price master service agreements and other service agreements. Under these contracts, we typically set the price of our services on a per unit or aggregate basis and assume the risk that costs associated with our performance may be greater than what we estimated.

We also enter into contracts for specific projects or jobs that require the installation or construction of an entire infrastructure system or specified units within an infrastructure system, many of which are priced on a fixed price or per unit basis. Our profitability will be reduced if actual costs to complete a project exceed our original estimates. Our profitability is therefore dependent upon our ability to accurately estimate the costs associated with our services and our ability to execute in accordance with our plans. A variety of factors could negatively affect these estimates, including delays resulting from weather and the COVID-19 pandemic, changes in expected productivity levels, conditions at work sites differing materially from those anticipated at the time we bid on the contract and higher than expected costs of labor and/or materials. These variations, along with other risks inherent in performing fixed price contracts, could cause actual project results to differ materially from our original estimates, which could result in lower margins than anticipated, or losses, which could reduce our profitability, cash flows and liquidity.

In addition, we recognize revenue from fixed price contracts, as well as for certain projects pursuant to master and other service agreements, over time utilizing the cost-to-cost measure of progress, or the “cost-to- cost”“cost-to-cost” method of accounting, under which the percentage of revenue to be recognized in a given period is measured by the percentage of costs incurred to date on the contract to the total estimated costs for the contract. The cost-to-cost method, therefore, relies on estimates of total expected contract costs. Contract revenue and total contract cost estimates are reviewed and revised on an ongoing basis as the work progresses. Adjustments arising from changes in the estimates of contract revenue or costs are reflected in the fiscal period in which such estimates are revised. Estimates are based on management’s reasonable assumptions, judgment and experience, but are subject to the risks inherent in estimates, including unanticipated delays or technical complications, changes in job performance, job conditions and management’s assessment of expected variable consideration. Variances in actual results from related estimates on a large project, or on several

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smaller projects, could be material. The full amount of an estimated loss on a contract is recognized in the period such losses are determined. Any such adjustments could result in reduced profitability and negatively affect our results of operations.

We derive a significant portion of our revenue from a few customers, and the loss of one or more of these customers, or a reduction in their demand for our services, could impair our financial performance. In addition, many of our contracts, including our service agreements, do not obligate our customers to undertake any infrastructure projects or other work with us, and most of our contracts may be canceled on short or no advance notice.

Our business is concentrated among relatively few customers, and a substantial portion of our services are provided on a non-recurring, project-by-project basis. Our revenue could significantly decline if we were to lose one or more of our significant customers, or if one or more of our customers reduce the amount of business they provide to us. For the fiscal year ended December 31, 2020,2021, our top two customers accounted for approximately 54%41% and 18%13% of our total revenues, respectively. In addition, our results of operations, cash flows and liquidity could be negatively affected if we complete the required work on non-recurring projects and cannot replace them with similar projects. See Note 56 — Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration, in the notes to our audited consolidated financial statements included herein for revenue concentration information.

We derive a significant portion of our revenue from multi-year master service agreements and other service agreements. Under these agreements, our customers have no obligation to undertake any infrastructure projects or other work with us. In addition, most of our contracts are cancelable on short or no advance notice. This makes it difficult to estimate our customers’ demand for our services. A significant decline in the volume of work our customers request us to perform under these service agreements could negatively affect our results of operations, cash flows and liquidity.

Some of our contracts, including our service agreements, are periodically open to public bid. We may not be the successful bidder on existing contracts that are re-bid. We could experience a reduction in revenue, profitability and liquidity if we fail to win a significant number of existing contracts upon re-bid, or, for services that are provided on a non-recurring basis, if we complete the required work under a significant number of projects and cannot replace them with similar projects. Additionally, from time to time, we enter into contracts that contain financing or other conditions that must be satisfied before we can begin work. Certain of these contracts may not result in revenue or profits if our customers are unable to obtain financing or to satisfy other conditions associated with such projects.

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Amounts included in our backlog may not result in actual revenue or translate into profits. Our backlog is subject to cancellation and unexpected adjustments and is, therefore, an uncertain indicator of future operating results.

Our backlog consists of the estimated amount of revenue we expect to realize from future work on uncompleted contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options. A significant portion of our 24-month backlog is attributable to master service agreements and other service agreements, none of which require our customers to purchase a minimum amount of services and are cancelable on short or no advance notice. The balance of our backlog is our estimate of work to be completed under contracts for specific projects. Backlog amounts are determined based on estimates that incorporate historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers. These estimates may prove inaccurate, which could cause estimated revenue to be realized in periods later than originally expected, or not at all. In the past, we have experienced postponements, cancellations and reductions in expected future work due to changes in our customers’ spending plans, market volatility, regulatory delays and/or other factors. There can be no assurance as to our customers’ requirements or that actual results will be consistent with the estimates included in our forecasts. As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings. In addition, contracts included in our backlog may not be profitable. If our backlog fails to materialize, our results of operations, cash flows and liquidity would be materially and adversely affected.

Our business and operations, and the operations of our customers, may be adversely affected by epidemics or pandemics such as the COVID-19 pandemic.

We may face risks related to health epidemics and pandemics or other outbreaks of communicable diseases. The global spread of COVID-19 has created significant volatility, uncertainty and economic disruption, including significant volatility in the U.S. and Canadian economieseconomy and financial markets. The extent to which the COVID-19 pandemic could affect our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict, including the duration and scope of the pandemic and new information that may emerge concerning the severity and effect of COVID-19, the continued emergence of new strains of

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COVID-19, the development and availability of effective treatments and vaccines and the speed with which they are administered to the public. Additional factors include governmental and business actions that have been and continue to be taken in response to the pandemic, including mitigation efforts such as “stay-at-home,” “shelter-in-place,” social distancing, travel restrictions and other similar orders, as well as the impact of the pandemic on the U.S. and Canadian economies,economy, global economic and market activity and actions taken in response, including from governmental stimulus efforts.

A public health epidemic or pandemic, such as the COVID-19 pandemic, poses the risk that we or our employees, customers and/or business partners may be prevented from conducting ordinary course business activities for an indefinite period of time, including due to shutdowns or cancellations that have been, and may continue to be, mandated or requested by governmental authorities or others, or that the pandemic may otherwise interrupt or affect business activities. While our business model has, thus far, proven resilient, the COVID-19 pandemic has had a negative effect on our operations, and we expect this to continue until the systemic effects that COVID-19 has had on labor, materials, supply chains, governmental response time, among others, return to pre-COVID levels. It is currently unclear how long an economic recovery could take, and we cannot predict the extent or duration of potential negative effects on our operations. We have adjusted standard operating procedures within our business operations to ensure continued employee and customer safety and are continually monitoring evolving health guidelines as well as market conditions and responding to changes as appropriate. We cannot be certain, however, that these efforts will prevent further disruption due to effects of the pandemic on business and market conditions. Additionally, we could be exposed to increased risks and costs associated with workplace health claims. To comply with health guidelines implemented to control the spread of COVID-19, we have incorporated work-at-home programs as appropriate for our administrative offices and, despite our implementation of information technology security measures, there is no guarantee that the data security and privacy safeguards we have put in place will be completely effective or that we will not encounter some of the common risks associated with employees accessing company data and systems remotely.

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Disruptions in global economic activity as a result of the COVID-19 pandemic have had, and may continue to have, adverse effects across our end markets. Unfavorable market conditions and market uncertainty due to the COVID-19 pandemic could have a negative effect on demand for our customers’ services and/or the profitability of services. Our customers may not have the ability to fund capital expenditures for infrastructure, or may have difficulty obtaining financing for planned projects, which could reduce their capital spending and/or result in reduced demand for our services and/or delays or cancellations of current or planned future projects. Delay in the receipt of regulatory approvals due to pandemic-related disruptions could also affect project timing and activity levels. We could also incur incremental costs to operate in the current environment or experience lower levels of overhead absorption from a reduction in revenue, both of which could negatively affect our margins and profitability. Additionally, the economic and market disruptions resulting from COVID-19 could also lead to greater than normal uncertainty with respect to the realization of estimated amounts, including our estimates for backlog, revenue recognition, recoverability of goodwill, intangible assets and other investments and our provisions for credit losses.

Our customers could seek to delay payments to us as a result of the pandemic’s financial effects on them, which could negatively affect our cash flows and liquidity. The COVID-19 pandemic or any other future pandemics could also precipitate or aggravate other risk factors presented in this prospectus, which in turn could materially adversely affect our business, financial condition and results of operations.

The ultimate extent, duration and impact of the COVID-19 pandemic is uncertain. The effecteffects of COVID-19 have been and could continue to be significant, and we cannot predict or quantify with any certainty the extent to which it could adversely affect our future financial condition, results of operations, liquidity, cash flows or the market price of our common stock.Class A Common Stock.

We maintain a workforce based upon current and anticipated workloads. We could incur significant costs and reduced profitability from underutilization of our workforce if there is a significant reduction in the level of services we provide or if contract awards are delayed or not received.

Our estimates of future performance and results of operations depend, among other factors, on whether and when we receive new contract awards, which affect the extent to which we are able to utilize our workforce. The rate at which we utilize our workforce is affected by a variety of factors, including our ability to forecast the need for our services, which allows us to maintain an appropriately sized workforce, our ability to transition employees from completed projects to new projects, our ability to manage attrition and our need to devote resources to non-chargeable activities such as training or business development. While our estimates are based upon our good faith judgment, professional knowledge and experience, these estimates may not be accurate and can frequently change based on newly available information. In the case of large- scalelarge-scale projects where timing is often uncertain, it is particularly difficult to predict whether and when we will receive a contract award. The uncertainty of contract award timing can present difficulties in matching our workforce size to our project needs. If an expected contract award is delayed or not received, we could incur costs

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resulting from underutilization of our workforce, redundancy of facilities, or from efforts to right- sizeright-size our workforce and/or operations, which could reduce our profitability and cash flows.

Our financial results are based, in part, upon estimates and assumptions that may differ from actual results. In addition, changes in accounting principles may cause unexpected fluctuations in our reported financial information.

In preparing our consolidated financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP,”), management makes a number of estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. These estimates and assumptions must be made because certain information used in the preparation of our consolidated financial statements is either dependent on future events or cannot be calculated with a high degree of precision from data available. In some cases, these estimates are particularly uncertain and we must exercise significant judgment. See Note 1— Nature of Business and Summary of Significant Accounting Policies in the notes to the audited consolidated financial statements included herein for details of key estimates. Actual results could differ materially from the estimates and assumptions that we use, which could have a material adverse effect on our results of operations, cash flows and liquidity.

In addition, accounting rules and regulations are subject to review and interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC and various other governing bodies. A change in U.S. GAAP could have a material effect on our reported financial results, and the adoption of new or revised accounting principles could require that we make significant changes to our systems, processes and controls, which could have an adverse effect on our results of operations, cash flows and liquidity.

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Our business is subject to operational risk, including from operational and physical hazards that could result in substantial liabilities and weaken our financial condition.

Our business is subject to operational hazards due to the nature of services we provide and the conditions in which we operate, including electricity, fires, explosions, mechanical failures and weather- relatedweather-related incidents. While we invest substantial resources in occupational health and safety programs, there can be no assurance that we will be able to mitigate all such hazards or avoid significant liability. Construction and electrical projects undertaken by us expose our employees to electrical lines, heavy equipment, transportation accidents, adverse weather conditions and the risk of damage to equipment and property. These risks and hazards, among others, can cause personal injuries and loss of life, severe damage to or destruction of property and equipment and other consequential damages and could lead to suspension of operations, large damage claims which could, in some cases, substantially exceed the amount we charge for the associated services, government enforcement actions or regulatory penalties, civil litigation or criminal prosecution. Personal injury claims for damages, including for bodily injury or loss of life, could result in substantial costs and liabilities, which could materially and adversely affect our financial condition, results of operations or cash flows. In addition, if serious accidents or fatalities occur, or if our safety records were to deteriorate, we may be restricted from bidding on certain work or obtaining new contracts, and certain existing contracts could be terminated. Our safety processes and procedures are monitored by various agencies and ratings bureaus. The occurrence of accidents in the course of our business could result in significant liabilities, employee turnover, an increase in insurance costs or an increase in the costs of our projects or harm our ability to perform under our contracts or enter into new customer contracts, all of which could materially adversely affect our revenue, profitability and liquidity.

Our business is seasonal and affected by the spending patterns of our customers and timing of governmental permitting, as well as weather conditions and natural catastrophes, which exposes us to variations in quarterly results.

Some of our customers reduce their expenditures and work order requests towards the end of the calendar year. In addition, adverse weather conditions, particularly during the winter season, can affect our ability to perform outdoor services in certain regions. As a result, we generally experience reduced revenue in the first and fourth quarters of each calendar year. Natural catastrophes such as hurricanes or other severe weather, wildfires or flooding could affect our ability to perform outdoor services or utilize equipment and crews in affected regions. For instance, in the second quarter of 2021, we experienced delays in certain renewables and recovery logistics projects in Texas because of heavy rains, which is expected to delay or reducereduced our anticipated revenue orand profits from these projects. The effects of the COVID-19 pandemic and changes in governmental permitting could also result in greater seasonal and cyclical volatility than would otherwise exist under normal conditions. These events, as well as other global and/or economic effects, could adversely affect demand for our services and our results of operations, cash flows and liquidity.

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In the ordinary course of our business, we may become subject to lawsuits, indemnity or other claims, which could materially and adversely affect our business, results of operations and cash flows.

From time to time, we are subject to various claims, lawsuits and other legal proceedings brought or threatened against us in the ordinary course of our business. These actions and proceedings may seek, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination and other employment-related damages, breach of contract, intellectual property violations, property damage, environmental liabilities, liquidated damages, consequential damages, punitive damages and civil penalties or other losses, or injunctive or declaratory relief. We may also be subject to litigation in the normal course of business involving allegations of violations of the Fair Labor Standards Act, Fair Credit Reporting Act and state wage and hour laws, misclassification of independent contractors, and determination of the Company as a joint employer of subcontractor employees. In addition, we generally indemnify our customers for claims related to the services we provide and actions we take under our contracts, and, in some instances, we may be allocated risk through our contract terms for actions by our customers or other third parties.

Claimants may seek large damage awards and defending claims can involve significant costs. When appropriate, we establish accruals for litigation and contingencies that we believe to be adequate in light of current information, legal advice and our indemnity insurance coverages. We reassess our potential liability for litigation and contingencies as additional information becomes available and adjust our accruals as necessary. We could experience a reduction in our profitability and liquidity if we do not properly estimate the amount of required accruals for litigation or contingencies, or if our insurance coverage proves to be inadequate or becomes unavailable, or if our claim liabilities (including those attributable to insurance deductibles) are higher than expected. The outcome of litigation is difficult to assess or quantify, as plaintiffs may seek recovery of very large or indeterminate amounts and the magnitude of the potential loss may remain unknown for substantial periods of time. Furthermore, because litigation is inherently uncertain, the ultimate resolution of any such claim, lawsuit or proceeding through settlement, mediation or court judgment could have a material adverse effect on our business, financial condition or results of operations. In addition, claims, lawsuits and proceedings may harm our reputation or divert management’s attention from our business or divert resources away from operating our business and cause us to

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incur significant expenses, any of which could have a material adverse effect on our business, results of operations or financial condition.

We rely on information, communications and data systems in our operations. System and information technology interruptions and/or data security breaches could adversely affect our ability to operate and our operating results or could result in harm to our reputation.

We rely on information and communications technology, computer and other related systems in order to operate. We also rely, in part, on third-party software and information technology to run certain of our critical accounting, project management and financial information systems. From time to time, we experience system interruptions and delays. Our operations could be interrupted or delayed, or our data security could be breached, if we are unable to deploy software and hardware, gain access to, or effectively maintain and upgrade, our systems and network infrastructure and/or take other steps to improve and otherwise protect our systems. In addition, our information technology and communications systems, including those associated with acquired businesses, and our operations could be damaged or interrupted by cyber-attacks and/or physical security risks. These risks include natural disasters, power loss, telecommunication failures, intentional or inadvertent user misuse or error, failures of information technology solutions, computer viruses, phishing attacks, social engineering schemes, malicious code, ransomware attacks, acts of terrorism and physical or electronic security breaches, including breaches by computer hackers, cyber-terrorists and/or unauthorized access to or disclosure of our and/or our employees’ or customers’ data. Furthermore, such unauthorized access, cyber-attacks or data security breaches could go unnoticed for some period of time.

These events, among others, could cause system interruptions, delays and/or the loss or release of critical or sensitive data, including the unintentional disclosure of our and/or our employees’ or customers’ data, and could delay or prevent operations, including the processing of transactions and reporting of financial results or cause processing inefficiency or downtime, all of which could have a material adverse effect on our business, results of operations and financial condition and could harm our reputation and/or result in significant costs, fines or litigation. Similar risks could affect our customers, subcontractors, suppliers or other third-party providers, indirectly affecting us.

While we have security, internal control and technology measures in place to protect our systems and network, if these measures fail as a result of a cyber-attack, other third-party action, employee error, malfeasance or other security breach or failure, and someone obtains unauthorized access to our and/or our employees’ or customers’ data, our reputation could be damaged, our business may suffer and we could incur significant liability, or, in some cases, we may lose access to our business data. In the ordinary course of business, we have been targeted by malicious cyber-attacks, although our systems have been sufficiently resilient to prevent material

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disruption of our operations; however, because the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched against a target, our current or future defenses may not be adequate to protect against new or revised techniques. As a result, we may be required to expend significant resources to protect against the threat of system disruptions and security breaches or to investigate and mitigate problems caused by these disruptions and breaches. Any of these events could damage our reputation and have a material adverse effect on our business, results of operations, financial condition and cash flows. Furthermore, while we maintain insurance policies that we consider to be adequate, our coverage may not specifically cover all types of losses or claims that may arise.

In addition, the unauthorized disclosure of confidential information and current and future laws and regulations governing data privacy may pose complex compliance challenges and/or result in additional costs. Failure to comply with such laws and regulations could result in penalties, fines and/or legal liabilities and/or harm our reputation. The continuing and evolving threat of cyber-attacks has also resulted in increased regulatory focus on risk management and prevention. New data privacy-related regulations or other requirements could require significant additional resources and/or cause us to incur significant costs, which could have an adverse effect on our results of operations and cash flows.

We regularly evaluate the need to upgrade, enhance and/or replace our systems and network infrastructure to protect our information technology environment, to stay current on vendor-supported products and to improve the efficiency and scope of our systems and information technology capabilities. The implementation of new systems and information technology could adversely impact our operations by requiring substantial capital expenditures, diverting management’s attention, and/or causing delays or difficulties in transitioning to new systems. In addition, our system implementations may not result in productivity improvements at the levels anticipated. System implementation and/or any other information technology disruptions, if not anticipated and appropriately mitigated, could have an adverse effect on our business and remediation of any such disruptions could result in significant costs.

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Our subcontractors and suppliers may fail, or be unable to, satisfy their obligations to us or other parties, or we may be unable to maintain these relationships, either of which could have a material adverse effect on our results of operations, cash flows and liquidity.

We depend on subcontractors to perform work for some of our projects. There is a risk that we could have disputes with subcontractors arising from, among other things, the quality and timeliness of the work they perform, customer concerns or our failure to extend existing work orders or issue new work orders under a subcontracting arrangement. Our ability to fulfill our obligations as a prime contractor could be jeopardized if any of our subcontractors fail to perform the agreed-upon services on a timely basis and/or deliver the agreed-upon supplies. In addition, the absence of qualified subcontractors with whom we have satisfactory relationships could adversely affect our ability to perform under some of our contracts, or the quality of the services we provide. Additionally, in some cases, we pay our subcontractors before our customers pay us for the related services. We could experience a material decrease in profitability and liquidity if we pay our subcontractors for work performed for customers that fail to or delay paying us for the related work. Any of these factors could have a material adverse effect on our results of operations, cash flows and liquidity.

We also rely on suppliers, equipment manufacturers and lessors to obtain or provide the materials and equipment we require to conduct our operations. Any substantial limitation on the availability of suppliers or equipment, including from economic, regulatory or market conditions, could negatively affect our operations. Our results of operations, cash flows and liquidity could be adversely affected if we were unable to acquire sufficient materials or equipment to conduct our operations.

We may have additional tax liabilities associated with our domestic and former international operations.

We are subject to income taxes in the United States, Puerto Rico and Canada.States. Management must exercise significant judgment in determining our provision for income taxes due to lack of clear and concise tax laws and regulations in certain jurisdictions. Tax laws are dynamic and subject to change as new laws are passed and new interpretations of laws are issued or applied, and such changes could materially affect our tax provisions. The federal government signed various relief measures into law in 2020 in response to the COVID-19 pandemic, including the Coronavirus Aid, Relief and Economic Security Act, which provides various tax relief and incentive measures, including provisions permitting the deferral and/or reduction of certain federal and payroll tax amounts. We have pursued certain of these relief provisions, which permit certain deferred employer taxes to be repaid in future years. Our interpretations of these provisions could differ from those of the U.S. Treasury Department or the Internal Revenue Service. The foregoing items, as well as any other future changes in tax laws, could have a material adverse effect on our business, cash flow, financial condition, or results of operations.

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In addition, we are auditedsubject to audit by various U.S. and foreign tax authorities and in the ordinary course of our business, and upon audit there are many transactions and calculations for which the ultimate tax determination may be uncertain. TheIn the event of an audit, the final outcome of income tax examinations could be materially different from our expectations and the estimates that are reflected in our consolidated financial statements, which could have a material adverse effect on our results of operations, cash flows and liquidity.

We could incur goodwill and intangible asset impairment charges, which could harm our profitability.

We have significant amounts of goodwill and intangible assets. We periodically review the carrying values of goodwill and intangible assets to determine whether such carrying values exceed their fair market values. Declines in the profitability of individual reporting units due to economic or market conditions or otherwise, as well as adverse changes in financial, competitive and other conditions, including declines in the operating performance of our reporting units or other adverse changes in the key valuation assumptions contributing to the estimated fair value of our reporting units, could adversely affect the estimated fair values of the related reporting units, which could result in an impairment of the recorded balances of goodwill or intangible assets. See Note 67 — Goodwill and Intangible Assetsin the notes to our audited consolidated financial statements included herein for additional details.

We have liability claims exposure due to high deductible insurance and potential uninsured claims.

We maintain insurance policies with respect to automobile liability, general liability, employer’s liability, workers’ compensation and other types of coverage. These policies are subject to high deductibles or self- insuredself-insured retention amounts. We are effectively self-insured for substantially all claims because most claims against us do not exceed the deductibles or the self-insured retention amounts under our insurance policies and there can be no assurance that our insurance coverages will be sufficient or effective under all circumstances, or against all claims or liabilities to which we may be subject, which could expose us to significant liabilities and materially and adversely affect our business, financial condition, results of operations and cash flows. In addition, insurance liabilities are difficult to assess and estimate due to many factors, the effects of which are often unknown or difficult to estimate, including the

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severity of an injury, the determination of our liability in proportion to other parties’ liability, the number of incidents not reported and the effectiveness of our safety programs. If our insurance costs exceed our estimates of insurance liabilities, or if our insurance claims increase, or if our insurance coverage proves to be inadequate or becomes unavailable, we could experience increased exposure to risk and/or a decline in profitability and liquidity.

If we are unable to attract and retain qualified managers and skilled employees, we will be unable to operate efficiently, which could reduce our revenue, profitability and liquidity.

Our business is labor intensive, and some of our operations experience a high rate of employee turnover. In addition, given the nature of the highly specialized work we perform, many of our employees are trained in, and possess, specialized technical skills that are necessary to efficiently operate our business and maintain productivity and profitability. At times of low unemployment, it can be difficult for us to find appropriately skilled and qualified personnel at affordable rates. We may be unable to hire and retain a sufficiently skilled labor force to support our operating requirements and growth strategy. Our labor and training expenses could increase as a result of a shortage in the supply of skilled personnel, which could adversely affect our profitability. We cannot be certain that we will be able to maintain and ensure the productivity of the skilled labor force necessary to operate our business. Our ability to do so depends on a number of factors, such as the general rate of employment, competition for employees possessing the skills we need, the general health and welfare of our employees, which has been impacted by the COVID-19 pandemic, and the level of compensation required to hire, train and retain qualified employees. Additionally, our business is managed by a number of key executive and operational officers, many of whom have extensive industry experience, and is dependent upon retaining and recruiting qualified management to execute our business strategy. Labor shortages, increased labor or training costs or the loss of key personnel could materially adversely affect our results of operations, cash flows and liquidity.

The use of unionized employees and contractors and any related obligations could subject us to liabilities that could adversely affect our liquidity, cash flows and results of operations.

Certain of our Canadian employees are represented by labor unions and collective bargaining agreements. Although all such collective bargaining agreements prohibit strikes and work stoppages, we cannot be certain that strikes or work stoppages will not occur despite the terms of these agreements. Strikes or work stoppages could adversely affect our relationships with our customers and cause us to lose business. Additionally, as current agreements expire, the labor unions may not be able to negotiate extensions or replacements on terms favorable to their members, or at all, or avoid strikes, lockouts or other labor actions that could affect their members. Therefore, we cannot assure you that new agreements will be reached with employee labor unions as existing contracts expire, or on desirable terms. In the United States, we occasionally engage unionized contractors as well. Any action against us relating to the union workforce we employ could have a material adverse effect on our liquidity, cash flows and results of operations.

Our recovery logisticsRecovery Logistics business is subject to a number of risks that may impact our business, liquidity, cash flows and results of operations.

Our recovery logisticsRecovery Logistics business provides recovery and restoration services for our energy and telecommunications customers. The majority of its revenue is earned through support of the restoration efforts of our customers affected by storms and other disasters. The timing, duration and severity of these events is uncertain and difficult to predict. In addition, much of these services are provided by third parties which may be difficult or costly to mobilize in the event of unexpected demand for services. Customers may also rely on their employees to provide these services, which reduces demand for our services. We do not control such factors and, as a result,

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our revenue and income can vary from quarter to quarter, and past financial results for certain quarters may not be a reliable indicator of future results for comparable quarters in subsequent years.

23We may be impacted by unionization or attempts to unionize by our workforce.

TableOur personnel may attempt, successfully or unsuccessfully, to form one or more unions. The outcome of Contentsany election process is uncertain. Further disruptions to or organizing efforts within our workforce could negatively impact our business, result in adverse publicity, and lead to delays in project completion. Additionally, any action against us relating to any unionized workforce could have a material adverse effect on our liquidity, cash flows and results of operations.

Risks Related to Regulation and Compliance

Our operations could affect the environment or cause exposure to hazardous substances. In addition, our properties could have environmental contamination, which could result in material liabilities.

Our operations are subject to various environmental laws and regulations, including those dealing with the handling and disposal of waste products, polychlorinated biphenyls, air quality, transportation of hazardous materials and the protection of endangered species. Certain of our current and historical construction operations have used hazardous materials and, to the extent that such materials are not properly stored, contained or recycled, they could become hazardous waste. Additionally, some of our contracts require that we assume the environmental risk of site conditions and require that we indemnify our customers for any damages, including environmental damages, incurred in connection with our projects. We may be subject to claims under various environmental laws and regulations, federal and state statutes and / or common law doctrines for toxic torts and other damages, as well as for natural resource damages and the investigation and clean-up of soil, surface water, groundwater and other media under laws such as the Comprehensive Environmental Response, Compensation and Liability Act. Such claims may arise, for example, out of current or former conditions at project sites, current or former properties owned or leased by us or contaminated sites that have always been owned or operated by third parties. Liability may be imposed without regard to fault and may be strict and joint and several, such that we may be held responsible for more than our share of any contamination or other damages, or even for the entire share, and we may be unable to obtain reimbursement from the parties that caused the contamination. The obligations, liabilities, fines and costs or reputational harm associated with these and other events could be material and could have a material adverse impact on our business, financial condition, results of operations and cash flows.

We perform work in underground environments, which could affect the environment. A failure to comply with environmental laws could result in significant liabilities or harm our reputation, and new environmental laws or regulations could adversely affect our business.

Some of the work we perform is in underground environments. If the field location maps supplied to us are not accurate, or if objects are present in the soil that are not indicated on the field location maps, our underground work could strike objects in the soil containing pollutants and result in a rupture and discharge of pollutants. In such a case, we could incur significant costs, including clean-up costs, and we may be liable for significant fines and damages and could suffer reputational harm. Additionally, we sometimes perform directional drilling operations below certain environmentally sensitive terrains and water bodies.

Due to the inconsistent nature of terrain and water bodies, it is possible that such directional drilling could cause a surface fracture releasing subsurface materials or drilling fluid. These releases alone or, in combination with releases that may contain contaminants in excess of amounts permitted by law, could potentially expose us to significant clean up and remediation costs, damages, fines and reputational harm, which could have a material adverse effect on our results of operations, cash flows and liquidity.

New environmental laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or leaks or the imposition of new clean-up requirements could require us to incur significant costs or result in new or increased liabilities that could have a material adverse effect on our results of operations, cash flows and liquidity. We may incur work stoppages to avoid violating these laws and regulations, or we may risk fines or other sanctions if we inadvertently violate these laws and regulations, which could adversely affect our business.

We are subject to risks associated with climate change.

In recent years, there has been an increased focus on climate change, greenhouse gas and other emissions and other potential damage to the environment caused by human activities. The potential effects of climate change on our operations is highly uncertain.

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Climate change may result in, among other things, an increase in extreme weather events, such as floods, hurricanes, wildfires, rising sea levels and limitations on water availability and quality. Extreme weather conditions could limit the availability of resources or increase the costs of our projects, or could cause projects to be delayed or canceled. Our operating results are significantly influenced by weather. Therefore, major changes in weather patterns could have a significant effect on our future operating results. We could experience project cancellations, reduced demand or reduced productivity if climate change results in a significant increase in adverse weather conditions in a given period, which could negatively affect our revenue and profitability.

Climate change could also affect our customers and the projects they award. Concerns about climate change could result in potential new regulations, regulatory actions or requirements to fund energy efficiency activities, any of which could negatively affect our customers, decrease the projects they award and decrease demand for our services, including for power projects and other projects,

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or result in increased costs associated with our operations. Legislative and/or regulatory responses related to climate change could also affect the availability of goods, increase our costs or otherwise negatively affect our operations.

There are significant environmental regulations and policies under consideration or reconsideration to encourage the use of clean energy technologies and regulate emissions of greenhouse gases to address climate change. For example, in February 2021, the United States reentered the 2015 Paris Agreement as part of an executive order signed by the new administration.Agreement. We cannot predict future changes to environmental regulations and policies, nor can we predict the effects that any conceivable changes would have on our business. The establishment of rules limiting greenhouse gas emissions could affect customer demand as well as our ability to perform construction services or to perform these services at current levels of profitability. For example, if new regulations were adopted regulating greenhouse gas emissions from sources such as cars and trucks, we could experience a significant increase in environmental compliance costs in light of our large fleet and the amount of construction machinery we own.own and/or lease. New regulations may require us to acquire different equipment or change processes. The new equipment may not be available, or we may not be able to purchase or rent this equipment in a cost-effective manner. Compliance with any new laws or regulations regarding the reduction of greenhouse gases could result in significant changes to our operations and a significant increase in the cost of conducting our business. In addition, our reputation could suffer and/or we could experience a reduction in the amount of future work we are awarded if our operations are perceived to result in high greenhouse gas emissions or to otherwise pose environmental risks. Reductions in project awards, project deferrals, delays or cancellations or increases in costs related to the effects of climate change, climate change initiatives or climate change regulations could have a material adverse effect on our results of operations, cash flows and liquidity.

Our failure to comply with the regulations of federal, state and local agencies that oversee transportation and safety compliance could reduce our revenue, profitability and liquidity.

The Occupational Safety and Health Administration (“OSHA”) establishesand various states establish certain employer responsibilities, including maintenance of a workplace free of recognized hazards likely to cause death or serious injury, compliance with standards promulgated by OSHA and various recordkeeping, disclosure and procedural requirements. Various standards, including standards for notices of hazards and safety in excavation and demolition work, may apply to our operations. We incur capital and operating expenditures and other costs in the ordinary course of business in complying with OSHA and other state and local laws and regulations, and could incur penalties and fines in the future from violations of health and safety regulations, including, in extreme cases, criminal sanctions. Our customers could cancel existing contracts and not award future business to us if we were in violation of these regulations.

We are also subject to a number of state and federal laws and regulations related to the operation of our fleet of commercial motor vehicles. If we are not in compliance with these laws and regulations, we may be unable to perform services for our customers and may also be subject to fines, penalties, and the suspension or revocation of our licenses. Our failure to comply with these laws and regulations may affect our ability to operate and could require us to incur significant costs that adversely affect our results of operations.

Our failure to comply with various laws and regulations related to contractor licensing and business licensing could result in significant liabilities.

We are subject to a number of state and federal laws and regulations, including those related to contractor licensing, business licensing and employment of qualified individuals. If we are not in compliance with these laws and regulations, we may be unable to perform services for our customers and may also be subject to fines, penalties, and the suspension or revocation of our licenses. Our failure to comply with these laws and regulations may affect our ability to operate and could require us to incur significant costs that adversely affect our results of operations.

The unaudited pro forma condensed combined financial information included in this prospectus may not be indicative of what the Combined Company’s actual financial position or results of operations would have been.

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

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The Combined Company’s ability to be successful following the Business Combination will depend upon the efforts of the Combined Company’s Board and QualTek’s key personnel and the loss of such persons could negatively impact the operations and profitability of the Combined Company’s business following the Business Combination.business.

The Combined Company’s ability to be successful following the Business Combination will be dependent upon the efforts of the Combined Company Board and key personnel. ROCRWe cannot assure you that following the Business Combination, the Combined Company Board and the Combined Company’s key personnel will be effective or successful or remain with the Combined Company.

In connection with the recent restatements of our financial statements, our management has concluded that our disclosure controls and procedures were not effective as of September 30, 2021 due to a material weakness in internal control over financial reporting solely related to our accounting for complex financial instruments. If we are unable to maintain an effective system of disclosure controls and procedures and internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and financial results.

After consultation with our independent registered public accounting firm and our management team, our audit committee concluded that it was appropriate to restate our previously issued financial statements as described in Note 2 to the financial statements included elsewhere in this prospectus. As part of such process, we identified a material weakness in our internal control over financial reporting, solely related to our accounting for complex financial instruments.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. We expect to take steps to remediate the material weakness, but there is no assurance that any remediation efforts will ultimately have the intended effects.

If we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.

Risks Related to Strategic Transactions

Acquisitions, strategic investments and dispositions involve risks that could negatively affect our operating results, cash flows and liquidity and may not enhance shareholder value.

We have made, and may continue to make, strategic acquisitions and investments. Acquisitions may expose us to operational challenges and risks, including the ability to profitably manage the acquired business or successfully integrate the operations, internal controls and procedures and financial reporting and accounting systems of the acquired business into our business; increased indebtedness and contingent earn- outearn-out obligations; the ability to fund cash flow shortages that may occur if anticipated revenue is not realized or is delayed, whether by general economic or market conditions, or other unforeseen difficulties; the expense of integrating acquired businesses; the availability of funding sufficient to meet increased capital needs; diversion of management’s attention; and the ability to retain or hire qualified personnel required for expanded operations.

In addition, we may not be able to identify suitable acquisition or strategic investment opportunities or may be unable to obtain the required consent of our lenders and therefore, may not be able to complete such acquisitions or strategic investments. We may pay for acquisitions or strategic investments with our common stockCommon Stock or with debt instruments, including convertible or exchangeable debt securities, which could dilute the ownership interests of our stockholders, or we may decide to pursue acquisitions with which our investors may not agree. Borrowings or issuances of debt associated with these acquisitions could also result in higher levels of indebtedness, which could negatively affect our ability to service our debt within the scheduled repayment terms. In addition, to the extent we defer payment of an acquisition’s purchase price through a cash earn-out arrangement, it will reduce our cash flows in subsequent periods.

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Acquired companies may have liabilities that we failed, or were unable, to discover in the course of performing due diligence investigations. We cannot assure you that the indemnifications granted to us by sellers of acquired companies will be sufficient in amount, scope or duration to fully offset potential liabilities associated with acquired businesses. We may learn additional information about the businesses we have acquired that could materially adversely affect us, such as unknown or contingent liabilities, unprofitable projects and liabilities related to compliance with applicable laws. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business. We generally require that key management and former principals of the businesses we acquire enter into non-competition agreements in our favor. If we are unable, and the courts refuse to enforce the non-competition agreement entered into by such person or persons, we might be subject to increased competition. Failure to successfully manage the operational challenges and risks associated with, or resulting from, our acquisitions could adversely affect our results of operations, cash flows and liquidity.

Additionally, we may from time to time explore opportunities to maximize value through the disposition of assets and businesses, including the sale of certain businesses. These sales or transactions could adversely affect our results of operations, cash flows and liquidity.

Risks Related to Financing Our Business

We have a significant amount of debt, which could adversely affect our business, financial condition and results of operations or could affect our ability to access capital markets in the future. In addition, our debt contains restrictive covenants that may prevent us from engaging in transactions that might benefit us.

Our outstanding debt and debt service requirements could have significant consequences on our future operations, including: making it more difficult for us to meet our payment and other obligations; an event of default if we fail to comply with the financial and other restrictive covenants contained in our debt agreements, which could result in all of our debt becoming immediately due and payable; reducing the availability of our cash flows to fund working capital, capital expenditures, acquisitions or strategic investments, and limiting our ability to obtain additional financing for these purposes; subjecting us to the risk of increasing interest expense on variable rate indebtedness; limiting our flexibility in planning for, or reacting to changes in our business, the industries in which we

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operate and the general economy; and placing us at a competitive disadvantage compared to our competitors that have less debt or are less leveraged.

The terms of our indebtedness contain customary events of default and covenants that prohibit us from taking certain actions without satisfying certain financial tests or obtaining the consent of the lenders. Should we be unable to comply with the terms and covenants of our indebtedness, including our credit facility, we would be required to obtain consents from our bank group, modify our credit facility or other debt instruments or secure another source of financing to continue to operate our business, none of which may be available to us on reasonable terms or at all. A default could also result in the acceleration of our obligations. In addition, these covenants may prevent us from engaging in transactions that benefit us, including responding to changing business and economic conditions or securing additional financing, if needed.

Any of these factors could have an adverse effect on our business, financial condition and results of operations. Our ability to meet our payment and other obligations under our debt instruments depends on our ability to generate significant cash flow in the future, which can be subject to many factors, some of which are beyond our control. We cannot assure that our business will generate future cash flow from operations, or that future borrowings will be available to us in an amount sufficient to enable us to meet our payment obligations and to fund other liquidity needs. Our business is capital intensive, and if we are not able to generate sufficient cash flow to service our debt obligations, we may need to refinance or restructure our debt, sell assets, reduce or delay capital investments, or seek to raise additional capital, and some of these activities could have terms that are unfavorable or could be highly dilutive. Our ability to obtain additional financing or to refinance our existing indebtedness will depend on the capital markets and our financial condition at such time. Any of the above factors could adversely affect our results of operations, cash flows and liquidity.

In addition, regulatory changes and/or reforms, such as the phase-out of the London Inter-bank Offered Rate (“LIBOR”), which is expected to occur by June 30, 2023, could lead to additional volatility in interest rates for our variable rate debt and other unpredictable effects. While our material financing arrangements indexed to LIBOR have procedures for determining an alternative base rate, such alternative base rate could perform differently than the current LIBOR-indexed rate and could result in an increase in the cost of our variable rate indebtedness, which could negatively affect our results of operations and cash flows.

We are also party to certain factoring arrangements. Any termination of such factoring arrangements could adversely affect our results of operations, cash flows and liquidity.

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We may be unable to obtain sufficient bonding capacity to support certain service offerings, and the need for performance and surety bonds could reduce availability under our credit facility.

Some of our contracts require performance and payment bonds. If we are not able to renew or obtain a sufficient level of bonding capacity in the future, we may be precluded from being able to bid for certain contracts or successfully contract with certain customers. In addition, even if we are able to successfully renew or obtain performance or payment bonds, we may be required to post letters of credit in connection with the bonds, which would reduce availability under our credit facility. Furthermore, under standard terms in the surety market, sureties issue bonds on a project-by-project basis and can decline to issue bonds at any time or require the posting of additional collateral as a condition to issuing or renewing any bonds. If we were to experience an interruption or reduction in the availability of bonding capacity, we may be unable to compete for or work on projects that require bonding.

Risks Related to the 2027 Convertible Notes

Our indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under the 2027 Convertible Notes.

In the future, we may seek to raise or borrow additional funds to expand our product or business development efforts, make acquisitions or otherwise fund or grow our business and operations. Our indebtedness could have important consequences to the holders of the 2027 Convertible Notes, including:

increasing our vulnerability to general adverse economic and industry conditions;
requiring us to dedicate a portion of our cash flow from operations to principal and interest payments on our indebtedness, thereby reducing the availability of cash flow to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes;
making it more difficult for us to optimally capitalize and manage the cash flow for our businesses;
limiting our flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate;
possibly placing us at a competitive disadvantage compared to our competitors that have less debt;

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limiting our ability to borrow additional funds or to borrow funds at rates or on other terms that we find acceptable; and
exposing us to the risk of increased interest rates because certain of our borrowings, including our credit agreements, are subject to variable rates of interest.

In addition, it is possible that we may need to incur additional indebtedness in the future in the ordinary course of business.

The terms of our credit agreements and our Indenture that governs the 2027 Convertible Notes allow us to incur additional debt subject to certain limitations; however, there is no assurance that additional financing will be available to us on terms favorable to us, if at all. In addition, if new debt is added to the then existing debt levels, the risks described above could intensify.

Our credit agreements and our Indenture contain restrictive covenants that will limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all of our indebtedness. See “Description of Securities — 2027 Convertible Notes.”

We may be able to incur substantial indebtedness. This could exacerbate the risks to our financial condition described above and prevent us from fulfilling our obligations under the 2027 Convertible Notes.

We may be able to incur significant additional indebtedness in the future and this could result in additional risk. Although our credit agreements and our Indenture contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. In the future we may draw on the credit agreements to reinforce our liquidity position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the COVID-19 pandemic.

If we incur any additional indebtedness that ranks equally with the 2027 Convertible Notes, subject to any collateral arrangements, the holders of that debt will be entitled to share ratably with you in any proceeds distributed in connection with our insolvency, liquidation, reorganization, dissolution or other winding up as a company. This may have the effect of reducing the amount of proceeds paid to you. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness. If new indebtedness is added to our current indebtedness levels, the related risks that we now face could increase. Any of these risks could materially impact our ability to fund our operations or limit our ability to expand our business, which could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to generate sufficient cash to service all of our indebtedness, including the 2027 Convertible Notes, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments on or to refinance our debt obligations, including the 2027 Convertible Notes, depends on our financial condition and results of operations, which in turn are subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, including the 2027 Convertible Notes.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness, including the 2027 Convertible Notes. Our ability to restructure or refinance our debt will depend on, among other things, the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments and the Indenture that governs the 2027 Convertible Notes may restrict us from adopting some of these alternatives. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. In the absence of such cash flows and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.

Further, our credit agreements and our Indenture contain provisions that will restrict our ability to dispose of assets and use the proceeds from any such disposition. We may not be able to consummate those dispositions or to obtain the proceeds that we could

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realize from them and these proceeds may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.

Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our financial position and results of operations and our ability to satisfy our obligations under the 2027 Convertible Notes.

If we cannot make scheduled payments on our indebtedness, to the extent applicable, we will be in default and holders of the 2027 Convertible Notes could declare all outstanding principal and interest to be due and payable and the lenders under the credit agreements could terminate their commitments to loan money, our secured lenders could foreclose against the assets securing their borrowings and we could be forced into bankruptcy or liquidation. If we breach the covenants under our debt instruments, we would be in default under such instruments. The holders of such indebtedness could exercise their rights, as described above, and we could be forced into bankruptcy or liquidation. All of these events could result in your losing your entire investment in the 2027 Convertible Notes.

Our credit agreements and the Indenture contain terms which restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.

Our credit agreements and the Indenture contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including, among other things, restrictions on our ability to:

incur or guarantee additional indebtedness or issue disqualified stock or preferred stock;
pay dividends and make other distributions on, or redeem or repurchase, capital stock;
make certain investments;
incur certain liens;
enter into transactions with affiliates;
merge or consolidate;
enter into agreements that restrict the ability of restricted subsidiaries to make dividends or other payments to us or the guarantors;
designate restricted subsidiaries as unrestricted subsidiaries; and
transfer or sell assets.

The covenants in the Indenture that governs the 2027 Convertible Notes are subject to important exceptions and qualifications, which are described under “Description of Securities—2027 Convertible Notes.” These covenants may limit our ability to optimally operate our business.

As a result of these restrictions, we will be limited as to how we conduct our business and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur could include more restrictive covenants. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.

Our failure to comply with the restrictive covenants described above and/or the terms of any future indebtedness from time to time could result in an event of default, which, if not cured or waived, could result in our being required to repay these borrowings before their due date and the termination of future funding commitments by our lenders. If we are forced to refinance these borrowings

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on less favorable terms or cannot refinance these borrowings, our results of operations and financial condition could be adversely affected.

Our credit agreements and the Indenture contain cross-default provisions that could result in the acceleration of all of our indebtedness.

A breach of the covenants under our credit agreements or our Indenture could result in an event of default under the applicable indebtedness. Such a default may allow the creditors to accelerate the related indebtedness and may result in the acceleration of any other indebtedness to which a cross-acceleration or cross-default provision applies. In the event our lenders or noteholders accelerate the repayment of our borrowings, we and our guarantors may not have sufficient assets to repay that indebtedness. Additionally, we may not be able to borrow money from other lenders to enable us to refinance our indebtedness.

The 2027 Convertible Notes are effectively subordinated to our indebtedness under our credit agreements and our other secured indebtedness to the extent of the value of the assets securing that indebtedness.

The 2027 Convertible Notes are not secured by any of our assets. As a result, the 2027 Convertible Notes and the guarantees are effectively subordinated to our existing and future secured indebtedness (including any indebtedness under the credit agreements) with respect to the assets that secure that indebtedness. The effect of this subordination is that upon a default in payment on, or the acceleration of, any of our secured indebtedness, or in the event of bankruptcy, insolvency, liquidation, dissolution or reorganization of our company, the proceeds from the sale of assets securing our secured indebtedness are available to pay obligations on the 2027 Convertible Notes only after all secured indebtedness has been paid in full. The holders of the 2027 Convertible Notes may receive less, ratably, than the holders of secured indebtedness in the event of our or any of the guarantors’ bankruptcy, insolvency, liquidation, dissolution or reorganization.

The 2027 Convertible Notes are structurally subordinated to all obligations of our existing and future subsidiaries that are not and do not become guarantors of the 2027 Convertible Notes.

Each of our existing and future domestic restricted subsidiaries that is a borrower under or that guarantees obligations under our credit agreements or that guarantees certain of our other indebtedness is a guarantor of the 2027 Convertible Notes (subject to certain exceptions). Our subsidiaries that do not guarantee the 2027 Convertible Notes, including all of our non-domestic subsidiaries, will have no obligation, contingent or otherwise, to pay amounts due under the 2027 Convertible Notes or to make any funds available to pay those amounts, whether by dividend, distribution, loan or other payment. The 2027 Convertible Notes are structurally subordinated to all indebtedness and other obligations of any non-guarantor subsidiary such that in the event of insolvency, liquidation, reorganization, dissolution or other winding up of any subsidiary that is not a guarantor, all of that subsidiary’s creditors (including trade creditors and preferred stockholders, if any) would be entitled to payment in full out of that subsidiary’s assets before we would be entitled to any payment.

In addition, the Indenture, subject to some limitations, permits these subsidiaries to incur additional indebtedness and will not contain any limitation on the amount of other liabilities, such as trade payables, that may be incurred by these subsidiaries.

In addition, our subsidiaries that provide, or will provide, guarantees of the 2027 Convertible Notes will be automatically released from those guarantees upon the occurrence of certain events, including the following:

upon a sale, transfer, exchange or other disposition (including by way of consolidation or merger) of Capital Stock (as defined in the Indenture) of such Guarantor following which the applicable Guarantor ceases to be a Restricted Subsidiary or the sale, transfer, exchange or other disposition of all or substantially all the properties and assets of the applicable Guarantor (other than to the other Guarantors) otherwise not prohibited by the Indenture;
upon the release or discharge of such Guarantor’s obligations under our credit agreements or other Indebtedness that resulted in the creation of such Guarantee other than, in each case, a release or discharge through payment thereon;
upon the merger, amalgamation or consolidation of any Guarantor with and into the Company or another Guarantor or upon the liquidation of such Guarantor, in each case, in compliance with the Indenture,
upon the discharge of the 2027 Convertible Notes, as provided in Article 3 of the Indenture; or

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as provided in Article 10 of the Indenture.

If any guarantee is released, no holder of the 2027 Convertible Notes will have a claim as a creditor against that subsidiary, and the indebtedness and other liabilities (including trade payables and preferred stock, if any), whether secured or unsecured, of that subsidiary will be effectively senior to the claim of any holders of the 2027 Convertible Notes. See “Description of Securities — 2027 Convertible Notes — Notes Guarantees.”

Federal and state fraudulent transfer laws may permit a court to void the 2027 Convertible Notes or the guarantees, and if that occurs, you may not receive any payments on the 2027 Convertible Notes.

Federal and state fraudulent transfer and conveyance statutes may apply to the issuance of the 2027 Convertible Notes and the incurrence of the guarantees of the 2027 Convertible Notes. Under federal bankruptcy law and comparable provisions of state fraudulent transfer or conveyance laws, which may vary from state to state, the 2027 Convertible Notes or the guarantees thereof could be voided as a fraudulent transfer or conveyance if QualTek or a guarantor, as applicable,

(1)issued the 2027 Convertible Notes or incurred its guarantee with the intent of hindering, delaying or defrauding creditors or

(2)received less than reasonably equivalent value or fair consideration in return for either issuing the 2027 Convertible Notes or incurring the guarantee and, in the case of (2) only, one of the following is also true at the time thereof:

the issuer or such guarantor, as applicable, was insolvent or rendered insolvent by reason of the issuance of the 2027 Convertible Notes or the incurrence of its guarantees;
the issuance of the 2027 Convertible Notes or the incurrence of its guarantees left the issuer or such guarantor, as applicable, with an unreasonably small amount of capital or assets to carry on the business;
the issuer or such guarantor intended to, or believed that it would, incur indebtedness beyond its ability to pay as they mature; or
the issuer or such guarantor was a defendant in an action for money damages, or had a judgment for money damages docketed against it if, in either case, the judgment is unsatisfied after final judgment.

As a general matter, value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or a valid antecedent debt is secured or satisfied. A court would likely find that a guarantor did not receive reasonably equivalent value or fair consideration for its guarantee to the extent the guarantor did not obtain a reasonably equivalent benefit directly or indirectly from the issuance of the 2027 Convertible Notes.

We cannot be certain as to the standards a court would use to determine whether or not we or a guarantor was insolvent at the relevant time or, regardless of the standard that a court uses, whether the 2027 Convertible Notes or the guarantees would be subordinated to other indebtedness. In general, however, a court would deem an entity insolvent if:

the sum of its indebtedness, including contingent and unliquidated liabilities, was greater than the fair saleable value of all of its assets;
the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing indebtedness, including contingent liabilities, as they become absolute and mature; or
it could not pay its indebtedness as it became due.

If a court were to find that the issuance of the 2027 Convertible Notes or the incurrence of a guarantee was a fraudulent transfer or conveyance, the court could void the payment obligations under the 2027 Convertible Notes or that guarantee, could subordinate the 2027 Convertible Notes or that guarantee to our presently existing and future indebtedness or of the relevant guarantor or could require the holders of the 2027 Convertible Notes to repay any amounts received with respect to the 2027 Convertible Notes or that guarantee. In the event of a finding that a fraudulent transfer or conveyance occurred, you may not receive any repayment on the 2027 Convertible Notes. Further, the avoidance of the 2027 Convertible Notes could result in an event of default with respect to our and our subsidiaries’ other indebtedness that could result in acceleration of that indebtedness.

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Although each guarantee entered into in connection with the 2027 Convertible Notes will contain a provision intended to limit that guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent conveyance or fraudulent transfer, this provision may not be effective as a legal matter to protect those guarantees from being avoided under fraudulent conveyance or fraudulent transfer law or otherwise, or may reduce that guarantor’s obligation to an amount that effectively makes its guarantee worthless.

In addition, as noted above, any payment by us pursuant to the 2027 Convertible Notes or by a guarantor under a guarantee made at a time we or such guarantor was found to be insolvent could be avoided and required to be returned to the issuer or such guarantor if such payment is made to an insider within a one-year period prior to a bankruptcy filing or within 90 days for any non-insider party and such payment would give such insider or non-insider party (as the case may be) more than such creditors would have received in a distribution under the U.S. Bankruptcy Code in a hypothetical Chapter 7 case.

Finally, as a court of equity, the bankruptcy court may subordinate the claims in respect of the 2027 Convertible Notes to other claims against us under the principle of equitable subordination if the court determines that (1) the holder of 2027 Convertible Notes engaged in some type of inequitable conduct, (2) the inequitable conduct resulted in injury to our other creditors or conferred an unfair advantage upon the holders of 2027 Convertible Notes and (3) equitable subordination is not inconsistent with the provisions of the United States Bankruptcy Code.

There is no existing public trading market for the 2027 Convertible Notes, and holders’ ability to sell the 2027 Convertible Notes will be limited.

There is no existing public market for the 2027 Convertible Notes. No market for the 2027 Convertible Notes may develop, and any market that develops may not persist. We cannot assure you as to the liquidity of any market that may develop for the 2027 Convertible Notes, your ability to sell your 2027 Convertible Notes or the price at which you would be able to sell your 2027 Convertible Notes. Future trading prices of the new notes will depend on many factors, including, among other things, prevailing interest rates, our operating results and the market for similar securities. The liquidity of any trading market and the trading price of such notes may be adversely affected by changes in our financial performance or prospects and by changes in the financial performance of or prospects for companies in our industry generally.

Even though the 2027 Convertible Notes are convertible into shares of our Class A Common Stock, the terms of the 2027 Convertible Notes will not provide protection against some types of important corporate events.

The 2027 Convertible Notes are convertible into shares of our Class A Common Stock. Certain important corporate events, such as leveraged recapitalizations, that would increase the level of our indebtedness, would not constitute a “fundamental change” under the 2027 Convertible Notes. See “Description of Securities — 2027 Convertible Notes.”

A lowering or withdrawal of the ratings assigned to our debt securities by rating agencies may increase our future borrowing costs and reduce our access to capital.

There can be no assurances that any rating assigned to our debt securities will remain for any given period of time or that a rating will not be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant. Consequently, real or anticipated changes in our credit ratings will generally affect the market value of the 2027 Convertible Notes. Credit ratings are not recommendations to purchase, hold or sell the 2027 Convertible Notes, and may be revised or withdrawn at any time. Additionally, credit ratings may not reflect the potential effect of risks relating to the structure or marketing of the 2027 Convertible Notes.

Any future lowering of our ratings likely would make it more difficult or more expensive for us to obtain additional debt financing. If any credit rating initially assigned to the 2027 Convertible Notes is subsequently lowered or withdrawn for any reason, you may not be able to resell your 2027 Convertible Notes at a favorable price or at all.

We may not have the ability to repurchase the 2027 Convertible Notes upon a fundamental change.

Holders of the 2027 Convertible Notes have the right to require us to repurchase their 2027 Convertible Notes upon the occurrence of a fundamental change, which includes a delisting of the Class A Common Stock. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of 2027 Convertible Notes. In addition, our ability to repurchase the 2027 Convertible Notes is limited by the agreements governing our existing indebtedness and may also be

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limited by law, by regulatory authority or by agreements that governs our future indebtedness. Our failure to repurchase the 2027 Convertible Notes at a time when the repurchase is required by the Indenture would constitute a default under the Indenture. A default under the Indenture or the fundamental change itself could also lead to a default under the agreements governing our existing or future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2027 Convertible Notes.

Risks Related to Our Class A Common Stock

An active trading market for the Class A Common Stock may never develop or be sustained, which may make it difficult to sell the shares of the Class A Common Stock you purchase.

An active trading market for the Class A Common Stock may not develop or continue or, if developed, may not be sustained, which would make it difficult for you to sell your shares of the Class A Common Stock at an attractive price (or at all). The market price of the Combined Company’s Class A Common Stock may decline below your purchase price, and you may not be able to sell your shares of the Combined Company’s Class A Common Stock at or above the price you paid for such shares (or at all).

The Combined Company will be required to meet the initial listing requirements to be listed on Nasdaq. However, the Combined CompanyWe may be unable to maintain the listing of itsour securities inon the future.Nasdaq Capital Market.

If the Combined Company fails to meet the continued listing requirements and Nasdaq delists the Combined Company’s Class A Common Stock, the Combined Company could face significant material adverse consequences, including:

a limited availability of market quotations for the Combined Company’s Class A Common Stock;
a limited amount of news and analyst coverage for the Combined Company; and
a decreased ability to issue additional securities or obtain additional financing in the future.

The market price of the Class A Common Stock is likely to be highly volatile, and you may lose some or all of your investment.

Following the Business Combination, theThe market price of Class A Common Stock is likely to be highly volatile and may be subject to wide fluctuations in response to a variety of factors, including the following:

the impact of COVID-19 pandemic on QualTek’sour business;
the inability to obtain or maintain the listing of the Combined Company’s shares of Class A Common Stock on the Nasdaq;
the inability to recognize the anticipated benefitsgrowth of the Business Combination,Company, which may be affected by, among other things, competition, QualTek’sour ability to grow and manage growth profitably, and retain its key employees;
changes in applicable laws or regulations;
risks relating to the uncertainty of QualTek’sour projected financial information; and
risks related to the growth of QualTek’sour business, the timing of expected business milestones, and the success of future acquisitions, if any; and
the amount of redemption requests made by ROCR’s stockholders.any.

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In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors, as well as general economic, political, regulatory and market conditions, may negatively affect the market price of the Class A Common Stock, regardless of the Combined Company’s actual operating performance.

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The Combined Company’s business and operations could be negatively affected if it becomes subject to any securities litigation or shareholder activism, which could cause the Combined Company to incur significant expense, hinder execution of business and growth strategy and impact its stock price.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Shareholder activism, which could take many forms or arise in a variety of situations, has been increasing recently. Volatility in the stock price of the Class A Common Stock or other reasons may in the future cause it to become the target of securities litigation or shareholder activism. Securities litigation and shareholder activism, including potential proxy contests, could result in substantial costs and divert management’s and board of directors’the Board’s attention and resources from the Combined Company’s business. Additionally, such securities litigation and shareholder activism could give rise to perceived uncertainties as to the Combined Company’s future, adversely affect its relationships with service providers and make it more difficult to attract and retain qualified personnel. Also, the Combined Company may be required to incur significant legal fees and other expenses related to any securities litigation and activist shareholder matters. Further, its stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and shareholder activism.

If securities or industry analysts do not publish research or reports about the Combined Company, or publish negative reports, the Combined Company’s stock price and trading volume could decline.

The trading market for the Combined Company’s Class A Common Stock will depend, in part, on the research and reports that securities or industry analysts publish about the Combined Company. The Combined Company does not have any control over these analysts. If the Combined Company’s financial performance fails to meet analyst estimates or one or more of the analysts who cover the Combined Company downgrade its common stockClass A Common Stock or change their opinion, the Combined Company’s stock price would likely decline. If one or more of these analysts cease coverage of the Combined Company or fail to regularly publish reports on the Combined Company, it could lose visibility in the financial markets, which could cause the Combined Company’s stock price or trading volume to decline.

Because the Combined Company does not anticipate paying any cash dividends in the foreseeable future, capital appreciation, if any, would be your sole source of gain.

The Combined Company currently anticipates that it will retain future earnings for the development, operation and expansion of its business and do not anticipate declaring or paying any cash dividends for the foreseeable future. As a result, capital appreciation, if any, of the Combined Company’s shares of common stockClass A Common Stock would be your sole source of gain on an investment in such shares for the foreseeable future.

Certain of our warrants are accounted for as a warrant liability and are recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our Class A Common Stock.

We had 102,000 Private Placement Warrants that were issued concurrently with the ROCR IPO. The Private Placement Warrants and the shares of Class A Common Stock issuable upon the exercise of the Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by us and exercisable by such holders on the same basis as the warrants included in the units sold in the ROCR IPO, in which case the 102,000 Private Placement Warrants could be redeemed by the Company for $1,020 (or $0.01 per Warrant). Under GAAP, we are required to evaluate contingent exercise provisions of these warrants and then their settlement provisions to determine whether they should be accounted for as a warrant liability or as equity. Any settlement amount not equal to the difference between the fair value of a fixed number of our equity shares and a fixed monetary amount precludes these warrants from being considered indexed to its own stock, and therefore, from being accounted for as equity. As a result of the provision that the Private Placement Warrants, when held by someone other than the initial purchasers or their permitted transferees, will be redeemable by us, the requirements for accounting for these warrants as equity are not satisfied. Therefore, we are required to account for these Private Placement Warrants as a warrant liability and record (a) that liability at fair value, which was determined as the same as the fair value of the warrants included in the units sold in the ROCR IPO, and (b) any subsequent changes in fair value as of the end of each period for which earnings are reported. The impact of changes in fair value on earnings may have an adverse effect on the market price of our Class A Common Stock.

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The exercise price for our public warrants is higher than in many similar blank check company offerings in the past, and, accordingly, the public warrants are more likely to expire worthless.

The exercise price of our public warrants is higher than is typical with many similar blank check companies in the past. Historically, with regard to units offered by blank check companies, the exercise price of a public warrant was generally a fraction of the purchase price of the units in the initial public offering. The exercise price for our public warrants is $11.50 per share, subject to adjustment as provided herein. As a result, the public warrants are less likely to ever be in the money and more likely to expire worthless. We do not believe it is likely that a warrant holder would elect to exercise its warrants when our common stock is trading below $11.50 and any cash proceeds that would be received by the Company are dependent on the trading price of the common stock underlying the warrants. We do not believe that the warrant holders’ failure to exercise warrants for cash would have a material impact on our liquidity, financial position or results of operations.

Our 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.

Our public warrants issued as part of the ROCR IPO are exercisable for up to one share of Class A Common Stock at $11.50 per share. The additional shares of Class A Common Stock issued upon exercise of our warrants will result in dilution to the then existing holders of our Class A Common Stock 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 Class A Common Stock.

We have no obligation to net cash settle the warrants.

In no event will we have any obligation to net cash settle the warrants. Furthermore, there are no contractual penalties for failure to deliver securities to the holders of the warrants upon consummation of an initial business combination, including the Business Combination, or exercise of the warrants. Accordingly, the warrants may expire worthless.

There is no guarantee that the warrants will ever be in the money, and they may expire worthless and the terms of warrants may be amended.

The exercise price for the warrants is $11.50 per share of Class A Common Stock. There is no guarantee that the warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless. In addition, the Company’s warrants were issued in registered form under the Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and the Company. The Warrant Agreement 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 50% of the then outstanding public warrants to make any other change. Accordingly, the Company may amend the terms of the warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although the Company’s ability to amend the terms of the warrants with the consent of at least 50% 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 and their respective affiliates and associates have of Class A Common Stock purchasable upon exercise of a warrant.

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

We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of the Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date QualTek sends the notice of redemption to the warrant holders. If and when the warrants become redeemable by QualTek, QualTek may exercise its redemption right even if QualTek is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force the holder (i) to exercise their warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) 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 your warrants. Historical trading prices for our Common Stock have not exceeded the $18.00 per share threshold at which the public warrants become redeemable. In the event QualTek exercises its redemption right, holders of the warrants would be notified of such redemption as described in our Warrant Agreement. Specifically, in the event that QualTek elects to redeem all of the outstanding warrants, QualTek shall fix a date for the

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redemption (the “Redemption Date”). Notice of redemption shall be mailed by first class mail, postage prepaid, by QualTek not less than 30 days prior to the Redemption Date to the registered holders of the outstanding warrants to be redeemed at their last addresses as they appear on the registration books. Any notice mailed in the manner provided in the warrant agreement shall be conclusively presumed to have been duly given whether or not the registered holder received such notice. In addition, beneficial owners of the warrants will be notified of such redemption via the Company’s posting of the redemption notice to DTC. None of the private placement warrants and warrants underlying the units issuable upon conversion of working capital loan will be redeemable by QualTek so long as they are held by their initial purchasers or their permitted transferees.

The grant of registration rights to our stockholders and holders of our Private Placement Warrants and the future exercise of such rights may adversely affect the market price of our Class A Common Stock.

UponOn February 14, 2022, in connection with the completionclosing of the Business Combination, the Company entered into an investor rights agreement (the “Investor Rights Agreement will be entered into between ROCR, Sellers”) with the sellers as set forth therein, the Equity Representative,BCP QualTek, the Sponsors, Sponsor Representative, and certain Other Holders replacing the Original Registration Rights Agreement, dated as of March 2, 2021, between the Other Holders (as defined therein) and ROCR.. Pursuant to the Investor Rights Agreement, the Holders (as defined therein), which includes those certain QualTek EquityholdersHoldCo equityholders as well as the Sponsor,Sponsors, and, in each case, their permitted transferees will have customary registration rights (including with respect to cooperation and reduction of underwritten shelf takedown provisions (subject to lock-up restrictions for six months after the Closing Date)closing of the Business Combination)) with respect to (i) the Class A Common Stock (including the Class A common stockCommon Stock issued (a) pursuant to the Company’s the Third Amended and Restated LLCA upon exchange of theQualTek Common Units along with a corresponding number of shares of the Class B Common Stock, and (b) upon conversion of the Restricted Sponsor Shares, in each case, upon the issuance thereof or lapse of transfer restrictions applicable thereto), (ii) the Private Placement Warrants and the Class A Common Stock issuable upon exercise of the Private Placement Warrants, and (iii) any common stockClass A Common Stock of the Company or any subsidiary of the Company issued or issuable with respect to the securities referred to in clause (i) and (ii) above by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization.

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Further, pursuant to the Pre-PIPE Registration Rights Agreement, ROCR has agreed to file the Pre-PIPE Resale Registration Statement registering the resale of the shares of Class A Common Stock to be received upon automatic conversion of the Pre-PIPE Notes  with the SEC no later than the 10th business day following the date ROCR first filed the proxy statement with the SEC, or August 25, 2021. ROCR will use its commercially reasonable efforts to have the Pre-PIPE Resale Registration Statement declared effective no later than the 60th calendar day following the Closing Date (or, in the event the SEC notifies ROCR that it will “review” the PIPE Resale Registration Statement, the 90th calendar day following the Closing Date (as defined in the Pre-PIPE Registration Rights Agreement)). Similarly, pursuant to the PIPE Registration Rights Agreement, we agreed that we will use our reasonable best efforts (i) to file no later than the 10th business following the date ROCR first filed the proxy statement, a registration statement with the SEC for a secondary offering of the PIPE Shares (and underlying Class A Common Stock), (ii) to use our commercially reasonable efforts to have the registration statement declared effective no later than the 60th calendar day following the Closing Date (or, in the event the SEC notifies us that it will “review” the registration statement, the 90th calendar day following the Closing Date (as defined in the PIPE Registration Rights Agreement)) and (iii) to maintain the effectiveness of such registration statement until the earlier of such date and as the Business Combination Agreement is validly terminated in accordance with its terms, and (b) upon the mutual written agreement of each of the parties to the Subscription Agreements and the Company, or (c)  three years from the Closing. In addition, the PIPE Subscription Agreements provide these holders will have certain “piggy-back” registration rights to include their securities in other registration statements filed by us. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of the Class A Common Stock of the Company.

Future offerings of debt or offerings or issuances of equity securities by the Combined Company may adversely affect the market price of the Combined Company’s Class A Common Stock or otherwise dilute all other stockholders.

In the future, we may attempt to obtain financing or to further increase the Combined Company’sour capital resources by issuing additional shares of the Class A Common Stock or offering debt or other equity securities, including commercial paper, medium-term notes, senior or subordinated notes, debt securities convertible into equity or shares of preferred stock. We also expect to grant equity awards to employees, directors, and consultants under the Combined Company’sour stock incentive plans. Future acquisitions could require substantial additional capital in excess of cash from operations. The Combined Company wouldWe expect to obtain the capital required for acquisitions through a combination of additional issuances of equity, corporate indebtedness and cash from operations.

Issuing additional shares of the Class A Common Stock or other equity securities or securities convertible into equity may dilute the economic and voting rights of the Combined Company’sour existing stockholders or reduce the market price of the Class A Common Stock or both. Upon liquidation, holders of such debt securities and preferred shares, if issued, and lenders with respect to other borrowings would receive a distribution of the Combined Company’sour available assets prior to the holders of the Class A Common Stock. Our debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. Preferred shares, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit the Combined Company’sour ability to pay dividends to the holders of the Class A Common Stock. The Combined Company’sOur decision to issue securities in any future offering will depend on market conditions and other factors beyond the Combined Company’sour control, which may adversely affect the amount, timing and nature of the Combined Company’sour future offerings.

The 2027 Convertible Notes may be converted into Class A Common Stock in the future, which would cause immediate and substantial dilution to our stockholders.

We expect to issueissued the 2027 Convertible Notes inwith an aggregate principal amount of up to $125,000,000.The$124,685,000. The 2027 Convertible Notes are initially convertible into up to 12,500,00012,468,500 shares of Class A Common StockStock. The 2027 Convertible Notes are convertible at an initial conversion price of $10.00 (subject to downward adjustment during the first year depending on the price of the Class A Common Stock and other anti-dilution adjustments). The issuance of shares of Class A Common Stock upon any conversion of the 2027

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Convertible Notes will result in dilution to the interests of stockholders and such dilution may increase as a result of the conversion price adjustment and anti-dilution provisions in the indenture governing the 2027 Convertible Notes.

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We may not have the ability to repurchase the Convertible Notes upon a fundamental change.

Holders of the Convertible Notes will have the right to require us to repurchase their Convertible Notes upon the occurrence of a fundamental change, which includes a delisting of the Combined Company Stock. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of Convertible Notes. In addition, our ability to repurchase the Convertible Notes is limited by the agreements governing our existing indebtedness and may also be limited by law, by regulatory authority or by agreements that will govern our future indebtedness. Our failure to repurchase the Convertible Notes at a time when the repurchase is required by the indenture that will govern the notes would constitute a default under such indenture. A default under the indenture that will govern the Convertible Notes or the fundamental change itself could also lead to a default under the agreements governing our existing or future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Convertible Notes.

If our security holders exercise their registration rights with respect to their securities, it may have an adverse effect on the market price of our securities.

ROCR’sOur Initial Stockholders are entitled to make a demand that itthe Company register the resale of their Insider Sharesinsider shares at any time commencing three months prior to the date on which their shares may be released from escrow. Additionally, our Initial Stockholders, officers and directors are entitled to demand that we register the resale of the shares underlying any securities our Initial Stockholders, officers, directors or their affiliates may be issued in payment of working capital loans made to us at any time after the consummation of the Business Combination.time. If such persons exercise their registration rights with respect to all of these securities, then there will be an additional 3,283,0003,589,000 shares of Class A Common Stock eligible for trading in the public market. The presence of these additional shares of Class A Common Stock trading in the public market may have an adverse effect on the market price of our securities.

QualTek is an emerging growth company within the meaning of the Securities Act and QualTek has taken advantage of certain exemptions from disclosure requirements available to emerging growth companies; this could make QualTek’s securities less attractive to investors and may make it more difficult to compare QualTek’s performance with other public companies.

QualTek is an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and has taken advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in QualTek’s periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on certain executive compensation matters. As a result, QualTek’s stockholders may not have access to certain information they may deem important. QualTek may be an emerging growth company for up to five years, although circumstances could cause the loss of that status earlier, including if the market value of the common stockCommon Stock of QualTek held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case the Combined Company would no longer be an emerging growth company as of the following December 31. QualTek cannot predict whether investors will find its securities less attractive because QualTek relies on these exemptions. If some investors find the securities less attractive as a result of reliance on these exemptions, the trading prices of the QualTek’s securities may be lower than they otherwise would be, there may be a less active trading market for the QualTek’s securities and the trading prices of the securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. QualTek has elected not to opt out of such extended transition period. Accordingly, when a standard is issued or revised and it has different application dates for public or private companies, QualTek, as an emerging growth company, will adopt the new or revised standard at the time private companies adopt the new or revised standard, unless early adoption is permitted by the standard. This may make comparison of QualTek’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

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Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for ROCR to effectuate the Business Combination, require substantial financial and management resources and increase the time and costs of completing an acquisition.

Section 404 of the Sarbanes-Oxley Act requires that ROCR evaluate and report on its system of internal controls beginning with its Annual Report on Form 10-K for the year ending December 31, 2022. Following the initial Business Combination, if the Combined Company is deemed to be a large accelerated filer or an accelerated filer, it will be required to comply with the independent registered public accounting firm attestation requirement on its internal control over financial reporting. Further, for as long as the Combined Company remains an emerging growth company, it will not be required to comply with the independent registered public accounting firm attestation requirement on its internal control over financial reporting. Following the Business Combination, the Combined Company will be required to assure that it is in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The need to develop the internal control system to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete the Business Combination as well as impose obligations on the Combined Company following the Business Combination.

Risks Related to Tax

Our only principal asset following the Business Combination will beis our interest in QualTek HoldCo, and accordingly we will depend on distributions from QualTek HoldCo to pay dividends, taxes, other expenses, and make any payments required to be made by us under the Tax Receivable Agreement.

Upon consummation of the Business Combination, we will beWe are a holding company and will have no material assets other than our ownership of QualTek Common Units. We aredo not expected to have independent means of generating revenue or cash flow, and our ability to pay our taxes, operating expenses, and pay any dividends in the future will be dependent upon the financial results and cash flows of QualTek.QualTek HoldCo. There can be no assurance that QualTek HoldCo will generate sufficient cash flow to distribute funds to us or that applicable state law and contractual restrictions, including negative covenants under debt instruments, will permit such distributions. If QualTek HoldCo does not distribute sufficient funds to us to pay our taxes or other liabilities, we may default on contractual obligations or have to borrow additional funds. In the event that we

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are required to borrow additional funds it could adversely affect our liquidity and subject us to additional restrictions imposed by lenders.

QualTek HoldCo will continue to be treated as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, taxable income will be allocated, for U.S. federal income tax purposes, to the holders QualTek Common Units. Under the terms of the Third Amended and Restated LLCA, QualTek HoldCo is obligated to make pro rata tax distributions to holders of QualTek Common Units calculated at certain assumed rates. In addition to tax expenses, we will also incur expenses related to our operations, including payment obligations under the Tax Receivable Agreement, which could be significant and some of which will be reimbursed by QualTek HoldCo (excluding payment obligations under the Tax Receivable Agreement). For so long as we are Managing Member (as defined in the Third Amended and Restated LLCA) of QualTek HoldCo, we intend to cause QualTek HoldCo to make ordinary distributions and tax distributions to the holders of QualTek Common Units on a pro rata basis in amounts sufficient to enable us to cover all applicable taxes, relevant operating expenses, payments under the Tax Receivable Agreement and dividends, if any, declared by us. However, QualTek’sQualTek HoldCo’s ability to make such distributions may be subject to various limitations and restrictions, including, but not limited to, retention of amounts necessary to satisfy the obligations of QualTek HoldCo and its subsidiaries and restrictions on distributions that would violate any applicable restrictions contained in QualTek’sQualTek HoldCo’s debt agreements, or any applicable law, or that would have the effect of rendering QualTek HoldCo insolvent. To the extent we are unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid. Additionally, nonpayment for a specified period and/or under certain circumstances may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments under the Tax Receivable Agreement, which could be substantial.

We anticipate that the distributions received from QualTek HoldCo may, in certain periods, exceed our actual tax liabilities and obligations to make payments under the Tax Receivable Agreement. The board,Board, in its sole discretion, will make any determination from time to time with respect to the use of any such excess cash so accumulated, which may include, among other uses, to pay dividends on our Class A Common Stock. We will have no obligation to distribute such cash (or other available cash other than any declared dividend) to our stockholders.

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The Tax Receivable Agreement will requirerequires us to make cash payments to the TRA Holders in respect of certain tax benefits and such payments may be substantial. In certain cases, payments under the Tax Receivable Agreement may (i) exceed any actual tax benefits the Tax Group realizes or (ii) be accelerated.

AtAs of the Closing, ROCR (and subsequent toclosing of the Business Combination, the Company),Company, QualTek HoldCo, the TRA Holders (as defined in the Tax Receivable Agreement) and the TRA Holder Representative (as defined in the Tax Receivable Agreement) will enterentered into the Tax Receivable Agreement.

Pursuant to the Tax Receivable Agreement, ROCR willthe Company is generally be required to pay the TRA Holders 85% of the amount of savings, if any, in U.S. federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that ROCRthe Company (and applicable consolidated, unitary, or combined Subsidiariessubsidiaries thereof, if any) realizes,realized, or is deemed to realize,have realized, as a result of certain tax attributes (the “Tax Attributes”), including:

existing tax basis in certain assets of QualTek and certain of its direct or indirect Subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service, attributable to QualTek Common Units acquired by ROCRthe Company at the Closingclosing of the Business Combination or from a TRA Holder (including any QualTek Common Units held by the Blocker, which isare acquired by ROCRthe Company in a Reorganization Transaction (as defined in the Tax Receivable Agreement));
tax basis adjustments resulting from the acquisition of QualTek Common Units by ROCRthe Company at the Closingclosing of the Business Combination and taxable exchanges of QualTek Common Units (including any such adjustments resulting from certain payments made by ROCRthe Company under the Tax Receivable Agreement) acquired by ROCRthe Company from a TRA Holder pursuant to the terms of the Third Amended and Restated LLCA;
tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement; and
certain tax attributes of the Blocker, which holds QualTek Common Units that are acquired directly or indirectly by ROCRthe Company pursuant to a Reorganization Transaction.

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Under the Tax Receivable Agreement, the Tax Group will(as defined in the Tax Receivable Agreement) is generally be treated as realizing a tax benefit from the use of a Tax Attribute on a “with and without” basis, thereby generally treating the Tax Attributes as the last item used, subject to several exceptions. Payments under the Tax Receivable Agreement generally will beare based on the tax reporting positions that ROCRthe Company determines (with the amount of subject payments determined in consultation with an advisory firm and subject to the TRA Holder Representative’s review and consent), and the IRS or another taxing authority may challenge all or any part of position taken with respect to Tax Attributes or the utilization thereof, and a court may sustain such a challenge. In the event that any tax benefits initially claimed by the Tax Group are disallowed, the TRA Holders are not required to reimburse ROCRthe Company for any excess payments that may previously have been made pursuant to the Tax Receivable Agreement, for example, due to adjustments resulting from examinations by taxing authorities. Rather, any excess payments made to such TRA Holders are applied against and reduce any future cash payments otherwise required to be made by ROCRthe Company under the Tax Receivable Agreement, if any, after the determination of such excess. As a result, in certain circumstances ROCRthe Company could be required to make payments under the Tax Receivable Agreement in excess of the Tax Group’s actual savings in respect of the Tax Attributes.

The Tax Receivable Agreement will provideprovides that, in the event (such events collectively, “Early Termination Events”) that (i) ROCRthe Company exercises its early termination rights under the Tax Receivable Agreement, (ii) certain changes of control of ROCRthe Company or QualTek HoldCo occur (as described in the Third Amended and Restated LLCA), (iii) ROCRthe Company in certain circumstances, fails to make a payment required to be made pursuant to the Tax Receivable Agreement by its final payment date, which non-payment continues for 60 days following such final payment date or (iv) ROCRthe Company materially breaches (or is deemed to materially breach) any of its material obligations under the Tax Receivable Agreement other than as described in the foregoing clause (iii) and, in the case of clauses (iii) and (iv), unless certain liquidity related or restrictive covenant related exceptions apply, ROCR’sthe Company’s obligations under the Tax Receivable Agreement will accelerate (if the TRA Holder Representative so elects in the case of clauses (ii)-(iv)) and ROCR will bethe Company is required to make a lump-sum cash payment to all the TRA Holders equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement, which lump-sum payment would be based on certain assumptions, including those relating to there being sufficient future taxable income of the Tax Group to fully utilize the Tax Attributes over certain specified time periods and that all QualTek Common Units (including QualTeckQualTek Common Units held by Blocker) that had not yet been exchanged for Common Stock or cash are deemed exchanged for cash. The lump-sum payment could be material and could materially exceed any actual tax benefits that the Tax GroupTRA Holder realizes subsequent to such payment.

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As a result of the foregoing, in some circumstances (i) ROCRthe Company could be required to make payments under the Tax Receivable Agreement that are greater than or less than the actual tax savings that the Tax Group realizes in respect of the Tax Attributes and (ii) it is possible that ROCRthe Company may be required to make payments years in advance of the actual realization of tax benefits (if any, and may never actually realize the benefits paid for) in respect of the Tax Attributes (including if any Early Termination Events occur).

Payments under the Tax Receivable Agreement will be ourare the Company’s obligations and not obligations of QualTek.QualTek HoldCo. Any actual increase in our allocable share of QualTek HoldCo and its relevant subsidiaries’ tax basis in relevant assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of exchanges, the market price of the Class A Common Stock at the time of an exchange of QualTek Common Units by a TRA Holder pursuant to the terms of the Third Amended and Restated LLCA and the amount and timing of the recognition of the Tax Group’s income for applicable tax purposes. While many of the factors that will determine the amount of payments that we will beare required to make under the Tax Receivable Agreement are outside of our control, we expect that the aggregate payments we will beare required to make under the Tax Receivable Agreement could be substantial and, if those payments substantially exceed the tax benefit we realize in a given year or in the aggregate, could have an material adverse effect on our financial condition.

Any payments made by us under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to us. To the extent that we are unable to make timely payments under the Tax Receivable Agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid. Additionally, nonpayment for a specified period and/or under certain circumstances may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement. Furthermore, our future obligation to make payments under the Tax Receivable Agreement could make us a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the Tax Attributes that may be deemed realized under the Tax Receivable Agreement.

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We could be adversely affected by changes in applicable tax laws, regulations, or administrative interpretations thereof in the United States or other jurisdictions.

We could also be adversely affected by changes in applicable tax laws, regulations, or administrative interpretations thereof in the United States or other jurisdictions and changes in tax law could reduce our after-tax income and adversely affect our business and financial condition. For example, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) enacted on March 27, 2020, relaxed certainTable of the limitations imposed by the Tax Act for certain taxable years, including the limitation on the use and carryback of net operating losses and the limitation on the deductibility of business interest expense. The exact impact of the CARES Act for future years is difficult to quantify, but these changes could materially affect ROCR, QualTek or its subsidiaries. In addition, other changes could be enacted in the future to increase the corporate tax rate, limit further the deductibility of interest, or effect other changes that could have a material adverse effect on our financial condition. Such changes could also include increases in state taxes and other changes to state tax laws to replenish state and local government finances depleted by costs attributable to the COVID-19 pandemic and the reduction in tax revenues due to the accompanying economic downturn.Contents

In addition, our effective tax rate and tax liability are based on the application of current income tax laws, regulations and treaties. These laws, regulations and treaties are complex and often open to interpretation. In the future, the tax authorities could challenge our interpretation of laws, regulations and treaties, resulting in additional tax liability or adjustment to our income tax provision that could increase our effective tax rate. Changes to tax laws may also adversely affect our ability to attract and retain key personnel.

Risks Related to the Combined Company’sour Corporate Governance

Following the Business Combination, we will beWe are a “controlled company” within the meaning of the applicable rules of Nasdaq and, as a result, maywe qualify for exemptions from certain corporate governance requirements. To the extent we rely on such exemptions, our shareholders willdo not have the same protections afforded to shareholders of companies that are not controlled companies.

Following the Business Combination, Brightstar will ownowns a majority of the voting power of our Class A Common Stock. As a result, we will beare a “controlled company” under Nasdaq rules. As a controlled company, we will beare exempt from certain corporate governance requirements, including those that would otherwise require our board of directorsBoard to have a majority of independent directors and require that we either establish compensation and nominating and corporate governance committees, each comprised entirely of independent directors, or otherwise ensure that the compensation of our executive officers and nominees of directors are determined or recommended to our board of directorsBoard by independent members of our board of directors.Board. To the extent we rely on one

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or more of these exemptions, holders of our Class A Common Stock willdo not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.

The SponsorQualTek Equityholders and QualTek Equityholdersthe Sponsors have the right to elect a certain number of directors to our board of directors.Board.

The terms of the Investor Rights Agreement provide the SponsorSponsors the right to elect one director to the board of directors of the Combined CompanyBoard so long as the Sponsor holdsSponsors hold 40% or more of the Combined Company’sour outstanding Class A Common Stock. In addition, the pre-Business Combination holders of QualTek HoldCo equity (the “QualTek Equityholders”) are entitled pursuant to the Investor Rights Agreement to select up to seven directors, depending on the percentage of the Combined Company’sour outstanding Class A Common Stock held by them. The remaining director will be selected jointly by the SponsorSponsors and the QualTek Equityholders. See Description of Capital Stock.Securities”.

Pursuant to these provisions, the Sponsor has designated Sam Chawla to assume a seat on the Combined Company’s board of directorsour Board upon the consummation of the Business Combination and the QualTek Equityholders have designated Christopher S. Hisey, Matthew Allard, Andrew Weinberg, Raul Deju,Sam Totusek, Roger Bulloch and Maha Eltobgy and Renee Noto to assume the other seats as directors. Jigisha Desai hasand Daniel Lafond have been jointly selected to serve on the Surviving Company’s boardBoard as a director.directors. As a result of these provisions, following the Closing Date, it is unlikely that public stockholders of the Combined Company will have the ability to effectively influence the election of directors during the period these provisions of the Investor Rights Agreement are applicable. While the directors designated pursuant to the Investor Rights Agreement are obligated to act in accordance with their applicable fiduciary duties, their interests may be aligned with the interests of the investors they represent, which may not always coincide with our corporate interests or the interests of our other stockholders.

Anti-takeover provisions contained in the CharterCertificate of Incorporation and Amended and Restated Bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

The Charter will containCertificate of Incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. ROCRThe Company is also subject to anti- takeoveranti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for ROCR’sthe Company’s securities. These provisions are described in the CharterCertificate of Incorporation and in the Amended and Restated Bylaws.

The Charter will provideCertificate of Incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between the Combined Company and its stockholders, which could limit the Combined Company’sour stockholders’ ability to obtain a favorable judicial forum for disputes with the Combined Company or its directors, officers, or employees.

The Charter will provideCertificate of Incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for:

any derivative action or proceeding brought on its behalf;
any action asserting a breach of fiduciary duty by any director, officer, other employee or Company stockholder to us or to our stockholders;
any action asserting a claim against the Combined Company arising under the Delaware General Corporation Law, the Charter,Certificate of Incorporation, or the Amended and Restated Bylaws; and

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any action asserting a claim against us, our directors, officers, other employees or the Combined Company stockholders arising pursuant to any provision of the DGCL, the CharterCertificate of Incorporation or the Amended and Restated Bylaws, or (iv) any action asserting a claim against us, our directors, officers, other employees or Combined Company stockholders governed by the internal affairs doctrine under Delaware law shall be brought, to the fullest extent permitted by law, solely and exclusively in the Court of Chancery in the State of Delaware; provided, however, that, in the event that the Court of Chancery in the State of Delaware lacks subject matter jurisdiction over any such actions, the Charter will provideCertificate of Incorporation provides that the sole and exclusive forum shall be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant.

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In addition, the Charter will require,Certificate of Incorporation requires, unless we consent in writing to the selection of an alternative forum, that the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. This provision in the Charter willCertificate of Incorporation does not address or apply to claims that arise under the Exchange Act; however, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

Although we believe this provision benefits us by providing increased consistency in the application of law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers.

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USE OF PROCEEDS

All of the Class A Common Stock and warrants offered by the Selling Stockholders pursuant to this prospectus will be sold by the Selling Stockholders for their respective accounts. All of the Class A Common Stock and 2027 Convertible Notes offered by the Selling Noteholders pursuant to this prospectus will be sold by the Selling Noteholders for their respective accounts. We will not receive any of the proceeds from these sales.

The Selling Securityholders will pay any underwriting fees, discounts, selling commissions, stock transfer taxes and certain legal expenses incurred by such Selling Securityholders in disposing of their securities, and we will bear all other costs, fees and expenses incurred in effecting the registration of the securities covered by this prospectus, including, without limitation, all registration and filing fees, Nasdaq listing fees and fees and expenses of our counsel and our independent registered public accountants.

We will not receive any proceeds from the sale of theshares of Class A Common Stock or 2027 Convertible Notes by the Selling Stockholders.Securityholders. With respect to the shares of Class A Common Stock underlying the warrants, we will not receive any proceeds from such shares except with respect to amounts received by us upon exercise of such warrants to the extent such warrants are exercised for cash. We intend to use any such proceeds for general corporate purposes.

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DETERMINATION OF OFFERING PRICE

Our Class A Common Stock and warrants are listed on Nasdaq under the symbols “QTEK” and “QTEKW,” respectively. The 2027 Convertible Notes will not be listed on any securities exchange.

The actual offering price by the Selling Stockholders of the shares of Class A Common Stock and the warrants and by the Selling Noteholders of the shares of Class A Common Stock and the 2027 Convertible Notes covered by this prospectus will be determined by prevailing market prices at the time of sale, by private transactions negotiated by the Selling Securityholders or as otherwise described in the section entitled “Plan of Distribution.”

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Unless otherwise indicated, defined terms included below shall have the same meaning as terms defined and included elsewhere in this prospectus. For the purposes of this section, “Combined Company” means QualTek Services Inc. and “QualTek” means QualTek HoldCo, LLC (f/k/a BCP QualTek HoldCo, LLC).

The following unaudited pro forma condensed combined financial information presents the combination of the financial information of QualTek and ROCR adjusted to give effect to the Business Combination. The unaudited pro forma condensed combined financial information has been prepared in accordance with Regulation S-X Article 11, Pro Forma Financial Information, as amended by the final rule, Release No. 33-10786; Amendments to Financial Disclosures about Acquired and Disposed Businesses.

Introduction

ROCR is a special purpose acquisition company whose purpose is to acquire, through a merger, share exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. ROCR was incorporated in Delaware on February 13, 2019, as Roth CH Acquisition III Co.

On March 5, 2021, ROCR consummated its IPO of 11,500,000 of Units, each consisting of one share of Common Stock and one-quarter of one redeemable Warrant, at a price of $10.00 per Unit, generating gross proceeds of $115.0 million, including the exercise of the underwriters’ over-allotment option. Simultaneously with the closing of the IPO, ROCR completed the private sale of an aggregate of 408,000 Private Units to its Initial Stockholders at a purchase price of $10.00 per unit, generating gross proceeds of approximately $4.1 million. Each Private Unit consists of one share of Common Stock and one- quarterone-quarter of one redeemable Warrant, with each whole Warrant entitling the holder thereof to purchase one share of Common Stock for $11.50 per share. Following the closing of the IPO, approximately $115.0 million from the net proceeds of the sale of the Units in the IPO and the sale of the Private Units was placed in a Trust Account invested only in U.S. government treasury bills, notes and bonds with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act and which invest solely in U.S. Treasuries. Except for all interest income that may be released to us to pay our tax obligations, none of the funds held in the Trust Account will be released from the Trust Account until the earlier of: (i) the consummation of our initial business combination within 24 months from the closing of the IPO and (ii) a redemption to public stockholders prior to any voluntary winding-up in the event we do not consummate our initial business combination within the applicable period.

QualTek, through its subsidiaries, is a leading provider of communication infrastructure services including engineering, installation, fulfillment and program management, renewable energy solutions, and business continuity and disaster recovery support, delivering a full suite of critical services to the North American telecommunications and power sectors.

The unaudited pro forma condensed combined balance sheet as of October 2, 2021 combines the unaudited condensed balance sheet of ROCR as of September 30, 2021 and the unaudited consolidated balance sheet of QualTek as of October 2, 2021 on a pro forma basis as if the Business Combination and the related transactions contemplated by the Business Combination Agreement, summarized below, had been consummated on October 2, 2021. The unaudited pro forma condensed combined statements of operations and comprehensive loss for the nine months ended October 2, 2021 combines the unaudited condensed statement of operations of ROCR for the nine months ended September 30, 2021 with the unaudited consolidated statement of operations and comprehensive loss of QualTek for the nine months ended October 2, 2021. The unaudited pro forma condensed combined statements of operations and comprehensive loss for the year ended December 31, 20202021 combines the audited consolidated statement of operations of ROCR for the year ended December 31, 20202021 with the audited consolidated statement of operations and comprehensive loss of QualTek for the year ended December 31, 2020.2021. The unaudited pro forma condensed combined statement of operations and comprehensive loss for the nine months ended October 2, 2021 and the year ended December 31, 2020 give2021 gives effect as if the Business Combination and the transactions contemplated by the Business Combination Agreement, summarized below, had been consummated on January 1, 2020,2021, the beginning of the earliest period presented. The transactions contemplated by the Business Combination Agreement that are given pro forma effect include:

the reverse recapitalization between the Merger Subs and QualTek;
the actual redemption of Common Stock held by ROCR’s public stockholders;
the net proceeds from the issuance of ROCR Common Stockcommon stock in the PIPE investment;
the conversion of the Pre-PIPE Notes into Class B Common Stock ;Stock; and

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the issuance of the ConvertibleExchangeable Notes by ROCRROCR.

The pro forma condensed combined financial information may not be useful in predicting the future financial conditions and results of operations of the Combined Company. The actual financial position and results of operation may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

The historical financial information46

Table of ROCR was derived from the unaudited condensed financial statements as of and for the nine months ended September 30, 2021 and the audited financial statements of ROCR as of and for the year ended December 31, 2020, which are included elsewhere in this prospectus. Contents

The historical financial information of QualTek was derived from the unaudited consolidated financial statements as of and for the nine months ended October 2, 2021, and the audited consolidated financial statements of QualTek as of and for the year ended December 31, 2020, which are2021 included elsewhere in this prospectus. This information should be read together with ROCR’s and QualTek’s audited financial statements and related notes, and the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of ROCR,” andsection entitledManagement’s Discussion and Analysis of Financial Condition and Results of Operations of QualTekand other financial information included elsewhere in this prospectus.

The Business Combination will be accounted for as a reverse recapitalization, in accordance with GAAP. Under this method of accounting, ROCR will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of QualTek issuing stock for the net assets of ROCR, accompanied by a recapitalization. The net assets of ROCR will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of QualTek.

QualTek’s and ROCR’s management have made significant estimates and assumptions in its determination of the pro forma adjustments. AsThe pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the differences may be material. Management believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Business Combination based on information available to management at the time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.information.

QualTek has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances under both the minimum and maximum redemption scenarios:circumstances:

QualTek will have the largest single voting interest block in the Combined Company under the minimum redemption scenario and the maximum redemption scenario;Company;
QualTek will hold executive management roles for the Combined Company and be responsible for the day-to-day operations;
QualTek will have the ability to nominate all but two members of the Board following the Closing;closing of the Business Combination;
The Combined Company will assume QualTek’s name; and
The intended strategy of the Combined Company will continue QualTek’s current strategy of being a leader in communication infrastructure and renewable solutions.

The unauditedfollowing summarize the pro forma condensed combined financial information has been prepared usingcommon stock outstanding, which excludes the assumptions below with respect toPrivate Warrants and the potential redemption into cash of Common Stock:Public Warrants:

    

Shares

    

%

 

Existing QualTek equityholders

 

30,688,837

 

60

%

ROCR Public Shares

 

100,409

 

0

%

Founder and Private Shares

 

3,283,000

 

6

%

Pre-PIPE Shares

 

6,937,500

 

14

%

PIPE Shares(1)

 

3,989,000

 

8

%

Earnout Shares

 

6,111,111

 

12

%

Total Common Stock

 

51,109,857

 

  

(1)

Assuming No Redemptions:

              This presentation assumes that no public stockholders of ROCR exercise redemption rights with respect to their Public Shares for a pro rata shareBCP entities will hold 750,000 of the funds in the Trust Account.total 3,989,000 PIPE Shares.

Assuming Maximum Redemptions:   This presentation assumes that public stockholders holding 11.5 million of the Public Shares will exercise their redemption rights for their pro rata share (approximately $10.00 per share) of the funds in the Trust Account. This scenario gives effect to public share redemptions for aggregate redemption payments of $115.0 million using a per share redemption price of $10.00 per share. Additionally, this presentation also contemplates that ROCR’s Initial Stockholders have agreed to waive their redemption rights with respect to their Founder Shares, Private Shares and any Public Shares they hold in connection with the completion of a Business Combination.

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The following summarize the pro forma Common Stock outstanding under the two redemption scenarios (in thousands), which excludes the Private Warrants and the Public Warrants:

    

    

    

Assuming 

    

 

Assuming No 

Maximum 

 

Redemptions

Redemptions

 

 

(Shares)

 

%

 

(Shares)

 

%

Existing QualTek equityholders

 

30,688,837

 

49

%  

30,688,837

 

59

%

ROCR Public Shares

 

11,500,000

 

18

%  

 

0

%

Founder and Private Shares

 

3,283,000

 

5

%  

3,283,000

 

6

%

Pre-PIPE Shares

 

6,937,500

 

11

%  

6,937,500

 

14

%

PIPE Shares(1)

 

4,676,500

 

7

%  

4,676,500

 

9

%

Earnout Shares

 

6,111,111

 

10

%  

6,111,111

 

12

%

Total Common Stock

 

63,196,948

 

  

 

51,696,948

 

  

(1)BCP entities will hold 750,000 of the total 4,676,500 PIPE Shares.

The unaudited pro forma condensed combined financial information is for illustrative purposes only and is not necessarily indicative of what the actual results of operations and financial position would have been had the Business Combination and the related transactions occurred on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the Combined Company. The unaudited pro forma condensed combined financial information is based on information and assumptions which are described in the accompanying notes.

The following unaudited pro forma condensed combined balance sheet as of October 2, 2021 and the unaudited pro forma combined statements of operations and comprehensive loss for the nine months ended October 2, 2021 and for the year ended December 31, 2020 are2021 is based on the historical financial statements of ROCR and QualTek. The unaudited pro forma adjustments are based on information currently available, and assumptions and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the accompanied unaudited pro forma condensed combined financial information.

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Unaudited Pro Forma Condensed Combined Balance Sheet As of October 2, 2021

(In thousands)

    

    

    

    

As of 

    

    

    

As of 

    

    

    

    

    

As of 

September 30, 

October 2, 

October 2, 

As of October 2, 2021

2021

2021

2021

Transaction

Transaction

 Accounting

Pro Forma

 Accounting

Pro Forma

 adjustments

Combined 

 adjustments

Combined 

(Assuming

(Assuming

QualTek

QualTek

QualTek As

ROCR

(Assuming No

(Assuming No

Maximum 

Maximum 

Historical

Adjustments

Adjusted

Historical

Redemption)

Redemption)

Redemption)

Redemption)

Assets

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Current assets:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Cash

$

5,405

$

$

5,405

$

94

 

115,007

 

B

$

264,043

 

(115,000)

 

J

$

149,043

 

41,415

 

C

 

(1)

 

E

 

(15,018)

 

F

 

117,141

 

O

Accounts receivable, net of allowance

 

249,264

 

 

249,264

 

 

 

  

 

249,264

 

 

  

 

249,264

Inventories, net

 

5,633

 

 

5,633

 

 

 

  

 

5,633

 

 

  

 

5,633

Prepaid expenses

 

7,446

 

 

7,446

 

287

 

 

  

 

7,733

 

 

  

 

7,733

Other current assets

 

1,952

 

 

1,952

 

 

 

  

 

1,952

 

 

  

 

1,952

Current assets of discontinued operations

 

8,157

 

 

8,157

 

 

 

  

 

8,157

 

 

  

 

8,157

Total current assets

 

277,857

 

 

277,857

 

381

 

258,544

 

  

 

536,782

 

(115,000)

 

  

 

421,782

Property and equipment, net

 

42,187

 

 

42,187

 

 

 

  

 

42,187

 

 

  

 

42,187

Intangible assets, net

 

364,722

 

 

364,722

 

 

 

  

 

364,722

 

 

  

 

364,722

Goodwill

 

81,775

 

 

81,775

 

 

 

  

 

81,775

 

 

  

 

81,775

Other long-term assets

 

1,676

 

 

1,676

 

 

 

  

 

1,676

 

 

  

 

1,676

Marketable securities held in Trust Account

 

 

 

 

115,007

 

(115,007)

 

B

 

 

 

  

 

Deferred tax asset

 

 

 

 

 

 

K

 

 

 

  

 

Non-current assets of discontinued operations

 

1,348

 

 

1,348

 

 

 

  

 

1,348

 

 

  

 

1,348

Total assets

$

769,565

$

$

769,565

$

115,388

$

143,537

 

  

$

1,028,490

$

(115,000)

 

  

$

913,490

Liabilities and Equity (Deficit)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Current liabilities:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Current portion of long-term debt and capital lease obligations

$

119,545

$

(30,568)

A

$

52,075

$

$

$

52,075

$

 

  

$

52,075

 

 

(36,902)

D

Current portion of contingent consideration

 

4,292

 

 

4,292

 

 

  

 

4,292

 

 

  

 

4,292

Accounts payable

 

74,217

 

 

74,217

 

 

  

 

74,217

 

 

  

 

74,217

Accrued expenses

 

60,713

 

 

60,713

 

 

  

 

60,713

 

 

  

 

60,713

Accounts payable and accrued expenses

 

 

 

 

393

 

  

 

393

 

 

  

 

393

Accrued offering costs

 

 

 

 

1

 

(1)

E

 

 

 

  

 

Contract liabilities

 

14,950

 

 

14,950

 

 

  

 

14,950

 

 

  

 

14,950

Current liabilities of discontinued operations

 

3,941

 

 

3,941

 

 

  

 

3,941

 

 

  

 

3,941

Total current liabilities

 

277,658

 

(67,470)

 

210,188

 

394

 

(1)

  

 

210,581

 

 

  

 

210,581

Capital lease obligations, net of current portion

 

16,471

 

 

16,471

 

 

  

 

16,471

 

 

  

 

16,471

Long-term debt, net of current portion and deferred financing fees

 

429,033

 

 

429,033

 

  

 

117,141

O

 

546,174

 

 

  

 

546,174

Contingent consideration, net of current portion

 

24,137

 

 

24,137

 

  

 

  

 

24,137

 

 

  

 

24,137

Distributions payable

 

11,409

 

 

11,409

 

 

  

 

11,409

 

 

  

 

11,409

Warrant liability

 

 

 

 

217

 

  

 

217

 

 

  

 

217

Payable to related parties pursuant to tax receivable agreement

35,637

L

35,637

(263)

L

35,374

Total liabilities

758,708

(67,470)

691,238

612

152,777

844,627

(263)

844,364

Commitments

  

  

Temporary Equity:

  

  

  

Common stock subject to possible redemption

115,000

(115,000)

G

Equity:

  

  

Class A units

248,595

30,568

A

279,163

(279,163)

H

Accumulated other comprehensive income

471

471

471

471

Class A Common stock

  

0

1

C

3

(1)

J

2

1

G

1

H

N

Class B Common Stock

1

D

1

2

H

3

3

N

Additional paid-in-capital

36,901

D

36,901

1,201

41,414

C

378,782

(114,999)

J

306,932

(7,334)

F

263

L

114,999

G

42,886

M

279,160

H

(1,425)

I

K

52,099

N

(102,596)

M

(35,637)

L

Accumulated deficit

(238,209)

  

(238,209)

(1,425)

(7,684)

F

(297,992)

(297,992)

1,425

I

(52,099)

N

Non-controlling interest

102,596

M

102,596

(42,886)

M

59,710

Total equity (deficit)

10,857

67,470

78,327

114,776

(9,240)

183,863

(114,737)

69,126

Total liabilities and equity (deficit)

$

769,565

$

$

769,565

$

115,388

$

143,537

$

1,028,490

$

(115,000)

$

913,490

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Unaudited Pro Forma Condensed Combined Statement of Operations and Comprehensive Loss For the Year Ended December 31, 2021

For the Nine Months Ended October 2, 2021

(In thousands, except per share data)

For the Year

For the Year

Ended

Ended

For the Year Ended

December 31,

December 31,

December 31, 2021 

2021

2021

    

    

    

QualTek

    

    

Transaction

    

QualTek

QualTek

As

ROCR

Accounting

Pro Forma

Historical

Adjustments

Adjusted

Historical

adjustments

Combined

Revenue

$

612,241

$

  

$

612,241

$

$

  

$

612,241

Costs and expenses:

 

  

 

  

  

 

  

 

  

 

  

  

 

  

Cost of revenues

 

502,688

 

  

 

502,688

 

 

  

 

502,688

General and administrative

 

50,994

 

  

 

50,994

 

4,771

 

  

 

55,765

Transaction expenses

 

3,826

 

  

 

3,826

 

 

5,435

BB

 

9,261

Loss on legal settlement

 

2,600

 

  

 

2,600

 

 

  

 

2,600

Change in fair value of contingent consideration

 

(4,780)

 

  

 

(4,780)

 

 

  

 

(4,780)

Impairment of goodwill

 

52,487

 

  

 

52,487

 

 

  

 

52,487

Depreciation and amortization

 

53,675

 

  

 

53,675

 

 

  

 

53,675

Total costs and expenses

 

661,490

 

  

 

661,490

 

4,771

 

5,435

  

 

671,696

Income from operations

 

(49,249)

 

  

 

(49,249)

 

(4,771)

 

(5,435)

  

 

(59,455)

Other income (expense):

 

  

 

  

  

 

  

 

  

 

  

  

 

  

Gain on sale/disposal of property and equipment

 

587

 

  

 

587

 

 

  

 

587

Interest expense

 

(50,477)

 

12,520

AA

 

(37,957)

 

 

(16,396)

HH

 

(51,701)

 

2,652

II

Loss on extinguishment of debt

 

(2,436)

 

  

 

(2,436)

 

 

  

 

(2,436)

Change in fair value of warrants

 

  

 

  

 

  

 

(114)

 

  

 

(114)

Interest earned on marketable securities held in Trust Account

 

 

  

 

 

10

 

(10)

CC

 

Total other income (expense)

 

(52,326)

 

12,520

  

 

(39,806)

 

(104)

 

(13,754)

  

 

(53,664)

Income tax benefit

 

 

  

 

 

 

1,754

DD

 

1,754

Loss from continuing operations

 

(101,575)

 

12,520

  

 

(89,055)

 

(4,875)

 

(17,435)

  

 

(111,365)

Loss from discontinued operations

 

(8,851)

 

  

 

(8,851)

 

 

  

 

(8,851)

Net loss

$

(110,426)

$

12,520

  

$

(97,906)

$

(4,875)

$

(17,435)

  

$

(120,216)

Other comprehensive income:

 

  

 

  

  

 

  

 

  

 

  

  

 

  

Foreign currency translation adjustment

 

111

 

  

 

111

 

 

  

 

111

Comprehensive loss

��

 

(110,315)

 

12,520

  

 

(97,795)

 

(4,875)

 

(17,435)

  

 

(120,105)

Net loss attributable to noncontrolling interest

 

  

 

  

  

 

  

 

  

 

(65,376)

FF

 

(65,376)

Net loss attributable to controlling interest

 

  

 

  

  

 

  

 

  

 

  

  

 

(54,729)

Loss per share:

 

  

 

  

  

 

  

 

  

 

  

  

 

  

Basic and diluted net loss per share from continuing operations

$

(8.70)

 

  

  

 

  

 

  

 

  

  

 

  

Basic and diluted net loss per share from discontinued operations

$

(0.75)

 

  

  

 

  

 

  

 

  

  

 

  

Basic and diluted net loss per share

$

(9.45)

 

  

  

 

  

 

  

 

  

  

 

  

Basic and diluted weighted average Class A common shares outstanding

 

11,859,955

 

  

  

 

  

 

  

 

  

  

 

  

Basic and diluted net loss per share, redeemable common stock

 

  

 

  

  

 

  

$

(0.39)

 

  

  

 

  

Basic and diluted weighted average shares outstanding, redeemable common stock

 

  

 

  

  

 

  

 

9,483,562

 

  

  

 

  

Basic and diluted net loss per share, non-redeemable common stock

 

  

 

  

  

 

  

$

(0.39)

 

  

  

 

  

Basic and diluted weighted average shares outstanding, non-redeemable common stock

 

  

 

  

  

 

  

 

3,145,707

 

  

  

 

  

Basic and diluted net loss per share from continuing operations

 

  

 

  

  

 

  

 

  

 

  

  

$

(2.54)

Basic and diluted weighted average common shares outstanding

 

  

 

  

  

 

  

 

  

 

  

  

 

19,296,348

For the Nine Months

For the Nine Months

For the Nine Months

For the Nine Months 

  Ended 

 Ended

  Ended

Ended October 2, 2021

September 30, 2021

 October 2, 2021

 October 2, 2021

Transaction 

Transaction 

Accounting 

Pro Forma 

Accounting 

Pro Forma 

adjustments 

Combined 

adjustments 

Combined 

QualTek 

QualTek 

QualTek 

ROCR

(Assuming No 

(Assuming No 

(Assuming Maximum 

(Assuming Maximum 

Historical

Adjustments

As Adjusted

 Historical

Redemption)

Redemption)

Redemption)

Redemption)

Revenue

    

$

465,184

    

$

    

$

465,184

    

$

    

$

    

$

465,184

    

$

    

$

465,184

Costs and expenses:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Cost of revenues

 

372,496

 

 

372,496

 

 

 

372,496

 

 

372,496

General and administrative

 

37,962

 

 

37,962

 

1,304

 

39,266

 

 

39,266

 

  

Transaction expenses

 

2,875

 

 

2,875

 

 

(1,559)

BB

 

1,316

 

 

1,316

Change in fair value of contingent consideration

 

(4,544)

 

 

(4,544)

 

 

 

(4,544)

 

 

(4,544)

Depreciation and amortization

 

39,136

 

 

39,136

 

 

 

39,136

 

 

39,136

Total costs and expenses

 

447,925

 

 

447,925

 

1,304

 

(1,559)

 

447,670

 

 

447,670

Income from operations

 

17,259

 

 

17,259

 

(1,304)

 

1,559

 

17,514

 

 

17,514

Other income (expense):

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Gain on sale/disposal of property and equipment

 

514

 

 

514

 

 

 

514

 

 

514

Interest expense

 

(35,778)

 

6,740

AA

 

(29,038)

 

 

(11,652)

HH

 

(40,690)

 

 

(40,690)

Loss on extinguishment of convertible notes

 

(2,436)

 

 

(2,436)

 

 

 

(2,436)

 

 

(2,436)

Change in fair value of warrants

 

 

(125)

 

 

(125)

 

 

(125)

 

  

 

  

Interest earned on marketable securities held in Trust Account

 

 

 

 

7

 

(7)

CC

 

 

 

Total other income (expense)

 

(37,700)

 

6,740

 

(30,960)

 

(118)

 

(11,659)

 

(42,737)

 

 

(42,737)

Income tax benefit (provision)

 

 

 

 

 

883

DD

 

883

 

 

883

Loss from continuing operations

 

(20,441)

 

6,740

 

(13,701)

 

(1,422)

 

(9,217)

 

(24,340)

 

 

(24,340)

Loss from discontinued operations

 

(8,114)

 

 

(8,114)

 

 

 

(8,114)

 

 

(8,114)

Net loss

 

(28,555)

 

6,740

 

(21,815)

 

(1,422)

 

(9,217)

 

(32,454)

 

 

(32,454)

Other comprehensive income:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Foreign currency translation adjustment

 

75

 

 

75

 

 

 

75

 

 

75

Comprehensive loss

$

(28,480)

$

6,740

$

(21,740)

$

(1,422)

$

(9,217)

$

(32,379)

$

$

(32,379)

Net loss attributable to noncontrolling interest

 

  

 

  

 

  

 

  

 

(11,789)

FF

 

(11,789)

 

(2,623)

FF

 

(14,412)

Net loss attributable to controlling interest

 

  

 

  

 

  

 

  

 

  

$

(20,590)

 

  

$

(17,967)

Earnings per share:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Basic and diluted net loss per unit from continuing operations

$

(10.21)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Basic and diluted net loss per unit from discontinued operations

 

(3.75)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Basic and diluted net loss per unit

$

(13.96)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Basic and diluted weighted average common units outstanding

 

2,161,951

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Basic and diluted net loss per share, redeemable common stock

 

  

 

  

 

  

$

(0.12)

 

  

 

  

 

  

 

  

Basic and diluted weighted average shares outstanding, redeemable common stock

 

  

 

  

 

  

 

8,804,029

 

  

 

  

 

  

 

  

Basic and diluted net loss per share, non-redeemable common stock

 

  

 

  

 

  

$

(0.12)

 

  

 

  

 

  

 

  

Basic and diluted weighted average shares outstanding, non- redeemable common stock

 

  

 

  

 

  

 

3,099,440

 

  

 

  

 

  

 

  

Basic and diluted net loss per share from continuing operations

 

  

 

  

 

  

 

  

 

  

 

(0.61)

 

  

 

(0.81)

Basic and diluted weighted average common shares outstanding

 

  

 

  

 

  

 

  

 

  

 

31,383,438

 

  

 

19,883,438

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Unaudited Pro Forma Condensed Combined Statement of Operations and Comprehensive Loss

For the Year Ended December 31, 2020

(In thousands, except share and per share data)

    

    

    

    

    

For the 

    

    

    

For the Year

Year Ended 

 Ended 

December 31,

December 31,

For the Year Ended December 31, 2020

 2020

Transaction 

 2020

Transaction 

Pro

Accounting 

Pro Forma 

Accounting 

Forma

adjustments

Combined 

QualTek

adjustments 

Combined

 (Assuming 

(Assuming 

QualTek 

QualTek 

 As 

ROCR

(Assuming No 

(Assuming No

Maximum

Maximum 

Historical

Adjustments

Adjusted

 Historical

Redemption)

Redemption)

 Redemption)

Redemption)

Revenue

$

656,524

$

$

656,524

$

$

$

656,524

$

$

656,524

Costs and expenses:

 

 

 

 

 

  

 

 

 

  

Cost of revenues

 

597,583

 

 

597,583

 

 

 

597,583

 

 

597,583

General and administrative

 

47,049

 

 

47,049

 

 

1

EE

 

47,050

 

 

47,050

Transaction expenses

 

988

 

 

988

 

 

9,243

BB

 

10,231

 

 

10,231

Change in fair value of contingent consideration

 

(7,081)

 

 

(7,081)

 

 

 

(7,081)

 

 

(7,081)

Impairment of goodwill

 

28,802

 

 

28,802

 

 

 

28,802

 

 

28,802

Depreciation and amortization

 

46,475

 

 

46,475

 

 

 

46,475

 

 

46,475

Operating and formation costs

 

 

 

 

1

 

(1)

EE

 

-

 

 

Total costs and expenses

 

713,816

 

 

713,816

 

1

 

9,243

 

723,060

 

 

723,060

Loss from operations

 

(57,292)

 

 

(57,292)

 

(1)

 

(9,243)

 

(66,536)

 

 

(66,536)

Other income (expense):

 

 

 

 

 

  

 

 

 

  

Gain on sale/disposal of property and equipment

 

729

 

 

729

 

 

 

729

 

 

729

Interest expense

 

(37,659)

 

 

(37,659)

 

 

(15,536)

HH

 

(53,195)

 

 

(53,195)

Loss on extinguishment of debt

 

 

(7,498)

GG

(7,498)

 

 

 

(7,498)

 

 

(7,498)

Total other income (expense)

 

(36,930)

 

(7,498)

 

(44,428)

 

 

(15,536)

 

(59,964)

 

 

(59,964)

Income tax benefit (provision)

 

 

 

 

 

8,489

DD

 

8,489

 

 

8,489

Loss from continuing operations

 

(94,222)

 

(7,498)

 

(101,720)

 

(1)

 

(16,290)

 

(118,011)

 

 

(118,011)

Loss from discontinued operations

 

(3,865)

 

 

(3,865)

 

 

 

(3,865)

 

 

(3,865)  

Net loss

 

(98,087)

 

(7,498)

 

(105,585)

 

(1)

 

(16,290)

 

(121,876)

 

 

(121,876)

Other comprehensive income:

 

 

 

 

 

 

 

 

  

Foreign currency translation adjustment

 

239

 

 

239

 

 

 

239

 

 

239

Comprehensive loss

$

(97,848)

$

(7,498)

$

(105,346)

$

(1)

$

(16,290)

$

(121,637)

$

 

$

(121,637)

Net loss attributable to noncontrolling interest

 

 

 

 

 

(59,127)

 

FF

 

(59,127)

 

(13,153)

 

FF

(72,280)

Net loss attributable to controlling interest

 

  

 

  

 

  

 

  

$

(62,510)

 

  

 

$

(49,357)

Earnings per share:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Basic and diluted net loss per unit from continuing operations

$

(48.61)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Basic and diluted net loss per unit from discontinued operations

 

(1.93)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Basic and diluted net loss per unit

$

(50.54)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Basic and diluted weighted average common units outstanding

 

2,005,824

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Basic and diluted net loss per share

 

  

$

(0.00)

 

  

 

  

 

  

 

  

 

  

 

  

Basic and diluted weighted average common shares outstanding

 

 

  

 

2,500,000

 

  

 

  

 

  

 

  

 

  

 

  

Basic and diluted net loss per share from continuing operations

$

(1.86)

$

(2.23)

Basic and diluted weighted average common shares outstanding

31,383,438

19,883,438

4249

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Notes to Unaudited Pro Forma Condensed Combined Financial Information

1.

1.     Basis of Presentation

The Business Combination will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, ROCR will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of QualTek issuing stock for the net assets of ROCR, accompanied by a recapitalization. The net assets of ROCR will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of QualTek.

The unaudited pro forma condensed combined balance sheet as of October 2, 2021 assumes that the Business Combination occurred on October 2, 2021. The unaudited pro forma combined statementsstatement of operations and comprehensive loss for the nine months ended October 2, 2021 and the year ended December 31, 2020 give2021 gives pro forma effect to the Business Combination as if it had been completed on January 1, 2020. These periods are2021. The period is presented on the basis of QualTek as the accounting acquirer.

The unaudited pro forma condensed combined financial information has been derived from and should be read in conjunction with, the following historical financial statements and the accompanying notes, which are included elsewhere in this prospectus:notes:

The historical unaudited condensed financial statements of ROCR as of and for the nine months ended September 30, 2021 and the historical audited financial statements of ROCR as of and for the year ended December 31, 2020; and
The historical unaudited condensed consolidated financial statements of QualTek as of and for the nine months ended October 2, 2021 and the audited consolidated financial statements of QualTek as of and for the year ended December 31, 2020.2021 included in this prospectus.

Management has made significant estimates and assumptions in its determination of the pro forma adjustments based on information available as of the date of this prospectus. AsThe pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the differences may be material. Management believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Business Combination based on information available to management at the time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented. Management considers this basis of presentation to be reasonable under the circumstances.information.

The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings or cost savings that may be associated with the Business Combination.

The unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and financial position would have been had the Business Combination taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the Combined Company. The unaudited pro forma condensed combined financial information should be read in conjunction with the historical financial statements and notes thereto of ROCR and QualTek.

2.

2.    Accounting Policies

Upon consummation of the Business Combination, the Combined Company will perform a comprehensive review of the two entities’ accounting policies. As a result of the review, management may identify differences between the accounting policies of the two entities which, when conformed, could have a material impact on the financial statements of the Combined Company.

3.

3.    Adjustments to Unaudited Pro Forma Condensed Combined Financial Information

The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and has been prepared for informational purposes only.

The following unaudited pro forma condensed combined financial information has been prepared in accordance with Regulation S-X Article 11, Pro Forma Financial Information, as amended by the final rule, Release No. 33-10786; Amendments to Financial Disclosures about Acquired and Disposed Businesses. Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting AdjustmentsAdjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s AdjustmentsAdjustments”). QualTek has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting

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Table of Contents

Adjustments in the following unaudited pro forma condensed combined financial information. In addition, we will present adjustments to QualTek’s historical financial statements (“QualTek AdjustmentsAdjustments”), which represent transactions that have occurred in anticipation

50

Table of Contents

of the Business Combination that are required to be presented to illustrate the effects of the Business Combination on a pro forma basis.

The pro forma basic and diluted loss per share amounts presented in the unaudited pro forma condensed combined statements of operations are based upon the number of the Combined Company’s shares outstanding, assuming the Business Combination occurred on January 1, 2020.2021.

Adjustment to Unaudited Pro Forma Condensed Combined Balance Sheet

The adjustments included in the unaudited pro forma condensed combined balance sheet as of October 2, 2021 are as follows:

(A) Represents the conversion of the Convertible Notes- Related Party — June 2021 upon the consummation of the Business Combination into Class A Units of the Company at a price of $83.23 per unit.

(B) Reflects the reclassification of $115.0 million of marketable securities held in the Trust Account at the balance sheet date that becomes available to fund the Business Combination.

(C) Represents the net proceeds from the private placement of 4.7 million shares of common stock for total proceeds of $41.4 million pursuant to the PIPE Investment to Class A Common Stock under both min and max redemption scenarios. Both the no redemption and maximum redemption scenarios assume $24.7 million of the initial $66.1 million PIPE Investment will be funded through the Convertible Note Investment as part of adjustment (O).

(D) Represents the conversion of the Pre-PIPE convertible notes at $6.40 per share to Class B Common Stock in an aggregate principal amount of $44.4 million, which is recorded net of debt discount of $7.5 million.

(E) Reflects the settlement of $1.1 thousand of deferred underwriters’ fees. The fees are expected to be paid at the close of the Business Combination.

(F) Represents preliminary estimated transaction costs incurred by ROCR and QualTek of approximately $15.0 million, in addition to the $1.1 thousand of deferred underwriting fees noted above, inclusive of legal, advisory, printing, and accounting fees. The unaudited pro forma condensed combined balance sheet reflects these costs as a reduction of cash of $15.0 million. Equity issuance costs of $7.3 million are offset to additional paid-in capital and the remaining balance is expensed through accumulated deficit. The costs expensed through accumulated deficit are included in the unaudited pro forma combined statement of operations and comprehensive loss for the nine months ended October 2, 2021.

(G) Reflects the reclassification of approximately $115 million of common stock subject to possible redemption to permanent equity.

(H) Represents recapitalization of QualTek’s Units and the issuance of 12 million shares of Class A Common Stock and 18.8 million shares of Class B Common Stock to the historical QualTek and Blocker equity holders as consideration for the reverse recapitalization.

(I) Reflects the reclassification of ROCR’s historical accumulated deficit.

(J) Reflects the maximum redemption of 11.5 million ROCR Public Shares for aggregate redemption payments of $115.0 million allocated to Common Stock and additional paid-in capital using par value $0.0001 per share and a redemption price of $10.00 per share. This adjustment is recorded after consideration of the $115.0 million minimum cash requirement.

(K) Represents adjustments to reflect applicable deferred income taxes of $35.6 million offset by a valuation allowance of $35.6 million assuming no redemption, and deferred income taxes of $24.7 million offset by a valuation allowance of $24.7 million assuming maximum redemption. The deferred taxes are primarily related to the difference between the financial statement carrying amount and the tax basis in the QualTek partnership interest but also includes tax attributes (e.g., net operating losses) inherited from the Blocker. The basis difference primarily results from the Business Combination where ROCR will record a carryover tax basis in the QualTek partnership interests. The adjustment related to the deferred tax asset was calculated assuming:

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Table of Contents

(1) the GAAP balance sheet as of October 2, 2021 adjusted for the pro forma entries described herein, (2) estimated tax basis as of October 2, 2021 adjusted for the pro forma entries described herein, and (3) a constant federal income tax rate of 21.0% and a blended state tax rate of 5.3 % (net of federal tax benefit). Based on the weight of all positive and negative evidence, it was determined that the deferred tax asset is not more-likely-than-not to be realized. As such, a full valuation allowance was recorded under both redemption scenarios.

(L)   Upon the Closing, ROCR will be a party to a tax receivable agreement ("TRA"). Under the terms of that agreement, ROCR generally will be required to pay to the TRA Holders 85% of the applicable cash tax savings, if any, in U.S. federal, state and local tax that ROCR realizes or is deemed to realize in certain circumstances as a result of (i) existing tax basis in certain assets of QualTek and certain of its direct or indirect Subsidiaries allocable to ROCR as a result of the acquisition of Common Units by ROCR at the Closing of the Business Acquisition, (i) tax basis adjustments resulting from taxable exchanges of Common Units acquired by ROCR, (iii) tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement, and (iv) certain tax attributes of the Blocker, which holds Common Units that are acquired directly or indirectly by ROCR pursuant to the Reorganization Transaction. ROCR generally will retain the benefit of the remaining 15% of the applicable tax savings.

Upon the completion of the Business Combination, the Blocker TRA Holder will have exchanged their QualTek Common Units, which would create an obligation under the TRA. The $35.6 million adjustment and $35.4 million adjustment related to the TRA Assuming No Redemptions and Assuming Maximum Redemptions, respectively, both assume: (1) no cash paid to the TRA Parties in connection with the Business Combination, (2) a price per share of Company Class A Common stock equal to $10, (3) a constant federal U.S. income tax rate of 21.0% and an assumed weighted-average state and local income tax rate of 5.3% (net of federal tax benefit), (4) no material changes in tax law, (5) the ability to utilize some, but not all, of the tax attributes based on current alternative anticipated tax forecasts, and (6) future payments under the TRA. If there was sufficient income to utilize all tax attributes, the adjustment related to the TRA would be $45.73 million and $45.60 million Assuming No Redemptions and Assuming Maximum Redemptions, respectively.

The amount of expected future payments under the TRA is dependent upon a number of factors, including the Company's cash tax savings, the enacted tax rate in the years in which it utilizes tax attributes subject to the TRA, and current tax forecasts. These estimated rates and forecasts are subject to change based on actual results and realizations, which could have a material impact on the liability to be paid. If the Company exercises its right to terminate the TRA or in the case of a change in control of the Company or a material breach of the Company's obligations under the TRA all obligations under the TRA will be accelerated and the Company will be required to make a payment to the TRA Parties. Such payment would be in an amount equal to the present value of future payments under the Tax Receivable Agreement, as determined based on certain assumptions, including that the Company would have sufficient taxable income to fully utilize the tax deductions and other tax attributes subject to the TRA.

Due to the uncertainty as to the amount and timing of future exchanges of QualTek Common Units by the TRA Holders and as to the price of Class A Common Stock at the time of any such exchanges, the unaudited pro forma condensed combined financial information does not assume that any existing equityholder of QualTek has exchanged Common Units that would create an obligation to the Purchase TRA Holders or Exchange TRA Holders (both as defined in the TRA) under the TRA. Future exchanges will result in incremental tax attributes and potential cash tax savings for ROCR. Depending on ROCR’s assessment on realizability of such tax attributes, the arising TRA liability will be recorded at the exchange date.

(M)   Represents the allocation of net assets to the non-controlling interests, which are primarily due to the retained interests of the BCP and certain members of QualTek management in QualTek. Non-controlling interest was calculated using the post-acquisition number of Class B shares retained by QualTek owners as a percentage of total common shares multiplied by total adjusted equity. Total equity was adjusted to remove the value of any adjustments that solely impact the equity of ROCR and are not related to the equity in the QualTek partnership.

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Table of Contents

As of October 2, 2021

    

Pro Forma

    

Incremental

    

Pro Forma

    

Combined

Adjustment for

Combined

(Assuming No

Maximum

(Assuming Maximum

Adjustment

(in thousands except share and per share data)

    

Redemption)

    

Redemption

    

Redemption)

    

Tickmark

Total equity (deficit)

$

183,863

$

(114,737)

$

69,126

Adjustments to equity excluded from the calculation of noncontrolling interest

    

 

  

    

 

  

    

 

  

    

  

Payable to related parties pursuant to tax receivable agreement

 

35,637

 

(263)

 

35,374

 

(L)

Adjusted total equity (deficit)

$

219,500

$

(115,000)

$

104,500

 

  

Retained interest of Qualtek equityholders

 

47

%  

 

 

57

%  

  

Noncontrolling interest

$

102,596

$

(42,886)

$

59,710

 

  

(N)   Represents the issuance of the Earnout Shares consisting of 2.3 million shares of Class A Common Stock (Blocker Owner Earnout Shares) and 3.8 million shares of Class B Common Stock (Earnout Voting Shares). The existing shareholders of the Blocker and QualTek will each receive their proportionate amount of Earnout Shares (and in the case of the historical owners of QualTek, a corresponding number of Earnout Common Units) based on their share of merger consideration received upon consummation of the Business Combination. The Earnout Shares have an estimated fair value of $52.1 million, which was determined by using a Monte Carlo simulation to forecast the future daily price per share of Class A common stock over the earnout period of five years. The earnout triggering events are detailed within the section entitled "The Business Combination Agreement - Consideration to be Received in the Business Combination - The Earnout Shares and Earnout Common Units" within this prospectus.

(O)   Represents the Convertible Note Investment expected to be issued on the closing date, including the $24.7 million of cash from the initial PIPE Investment that is now expected to be funded through the Convertible Note. The adjustment amounts have been calculated as follows:

    

As of October 2, 2021

    

    

Incremental

    

Adjustment

Adjustment

for

Total Assuming

Assuming No

Maximum

Maximum

(in thousands)

    

Redemption

    

Redemption

    

Redemption

Investment expected from current Convertible Note Subscribers

$

100,000

$

$

100,000

Initial PIPE Investment expected to be funded through Convertible Note

 

24,685

 

 

24,685

Less: Convertible Note financing fees

 

(7,544)

 

 

(7,544)

Total pro forma adjustment

$

117,141

$

$

117,141

Adjustment to Unaudited Pro Forma Combined Statements of Operations and Comprehensive Loss

The pro forma adjustments included in the unaudited pro forma condensed combined statements of operations for the nine months ended October 2, 2021 and the year ended December 31, 20202021 are as follows:

(AA)

Reflects elimination of interest expense on the QualTek convertible notes for the year ended December 31, 2021.

(BB)

Reflects the total estimated transaction costs in the unaudited pro forma condensed combined statement of operations and comprehensive loss for the year ended December 31, 2021. Transaction costs are reflected as if incurred on January 1, 2021, the date the Business Combination occurred for the purposes of the unaudited pro forma condensed combined statement of operations and comprehensive loss. This is a non-recurring item.

(CC)

Reflects elimination of investment income on the Trust Account.

(DD)

Reflects the adjustment to income tax benefit as a result of the tax impact on pro forma net loss from continuing operations attributable to ROCR at the estimated combined federal and state statutory tax rate of 26.3%.

(EE)

(AA)   Reflects elimination of interest expense on the QualTek convertible notes for the nine months ended October 2, 2021.

(BB)   Reflects the total estimated transaction costs in the unaudited pro forma combined statement of operations and comprehensive loss for the year ended December 31, 2020. Transaction costs are reflected as if incurred on January 1, 2020, the date the Business Combination occurred for the purposes of the unaudited pro forma combined statement of operations and comprehensive loss. As such, transaction costs included in the historical QualTek results for the nine months ended October 2, 2021 have been eliminated and included in the unaudited pro forma combined statement of operations and comprehensive loss for the year ended December 31, 2020. This is a non-recurring item.

(CC)   Reflects elimination of investment income on the Trust Account.

(DD)   Reflects the adjustment to income tax benefit as a result of the tax impact on pro forma net loss from continuing operations attributable to ROCR at the estimated combined federal and state statutory tax rate of 26.3%.

(EE)   Reflects the reclassification of operating and formation costs to general and administrative expenses.

(FF)

Represents the allocation of net loss to the non-controlling interests due to the Common Units held by BCP and certain members of QualTek management upon closing. The amounts have been calculated as follows:

For the Year ended

(in thousands)

December 31, 2021

Pro Forma Combined Loss from continuing operations

$

(111,365)

Pro Forma Combined Income tax benefit

(1,754)

Pro Forma Combined Pre-tax Loss from continuing operations

(113,119)

Retained interest of QualTek equityholders

58

%

Pro Forma Combined Loss from continuing operations related to noncontrolling interest

$

(65,376)

46

(FF)   Represents the allocation of net loss to the non-controlling interests due to the Common Units held by BCP and certain members of QualTek management upon closing. The amounts have been calculated as follows:

For the nine months ended October 2, 2021

 

    

    

Incremental 

    

 

Adjustment 

Adjustment for 

Total Assuming 

 

Assuming No 

Maximum 

Maximum 

 

(in thousands)

    

Redemption

    

Redemption

    

Redemption

  

Pro Forma Combined Loss from continuing operations

 

(24,340)

 

 

(24,340)

Pro Forma Combined Income tax provision

 

883

 

 

883

Pro Forma Combined Pre-tax loss from continuing operations

 

(25,223)

 

 

(25,223)

Retained interest of QualTek equityholders

 

47

%  

  

 

57

%

Pro Forma Combined income/(loss) from continuing operations related to noncontrolling interest

 

(11,789)

 

(2,623)

 

(14,412)

For the year ended December 31, 2020

 

    

    

Incremental 

    

 

Adjustment 

Adjustment for 

Total Assuming 

 

Assuming No 

Maximum 

Maximum 

 

(in thousands)

    

Redemption

    

Redemption

    

Redemption

  

Pro Forma Combined Loss from continuing operations

 

(118,011)

 

 

(118,011)

Pro Forma Combined Income tax provision

 

8,489

 

 

8,489

Pro Forma Combined Pre-tax loss from continuing operations

 

(126,500)

 

 

(126,500)

Retained interest of QualTek equityholders

 

47

%  

  

 

57

%

Pro Forma Combined income/(loss) from continuing operations related to noncontrolling interest

 

(59,127)

 

(13,153)

 

(72,280)

(GG)

Represents the loss on debt extinguishment related to the Company’s expected conversion of the Pre-PIPE Convertible Notes at close. This is a non-recurring item.

(HH)

Represents interest expense on the expected Exchangeable Note Investment at close. The adjustment amounts have been calculated as follows:

    

For the Year ended

(in thousands)

December 31, 2021

Interest expense related to Exchangeable Note Investment

$

14,650

Amortization of deferred financing fees

 

1,746

Total pro forma adjustment

$

16,396

(GG)   Represents the loss on debt extinguishment related to the Company's expected conversion of the Pre- PIPE Convertible Notes at close. This is a non-recurring item.

(HH)   Represents interest expense on the expected Convertible Note Investment at close. The adjustment amounts have been calculated as follows:

For the nine months ended October 2, 2021

    

Adjustment Assuming No 

    

Incremental Adjustment for 

    

Total Assuming 

(in thousands)

Redemption

Maximum Redemption

Maximum Redemption

Interest expense related to Convertible Note Investment

 

10,520

 

 

10,520

Amortization of deferred financing fees

 

1,132

 

 

1,132

Total pro forma adjustment

$

11,652

$

$

11,652

For the year ended December 31, 2021

    

Adjustment Assuming No 

    

Incremental Adjustment for

    

Total Assuming 

(in thousands)

Redemption

Maximum Redemption

Maximum  Redemption

Interest expense related to Convertible Note Investment

 

14,027

 

 

14,027

Amortization of deferred financing fees

 

1,509

 

 

1,509

Total pro forma adjustment

$

15,536

$

$

15,536

Interest expense on the ConvertibleExchangeable Notes has been calculated assuming a 11.25%11.75% annual interest rate. A 0.125% change in the estimated interest rate on the variable rate ConvertibleExchangeable Note Investment would result in an increase or decrease in the pro forma annual interest expense of approximately $0.2 million for both the minimum and maximum redemption scenarios.million.

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Table of Contents

4.    Loss per share

(II)

Reflects the elimination of the line of credit’s interest expense of $2.7 million for the year ended December 31, 2021, assuming the paydown of the line of credit’s outstanding balance in conjunction with the Business Combination as if it occurred on January 1, 2021.

4.

Loss per share

The unaudited pro forma condensed combined basic and diluted net loss per share is calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding at January 1, 2020.2021. As the Business Combination and related transactions are being reflected as if they had occurred at the beginning of the periodsperiod presented, the calculation of weighted average shares outstanding for basic and diluted net (loss) per

47

share assumes that the shares issuable relating to the Business Combination have been outstanding for the entire periodsperiod presented.

Pro forma basic and diluted net loss per share has been prepared assuming two alternative levels of redemptionusing actual redemptions by the Company’s public stockholders of shares of Class A Common Stock for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account for each respective period.the period presented.

In accordance with the terms of the Business Combination Agreement, the Earnout Shares will be considered legally issued and outstanding shares of common stock issued to the historical Blocker and QualTek owners, subject to restrictions on transfer and voting described in the section entitled “The Business Combination Agreement — The Earnout Shares and Earnout Common Units” within this prospectus.the Proxy Statement. The 3.32.3 million Blocker Owner Earnout Shares are entitled to receive, ratably with the other outstanding Class A Common Stock, dividends, and other distributions prior to vesting, at which point they become issued common stock. The 2.83.8 million Earnout Voting Shares have only voting rights and therefore are not entitled to receive any distributions. For additional information on the Earnout Shares, refer to the section entitled “The Business Combination Agreement — The Earnout Shares and Earnout Common Units” within this prospectus.the Proxy Statement.

Pro forma basic and diluted net loss per share is presented in conformity with the two-class method required for participating securities, as the Blocker Owner Earnout Shares are considered participating securities. The net loss per share amounts is the same for Class A Common Stock and the Blocker Owner Earnout Shares because the holders of each are legally entitled to equal per share earnings, losses, and distributions, whether through dividends or liquidation. Shares of Class B Common Stock do not participate in

48

the earnings or losses of the Combined Company and, therefore, are not participating securities. As such, a separate presentation of basic and diluted earnings per share of Class B Common Stock under the two-class method has not been presented.

For the nine-months ended October 2, 2021

For the year ended December 31, 2020

    

Pro Forma Combined 

    

Pro Forma Combined 

    

Pro Forma Combined 

    

Pro Forma Combined 

(Assuming No 

(Assuming Maximum 

(Assuming No 

(Assuming Maximum 

(in thousands except share and per share data)

Redemption)

Redemption)

Redemption)

Redemption)

Pro forma net income (loss) attributable to the controlling interest (in thousands)

$

(20,590)

$

(17,967)

$

(62,510)

$

(49,357)

Less: undistributed earnings attributable to Class A Earnout Shares

 

(1,392)

 

(1,845)

 

(4,225)

 

(5,067)

Pro forma income (loss) from continuing operations attributable to common shareholders (in thousands) – basic

$

(19,198)

$

(16,122)

$

(58,285)

$

(44,290)

Weighted average common shares outstanding – basic and diluted

 

31,383,439

 

19,883,439

 

31,383,439

 

19,883,439

Net loss per share – basic and diluted

$

(0.61)

$

(0.81)

$

(1.86)

$

(2.23)

Weighted average common shares calculation

 

  

 

  

 

  

 

  

Existing QualTek Equity Holders

 

11,932,939

 

11,923,939

 

11,923,939

 

11,923,939

ROCR Public Shareholders

 

11,500,000

 

 

11,500,000

 

Founder Shares

 

3,283,000

 

3,283,000

 

3,283,000

 

3,283,000

Pre-PIPE Investors

 

 

 

 

PIPE Investors

 

4,676,500

 

4,676,500

 

4,676,500

 

4,676,500

Weighted average common shares outstanding, basic and diluted

 

31,383,439

 

19,883,439

 

31,383,439

 

19,883,439

Pro Forma Combined

For the Year ended

(in thousands except share and per share data)

December 31, 2021

Pro forma net loss attributable to the controlling interest (in thousands)

$

(54,729)

Less: undistributed loss attributable to Class A Earnout Shares

(5,772)

Pro forma loss from continuing operations attributable to common shareholders (in thousands) – basic

$

(48,957)

Weighted average common shares outstanding – basic and diluted

19,296,348

Net loss per share – basic and diluted

$

(2.54)

Weighted average common shares calculation

Existing QualTek Equity Holders

11,923,939

ROCR Public Shareholders

100,409

Founder Shares

3,283,000

Pre-PIPE Investors

PIPE Investors

3,989,000

Weighted average common shares outstanding, basic and diluted

19,296,348

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The unaudited pro forma condensed combined financial statements reflect a net loss in all periodsthe period presented and therefore the effect of the following securities are not included in the calculation of diluted loss per share as including them would have had an anti-dilutive effect:

    

    

Pro Forma 

Combined 

(Assuming 

Pro Forma Combined 

Maximum 

(Assuming No Redemption)

Redemption)

Excluded from the calculation(1)

 

  

 

  

Class B Common Stock

 

29,538,575

 

29,538,575

Private Warrants

 

102,000

 

102,000

Public Warrants

 

2,875,000

 

2,875,000

Convertible Notes

 

12,468,500

 

12,468,500

Total potentially dilutive shares excluded from calculation

 

44,984,075

 

44,984,075

Pro Forma Combined

Excluded from the calculation(1)

Class B Common Stock

29,538,575

Private Warrants

102,000

Public Warrants

25,102

Exchangeable Notes

12,468,500

Total potentially dilutive shares excluded from calculation

42,134,177

(1)

This table excludes Earnout Voting Shares as the earnout contingency has not been met at period end.

4953

UNAUDITED HISTORICAL COMPARATIVE AND PRO FORMA COMBINED PER SHARE DATA OF ROCR AND QUALTEKBUSINESS

The following table sets forth summary historical comparative share information for ROCROverview

We are a technology-driven, leading provider of communications infrastructure services, power grid modernization, and QualTek and unaudited pro forma condensed combined per share information after giving effectrenewables solutions to the Business Combination. The pro forma bookNorth American telecommunications and utilities industries. We provide a variety of mission-critical services across the telecom and renewable energy value information reflectschain, including wireline and fiber optic terminations, wireless, FTTH and customer fulfillment activities. Our experienced management team has leveraged our technical expertise, rigorous quality and safety standards, and execution track record to establish and maintain long-standing relationships with blue-chip customers.

We operate out of two business segments: Telecom and Renewables & Recovery Logistics. Telecom consists of wireless, wireline, and power, which represents 81% of our revenues for the Business Combinationfiscal year ending December 31, 2021. We entered the renewable infrastructure sector with our acquisition of Fiber Network Solutions, LLC, now known as if it had occurred on October 2,QualTek Renewables LLC (“Renewables”) in January 2021, which represents 5% of our revenues for the fiscal year ending December 31, 2021. The weighted average shares outstanding and net loss per share information reflectRecovery Logistics represents 14% of our revenues for the Business Combination as if they had occurred on January 1, 2020.fiscal year ending December 31, 2021.

This information is onlyTelecommunications

We provide a summary and should be read in conjunction with the historical financial statements and related notesfull suite of ROCR and QualTek that are included elsewhere in this prospectus. The unaudited pro forma combined per share information of ROCR and QualTek is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this prospectus.

The unaudited pro forma condensed combined per share information has been presented for informational purposes only and is not necessarily indicative of what the Combined Company’s results of operations actually would have been had the Business Combination been completed as of the dates indicated. In addition, the unaudited pro forma combined book value per share information does not purport to project the future financial position or operating results of the Combined Company.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respectservices to the potential redemption into cash of Common Stock:telecom sector across both the wireless and wireline markets, from site acquisition and permitting to initial engineering and design to installation, maintenance, program management and fulfillment. Our core offerings consist of:

Assuming No Redemptions:This presentation assumes that no public stockholdersEngineering and construction services including the design and construction of ROCR exercise redemption rights with respect to their Public Sharesaerial and underground fiber optic and coaxial systems for a pro rata share of the funds in the Trust Account.homes, businesses, cell towers, and small cells.
Installation services including the placement and splicing of fiber and coaxial cable, in addition to upgrades and new site builds for cellular towers.Assuming Maximum Redemptions:
Site acquisition services to determine the location for new sites prior to new site builds.
This presentation assumes that public stockholders holdingWe also provide cable and satellite fulfillment services for residential and commercial customers. These services are provided for telecom companies in connection with the maintenance or expansion of new and existing networks.

11.5 millionWhile the telecommunications industry is naturally concentrated, we maintain customer diversification across our business segments. We have numerous long-established relationships with telephone companies, wireless carriers, multiple cable system operators and electric utilities companies, which have been built upon and cultivated through numerous MSAs that extend for periods of one or more years (majority are for three or more years, some of which have auto-renewal provisions). Blue-chip, investment grade customers including AT&T, Verizon, COX Communications, T-Mobile, Spectrum, and Comcast comprise a substantial portion of our revenue.

Within our Telecommunications segment we also provide electrical contracting, and utility construction and maintenance services. We construct and maintain overhead and underground distribution systems for municipalities, electric membership cooperatives, and electric-utility companies.

Renewables and Recovery Logistics

We entered the Public Shares will exercise their redemption rights for their pro rata share (approximately $10.00 per share)renewable infrastructure sector with our acquisition of the fundsRenewables in January 2021. Renewables is a full-service provider of fiber optic and electrical services, focusing primarily on renewable energy projects. Our capabilities in the Trust Account. This scenario gives effect to public share redemptions for aggregate redemption payments of $115.0 million using a per share redemption price of $10.00 per share. Additionally, this presentation also contemplates that ROCR’s Initialspace include expertise in wind and solar farm fiber, installation, and testing, OPGW & ADSS aerial transmission line installation, and large-scale data com solutions and installation.

In serving our customers, we provide fiber optic terminations, OTDR and power meter testing, fusion splicing, fiber placement, extensive fiber optic and copper infrastructure installation, cable jetting, boring and trenching, industry specific maintenance and material procurement.

5054

StockholdersWe also provide business continuity and disaster relief services to telecommunications and power utility companies, as well as BAU services such as generator storage and repair and cell maintenance services.

Geographic Presence

Our consolidated business has a national footprint with approximately 80 service locations across the U.S., strategically located in close proximity to major customers and growing markets. Our geographic footprint has grown to its present state both organically and through strategic acquisitions. QualTek serves markets locally through a dedicated in-house employee base of approximately 1,900 employees and a workforce of over 5,000 individuals (inclusive of in-house employees). Ultimately, we are a technology-driven provider of communications infrastructure services and solutions to the North American telecommunications and utilities industries, and we believe we are well-positioned for continued growth.

Graphic

Industry Overview

Telecommunications

Significant advances in technology and rapid innovation in service offerings to data consumers have agreedsubstantially increased demand for faster and more reliable wireless and wireline/fiber communications network services. The 2020 CISCO Report predicts that by 2023, North Americans will have 5 billion networked devices/connections, up from 3 billion in 2018, with a nearly tripling of broadband and wireless speeds (measured in Mbps) over the same time period.

With the proliferation of mobile devices, advancements in the “internet of things,” or IoT, and segments of the workforce permanently shifting to waiveremote work post-COVID-19, network traffic is at an all-time high and is expected to continue to grow, generating demand for both wired and wireless connectivity. Increased data usage is driven by two key dynamics: i) an increase in the number of internet-enabled devices per capita and ii) an increase in connection speed. The 2020 Cisco Report provides that devices and connections are growing faster (10% CAGR) than both the population (1% CAGR) and internet users (6% CAGR). As a result, devices and connections per household and per capita in North America are expected to grow 63%, up from 8.2 in 2018 to 13.4 by 2023.

55

COVID-19 has further catalyzed network traffic growth by creating permanent shifts away from the office and into the home. Per a 2020 Gartner report, 75% of companies are planning to permanently shift to remote work post COVID-19, which will continue to drive consumer demand for high-speed home office connectivity.

Graphic

Low levels of fiber penetration and the nascent state of North American 5G deployment currently present significant opportunities for sustained growth for businesses such as QualTek:

Wireless: Major carriers have continued to expand wireless network capacity and density with accelerated development and planned implementation of 5G wireless technologies. The increased speed and capacity that will result from deployment of 5G technology will require additional and improved tower capacity with higher data frequencies, as well as deployment of numerous higher bandwidth small cells to “densify” network performance. Wireless technology will need to be supported by fiber backbone and as a result, many carriers have committed to investing in the fiber infrastructure buildout.
Wired: Telecommunication companies have also deployed capital and initiatives to improve fiber connectivity. Only about 10-15% of total broadband connections in the U.S. are provisioned by fiber, as compared to over 50% in other developed countries such as South Korea, Sweden and Finland. Importantly, with only about 47 million U.S. homes (about 37% as per

56

the Fiber Broadband Association) passed with fiber in 2019, over 100 million U.S. homes represent opportunities for fiber passing over the next several years, indicating a massive investment cycle that is still in early stages.

Graphic

Renewable and Recovery Logistics

In 2017 and 2018, solar PV and onshore wind consolidated their redemption rightsdominance in the renewable energy market, representing on average 77% of total finance commitments in renewable energy. The highly modular nature of these technologies, their short project development lead times, increasing competitiveness driven by technology and manufacturing improvements, and government regulations play an important role in explaining these technologies’ large share of global renewable energy investment.

57

Investment in offshore wind has picked up, attracting, on average, $21 billion a year globally between 2013 and 2018, and representing 8% of the total renewable capacity addition in 2018. According to IRENA, offshore wind holds considerable growth potential and will have a key role to play in achieving a level of deployment to support a decarbonized growth trajectory.

The Biden administration is expected to amplify this increase in spending for renewable power projects. For example, since his first day in office, President Biden has rejoined the 2015 Paris Agreement, committed to investing $400 billion in the next ten years in clean energy and innovation, and set a goal to achieve a carbon pollution-free power sector by 2035. We believe that this will translate into significant government spending in renewables to meet this goal, and also government regulations and policies that promote spending in the renewables space across various sectors of the economy. We believe that the Biden administration’s commitment to renewable energy will create ripple effects across the nation and ultimately lead to more opportunities for us to expand our business with customers.

Competitive Strengths

Culture of Operational Excellence that Resonates with Established Blue-Chip Customer Base

QualTek analyzes and evaluates key performance metrics, from customer satisfaction to technical issues in the field, hiring processes and working capital management. We have fostered a culture of continuous improvement and our operational excellence is reflected in our ability to take market share. Our decentralized operations create multiple points of contact with our customers, including Fortune 500 companies such as AT&T, Verizon, Comcast, Blattner Energy, Kiewit, and Dish thereby generating numerous individual relationships and contract opportunities per customer.

Highly Scalable Shared Services Platform Driven by Tech-Enabled Capabilities

QualTek provides full turnkey services to its customers. Our significant investment over the years to optimize our platform and technology has created a highly scalable business ready to support continued growth. For example, a centralized shared services system provides us with a competitive advantage for operational execution of customer services, process consistency and cross division sharing of “best practices,” resulting in enhanced efficiency and scalability. To maintain this operational excellence, we conduct disciplined measuring of KPIs with quality control for every division to ensure industry-leading execution capabilities.

Significant Revenue and Backlog Visibility

Our backlog consists of the estimated amount of revenue we expect to realize from future work on uncompleted contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options. A significant portion of our 24-month backlog is attributable to master service agreements and other service agreements, none of which require our customers to purchase a minimum amount of services and are cancelable on short or no advance notice. Backlog amounts are determined based on estimates that incorporate historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers.

Our long-standing relationships with blue-chip, investment grade customers enable us to understand our customers’ needs and expand our backlog. Our backlog provides long-term visibility into a recurring and growing revenue base. QualTek has significant revenue visibility given our estimated $2.1 billion two-year backlog of which $2.0 billion relates to our Telecom segment and $0.1 billion relates to our Renewables & Recovery Logistics segment.

Backlog is not a measure defined by GAAP and should be considered in addition to, but not as a substitute for, GAAP results. Participants in our industry often disclose a calculation of their backlog; however, our methodology for determining backlog may not be comparable to the methodologies used by others. There can be no assurance as to our customers’ requirements or if actual results will be consistent with the estimates included in our forecasts. As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings.

Proven Acquisition Strategy with Successful Integration Process

Our management team has demonstrated the success of its unique M&A strategy through the successful identification and integration of nine add-ons in the last three-and-a-half years, including four during 2021. QualTek’s successful M&A history demonstrates our extensive experience in identifying synergistic targets and successfully integrating them into our platform. QualTek enables a quick and seamless integration process by onboarding the target business onto QualTek’s supporting IT infrastructure,

58

leveraging our QVision platform to standardize performance within the target business to meet the standard of quality that QualTek delivers.

Our M&A activity has also successfully diversified our revenue base across a number of high quality customers in both the telecommunication and renewable energy sectors, with continued emphasis on providing complementary service offerings to drive cross-sell and capture market share and we expect to continue acquiring target companies at accretive multiples.

World-Class Talent and Management Team

QualTek is led by highly experienced management team that is positioned to drive market share capture and capitalize on sector momentum. Our senior management team has an average of 25+ years of individual industry experience and has worked together for a considerable period of time. Our team is well suited to establish and maintain long-standing relationships with blue-chip customers as a result of our technical expertise, rigorous quality and safety standards, and execution track record.

Strategic Regional Presence across the U.S.

QualTek has a national footprint with approximately 80 strategically located service locations across the U.S. in close proximity to our major customers, allowing us to respond to customer demand swiftly and efficiently. Our presence in multiple regions gives us valuable insight into local market drivers and customer demand, thereby enabling us to provide bespoke services in each market. Due to this presence, QualTek has also built deep relationships with local customers that help drive business development, project execution, and cross-sell opportunities. QualTek serves markets locally through a dedicated in-house employee base of approximately 1,900 employees and its activities provide work for over 5,000 people through the use of subcontracting firms to access a deeper and more flexible labor pool to efficiently deliver on engagements across the region.

Growth Strategy

Expand Service Offerings & Solutions while Leveraging Contract Opportunities

QualTek’s complementary service offering creates an opportunity for us to grow our business with customers in two core ways: by winning more contracts and cross-selling services. We anticipate growth in our Telecom business as spectrum continues to become available. Additionally, we plan to cross-sell our full-suite of wireless services to our existing customer base.

In our Renewables & Recovery Logistics segment, we see significant opportunity to leverage existing customers and footprint for incremental projects. We also expect the Biden administration to promote more spending in renewables, not only through government contracts, but also in other sectors and businesses that will in turn reinvest in renewable energy solutions.

Scaled Growth Leader in the Early Stage of a Multi-Year Telecom and Renewables Infrastructure Spend Cycle

We believe that QualTek is poised to capitalize on attractive industry dynamics and tailwinds. Increasing data consumption across multiple platforms, continued growth of mobile data demand, increasing popularity of video streaming services, and continued expansion of fiber networks are all drivers of carrier demand for network infrastructure. This exponential increase in data traffic will require an upgraded network infrastructure and deeper fiber penetration to serve as the foundation for 5G wireless technology moving forward. Every major carrier, including Verizon and AT&T, has publicly committed to investing in the fiber and 5G build-out.

Continued Value Creation Through Strategic M&A

Since 2012, QualTek has successfully leveraged the experience and track record of our seasoned management team to identify and integrate tuck-in opportunities, which have aided in our growth both organically and inorganically. In the past three-and-a-half years, we have successfully acquired and integrated nine targets. Our origination process is largely centered on management’s deep relationships across the industry, which enable us to actively identify strategic targets in attractive markets or with complementary, value-added service capabilities. Thus, we have a continually evolving platform of high quality potential targets.

QualTek also has a successful history of integrating tuck-ins and providing a conducive environment for target management to achieve earnouts. We are able to leverage our proprietary technology-driven and highly scalable shared services platform to seamlessly integrate and grow the acquisition targets. Over time, we often see a reduction in our acquisition multiple (between pre-

59

acquisition EBITDA multiple and post-acquisition EBITDA multiple) as QualTek realizes significant growth synergies and expands its business with customers.

Our Services and Solutions

We are a leading, one-stop infrastructure solutions provider at the epicenter of the 5G and renewables buildout. To serve our customers, we operate in two distinct segments: Telecom, which includes our wireless and wireline engineering and construction services along with our electrical construction and maintenance services, and Renewables & Recovery Logistics.

Graphic

Telecommunications

Our Telecom segment helps our clients build and maintain better, more reliable networks across the United States. We are able to provide technology-driven, field-based critical services across every stage of the network life-cycle for the telecommunications industry and power utility industry. This segment is composed of three sub-segments of services: wireless, wireline and power.

Wireless

This sub-segment operates under the brand QualTek Wireless as a turnkey provider of installation, project management, maintenance, real estate, and site acquisition to major wireless carriers. Some other services offered include:

Architecture and Engineering
Permitting
Program and Construction Management
Construction and Integration
Site Acquisition
Real Estate

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Wireline

This sub-segment provides fiber optic aerial and underground installation, fiber optic splicing, termination & testing, new installation, engineering, and fulfillment services to major telecommunication companies. Other wireline services include:

Fiber Backhaul
Aerial Installation
Pole Upgrades
Fiber / Copper Splicing
Direction Drilling
Missile Boring
Trenching
OTDR Test / Certification
MDU Retro-Fits
MTU Builds

QualTek’s ability to implement smarter designs, increase utilization rates, and improve network performance all help lower operating expenses and increase profits for our customers. In the Wireless and Wireline sub-segments, QualTek has long-standing relationships with AT&T, Verizon, T-Mobile, Dish, Comcast, Altice, amongst many other blue-chip names.

Power

This sub-segment provides electrical contracting, and utility construction and maintenance services to municipalities, electric membership cooperatives, and electric-utility companies, including the construction and maintenance of overhead and underground distribution systems. We provide comprehensive power line services including:

New-build Distribution Line Construction
Maintenance
Pole Replacements
Live-line Maintenance
Hardening and Reliability Services
Directional Boring
Underground Structures
Duct Bank Projects
Direct-Bury Conduit
Greenfield Residential Distribution

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QualTek has the experience and the resources necessary to reliably deliver quality work for even the most complex and demanding overhead and underground ventures.

Renewables & Recovery Logistics

Our Renewables & Recovery Logistics segment provides end-to-end services for clients in the renewable energy sector and supports business continuity and disaster relief for clients in the telecommunications, power utility, and renewable energy industries.

Renewables

This sub-segment operates under the brand QualTek Renewables and provides installation, testing, and maintenance for wind farms, solar farms, and fiber optic grids. Other QualTek Renewables services include:

Fiber Optic Terminations
OTDR and Power Meter Testing
Fusion Splicing
Fiber Replacement
Fiber Optic and Copper Infrastructure Installation
Cable Jetting
Boring & Trenching
Wind and Solar Farm fiber, installation, and testing
Large scale data communications solutions and installation
OPGW & ADSS Aerial transmission line installation

Our wind business comprises a majority of the revenue for our Renewables sub-segment for the fiscal year ending December 31, 2021. Advanced wind turbines include a large number of sensors whose signals are prone to contamination from electrical interference from lightning strikes. It is increasingly common to use fiber optics to galvanically isolate such interfaces, which is more difficult and costly with copper wires. This not only limits the damage of any lightning strikes but also can help reduce the effects of power line noise on sensitive sensor readings. Fiber optics are used for both galvanic isolation purposes and data communications. In addition, offshore turbines are often situated five plus miles from the control center on land, making routine maintenance difficult and costly. As a result, wind turbine operators increasingly rely on complex sensors to monitor efficiently and schedule routine maintenance. Fiber optic cables are the preferred choice from a reliability and ease of maintenance perspective, especially at scale.

Our solar business services help support solar power generation by ensuring that our clients’ farms are running safely and efficiently. In a solar farm power generation system, large amounts of current are generated from the heat of the sun. In order to protect the equipment from current leakage, galvanic insulation becomes important to ensure the power system’s quality and reliability. Fiber optics offer insulation protection from high-voltage/current glitches and unwanted signals into power equipment controls and communication. In addition, fiber optic communication can cover longer link distance connections compared to copper wire. As the solar farms grow in size, monitoring and controlling all the solar panels requires long link distance connections, which is only possible with fiber optic cable.

Recovery Logistics

This sub-segment operates under the brand QualTek Recovery Logistics and provides business continuity, restoration, and disaster relief services to its clients, including AT&T, Verizon, Duke Energy, Gulf Power, and Entergy, amongst others. QualTek

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Recovery Logistics is able to deploy recovery teams from any one of QualTek’s approximately 80 locations, enabling rapid responses across North America. Some other services offered include:

Recovery Management
Transport Logistics
Temporary Shelter
Network Recovery
Fleet Services
Energy Resources
Catering
Sanitation

Through our 2018 acquisition of Recovery Logistics, LLC (“RLI”), we transformed our recovery logistics sub-segment from a regional player with concentration in the Southeast to a fully national presence with a diversified customer base which can be served out of approximately 80 locations. RLI is a leading provider of business continuity and disaster recovery operations for the telecommunications and power utility sectors. RLI helps businesses recover from unplanned events, including hurricanes, winter storms and floods.

QualTek’s recent entry into the renewable energy space positions it to capitalize on sector tailwinds. Within Renewables, there is also significant opportunity for the Company to leverage existing customer relationships, as well as its footprint, to gain traction and win incremental projects. This also applies to QualTek’s Recovery Logistics sub-segment, as the Company may be able to cross-sell recurring maintenance and recovery services to capture incremental revenue and deepen penetration with existing customer relationships. Providing recovery logistics capabilities offers another touchpoint for the Company to deliver high value-added services, underlining QualTek’s extensive repertoire of end-to-end services.

We believe that revenue will continue to be propelled by the government’s focus and spending in the Renewables space, as well as QualTek’s commitment to expanding its service offerings and customer base, specifically in its Recovery Logistics sub-segment.

Contract Overview

QualTek has numerous MSAs with blue chip customers that extend for periods of one or more years, with a majority for three or more years, some of which have automatic renewals, providing meaningful revenue visibility. Generally, the Company maintains multiple agreements with each customer as different geographies and scopes of work are individually priced. Pricing is generally based on a fixed price per unit basis with up to hundreds of units priced in a single contract. Many contracts specify discrete billing milestones for each job to be performed. As an agreed-upon milestone is achieved, QualTek may bill for the work performed. Purchase orders for discrete projects are generally issued under an MSA. This allows for quantity adjustments for the number of tasks/units that are performed with respect to a project. There are also other adjustments such as “rock adders” that accommodate changes in scope versus original engineering plans. As these adjustments are billed continuously throughout the job, they are known and often accepted by the customer as the work proceeds, substantially reducing QualTek’s risk of having cost overruns. MSAs have historically been renewed creating sticky revenue.

QualTek utilizes a disciplined approach when bidding on new contracts and will decline to bid if management believes QualTek cannot deliver the quality that meets Company standards while achieving return targets. The Company’s approach in submitting a bid that meets target returns is based on a number of factors, including, but not limited to its:

Experience in understanding the true scope of the work and associated margin
Knowledge of local factors (i.e. resources, regional dynamics, work conditions, etc.) that will impact work to be performed

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Ability to simultaneously “lock-in” labor rates with contracts for the work to be performed on fixed price per unit basis (“back-to-back” agreements with contractors)
Pass-through nature of material purchases

Due to the Company’s turnkey capabilities and high standard for quality control, QualTek often receives requests from customers to bid on new contract opportunities.

Backlog

Our backlog consists of the estimated amount of revenue we expect to realize from future work on uncompleted contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options. A significant portion of our 24-month backlog is attributable to MSAs and other service agreements, none of which require our customers to purchase a minimum amount of services and are cancelable on short or no advance notice. Backlog amounts are determined based on estimates that incorporate historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers.

QualTek maintains strong potential revenue visibility through its two-year estimated backlog. Consistent with standard practice across the industry, QualTek calculates its estimated backlog for work under MSAs and other service agreements (including issued purchase orders) based on historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers. We have a two-year aggregate backlog of $2.1 billion of which $2.0 billion relates to our Telecom segment and $0.1 billion relates to our Renewables & Recovery Logistics segment.

Backlog is not a measure defined by GAAP and should be considered in addition to, but not as a substitute for, GAAP results. Participants in our industry often disclose a calculation of their Founder Shares, Private Shares and any Public Shares theybacklog; however, our methodology for determining backlog may hold in connectionnot be comparable to the methodologies used by others. There can be no assurance as to our customers’ requirements or if actual results will be consistent with the completionestimates included in our forecasts. As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings.

Facilities

QualTek’s headquarters are located in an approximately 39,000 square foot facility that we lease in Blue Bell, Pennsylvania. Our lease of this facility expires in 2031, and we have the option to extend the lease for an additional five-year period. QualTek has properties related to its operations in approximately 80 locations. QualTek’s management believes that its properties have been well maintained, are in good condition, and are adequate to meet our current needs.

Human Capital Resources

Our employees are critical to our success. In order to best service our customers, QualTek utilizes a Business Combination.hybrid in-house & contracted labor model to flex our workforce in real-time. As of December 31, 2021, the Company had a workforce of approximately 840 in the Midwest, 1,450 in the West, 600 in the Southwest, 820 in the Southeast, and 1,515 in the Northeast. The Northeast workforce included approximately 100 corporate employees that support all regions. Our executive leadership team averages over 25 years of industry or functional experience. To date, we have not experienced any work stoppages and consider our relationship with our employees to be in good standing.

Government Regulations

We are subject to state and federal laws that apply to businesses generally, including laws and regulations related to labor relations, wages, worker safety and environmental protection. While many of our customers operate in regulated industries (for example, utilities regulated by the public service commission or communications companies regulated by the Federal Communications Commission (“FCC”)), we are not generally subject to such regulation and oversight.

In addition to environmental laws and regulations, as a contractor, our operations are subject to various laws, including:

regulations related to worker safety and health, including those established by the Occupational Safety and Health Administration and state equivalents;

64

regulations related to vehicle registrations, including those of the states and the U.S. Department of Transportation;
contractor licensing requirements;
permitting and inspection requirements; and
building and electrical codes.

We are also subject to numerous environmental laws, regulations and programs, including the handling, transportation and disposal of non-hazardous and hazardous substances and wastes, laws governing emissions and discharges into the environment, including discharges into air, surface water, groundwater and soil, and programs related to the protection of endangered species and critical habitats.

We also are subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment. Under certain of these laws and regulations, liabilities can be imposed for cleanup of properties, regardless of whether we directly caused the contamination or violated any law at the time of discharge or disposal. The presence of contamination from such substances or wastes could interfere with ongoing operations or adversely affect our business.

In addition, we could be held liable for significant penalties and damages under certain environmental laws and regulations. Our contracts with customers may also impose liabilities on us regarding environmental issues that arise through the performance of our services. From time to time, we may incur unanticipated and substantial costs and obligations related to environmental compliance and/or remediation matters.

We believe we have all material licenses and permits needed to conduct operations and that we are in material compliance with all applicable regulatory and environmental requirements. We could, however, incur significant liabilities if we fail to comply with such requirements.

The potential effects of climate change on our operations is highly uncertain. Climate change may result in, among other things, changes in rainfall patterns, storm patterns and intensities and temperature levels. Our operating results are significantly influenced by weather. Therefore, major changes in weather patterns could have a significant effect on our future operating results. For example, if climate change results in significantly more adverse weather conditions in a given period, we could experience reduced productivity, which could negatively affect our revenue and profitability. Climate change could also affect our customers and the projects that they award. Demand for power projects or other projects could be negatively affected by significant changes in weather or from legislation or regulations governing climate change.

Legal Proceedings

We are from time to time subject to various claims, lawsuits and other legal and administrative proceedings arising in the ordinary course of business. Some of these claims, lawsuits and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, non-monetary sanctions or relief. We recognize provisions for claims or pending litigation when we determine that an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Due to the inherent uncertain nature of litigation, the ultimate outcome or actual cost of settlement may materially vary from estimates.

Available Information

Our investor relations website address is https:\\investors.qualtekservices.com. We are required to file Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material events in a Current Report on Form 8-K. The SEC also maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The SEC’s website is located at http://www.sec.gov.

    

Combined Pro Forma

    

    

    

Pro Forma

    

Pro Forma

Combined

Combined

QualTek

ROCR

(Assuming No

(Assuming Maximum

    

(Historical)

    

(Historical)

    

Redemption)

    

Redemption)

As of and for the nine months ended October 2, 2021

Book value per share(1)

$

4.88

$

(0.07)

$

5.46

$

3.12

Weighted average share outstanding, redeemable common stock – basic and diluted

 

8,804,029

Net loss per share, redeemable common stock – basic and diluted

$

(0.12)

Weighted average share outstanding non-redeemable common stock – basic and diluted

 

3,099,440

Net loss per share, non-redeemable common stock – basic and diluted

$

(0.12)

 

  

 

  

Weighted average share common units outstanding – basic and diluted

 

2,161,951

 

  

 

  

 

  

Net loss per unit – basic and diluted

$

(13.96)

 

  

 

  

 

  

Weighted average share outstanding of common stock – basic and diluted

 

 

 

31,383,439

 

19,883,439

Net loss per share of common stock – basic and diluted

$

(0.61)

$

(0.81)

As of and for the year ended December 31, 2020

 

  

 

  

 

  

 

  

Book value per share(1)

$

14.77

$

0.01

 

N/A(2)

 

N/A(2)

Weighted average share outstanding of common stock – basic and diluted

 

2,500,000

 

31,383,439

 

19,883,439

Net loss per share of common stock – basic and diluted

$

(0.00)

$

(1.86)

$

(2.23)

Weighted average share common units outstanding – basic and diluted

 

2,005,824

 

  

 

  

 

  

Net loss per unit – basic and diluted

$

(50.54)

 

  

 

  

 

  

65

EXECUTIVE COMPENSATION

References to the “Company,” “QualTek,” “our,” “us” or “we” in the following section refer to QualTek HoldCo prior to the Business Combination.

We are currently considered an “emerging growth Company” within the meaning of the Securities Act for purposes of the SEC’s executive compensation disclosure rules. Accordingly, we are required to provide a Summary Compensation Table, as well as limited narrative disclosures regarding executive compensation for our last two completed fiscal years and an Outstanding Equity Awards at Fiscal Year End Table for our last completed fiscal year. These reporting obligations extend only to the following “Named Executive Officers,” who are the individuals who served as our principal executive officer and the next two most highly compensated executive officers at the end of the fiscal years 2021 and 2020.

Name

Principal Position

Christopher S. Hisey

Chief Executive Officer, QualTek LLC

Elizabeth Downey

Chief Administrative Officer, QualTek LLC

Kevin Doran

Chief Executive Officer, QualTek Wireless LLC

This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt in the future may differ materially from the currently planned programs summarized in this discussion.

2020 and 2021 Summary Compensation Table

The following table summarizes the compensation awarded to, earned by or paid to our Named Executive Officers for the fiscal years ended December 31, 2021 and 2020.

Name and Principal Position (a)

    

Year

    

Salary
($)(2)(3)

    

Total
($)(4)

 

Christopher S. Hisey, Chief Executive Officer, QualTek LLC(1)

2021

$

500,000

$

500,000

2020

$

501,154

$

501,154

Elizabeth Downey, Chief Administrative Officer, QualTek LLC

2021

$

375,000

$

375,000

2020

$

375,433

$

375,433

Kevin Doran, Chief Executive Officer, QualTek Wireless LLC

2021

$

450,500

$

450,500

2020

$

450,520

$

450,520

(1)Book value per share = (Total equity)/common shares outstanding. InMr. Hisey served on the caseBoard of QualTek for the Pro Forma Combined, the denominator consists of shares of Class A Common Stockyears ended in December 31, 2021 and 2020. He earned no compensation for his role as the shares of Class B Common Stock have no economic rights.a director.
(2)Pro Forma balance sheetAmounts represent annualized base salary earned for the years ended December 31, 2021 and 2020.
(3)As a result of COVID-19, each of Mr. Hisey, Ms. Downey and Mr. Doran deferred a percentage of their base salaries (100% for Mr. Hisey and 50% for each of Ms. Downey and Mr. Doran) for the second quarter of the fiscal year ended December 31, 2020 due to the impact of the COVID-19 pandemic in exchange for 1% interest on such deferred salary. Mr. Hisey, Ms. Downey and Mr. Doran earned $1,154, $433 and $520, respectively, in interest as a result of such deferral.
(4)No Named Executive Officer earned compensation other than salary for the years ended December 31, 2021 and 2020.

Executive Services Agreements

Each of the Named Executive Officers is a party to an employment agreement (styled as executive services agreements) with QualTek, LLC (“QualTek,” which for purposes of this section does not refer to the Company) that provides for annual base salary, target bonus opportunity, paid vacation, reimbursement of reasonable business expenses and eligibility to participate in our benefit plans generally. Messrs. Hisey’s and Doran’s and Ms. Downey’s annualized base salaries at the end of the 2020 fiscal year were $500,000, $450,500 and $375,000, respectively, and their target annual bonuses were 100%, 50% and 50% of base salary, respectively. Messrs. Hisey’s and Doran’s and Ms. Downey’s annualized base salaries at the end of the 2020 fiscal year were $501,154, $450,520 and $375,433, respectively, and their target annual bonuses were 100%, 50% and 50% of base salary,

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respectively. For the 2020 and 2021 fiscal years, Messrs. Hisey and Doran and Ms. Downey did not receive any bonus payments, as described in more detail below.

In the event that a Named Executive Officer’s employment is terminated either by QualTek without “Cause,” by the Named Executive Officer for “Good Reason” (each as defined below) or due to QualTek’s non-renewal of the initial term, subject to the Named Executive Officer’s execution and non-revocation of a general release of claims and continued compliance with restrictive covenant obligations, each Named Executive Officer would be entitled to salary continuation for 24 months and Mr. Hisey would also be entitled to (i) a pro-rata portion of his bonus earned through the termination date and (ii) payment for 24 months’ of Mr. Hisey’s premiums incurred for participation in COBRA coverage pursuant to a QualTek sponsored group health plan.

For purposes of the employment agreements:

“Cause” means the Named Executive Officer’s (i) failure to materially perform and discharge the duties and responsibilities of the employee under his or her employment agreement after written notice and allowing the Named Executive Officer 10 business days to cure such failures, (ii) failure to observe any material policies of any of the company entities after receiving written notice and allowing the Named Executive Officer 10 business days to cure such failures, (iii) gross negligence, willful misconduct or intentional violation of law in the performance of the Named Executive Officer’s duties to any of the company entities, (iv) the commission of any act of fraud, intentional misrepresentation, dishonesty, misappropriation or embezzlement with respect to any of the company entities or the Named Executive Officer’s unethical, immoral or illegal act which could damage any of the company entities (or the reputation of any of the company entities), (v) breach of (A) any agreement or contract between the Named Executive Officer and any of the company entities (including the employment agreement), which breach has not been cured within 10 business days of the Named Executive Officer’s receipt of written notice thereof, or (B) sexual relationship with any other employee of any of the company entities, or (C) falsification of expense reports or requests for reimbursement, (vi) the conviction of, or pleading of guilty or nolo contendere to, any felony or any crime involving moral turpitude, or (vii) misappropriation, improper disclosure or improper use of materials or confidential information belonging to a former employer of the Named Executive Officer.

“Good Reason” means the occurrence of one or more of the following, subject to QualTek’s right to cure the circumstances giving rise to such occurrence within 20 business days of QualTek’s receipt of written notice: (i) assignment to the Named Executive Officer of any duties inconsistent, in the aggregate, in any material respect with the employment agreement, or (ii) a reduction in or the failure to pay the base compensation of the Named Executive Officer (other than a reduction of base salary of all of QualTek’s senior management due to poor financial performance of QualTek or any of its affiliates); provided, that the Named Executive Officer gives written notice to QualTek of the termination of employment for Good Reason within 30 days of the occurrence of the event constituting Good Reason, and such event remains uncured for 30 days following QualTek’s receipt of such written notice by the Named Executive Officer.

Annual Bonus Plan

The QualTek Annual Bonus Plan (“Annual Bonus Plan”) provides for the payments of annual cash incentives based on the achievement of Company EBITDA and free cash flow goals and individual performance objectives. The participants in the Annual Bonus Plan are determined based on an employee’s position and employment status, and include each of our Named Executive Officers.

Bonus levels are set as a percentage of the participant’s base salary and are established based upon the participant’s job-related responsibilities and corresponding impact on overall Company performance. Assuming achievement of the Company’s designated performance goals as described above and satisfactory performance of the participant, the Board makes the final determination of participant bonus awards.

None of our Named Executive Officer earned a bonus under the Annual Bonus Plan for the years ended December 31, 2021 and 2020 as the Company did not meet the applicable Company goals.

Equity Incentives

The Company was authorized at the discretion of its former board of managers, under its Second Amended and Restated Limited Liability Company Agreement, dated as of October 4, 2019 (the “Holdco LLC Agreement”), to issue Class P Units of Holdco (“Class P Units”). Class P Units were granted to service providers of the Company, including our Named Executive Officers, who immediately contributed them to BCP QualTek Management, LLC (“Management Holdco”), which in turn granted such service

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providers the same number of corresponding Class P Tracking Units of Management Holdco (“Class P Tracking Units”). The Class P Tracking Units were structured to provide the participating individuals with an opportunity to indirectly participate in Holdco’s future income and appreciation and to enhance our ability to attract and retain talented individuals to contribute to the sustained progress, growth, and profitability of the Company.

Class P Tracking Units represented an indirect interest in the future appreciation of Holdco and were intended to be treated as “profits interests” for United States federal income tax purposes, meaning that the Class P Tracking Units generally entitled the holder only to value created by the future appreciation or profits of Holdco.

The Company has granted each Named Executive Officer Class P Units, which were contributed to Management Holdco, which in turn granted the Named Executive Officers corresponding Class P Tracking Units. The Class P Tracking Units issued to each Named Executive Officer, and the underlying Class P Units, were to vest as follows: 20% on an initial vesting date set forth in each award agreement, and an additional 20% on each anniversary of the initial vesting date up to 80%, with the final 20% vesting immediately prior to a Sale of the Company (as defined in the Holdco LLC Agreement). Each Named Executive Officer was granted Class P Tracking Units and underlying Class P Units, with an initial vesting date of December 26, 2019. The Class P Tracking Units, and the underlying Class P Units were designated as Class P-1 Units, Class P-2 Units or Class P-3 Units. Vested Class P-1 Units, Class P-2 Units and Class P-3 Units, were eligible to participate in dividends/proceeds upon a Sale of the Company once Class A Members of the Company (as defined in the Holdco LLC Agreement) received a 1X, 2X or 3X cash return on their investment (on a fully diluted basis), respectively. Immediately prior to the Business Combination, management made a non-cash discretionary distribution to effectively settle all existing Class P Units in exchange for QualTek Common Units.

Outstanding Equity Awards at 2021 Fiscal Year-End

The following table summarizes, for each of the Named Executive Officers, the number of Class P Tracking Units held as of December 31, 2021.

Option Awards(1)

Number of

Number of

Securities

Securities

Underlying

Underlying

Unexercised

Unexercised

Option

Option

Options (#)

Options (#)

Exercise

Expiration

Grant Date

Exercisable

Unexercisable

Price ($)(2)

Date(2)

Christopher S, Hisey

April 15, 2019

18,457

12,305(3)

April 15, 2019

20,508

13,672(4)

April 15, 2019

22,921

15,280(5)

Elizabeth Downey

April 15, 2019

3,384

2,256(3)

April 15, 2019

3,760

2,506(4)

April 15, 2019

4,202

2,801(5)

Kevin Doran

April 15, 2019

4,307

2,871(3)

April 15, 2019

4,785

3,190(4)

April 15, 2019

5,348

3,566(5)

(1)This table reflects information regarding the Class P Tracking Units in Management Holdco to our Named Executive Officers that were outstanding as of December 31, 20202021. For more information on these incentive units, see “Executive Compensation — Equity Incentives” above.
(2)The Class P Tracking Units were not requiredtraditional options and, as such,therefore, there was no such calculation includedexercise price or option expiration date associated with them.
(3)These Class P Tracking Units were composed of Class P-1 Units, which were to vest according to the time-vesting schedule described above in this table.Executive Compensation — Equity Incentives”, subject to the Named Executive Officer’s continued employment with us through the applicable vesting date, and only participate in distributions if the Class A Members of the Company achieved a 1X cash return on their investment (on a fully diluted basis).
(4)These Class P Tracking Units were composed of Class P-2 Units, which were to vest according to the time-vesting schedule described above in “Executive Compensation — Equity Incentives”, subject to the Named Executive Officer’s continued employment with us through the applicable vesting date, and only participate in distributions if the Class A Members of the Company achieved a 2X cash return on their investment (on a fully diluted basis).

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(5)These Class P Tracking Units were composed of Class P-3 Units, which were to vest according to the time-vesting schedule described above in “Executive Compensation — Equity Incentives”, subject to the Named Executive Officer’s continued employment with us through the applicable vesting date, and only participate in distributions if the Class A Members of the Company achieved a 3X cash return on their investment (on a fully diluted basis).

Additional Narrative Disclosure

Retirement Benefits

We do not have a U.S. defined benefit pension plan or nonqualified deferred compensation plan. We currently maintain a defined contribution retirement plan intended to provide benefits under Section 401(k) of the Code, pursuant to which employees, including the Named Executive Officers, can make voluntary pre-tax contributions. We have the option to make discretionary employer matching and/or non-elective contributions to all participants. All contributions under the plan are subject to certain annual dollar limitations, which are periodically adjusted based on cost-of-living announcements by the Internal Revenue Services. The Company does not make these discretionary contributions.

Potential Payments Upon Termination or Change in Control

Each Named Executive Officer’s unvested Class P Tracking Units were to vest immediately prior to a Sale of the Company (as defined in the Holdco LLC Agreement), subject to the Named Executive Officer’s continued employment with us through the consummation of a Sale of the Company, and each Named Executive Officer would become entitled to distributions with respect to all vested Class P Tracking Units upon a Sale of the Company to the extent the applicable return on investment criteria are met, see “Executive Compensation — Equity Incentives” above. Immediately prior to the Business Combination, management made a non-cash discretionary distribution to effectively settle all existing Class P Units in exchange for QualTek Common Units.

Director Compensation

Our non-employee directors received no compensation for the year ending December 31, 2021. Following the consummation of this Business Combination, our independent non-employee directors who are not affiliated with Brightstar, Jigisha Desai and Sam Chawla, will each be paid an annual retainer of $70,000 for their service as a member of our Board. Mr. Desai will also receive an additional annual retainer of $55,000 for serving as the chair of our audit committee. Mr. Chawla will also receive an additional annual retainer of $12,500 ($37,500 in the aggregate) for serving on each of our audit committee, compensation committee, and nominating/governance committee. Finally, each of our independent non-employee directors who are not affiliated with Brightstar will receive, following the consummation of this Business Combination, an annual grant of stock options, with a grant date value (determined using the Black-Scholes method) of $105,000 that vest on the one-year anniversary of the date of grant, subject to the non-employee director’s continued service on the Board through the applicable vesting date.

Compensation of Executive Officers and Directors after the Business Combination

Following the consummation of the Business Combination, the following individuals have served as executive officers of the Company: Mr. Hisey as the Chief Executive Officer, Ms. Downey as the Chief Administrative Officer, Mr. Williams as the Chief Business Officer and Mr. Spittler as the Chief Financial Officer.

The Company intends to develop an executive compensation program that is consistent with Company’s existing compensation policies and philosophies, which are designed to align compensation with the Company’s business objectives and the creation of stockholder value, while enabling the Company to attract, motivate and retain individuals who contribute to the long-term success of the Company.

Decisions on the specific terms of the executive compensation program will be made by a compensation committee of the Board of Directors and are not currently known at this time. The executive compensation program actually adopted will depend on the judgment of the members of the compensation committee and may differ from that set forth in this discussion.

We anticipate that decisions regarding executive compensation will reflect our belief that the executive compensation program must be competitive in order to attract and retain our executive officers. We anticipate that the compensation committee will seek to implement our compensation policies and philosophies by linking a significant portion of our executive officers’ cash compensation to performance objectives and by providing a portion of their compensation as long-term incentive compensation in the form of equity awards.

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We anticipate that compensation for our executive officers will continue to have three primary components: base salary, an annual cash incentive bonus and long-term incentive based compensation in the form of stock-based awards.

Management Equity Incentive Plan

Background and Overview

Our Board and shareholders have approved the BCP QualTek HoldCo, LLC 2022 Long-Term Incentive Plan (the “2022 LTIP”), pursuant to which our and our affiliates’ employees, consultants and directors will be eligible to receive incentive awards. The 2022 LTIP provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, dividend equivalents, other stock-based awards, substitute awards, annual incentive awards and performance awards, in each case intended to align the interests of participants with those of our stockholders.

Summary of the 2021 LTIP

Share Reserve

In connection with its adoption by our Board and approval by our stockholders, we reserved a number of shares of Class A Common Stock equal to 12.5% of the fully diluted capitalization of the Company shares of Class A Common Stock for issuance under the 2022 LTIP. In addition, on each January 1 beginning on January 1, 2023 and ending on January 1, 2032, the aggregate number of shares reserved for issuance under the 2022 LTIP will be increased automatically by the number of shares equal to the lesser of (i) the lesser of (x) 2% of the total number of outstanding shares of Class A Common Stock and Class B Common Stock on the immediately preceding December 31 and (y) such number of shares of Class A Common Stock that would result in the number of shares of Class A Common Stock in the share reserve being equal to 12.5% of the aggregate number of shares of Class A Common Stock and Class B Common Stock outstanding as of the final day of the immediately preceding calendar year, and (ii) such lesser number as may be determined by the compensation committee.

Administration

The 2022 LTIP will be administered by our compensation committee. The compensation committee will have the authority to construe and interpret the 2022 LTIP, grant awards, and make all other determinations necessary or advisable for the administration of the plan. Awards under the 2022 LTIP may be made subject to “performance conditions” and any other terms and conditions that the compensation committee deems necessary or advisable.

Eligibility

Our employees, consultants, and directors, and the employees, consultants and directors of our affiliates, will be eligible to receive awards under the 2021 LTIP. The compensation committee will determine who will receive awards and the terms and conditions of such awards. As of the date of this filing, we anticipate that approximately 1,950 QualTek employees, three directors and no consultants will be eligible to participate in the 2022 LTIP.

Term

The 2022 LTIP will terminate 10 years from the date our Board adopts the plan, unless it is terminated earlier by our Board.

Award Forms and Limitations

The 2022 LTIP will authorize the grant of stock awards, performance awards and other cash-based awards. An aggregate of shares will be available for issuance under the 2022 LTIP. The maximum number of shares subject to stock options that are intended to qualify as incentive stock options, or ISOs, under Section 422 of the Code, will be equal to the initial share reserve.

Stock Options

The 2022 LTIP will provide for the grant of ISOs only to employees. All options other than ISOs may be granted to employees, directors, and consultants. The exercise price of each option to purchase stock must be at least equal to the fair market value of Class A Common Stock on the date of grant. The exercise price of ISOs granted to 10% or more stockholders must be at least equal to

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110% of that value. Options granted under the 2022 LTIP may be exercisable at such times and subject to such terms and conditions as the Compensation and Nominating Committee determines. The maximum term of options granted under the 2021 LTIP will be 10 years (five years in the case of ISOs granted to 10% or more stockholders).

Stock Appreciation Rights

Stock appreciation rights will provide for a payment, or payments, in cash or common stock, to the holder based upon the difference between the fair market value of Class A Common Stock on the date of exercise and the stated exercise price of the stock appreciation right. The exercise price must be at least equal to the fair market value of Class A Common Stock on the date the stock appreciation right is granted. Stock appreciation rights may vest based on time or achievement of performance conditions, as determined by the compensation committee.

Restricted Stock

The compensation committee may grant awards consisting of shares of Class A Common Stock subject to restrictions on sale and transfer. The price (if any) paid by a participant for a restricted stock award will be determined by the compensation committee. Unless otherwise determined by the compensation committee at the time of award, vesting will cease on the date the participant no longer provides services to us and unvested shares will be forfeited to or repurchased by us. The compensation committee may condition the grant or vesting of shares of restricted stock on the achievement of performance conditions and/or the satisfaction of a time-based vesting schedule.

Other Stock-Based and Other Cash-Based Awards

The compensation committee may grant other stock-based awards and other cash-based awards to participants under the 2022 LTIP in amounts and on terms and conditions determined by the compensation committee in its discretion. Such awards may be granted subject to vesting and other conditions or restrictions, or granted without being subject to any conditions or restrictions.

Additional Provisions

Awards granted under the 2022 LTIP will not be transferable other than by will or by the laws of descent and distribution, or as determined by the compensation committee. In the event of a change in control (as defined in the 2022 LTIP), the compensation committee will have the discretion to provide for any or all of the following actions: (i) awards may be continued, assumed, or substituted with new rights, (ii) awards may be purchased for cash equal to the excess (if any) of the highest price per share of common stock paid in the change in control transaction over the aggregate exercise price of such awards, (iii) outstanding and unexercised stock options and stock appreciation rights may be terminated before the change in control (in which case holders of such unvested awards would be given notice and the opportunity to exercise such awards), or (iv) vesting or lapse of restrictions may be accelerated. All 2022 LTIP awards will be equitably adjusted in the case of the division of stock and similar transactions.

United States Federal Income Tax Consequences

The following summary is based on an analysis of the Internal Revenue Code of 1986, as amended (the “Code”) as currently in effect, existing laws, judicial decisions, administrative rulings, regulations and proposed regulations, all of which are subject to change (possibly retroactively). Moreover, the following is only a summary of United States federal income tax consequences. No attempt has been made to discuss any potential foreign, state, or local tax consequences. Actual tax consequences to participants may be either more or less favorable than those described below depending on the participants’ particular circumstances.

In addition, nonstatutory stock options and SARs with an exercise price less than the fair market value of shares of Class A Common Stock on the date of grant, SARs payable in cash, and certain other awards that may be granted pursuant to the 2022 LTIP could be subject to additional taxes unless they are designed to comply with certain restrictions set forth in Section 409A of the Code and guidance promulgated thereunder.

The 2022 LTIP is not subject to the Employee Retirement Income Security Act of 1974, as amended, and is not intended to be qualified under Section 401(a) of the Code.

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Incentive Stock Options

No income will be recognized by a participant for United States federal income tax purposes upon the grant or exercise of an ISO. The basis of shares transferred to a participant upon exercise of an ISO (“ISO Shares”) is the price paid for the shares. If the participant holds the shares for at least one year after the transfer of the shares to the participant and two years after the grant of the stock option, the participant will recognize capital gain or loss upon sale of the shares received upon exercise equal to the difference between the amount realized on the sale and the basis of the stock. Generally, if the shares are not held for that period, the participant will recognize ordinary income upon disposition (a “Disqualifying Disposition”) in an amount equal to the excess of the fair market value of the shares on the date of exercise over the amount paid for the shares, or if less (and if the disposition is a transaction in which loss, if any, will be recognized), the gain on disposition. Any additional gain realized by the participant upon the disposition will be a capital gain. The excess of the fair market value of the ISO Shares over the stock option price for the shares is an item of adjustment for the participant for purposes of the alternative minimum tax. Therefore, although no income is recognized upon exercise of an ISO, a participant may be subject to alternative minimum tax as a result of the exercise. An employer will generally not be entitled to any federal income tax deduction upon the grant or exercise of an ISO, unless a participant makes a Disqualifying Disposition of the ISO Stock. If a participant makes a Disqualifying Disposition, the employer will then, subject to the deduction limitations described below, be entitled to a tax deduction that corresponds as to timing and amount with the compensation income recognized by the participant.

Nonstatutory Stock Options

No income is expected to be recognized by a participant for United States federal income tax purposes upon the grant of a nonstatutory stock option. Upon exercise of a nonstatutory stock option, the participant will recognize ordinary income in an amount equal to the excess of the fair market value of the shares on the date of exercise over the amount paid for the shares. Income recognized upon the exercise of a nonstatutory option will be considered compensation subject to withholding at the time the income is recognized and, therefore, the participant’s employer must make the necessary arrangements with the participant to ensure that the amount of the tax required to be withheld is available for payment. Nonstatutory stock options are designed to provide the employer with a deduction equal to the amount of ordinary income recognized by the participant at the time of the recognition by the participant, subject to the deduction limitations described below.

Stock Appreciation Rights

No income is expected to be recognized by a participant for United States federal income tax purposes upon the grant of SARs. Generally, the participant will recognize ordinary income subject to withholding upon the receipt of payment pursuant to SARs in an amount equal to the aggregate amount of cash and the fair market value of any property (including common stock) received. Subject to the deduction limitations described below, the employer generally will be entitled to a corresponding tax deduction equal to the amount includible in the participant’s income.

Restricted Stock

If the restrictions on an award of shares of restricted stock are of a nature that the shares are both subject to a substantial risk of forfeiture and are not freely transferable (within the meaning of Section 83 of the Code), the participant will not recognize income for United States federal income tax purposes at the time of the award unless the participant affirmatively elects to include the fair market value of the shares of restricted stock on the date of the award, less any amount paid for the shares, in gross income for the year of the award pursuant to Section 83(b) of the Code. In the absence of this election, the participant will be required to include in income for United States federal income tax purposes on the date the shares either become freely transferable or are no longer subject to a substantial risk of forfeiture (within the meaning of Section 83 of the Code), the fair market value of the shares of restricted stock on such date, less any amount paid for the shares. The employer will be entitled to a deduction at the time of income recognition to the participant in an amount equal to the amount the participant is required to include in income with respect to the shares, subject to the deduction limitations described below. If a Section 83(b) election is made within 30 days after the date the restricted stock is received, the participant will recognize ordinary income at the time of the receipt of the restricted stock, and the employer will be entitled to a corresponding deduction, equal to the fair market value of the shares at the time, less the amount paid, if any, by the participant for the restricted stock. If a Section 83(b) election is made, no additional income will be recognized by the participant upon the lapse of restrictions on the restricted stock, but, if the restricted stock is subsequently forfeited, the participant may not deduct the income that was recognized pursuant to the Section 83(b) election at the time of the receipt of the restricted stock but may recognize a loss in an amount equal to the excess, if any, of the amount paid for the restricted stock over the amount received upon such forfeiture (which loss will ordinarily be a capital loss).

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Dividends paid to a participant holding restricted stock before the expiration of the restriction period will be additional compensation taxable as ordinary income to the participant subject to withholding, unless the participant made an election under Section 83(b). Subject to the deduction limitations described below, the employer generally will be entitled to a corresponding tax deduction equal to the dividends includible in the participant’s income as compensation. If the participant has made a Section 83(b) election, the dividends will be dividend income, rather than additional compensation, to the participant.

If the restrictions on an award of restricted stock are not of a nature that the shares are both subject to a substantial risk of forfeiture and are not freely transferable, within the meaning of Section 83 of the Code, then the participant will recognize ordinary income for United States federal income tax purposes at the time of the transfer of the shares in an amount equal to the fair market value of the shares of restricted stock on the date of the transfer, less any amount paid therefore. The employer will be entitled to a deduction at that time in an amount equal to the amount the participant is required to include in income with respect to the shares, subject to the deduction limitations described below.

Restricted Stock Units

There will be no United States federal income tax consequences to either the participant or the employer upon the grant of restricted stock units. Generally, the participant will recognize ordinary income subject to withholding upon the receipt of cash and/or transfer of shares of Class A Common Stock in payment of the restricted stock units in an amount equal to the aggregate of the cash received and the fair market value of the Class A Common Stock so transferred. Subject to the deduction limitations described below, the employer generally will be entitled to a corresponding tax deduction equal to the amount includible in the participant’s income.

Generally, a participant will recognize ordinary income subject to withholding upon the payment of any dividend equivalents paid with respect to an award in an amount equal to the cash the participant receives. Subject to the deduction limitations described below, the employer generally will be entitled to a corresponding tax deduction equal to the amount includible in the participant’s income.

Limitation on the Employer’s Compensation Deduction

In order for the amounts described above to be deductible by the employer, such amounts must constitute reasonable compensation for services rendered or to be rendered and must be ordinary and necessary business expenses. In addition, Section 162(m) of the Code limits the deduction certain employers may take for otherwise deductible compensation payable to certain executive officers of the employer to the extent the compensation paid to such an officer for the year exceeds $1 million.

Excess Parachute Payments

Our ability (or the ability of one of our subsidiaries) to obtain a deduction for future payments under the 2022 LTIP could also be limited by the golden parachute rules of Section 280G of the Code, which prevent the deductibility of certain excess parachute payments made in connection with a change in control of an employer-corporation.

ESPP

Background

Our Board and shareholders have approved the QualTek 2022 Employee Stock Purchase Plan (the “ESPP”).

We strongly believe in improving opportunities for our employees to reap the benefits of increases in our stock’s value. In addition, the ability to contribute a portion of earnings to purchase our shares, would represent a key benefit for our employee. We believe that such a program improves our ability to attract, retain and incentivize our talent, and ultimately, better aligns the interests of our employees with those of our shareholders. As of the date of this filing, we anticipate that approximately 1,600 employees will be eligible to participate in the ESPP.

Summary of the 2022 ESPP

The following general description of material features of the ESPP is qualified in its entirety by reference to the provisions of the ESPP.

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Purpose and Eligibility

The ESPP is intended to assist employees of the Combined Company in acquiring share ownership interest in QualTek, and to help such employees provide for their future security and to encourage them to remain in the employment of the Combined Company or its subsidiaries. The ESPP is intended to have two components: a component intended to qualify as an “employee stock purchase plan” under Section 423 of the Code (the “423 Component”) and a component that is not intended to so qualify (the “Non-423 Component”). Except as otherwise provided, the Non-423 Component will be operated and administered in the same manner as the 423 Component, except where prohibited by law.

Our executive officers and all of our other employees who have worked at QualTek for at least six months will be allowed to participate in the ESPP, provided that the administrator, in its discretion, may also exclude any or all of the following unless prohibited by applicable law, so long as, for offerings under the 423 Component, any such exclusion is applied uniformly to all employees:

Any employee who is customarily scheduled to work 20 hours or less per week;
any employee whose customary employment is not more than five months in a calendar year;
any employee who is not employed by QualTek prior to the applicable exercise date occurs; and
any employee who is a highly compensated employee (within the meaning of Section 414(q) of the Code) or any highly compensated employee with compensation above a specified level, who is an officer, or who is subject to the disclosure requirements of Section 16(a) of the Exchange Act; or
any employee who is a citizen or resident of a jurisdiction outside the United States if the grant of the option is prohibited under the laws of the jurisdiction governing such Employee or compliance with the laws of the jurisdiction would cause the Section 423 Component or any offering or option granted thereunder to violate the requirements of Section 423 of the Code.

Notwithstanding the foregoing, any employee who, after the granting of the option, would possess 5% or more of the total combined voting power or value of all classes of shares of QualTek shall not be eligible. In addition, no employee shall be granted an option under the Section 423 Component which permits the employee to purchase shares under all of our “employee stock purchase plans” that would accrue at a rate which exceeds $25,000 of fair market value of our Class A Common Stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time.

Administration

The ESPP will be administered by the Board or a committee appointed by the Board, subject to applicable laws. The administrator will have full and exclusive authority to interpret the terms of the ESPP and determine eligibility, subject to the conditions of the ESPP, as described below.

Share Reserve

The maximum aggregate number of shares that may be issued pursuant to the ESPP will be equal to 2% of the fully diluted capitalization of the Company. In addition, on each January 1 beginning on January 1, 2023 and ending on January 1, 2032, the aggregate number of shares reserved for issuance under the ESPP will be increased automatically by the lesser of (x) a number of shares equal to 1% of the total number of our outstanding shares of Class A Common Stock and Class B Common Stock on the immediately preceding December 31 and (y) such number of shares of Class A Common Stock that would result in the number of shares in the share reserve being equal to 2% of the aggregate number of shares of Class A Common Stock and Class B Common Stock outstanding on the final day of the immediately preceding calendar year; except that the administrator may in its sole discretion reduce the amount of the increase in any particular year.

Contributions and Purchases

The ESPP will permit participants to purchase Class A Common Stock through contributions (in the form of payroll deductions or otherwise to the extent permitted by the administrator) of up to 15% of their eligible compensation, which includes a participant’s regular and recurring straight time gross earnings, payments for overtime and shift premium, bonuses, equity compensation and other

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similar compensation. Subject to the eligibility requirements discussed above, a participant may purchase a maximum of 1,000 shares of Class A Common Stock during each six-month offering period. The ESPP initially will have purchase periods approximately 6 months in duration commencing with the first trading day after one exercise date and ending with the next exercise date. The administrator may, in its discretion, modify the terms of future purchase periods and offering periods, provided that no offering period may be longer than 27 months.

Amounts contributed and accumulated by the participant during any offering period will be used to purchase shares of Class A Common Stock at the end of each six-month purchase period. The purchase price of the shares will be 85% of the lower of the fair market value of Class A Common Stock on the first trading day of the offering period or on the last trading day of the offering period.

Withdrawal and Termination of Participation

A participant may withdraw from the ESPP voluntarily at any time by filing a notice of withdrawal prior to the close of business on the date established by the administrator. A participant will be deemed to have elected to withdraw from the plan upon the termination of the participant’s employment for any reason or in the event the participant is no longer eligible to participate in the ESPP.

Restriction on Transfers

A participant may not transfer rights granted under the ESPP other than by will, the laws of descent and distribution or as otherwise provided under the ESPP.

Adjustments

In the event of certain changes in our capitalization, to prevent dilution or enlargement of the benefits or potential benefits available under the ESPP, the administrator will make adjustments, as it may deem equitable, to the number and class of shares that may be delivered, the applicable purchase price for shares, and/or the numerical share limits, pursuant to the ESPP.

Dissolution or Liquidation

In the event of our proposed liquidation or dissolution, any offering period then in progress will be shortened by setting a new exercise date, and will terminate immediately prior to such liquidation or dissolution unless otherwise determined by the administrator. The administrator will notify participants of the new exercise date in writing or electronically, at which time any participant’s purchase rights will be automatically exercised, unless the participant has earlier withdrawn from the offering period.

Certain Transactions

In the event of a merger, consolidation or similar transaction, an acquiring or successor corporation may assume or substitute each outstanding option. If the successor corporation refuses to assume or substitute for the outstanding option, the offering period then in progress will be shortened by setting a new exercise date. The administrator will notify each participant in writing or electronically that the exercise date has been changed and that the participant’s option will be exercised automatically on the new exercise date, unless the participant has already withdrawn from the offering period. Notwithstanding any other provision to the contrary, the ESPP will be automatically terminated following a change in control (as defined in our 2022 LTIP).

Summary of Material U.S. Federal Income Tax Considerations

Section 423 Component

The following summary is intended only as a general guide to the material U.S. federal income tax consequences of participation in the ESPP under the 423 Component. The summary is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s death, or the provisions of the income tax laws of any municipality, state or foreign country in which the participant may reside. As a result, tax consequences for any particular participant may vary based on individual circumstances.

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The rights of participants to make purchases under the ESPP are intended to qualify under the provisions of Section 423 of the Code. Assuming such qualification, no income will be taxable to a participant until the sale or other disposition of shares purchased under the ESPP. Upon such sale or disposition, the participant will generally be subject to tax in an amount that depends upon the holding period of such shares prior to disposing of them.

If the shares are sold or disposed of more than two years from the first day of the offering period during which the shares were purchased and more than one year from the date of purchase, or if the participant dies while holding the shares, the participant (or his or her estate) will recognize ordinary income generally measured as the lesser of (i) the excess of the fair market value of the shares at the time such sale or disposition over the purchase price of such shares or (ii) an amount equal to 15% of the fair market value of the shares on the first day of the offering period. Any additional gain will be treated as long-term capital gain. If the shares are held for at least the holding periods described above but are sold for a price that is less than the purchase price, there will be no ordinary income and the difference will be a long-term capital loss. We will not be entitled to an income tax deduction with respect to the grant or exercise of a right to purchase our shares, or the sale of such shares by a participant, where such participant holds such shares for at least the holding periods described above.

Any sale or other disposition of shares before the expiration of the holding periods described above will be a “disqualifying disposition,” and the participant will recognize ordinary income generally measured as the excess of the fair market value of the shares on the date the shares are purchased over the purchase price, and we will be entitled to an income tax deduction for such ordinary income. Any additional gain or loss on such sale or disposition will be a long-term or short-term capital gain or loss, depending on the holding period following the date the shares were purchased by the participant prior to such sale or disposition, and we will not be entitled to an income tax deduction for any such capital gain.

Non-423 Component

The following summary is intended only as a general guide to the material U.S. federal income tax consequences of participation in the ESPP under the Non-423 Component. Rights granted under the Non-423 Component are not intended to qualify for favorable U.S. federal income tax treatment associated with rights granted under an “employee stock purchase plan” that qualifies under provisions of Section 423 of the Code. Under this component, a participant will have compensation income equal to the value of the shares at the time of purchase, less the purchase price. When a participant sells shares purchased under the ESPP, he or she also will have a capital gain or loss equal to the difference between the sales proceeds and the value of shares at the time of purchase. Any capital gain or loss will be short-term or long-term, depending on how long the shares have been held.

Any compensation income that a participant receives upon sale of shares that he or she purchased under the Non-423 Component is subject to withholding for income, Medicare and social security taxes, as applicable.

New Plan Benefits

Participation in the ESPP is voluntary and each eligible employee will make his or her own decision whether and to what extent to participate in the ESPP. It is therefore not possible to determine the benefits or amounts that will be received in the future by individual employees or groups of employees under the ESPP.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS OF QUALTEK

The following discussion and analysis should be read in conjunction with the audited annual and unaudited interim consolidated financial statements and related notes appearing elsewhere in this registration statement.prospectus. This discussion and other parts of this registration statement may contain forward-looking statements based upon current expectations that involve risks, uncertainties, and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the heading entitled “Risk Factors” or in other parts of this registration statement.prospectus. Unless the context otherwise requires, references in this section to the “Company,” “we,” “us” or “our” are intended to mean the business and operations of QualTek and its consolidated subsidiaries.

The following discussion and analysis of financial condition and results of operations of QualTek is provided to supplement the consolidated financial statements and the accompanying notes of QualTek included elsewhere in this registration statement. We intend for this discussion to provide the reader with information to assist in understanding QualTek’s audited consolidated financial statements and the accompanying notes, the changes in those financial statements and the accompanying notes from period to period along with the primary factors that accounted for those changes.

The discussion and analysis of financial condition and results of operations of QualTek is organized as follows:

Overview: This section provides a general description of QualTek’s business, our priorities and the trends affecting our industry in order to provide context for management’s discussion and analysis of our financial condition and results of operations.
Recent Developments: This section provides recent developments that we believe are necessary to understand our financial condition and results of operations.
Results of Operations: This section provides a discussion of our current period, pro forma information and historical results of operations:
for the three and six months ended July 2, 2022 (the “2022 Interim Period”) and July 3, 2021 (the “2021 Interim Period”).
for the years ended December 31, 2021 (the “2021 Successor Period”) and December 31, 2020 (the “2020 Successor Period”).

Overview

BCP QualTek Holdco, LLC (“QualTek”), isWe are a technology-driven, leading provider of communicationcommunications infrastructure services, power grid modernization, and renewables solutions to the North American telecommunications and utilities industries. We provide a variety of mission-critical services across the telecom and renewable solutions, delivering a full suite of critical servicesenergy value chain, including wireline and fiber optic terminations, wireless, fiber-to-the-home, or FTTH, and customer fulfillment activities. Our experienced management team has leveraged our technical expertise, rigorous quality and safety standards, and execution track record to major telecommunicationsestablish and utilitymaintain long-standing relationships with blue-chip customers. The Company has an extensive national footprint, with approximately 85 service locations and a workforce of over 5,000 people across the United States. We benefit from substantial forecasted growth in 5G infrastructure buildout over the next 5-7 years, which will support a wide variety of attractive end-markets, including smartphones, smart sensors, virtual healthcare, networked cars, and connected utilities. In addition to 5G, our energy-related customers are increasing investment in access to clean energy sources, driving demand for fiber connectivity and solar infrastructure. The Company actively seeks strategic acquisitions to complement its existing portfolio of services or to increase its geographical presence.

We operate in two segments: (i) Telecom and (ii) Renewables and& Recovery Logistics. Our Telecom segment provides engineering, construction, installation, network design, project management, site acquisition and maintenance services to major telecommunication, utility, and cable carriers in various locations in the United States. Our Renewables and& Recovery Logistics segment provides businesses with continuity and disaster recovery operations as well as new fiber optic construction services and maintenance and repair services for telecommunications,to renewable energy, commercial and utilities customers across the United States.

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The Transaction

On February 14, 2022, QualTek Services Inc. closed its business combination (the “Business Combination”) with QualTek HoldCo, LLC (f/k/a BCP QualTek HoldCo, LLC), a Delaware limited liability company (“BCP QualTek”) (the “Closing”), pursuant to that certain Business Combination Agreement (the “Business Combination Agreement”) dated as of June 16, 2021, by and among (i) ROCR, (ii) Roth CH III Blocker Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of ROCR (“Blocker Merger Sub”), (iii) BCP QualTek Investors, LLC, a Delaware limited liability company (the “Blocker”), (iv) Roth CH III Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of ROCR (“Company Merger Sub”), (v) BCP QualTek and Merger Subs entered into(vi) BCP QualTek, LLC, a Delaware limited liability company, solely in its capacity as representative of the Business Combination Agreement. Blocker’s equity holders and BCP QualTek’s equity holders.

Pursuant to the Business Combination Agreement:

the cumulative value of the merger consideration was $306,888 thousand;
Blocker Merger Sub merged with and into the Blocker (the “Blocker Merger”), resulting in the equity interests of the Blocker being converted into the right to receive 11,924 thousand shares of Class A Common Stock under the Business Combination Agreement, and the owners of such equity interests in the Blocker (the “Blocker Owners”) being entitled to such shares of Class A Common Stock at the Closing, and thereafter, the surviving blocker merged with and into ROCR, with ROCR as the surviving company (the “Buyer Merger”), resulting in the cancellation of the equity interests of the surviving blocker and ROCR directly owning all of the units of QualTek (the “QualTek Units”) previously held by the Blocker in QualTek;
immediately following the Buyer Merger, Company Merger Sub merged with and into QualTek, with QualTek as the surviving company (the “QualTek Merger”), resulting in (i) QualTek becoming a subsidiary of ROCR, (ii) the QualTek Units (excluding those held by the Blocker and ROCR) being converted into the right to receive 18,765 thousand shares of Class B common stock, par value $0.0001 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), under the Business Combination Agreement and the holders of QualTek Units being entitled to such shares of Class B Common Stock at the Closing, (iii) the QualTek Units held by ROCR being converted into the right to receive a number of common units of BCP QualTek (the “Common Units”) equal to the number of shares of Class A Common Stock issued and outstanding (i.e., 21,571 thousand QualTek Units), less the number of Common Units received in connection with the contribution described immediately below (i.e., 16,160 thousand QualTek Units);
with respect to the portion of merger consideration under the Business Combination Agreement at the Closing to which the Blocker Owners and holders of QualTek Units were entitled as described above, the cumulative value of merger consideration to which they are together entitled equals the Equity Value. The “Equity Value” is the sum of (i) $294,319 thousand, plus (ii) the value of any Equity Interests of the Company issued as consideration for any acquisitions by the Company prior to the Closing (i.e., $10,000 thousand), plus (iii) the amount of interest accrued on that certain convertible promissory note (see Note 8 Debt and Capital Lease Obligations) in an aggregate principal amount of $30,558 thousand issued by the Company to BCP QualTek II in exchange for all of BCP QualTek II’s Class B Units. No portion of the merger consideration was paid in cash. The foregoing represents the total consideration to be paid to the Blocker Owners and holders of QualTek Units in connection with the Business Combination; and
the Company contributed, as a capital contribution in exchange for a portion of the QualTek Units it acquired in the QualTek Merger (i.e., 16,160 thousand QualTek Units), $161,604 thousand, representing the amount of cash available after payment of the merger consideration under the Business Combination Agreement, which will be used by QualTek or its Subsidiaries to pay the transaction expenses under the Business Combination Agreement.

On February 14, 2022, in connection with the closingClosing of the Business Combination, Merger Subs (a newly-formed, wholly-owned, direct subsidiary of ROCR formed solely for purpose of the Merger) will be merged with and into QualTek (the “QualTek Merger”), with QualTek continuing as the surviving company under the Companies Act following the QualTek Merger, as a wholly-owned subsidiary of ROCR and the separate corporate existence of Merger Subs shall cease. Upon completion of the Business Combination, QualTek will be the successor registrant with the SEC, meaning that QualTek’s financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed with the SEC.Company:

While the legal acquirer in the Business Combination Agreement is ROCR, for financial accounting and reporting purposes under GAAP, QualTek will be the accounting acquirer and the Business Combination will be accounted for as a “reverse recapitalization.” A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the financial statements of QualTek in many respects. Under this method of accounting, ROCR will be treated as the “acquired” company for financial reporting purposes. For accounting purposes, QualTek will be deemed to be the accounting acquirer in the transaction and, consequently, the transaction will be treated as a recapitalization of QualTek (i.e., a capital transaction involving the issuance of stock by ROCR for the stock of QualTek). Accordingly, the consolidated assets, liabilities and results of operations of QualTek will become the historical financial statements of the Combined Company, and ROCR’s assets, liabilities and results of operations will be consolidated with QualTek’s beginning on the acquisition date. Operations prior to the Business Combination will be presented as those of QualTek in future reports. The net assets of ROCR will be recognized at historical cost (which is expected to be consistent with carrying value), with no goodwill or other intangible assets recorded.

entered into an indenture (the “Indenture”) with Wilmington Trust, National Association, as trustee, and certain guarantors party thereto, including, among others, certain subsidiaries of the Company, in respect of $124,685 thousand in aggregate principal amount of senior unsecured convertible notes due 2027 (“Convertible Notes”, see Note 8 Debt and Capital Lease Obligation) that were issued to certain investors (collectively, the “Convertible Note Investors”). The Convertible Notes were purchased by the Convertible Note Investors pursuant to certain convertible note subscription agreements, dated as of February 14, 2022, between the Company and each of the Convertible Note Investors (collectively, the “Convertible Note Subscription Agreements”);

5278

received $35,915 thousand in aggregate consideration from Private Investment in Public Equity (“PIPE”) Subscribers Investors in exchange for 3,989 thousand shares of Class A common stock, pursuant to PIPE Subscription Agreements (“PIPE Financing”);
received $1,033 thousand from ROCR at closing, comprised of $1,004 thousand from the trust account for 100 thousand shares that were not redeemed by the public shareholders and $29 thousand of cash from ROCR’s closing balance sheet
issued 2,275 thousand shares of Class A Common Stock (“Blocker Owner Earnout Shares”) and 3,836 thousand shares of Class B Common Stock (“Earnout Voting Shares”) (collectively, the “Earnout Shares”) that are subject to certain restriction on transfer and voting and potential forfeiture pending the achievement of the earnout targets (see within Note 1 Nature of Business and Summary of Significant Accounting Policies);
converted Convertible notes June 2021 (see Note 8 Debt and Capital Lease Obligations) into 2,875 thousand shares of Class A common stock and 4,063 thousand shares of Class B common stock;
assumed 2,875 thousand Public Warrants and 102 thousand Private Placement Warrants sold by ROCR as part of its initial public offering;
fully repaid $34,718 thousand of acquisition debt (see Note 8 Debt and Capital Lease Obligations) plus accrued interest with the proceeds from the transaction;
paid down $73,000 thousand of debt associated with the line of credit (see Note 8 Debt and Capital Lease Obligations);
paid down $500 thousand of ROCR’s promissory note; and
the Company, QualTek HoldCo, the TRA Holders and the TRA Holder Representative entered into the TRA. Under the terms of the TRA, the Company will be required to pay the TRA Holders 85% of the amount of savings, if any, that the Company is deemed to realize in certain circumstances as a result of certain tax attributes that exist following the Business Combination and that are created thereafter, including as a result of payments made under the TRA. Refer to Note 13-Tax Receivable Agreement regarding the disclosures of the impact of the TRA as of the Closing Date and as of April 2, 2022.

Upon consummationThe Business Combination is accounted for as a reverse recapitalization in accordance with GAAP with QualTek HoldCo treated as the accounting acquirer. Accordingly, our condensed consolidated financial statements represent a continuation of the financial statements of QualTek HoldCo with net assets of the Company stated at historical cost. Following the closing of the Business Combination, the combined company is organized in an “Up-C” structure in which the Company becomes the sole managing member of QualTek HoldCo and the closingtherefore, operates and controls all of the Private Placement,business and affairs of QualTek HoldCo. Accordingly, QualTek Services Inc. consolidates the most significant change in QualTek’s future reported financial position and results of operations is expected to be an estimated increaseQualTek HoldCo, and reports a noncontrolling interest in cash (as compared to QualTek’s balance sheet as of October 2, 2021) of approximately $143.6 million, assuming maximum stockholder redemptions of 11,500,000 ofits condensed consolidated financial statements representing the Public Shares, or $258.6 million, assuming minimum stockholder redemptions, including up to $4.1 millioneconomic interest in gross proceeds from the Private PlacementQualTek HoldCo owned by the Initial Stockholders. Total direct and incremental transaction costsmembers, other than the Blocker, of ROCR and QualTek are estimated at approximately $10.2 million.HoldCo referred to as the “Flow-Through Sellers.” As of July 2, 2022, the Company owned an economic interest of 45% in QualTek HoldCo. The remaining 55% economic interest is owned by the Flow-Through Sellers.

As a consequence of the Business Combination, QualTek will becomewe became the successor to an SEC-registered and Nasdaq-listed company which will require QualTekrequired us to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. QualTek expectsWe expect to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit and legal fees.

Key Financial and Operating Measures

We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. We believe that these financial performance metrics represent the primary drivers of value enhancement, balancing both short- and long-term indicators of increased shareholder value. These are the metrics we use to measure our results and evaluate our business. See “— Results of Operations” for further detail.

    

For the Nine Months Ended

(in thousands)

    

October 2, 2021

    

October 3, 2020

Revenue

$

465,184

$

524,080

Net loss

$

(28,555)

$

(39,624)

Adjusted EBITDA(1)

$

55,991

$

26,627

79

2022 Interim Period and 2021 Interim Period

    

For the Three Months Ended

    

For the Six Months Ended

(in thousands)

July 2, 2022

July 3, 2021

July 2, 2022

July 3, 2021

Revenue

$

184,222

$

130,609

$

332,383

$

249,722

Net loss from continuing operations

$

(25,649)

$

(20,090)

$

(66,196)

$

(39,907)

Adjusted EBITDA continuing operations

$

10,154

$

7,623

$

14,185

$

11,386

Adjusted EBITDA discontinued operations

$

$

(1,212)

$

$

(2,075)

Total Adjusted EBITDA(1)

$

10,154

$

6,411

$

14,185

$

9,311

(1)For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of its use and a reconciliation of EBITDA and Adjusted EBITDA to net loss, see “—“— Non-GAAP Financial Measures”Measures below.

2021 Successor Period and 2020 Successor Period

    

For the Year Ended

(in thousands)

December 31, 2021

December 31, 2020

Revenue

$

612,241

$

656,524

Net loss

$

(110,426)

$

(98,087)

Adjusted EBITDA(1)

$

60,035

$

13,139

(1)

For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of its use and a reconciliation of EBITDA and Adjusted EBITDA to net loss, see “— Non-GAAP Financial Measures” below.

Non-GAAP Financial Measures

ToIn order to provide investors with additional information regarding our financial results, we have disclosed in the table above Adjusted EBITDA, which is a non-GAAP financial measure that we calculate as our net loss before interest, taxes, depreciation and amortization, management fees, transaction expenses, andintegration expenses, change in fair value of contingent consideration, impairment of goodwill, loss on legal settlement, loss on extinguishment of convertible notes.notes, public company readiness cost and certain legacy project close out costs. The reconciliation of net loss to Adjusted EBITDA is provided below.

We present Adjusted EBITDA as this metric is a key measure used by our management to assess the operating and financial performance of our operations in order to make decisions on the allocation of resources. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are as follows:

although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) the potentially dilutive impact of non-cash stock-based compensation; (3) tax payments that may represent a reduction in cash available to us; or (4) net interest expense/income; and
other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.

53

Because of these and other limitations, you should consider Adjusted EBITDA along with other GAAP-based financial performance measures, including net loss, cash flow metrics and our GAAP financial results.

The following table provides a reconciliation of net loss from operations to non-GAAP Adjusted EBITDA:

For the Nine Months Ended

(in thousands)

    

October 2, 2021

    

October 3, 2020

Net loss

$

(28,555)

$

(39,624)

Management fees

 

751

 

391

Transaction expenses

 

2,875

 

567

Change in fair value of contingent consideration

 

(4,544)

 

Depreciation and amortization

 

39,136

 

34,761

Interest expense

 

35,778

 

28,824

Loss on extinguishment of convertible notes

 

2,436

 

Loss from discontinued operations

 

8,114

 

1,708

Adjusted EBITDA

$

55,991

$

26,627

80

2022 Interim Period and 2021 Interim Period

    

For the Three Months Ended

    

For the Six Months Ended

(in thousands)

July 2. 2022

July 3, 2021

July 2. 2022

July 3, 2021

Net loss continuing operations

$

(25,649)

$

(20,090)

$

(66,196)

$

(39,907)

Net loss discontinued operations

$

$

(1,740)

$

$

(3,129)

Net loss

$

(25,649)

$

(21,830)

$

(66,196)

$

(43,036)

Management fees

124

126

622

Transaction expenses

1,320

903

10,588

1,452

Share-based compensation

1,114

7,825

Depreciation and amortization

14,794

13,023

29,560

25,645

Interest expense

13,085

11,227

25,428

21,138

Loss on extinguishment of convertible notes

2,436

2,436

Integration, public company readiness, and close out costs

5,490

6,854

Loss from discontinued operations

1,740

3,129

Adjusted EBITDA continuing operations

$

10,154

$

7,623

$

14,185

$

11,386

Adjusted EBITDA discontinued operations

$

$

1,212

$

$

2,075

Total Adjusted EBITDA

$

10,154

$

6,411

$

14,185

$

9,311

2021 Successor Period and 2020 Successor Period

    

For the Years Ended

(in thousands)

    

December 31, 2021

    

December 31, 2020

Net loss

$

(110,426)

$

(98,087)

Management fees

 

889

 

518

Transaction expenses

 

3,826

 

988

Loss on legal settlement

 

2,600

 

Change in fair value of contingent consideration

 

(4,780)

 

(7,081)

Impairment of goodwill

 

52,487

 

28,802

Depreciation and amortization

 

53,675

 

46,475

Interest expense

 

50,477

 

37,659

Loss on extinguishment of convertible notes

 

2,436

 

Loss from discontinued operations

 

8,851

 

3,865

Adjusted EBITDA

$

60,035

$

13,139

Factors Impacting Our Performance

QualTek’sOur historical financial performance and future financial performance depends on several factors that present significant opportunities but also pose risks and challenges, including those discussed below and in the section “— Risk FactorsFactors. found elsewhere in this prospectus.

Acquisitions

As part of our growth strategy, we may acquire companies that expand, complement, or diversify our business. We regularly review opportunities and periodically engage in discussions regarding possible acquisitions.

The Company completed the acquisitions listed belowof Concurrent, Broken Arrow, FNS, and Urban Cable during the first three quarters of 2021 and fiscal year 2019.2021. These acquisitions have all been accounted for in accordance with FASB ASC Topic 805, Business Combinations, and the operations of the acquired entities are included in our historical results for the periods following the closing of the acquisition. See Note 3:4: Acquisitions in the auditedunaudited condensed consolidated financial statements included elsewhere in this prospectus. The most significant of these acquisitions impacting the comparability of our operating results were:filing.

Concurrent Acquisition.On August 30, 2021, pursuant to the Unit Purchase Agreement, the Company purchased 100% of the membership interests of Concurrent Group LLC ("Concurrent"). The overall consideration transferred was $13.8 million of cash, rollover equity valued at $6.0 million, acquisition debt of $14.1 million, and contingent consideration with a provisional acquisition date fair value of $10.2 million.
Broken Arrow Acquisition.On August 6, 2021, pursuant to the Asset Purchase Agreement, the Company acquired certain assets and liabilities from Broken Arrow Communications, Inc. (“Broken Arrow”), a New Mexico based company that provides a wide variety of services for the installation, construction, and maintenance of wireless communication facilities. The overall consideration transferred was $5.0 million of cash and contingent consideration with a provisional acquisition date fair value of $5.7 million.
Fiber Network Solutions Acquisition. On January 26, 2021, pursuant to the Unit Purchase Agreement, the Company purchased 100% of the membership interests of Fiber Network Solutions, LLC (“FNS”). The overall consideration transferred was $20.1 million of cash, rollover equity valued at $2.0 million, and contingent consideration with an acquisition date fair value of $8.2 million.
Vertical Limit Acquisition.   On March 29, 2019, pursuant to the Asset Purchase Agreement between Vertical Limit Construction, LLC (Vertical Limit Seller) and the Company, the Company acquired certain assets and liabilities from the Vertical Limit Seller. The overall consideration transferred was $16.3 million of cash.

5481

Vinculums Acquisition.   On October 4, 2019, pursuant to the Asset Purchase Agreement between Vinculums Services, LLC (the Vinculums Seller) and the Company, the Company acquired certain assets and liabilities from the Vinculums Seller. The overall consideration transferred was $43.6 million of cash and rollover equity valued at $12.5 million.
Aerial Acquisition.   On October 18, 2019, Pursuant to the Asset Purchase Agreement between Aerial Wireless Services, LLC (the Aerial Seller) and the Company, the Company acquired certain assets and liabilities from the Aerial Seller. The overall consideration transferred was $16.5 million of cash, $1.5 million of timing payments and rollover equity valued at $1.0 million.

Seasonality and Cyclical Nature of Business

Some services provided by the Company are seasonal and vary from market to market in different geographic areas. As a majority of our work is performed in an outdoor environment, adverse weather such as heavy snow or rain or extreme low temperature could affect our performance. For instance, in the second quarter of 2021, we experienced delays in certain Renewables and Recovery Logistics projects in Texas because of heavy rains, which delayed or reduced our anticipated revenue or profits from these projects. Conversely, demand for some services within the Company’s Renewables and& Recovery Logistics segment are dependent upon the occurrence of adverse weather events in the summer and fall seasons.events.

The telecommunication industry has been and likely will continue to be highly cyclical. Fluctuations in demand can be caused by many factors such as new technology adoption, need for higher bandwidth, and change in spending environments. We generally expect growth in our industry given the national roll out of 5G network and home adoption of fiber optic internet. However, the demand can be subject to volatility from factors such as our customers’ access to capital and changes in regional and global economic conditions. For instance, in 2021, we have also experienced delays in certain 5G rollout projects, including equipment delays, which is expected to delaydelayed or reducereduced our anticipated revenue or profits from these projects. The effects of the COVID-19 pandemic could also result in greater seasonal and cyclical volatility than would otherwise exist under normal conditions. Since adverse weather events are more likely to occur in higher frequency and greater severity during winter, our first and fourth quarter results might be impacted by conditions that are out of our control.

Regulations

We are subject to many complex, overlapping local, state and federal laws, rules, regulations, policies and legal interpretations (collectively, “laws and regulations”) in the markets in which we operate. These laws and regulations govern, among other things, consumer protection, state and municipal licensing, privacy and data protection, labor and employment, competition, and marketing and communications practices, to name a few. These laws and regulations will likely have evolving interpretations and applications, and it can often be difficult to predict how such laws and regulations may be applied to our business.

COVID-19 Impact

During the COVID-19 pandemic, our services have mostly been considered essential in nature. As the situation continues to evolve, we are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, in addition to how the COVID-19 pandemic impacts our ability to provide services to our customers. As the COVID-19 pandemic is expected to continue to affect our future business activities for an unknown period of time, we believe there could be impacts to our financial performance. These impacts include lost productivity from governmental permitting approval delays, reduced crew productivity due to social distancing, other mitigation measures or other factors, the health and availability of work crews or other key personnel, including subcontractors or supply chain disruptions, and/or delayed project start dates or project shutdowns or cancellations that may be mandated or requested by governmental authorities or others, all of which could result in lower revenue or higher costs. Additionally, disruptions in economic activity as a result of the COVID-19 pandemic have had, and may continue to have, adverse effects across our end markets. To the extent that future business activities are adversely affected by the pandemic, we intend to take appropriate actions designed to mitigate these impacts. Given the uncertainty regarding the magnitude and duration of the pandemic’s effects, we are unable to predict with specificity or quantify any potential future impact on our business, financial condition and/or results of operations.

55

Components of Our Results of Operations

Revenue

We generate revenue from engineering, construction, installation, network design, project management, site acquisition, maintenance services, business continuity, disaster recovery operations, and fiber optic construction services in the United States.

Cost of Revenues

Cost of revenues primarily consists of labor, materials, equipment and overhead costs incurred in the services sold in the period as well as insurance costs. Labor and overhead costs consist of direct and indirect service costs, including wages and fringe benefits, and operating expenses. We expect our cost of revenues to continue to change proportionally and remain relatively flat as a percentage of revenue as we scale our business.

82

General and Administrative Expenses

General and administrative expenses consist primarily of payroll and related benefit costs for our employees involved in general corporate functions as well as costs associated with the use by these functions of facilities and equipment, such as rent, insurance, and other occupancy expenses. General and administrative expenses also include legal, consulting and professional fees. We expect general and administrative expenses will be impacted by the increased costs associated with being a publicly traded company.

Depreciation and Amortization Expenses

Depreciation and amortization expenses primarily consist of depreciation on assets under capital lease, machinery, equipment, vehicles, office furniture, computers, leasehold improvements, software, and amortization of intangible assets. We expect depreciation and amortization expenses to increase for the foreseeable future as we scale our business.

Other Expense, Net

Other expense, net, consists primarily of interest expense, loss on extinguishment of convertible notes, and gain/loss on the sale/ disposal of property and equipment.

Results of Operations

2022 Interim Period and 2021 Interim Period

Comparison of the Three Months Ended July 2, 2022 and July 3, 2021

The following table sets forth our condensed consolidated results of operations for the periods presented:

    

For the Three Months Ended

 

    

July 2,

    

July 3,

    

($)

    

(%)

 

(in thousands)

    

2022

    

2021

    

Change

    

Change

 

Revenue

$

184,222

$

130,609

$

53,613

 

41.0

%

Costs and Expenses: Cost of revenues

 

164,180

 

111,828

 

52,352

 

46.8

%

General and administrative (including $1,114 of share-based compensation)

 

16,637

 

11,396

 

5,241

 

46.0

%

Transaction expense

 

1,320

 

903

 

417

 

46.2

%

Depreciation and amortization

 

14,794

 

13,023

 

1,771

 

13.6

%

Total costs and expenses

 

196,931

 

137,150

 

59,781

 

43.6

%

Loss from operations

 

(12,709)

 

(6,541)

 

(6,168)

 

94.3

%

Other income (expense):

 

 

 

 

Gain on sale/disposal of property and equipment

 

145

 

114

 

31

 

27.2

%

Interest expense

 

(13,085)

 

(11,227)

 

(1,858)

 

16.5

%

Loss on extinguishment of convertible notes

(2,436)

2,436

(100.0)

%

Total other expense

 

(12,940)

 

(13,549)

 

609

 

(4.5)

%

Net loss from continuing operations

 

(25,649)

 

(20,090)

 

(5,559)

 

27.7

%

Net loss from discontinued operations

 

 

(1,740)

 

1,740

 

(100.0)

%

Net loss

$

(25,649)

$

(21,830)

$

(3,819)

 

17.5

%

Comparison of the Three Months Ended July 2, 2022 and July 3, 2021

Revenue

Revenue increased $53.6 million, or 41.0%, for the three months ended July 2, 2022, compared to the three months ended July 3, 2021, driven by a $57.2 million increase in Telecom revenues primarily due to new customer programs and growth in 5G and C-Band deployment.

Cost of Revenues

Cost of revenues increased by $52.4 million, or 46.8%, for the three months ended July 2, 2022, compared to the three months ended July 3, 2021 due to increased revenues and higher labor, fuel, and material costs.

5683

ResultsGeneral and Administrative

General and administrative expenses increased by $5.2 million for the three months ended July 2, 2022, compared to the similar period in 2021. The increase was primarily related to increased salary and compensation costs, share-based compensation related to the Company’s Long-Term Incentive Plan (“LTIP”) and incremental costs required of Operationsbeing a public company.

Transaction Expenses

Transaction expenses increased by $0.4 million for the three months ended July 2, 2022, compared to the three months ended July 3, 2021 due to the closing of the Business Combination on February 14, 2022.

Depreciation and Amortization

Depreciation and amortization expenses increased by $1.8 million, or 13.6%, for the three months ended July 2, 2022, compared to the three months ended July 3, 2021. The increase was driven by the depreciation and amortization related to the 2021 acquisitions.

Gain on sale/disposal of property and equipment

There was no material change to the gain on sale/disposal of property and equipment for the three months ended July 2, 2022.

Interest Expense, Net

Interest expense increased by $1.9 million, or 16.5%, for the three months ended July 2, 2022, compared to the three months ended July 3, 2021. This was due to the issuance of $124.6 million unsecured convertible notes in connection with the Business Combination as well as interest paid on acquisition debt.

Comparison of the NineSix Months Ended OctoberJuly 2, 2022 and July 3, 2021

The following table sets forth our condensed consolidated results of operations for the periods presented:

For the Six Months Ended

 

(in thousands)

    

July 2, 2022

    

July 3, 2021

    

($) Change

    

(%) Change

Revenue

$

332,383

$

249,722

$

82,661

33.1

%

Costs and Expenses:

Cost of revenues

296,285

215,339

80,946

37.6

%

General and administrative (including $7,825 of share-based compensation)

38,778

23,923

14,855

62.1

%

Transaction expense

10,588

1,452

9,136

629.2

%

Depreciation and amortization

29,560

25,645

3,915

15.3

%

Total costs and expenses

375,211

266,359

108,852

40.9

%

Loss from operations

(42,828)

(16,637)

(26,191)

157.4

%

Other income (expense):

Gain on sale/disposal of property and equipment

2,060

304

1,756

577.6

%

Interest expense

(25,428)

(21,138)

(4,290)

20.3

%

Loss on extinguishment of convertible notes

(2,436)

2,436

(100.0)

%

Total other expense

(23,368)

(23,270)

(98)

0.4

%

Net loss from continuing operations

(66,196)

(39,907)

(26,289)

65.9

%

Net loss from discontinued operations

(3,129)

3,129

(100.0)

%

Net loss

$

(66,196)

$

(43,036)

$

(23,160)

53.8

%

84

Comparison of the Six Months Ended July 2, 2022 and July 3, 2021

Revenue

Revenue increased $82.7 million, or 33.1%, for the six months ended July 2, 2022, compared to the six months ended July 3, 2021, driven by a $83.4 million increase in Telecom revenues primarily due to new customer programs and growth in 5G and C-Band deployment.

Cost of Revenues

Cost of revenues increased by $80.9 million, or 37.6%, for the six months ended July 2, 2022, compared to the six months ended July 3, 2021, due to increased revenues and higher labor and material costs.

General and Administrative

General and administrative expenses increased by $14.9 million for the six months ended July 2, 2022, compared to the six months ended July 3, 2021. The increase was primarily related to share-based compensation triggered by the close of the Business Combination and the Company’s LTIP, increased salary and compensation costs, and incremental costs required of being a public company.

Transaction Expenses

Transaction expenses increased by $9.1 million for the six months ended July 2, 2022, compared to the six months ended July 3, 2021 due to the closing of the Business Combination on February 14, 2022.

Depreciation and Amortization

Depreciation and amortization expenses increased by $3.9 million, or 15.3%, for the six months ended July 2, 2022, compared to the six months ended July 3, 2021. The increase was driven by the depreciation and amortization related to the 2021 acquisitions.

Gain on sale/disposal of property and equipment

Gain on sale/disposal of property and equipment increased by $1.8 million for the six months ended July 2, 2022, primarily due to the remarketing of vehicles during the first quarter of 2022.

Interest Expense, Net

Interest expense increased by $4.3 million, or 20.3%, for the six months ended July 2, 2022, compared to the six months ended July 3, 2021. This was due to the issuance of $124.6 million unsecured convertible notes in connection with the Business Combination as well as interest paid on acquisition debt.

85

Review of Operating Segments

Comparison of the Three Months Ended July 2, 2022, and the Three Months Ended July 3, 2021

    

For the Three Months Ended

 

(in thousands)

    

July 2, 2022

    

July 3, 2021

    

($) Change

    

(%) Change

 

Revenue:

 

  

 

  

 

  

 

  

Telecom

$

175,173

$

117,959

$

57,214

 

48.5

%

Renewables & Recovery Logistics

 

9,049

 

12,650

 

(3,601)

 

(28.5)

%

Total revenue

$

184,222

$

130,609

$

53,613

 

41.0

%

Adjusted EBITDA:

 

 

 

 

Telecom

$

17,031

$

11,202

$

5,829

 

52.0

%

Renewables & Recovery Logistics

 

(601)

 

1,141

 

(1,742)

 

(152.7)

%

Corporate

 

(6,276)

 

(4,720)

 

(1,556)

 

33.0

%

Total Adjusted EBITDA continuing operations

$

10,154

$

7,623

$

2,531

 

33.2

%

Total Adjusted EBITDA discontinuing operations

(1,212)

1,212

(100.0)

%

Total Adjusted EBITDA

$

10,154

$

6,411

$

3,743

58.4

%

Telecom

Revenue

Revenue increased by $57.2 million, or 48.5%, for the three months ended July 2, 2022, compared to the three months ended July 3, 2021. The increase was primarily due to increased 5G and C-Band deployment.

Adjusted EBITDA Continuing Operations

Telecom Adjusted EBITDA increased by $5.8 million, or 52.0%, for the three months ended July 2, 2022, compared to the three months ended July 3, 2021. The increase in Telecom Adjusted EBITDA was primarily due to increased revenues and offset by higher labor, fuel, and material costs from sustained levels of inflation.

Renewables and Recovery Logistics

Revenue

Revenue decreased by $3.6 million, or 28.5%, for the three months ended July 2, 2022, compared to the three months ended July 3,2021. The decrease was primarily driven by a lower volume of Renewables projects.

Adjusted EBITDA Continuing Operations

Renewables & Recovery Logistics Adjusted EBITDA decreased by $1.7 million, or 152.7%, for the three months ended July 2, 2022, compared to the three months ended July 3, 2021. The decrease was primarily driven by a decrease in revenues and a decrease in volume of Renewables projects in the three months ended July 2, 2022.

86

Comparison of the Six Months Ended July 2, 2022, and the Six Months Ended July 3, 2021

For the Six Months Ended

(in thousands)

    

July 2, 2022

    

July 3, 2021

    

($) Change

    

(%) Change

Revenue:

Telecom

$

307,837

$

224,439

$

83,398

37.2

%

Renewables & Recovery Logistics

24,546

25,283

(737)

(2.9)

%

Total revenue

$

332,383

$

249,722

$

82,661

33.1

%

Adjusted EBITDA:

Telecom

$

21,843

$

16,016

$

5,827

36.4

%

Renewables & Recovery Logistics

4,708

4,019

689

17.1

%

Corporate

(12,366)

(8,649)

(3,717)

43.0

%

Total Adjusted EBITDA continuing operations

$

14,185

$

11,386

$

2,799

24.6

%

Total Adjusted EBITDA discontinuing operations

(2,075)

2,075

(100.0)

%

Total Adjusted EBITDA

$

14,185

$

9,311

$

4,874

52.3

%

Telecom

Revenue

Revenue increased by $83.4 million, or 37.2%, for the six months ended July 2, 2022, compared to the six months ended July 3, 2021. The growth was primarily due to increased 5G and C-Band deployment.

Adjusted EBITDA Continuing Operations

Telecom Adjusted EBITDA increased by $5.8 million, or 36.4%, for the six months ended July 2, 2022, compared to the six months ended July 3, 2021. The increase in Telecom Adjusted EBITDA was primarily due increased revenues from 5G and C-Band deployment offset by higher labor, fuel, and material costs.

Renewables and Recovery Logistics

Revenue

Revenue decreased by $0.7 million, or 2.9%, for the six months ended July 2, 2022, compared to the six months ended July 3, 2021. The decrease was primarily driven by a lower volume of Renewables projects.

Adjusted EBITDA Continuing Operations

Renewables & Recovery Logistics Adjusted EBITDA increased by $0.7 million, or 17.1%, for the six months ended July 2, 2022, compared to the six months ended July 3, 2021. The increase was primarily driven by the mix of work and higher margins related to recovery events in the six months ended July 2, 2022.

We have historically financed our operations primarily through cash flows generated by operations and, as needed, with borrowings under our $103.5 million revolving credit facility with PNC Bank (“PNC Facility”), and Senior Secured Term Credit Guaranty Agreement with Citibank (“Term Loan”). Our uses of cash have been primarily to fund acquisitions, for the purchase of inventory, payroll, capital expenditures, and payment of our debt obligations and related interest expense. Our most significant contractual obligation for future uses of cash is our Term Loan and the senior unsecured convertible notes. As of July 2, 2022, $346.7 million was outstanding under our Term Loan and $124.7 million senior unsecured convertible notes were outstanding. On a quarterly basis, the Company is required to make principal payments of $2.4 million plus interest with all unpaid principal and interest due at maturity on July 17, 2025, on the Term Loan and quarterly interest payments commencing June 15, 2022 on the senior unsecured convertible notes with all unpaid principal due at maturity on February 15, 2027. On July 2, 2022, we had cash of $0.3 million and net working capital of $100.4 million, and on December 31, 2021, we had cash of $0.6 million and net working capital of $78.8 million. On July 2, 2022, our net working capital had increased by $21.6 million compared to December 31, 2021, mainly as a result of timing differences resulting in higher unbilled revenues, lower accrued amounts for annual year-end activities (insurance and compensation related items), lower accrued interest, as well as SPAC convertible debt of $3.4 million.

87

We believe that cash expected to be generated from operations and the availability of borrowings under the PNC Facility will be sufficient to fund our working capital requirements and to meet our commitments in the ordinary course of business for at least the next 12 months. For additional information on the Company’s future obligations see Note 8: Debt and Capital Lease Obligations in our unaudited condensed consolidated financial statements included elsewhere in this filing. As of July 2, 2022, we had cash of $25.4 million available under our PNC Facility.

The following table summarizes our cash flows for the periods presented:

    

For the Six Months Ended

(in thousands)

    

July 2, 2022

    

July 3, 2021

Net cash used in operating activities from continuing operations

$

(58,733)

$

(12,157)

Net cash used in investing activities from continuing operations

 

(62)

 

(21,208)

Net cash provided by financing activities from continuing operations

 

57,696

 

73,262

Effect of foreign currency exchange rate (translation) on cash

 

(310)

 

(13)

Net (decrease) increase in cash

$

(1,423)

$

37,628

Comparison of the Six Months Ended July 2, 2022, and the Six Months Ended July 3, 2021

Operating Activities

Cash used in the Company’s operating activities was $58.7 million for the six months ended July 2, 2022, compared to net cash used in operating activities of $12.2 million for the six months ended July 3, 2021. The primary driver of this cash used in operating activities is attributed to an increase in working capital associated with our Telecom segment period over period as well as accrued transaction expense, settled at the close of the SPAC transaction.

Investing Activities

Net cash used in the Company’s investing activities was $0.1 million for the six months ended July 2, 2022, compared with net cash used of $21.2 million for the six months ended July 3, 2021. The primary driver of the change is attributed to cash paid related to the FNS acquisition for the prior year’s quarter.

Financing Activities

Net cash provided by the Company’s financing activities decreased to $57.7 million for the six months ended July 2, 2022, compared to net cash provided by financing activities of $73.3 million for the six months ended July 3, 2021. The primary driver of the change in cash inflows is attributable to the increase in repayments to the line of credit, payments to settle the acquisition related debt, along with payments related to the equity issuance costs, offset by activity related to the Business Combination that resulted in $124.7 million of proceeds from the issuance of the Senior unsecured convertible notes and the issuance of common stock.

88

2021 Successor Period and 2020 Successor Period

Comparison of the Years Ended December 31, 2021 and October 3, 2020

The following table sets forth our consolidated results of operations for the periods presented:

    

For the Years Ended December 31,

    

For the Nine Months Ended

 

    

    

    

($)

    

(%)

(in thousands)

    

October 2, 2021

    

October 3, 2020

    

($) Change

    

(%) Change

 

2021

2020

Change

Change

Revenue

$

465,184

$

524,080

$

(58,896)

 

(11.2)

%

$

612,241

$

656,524

$

(44,283)

(6.7)

%

Costs and Expenses:

 

  

 

  

 

  

 

  

Cost of revenues

 

372,496

 

462,760

 

(90,264)

 

(19.5)

%

 

502,688

 

597,583

 

(94,895)

(15.9)

%

General and administrative

 

37,962

 

35,660

 

2,302

 

6.5

%

 

50,994

 

47,049

 

3,945

8.4

%

Transaction expense

 

2,875

 

567

 

2,308

 

407.1

%

Transaction expenses

 

3,826

 

988

 

2,838

287.2

%

Loss on legal settlement

 

2,600

 

 

2,600

100.0

%

Change in fair value of contingent consideration

 

(4,544)

 

 

(4,544)

 

(100)

%

 

(4,780)

 

(7,081)

 

2,301

(32.5)

%

Impairment of goodwill

 

52,487

 

28,802

 

23,685

82.2

%

Depreciation and amortization

 

39,136

 

34,761

 

4,375

 

12.6

%

 

53,675

 

46,475

 

7,200

15.5

%

Total costs and expenses

 

447,925

 

533,748

 

(85,823)

 

(16.1)

%

 

661,490

 

713,816

 

(52,326)

(7.3)

%

Income / (loss) from operations

 

17,259

 

(9,668)

 

26,927

 

278.5

%

Loss from operations

 

(49,249)

 

(57,292)

 

8,043

(14.0)

%

Other income (expense):

 

  

 

  

 

  

 

  

Gain on sales/disposal of property and equipment

 

514

 

576

 

(62)

 

(10.8)

%

Gain on sale/disposal of property and equipment

 

587

 

729

 

(142)

(19.5)

%

Interest expense

 

(35,778)

 

(28,824)

 

(6,954)

 

24.1

%

 

(50,477)

 

(37,659)

 

(12,818)

34.0

%

Loss on extinguishment of convertible notes

 

(2,436)

 

 

(2,436)

 

(100.0)

%

 

(2,436)

 

 

(2,436)

(100.0)

%

Total other expense

$

(37,700)

$

(28,248)

$

(9,452)

 

(33.5)

%

 

(52,326)

 

(36,930)

 

(15,396)

41.7

%

Net loss from continuing operations

 

(20,441)

 

(37,916)

 

17,475

 

46.1

%

Net loss from discontinued operations

 

(8,114)

 

(1,708)

 

(6,406)

 

(375)

%

Loss from continuing operations

 

(101,575)

 

(94,222)

 

(7,353)

7.8

%

Loss from discontinued operations

 

(8,851)

 

(3,865)

 

(4,986)

129.0

%

Net loss

$

(28,555)

$

(39,624)

$

11,069

 

27.9

%

$

(110,426)

$

(98,087)

$

12,339

12.6

%

Comparison of the Nine MonthsYears Ended October 2,December 31, 2021 and October 3, 2020

Revenue

Revenue decreased by $58.9$44.3 million, or 11.2%6.7%, for the nine monthsyear ended October 2,December 31, 2021 compared to the nine monthsyear ended October 3,December 31, 2020. The decrease was primarily driven by a $35.3$35.2 million decline in revenue attributable to the significant wind down and descoping of a large customer program and a $86.5 million decline in revenue due to the impact of the COVID-19 pandemic, delays of customers' spend due to timing of Spectrum auctions, which delayed build plans in 2021, and delays in 3rd party site acquisition providers meeting deadlines, which caused construction start date delays. These decreases were partially offset by the acquisitions of FNS, Concurrent, and Broken Arrow in 2021, which contributed $38.1 million in revenues. In addition, revenues for our legacy portion of our Renewables and Recovery Logistics segment increased by approx. $24.8 million period over period.

Cost of Revenues

Cost of revenues decreased by $90.3 million, or 19.5%, for the nine months ended October 2, 2021 compared to the nine months ended October 3, 2020. The decrease is primarily attributable to the decrease in revenue, noted above, period over period related to the significant wind down of a large customer program, the impact of the COVID-19 pandemic, delays of customers' spend due to timing of Spectrum auctions which delayed build plans in 2021, and delays in 3rd party site acquisition providers meeting deadlines, which caused construction start date delays resulting in a decrease in cost of revenues of $113.8 million. In addition, the Company recognized approximately $10.4 million in overall cost cutting measures, mainly related to travel and vehicle rentals period over period. These decreases were partially offset by the acquisitions of FNS, Concurrent, and Broken Arrow in 2021 which contributed $24.0 million in cost of revenues. In addition, cost of revenues our legacy portion of our Renewables and Recovery Logistics segment increased by approximately $9.9 million period over period due to the revenue growth noted above.

General and Administrative

General and administrative expenses increased by $2.3 million, or 6.5%, for the nine months ended October 2, 2021 compared to the nine months ended October 3, 2020. This increase was primarily attributable to the acquisitions of FNS, Concurrent and Broken Arrow in 2021, which resulted in general and administrative costs of $2.3 million.

57

Transaction Expenses

Transaction expenses increased by $2.3 million, or 407.1%, for the nine months ended October 2, 2021, compared to the nine months ended October 3, 2020. The driver for the increase is primarily due to transaction fees related to the Business Combination and the FNS, Concurrent, and Broken Arrow acquisitions in 2021 with no acquisitions occurring in the same period in 2020.

Change in fair value of contingent consideration

Change in fair value of contingent consideration decreased by $4.5 million, or 100%, for the nine months ended October 2, 2021 compared to the nine months ended October 3, 2020. The decrease was primarily attributable to the decrease in the value of the contingent earnout liabilities related to the year ending 2021 EBITDA earnout for the FNS acquisition in September 2021. There was no change to earnout values in the period ended October 3, 2020.

Depreciation and Amortization

Depreciation and amortization expenses increased by $4.4 million, or 12.6%, for the nine months ended October 2, 2021 compared to the nine months ended October 3, 2020. The increase was primarily attributable to higher depreciation and amortization expense related to assets acquired as part of the FNS, Concurrent and Broken Arrow acquisitions in 2021 as well as the strategic purchase of base camp equipment in our Renewables and Recovery Logistics segment in the second half of 2020 resulting in additional depreciation expense.

Interest Expense, Net

Interest expense increased by $7 million, or 24.1%, for the nine months ended October 2, 2021 compared to the nine months ended October 3, 2020. The increase was primarily driven by interest expense related to the subordinated convertible notes issued in January 2021 to fund the FNS acquisition and the subordinated convertible notes issued in June 2021, in conjunction with the Business Combination, as compared to the nine months ended October 3, 2020.

Loss on Extinguishment of Convertible Notes

Loss on extinguishment of convertible notes increased by $2.4 million, or 100.0%, for the nine months ended October 2, 2021 compared to the nine months ended October 3, 2020. The increase was driven by the extinguishment of convertible notes which occurred during the nine months ended October 2, 2021 with no such extinguishment occurring in the prior period.

58

Comparison of Years Ended December 31, 2020 and 2019

The following table sets forth our consolidated results of operations for the years presented:

For the Years Ended December 31,

 

(in thousands)

    

2020

    

2019

    

($) Change

    

(%) Change

 

Revenue

$

656,524

$

599,268

 

57,256

 

9.6

%

Costs and Expenses:

 

  

 

  

 

  

 

  

Cost of revenues

 

597,583

 

525,403

 

72,180

 

13.7

%

General and administrative

 

47,049

 

42,665

 

4,384

 

10.3

%

Transaction expense

 

988

 

4,257

 

(3,269)

 

(76.8)

%

Change in fair value of contingent consideration

 

(7,081)

 

6,149

 

(13,230)

 

(215.2)

%

Impairment of long-lived assets

 

 

840

 

(840)

 

(100.0)

%

Impairment of goodwill

 

28,802

 

8,132

 

20,670

 

254.2

%

Depreciation and amortization

 

46,475

 

40,103

 

6,372

 

15.9

%

Total costs and expenses

 

713,816

 

627,549

 

86,267

 

13.7

%

Loss from operations

 

(57,292)

 

(28,281)

 

(29,011)

 

(102.6)

%

Other income (expense):

 

  

 

  

 

  

 

  

Gain on sales/disposal of property and equipment

 

729

 

129

 

600

 

465.1

%

Interest expense

 

(37,659)

 

(33,380)

 

(4,279)

 

12.8

%

Total other expense

 

(36,930)

 

(33,251)

 

(3,679)

 

11.1

%

Net loss from continuing operations

$

(94,222)

$

(61,532)

$

(32,690)

 

(53.1)

%

Net loss from discontinued operations

$

(3,865)

$

(6,262)

$

2,397

 

38.3

%

Net loss

$

(98,087)

$

(67,794)

$

(30,293)

 

44.7

%

Comparison of Years Ended December 31, 2020 and 2019

Revenue

Revenue increased by $57.3 million, or 9.6%, for the year ended December 31, 2020 compared to the same period in 2019. The increase was driven by a full year of revenue recognized in 2020 related to our 2019 acquisitions of $108.4 million, partially offset by a decrease of organic revenue of $51.1 million related to COVID-19 delays, the delay of customers’ spend due to timing of Spectrum auctions, and the descoping of work from a large customer contract.

Cost of Revenues

Cost of revenues increased by $72.2 million, or 13.7%, for the year ended December 31, 2020, compared to the same period in 2019. Cost of revenues as a percentage of revenue increased from 87.7% of revenue in 2019 to 91.0% of revenue in 2020. Of the $72.2 million increase in cost of revenues, $46.7 million is attributable to higher revenue in 2020. The remaining increase is attributable to a loss on an onerous contract in our Telecom segment, increased costs caused by the COVID-19 pandemic related to permit delays, crew-level COVID-19 mitigations costs, government restrictions, and other inefficiencies.

General and Administrative

General and administrative expenses increased by $4.4 million, or 10.3%, for the year ended December 31, 2020, compared to the same period in 2019. This was largely due to a full year of general and administrative expenses for our 2019 acquisitions, higher bonus expense in our Renewables & Recovery Logistics segment, and exit activities related to our prior corporate office.

Transaction Expenses

Transaction expenses decreased by $3.3 million, or 76.8%, for the year ended December 31, 2020, compared to the same period in 2019. This decrease is due to the fact that we closed three acquisitions in 2019 and no acquisitions closed in 2020.

59

Change in Fair Value of Contingent Consideration

Change in fair value of contingent consideration decreased by $13.2 million, or 215.2%, for the year ended December 31, 2020, compared to the same period in 2019 and is attributed to a decrease in the value of the contingent earnout liabilities related to acquisitions as compared to the original value of contingent consideration at acquisition date.

Impairment of Long-lived Assets

Impairment of long-lived assets decreased by $0.8 million, or 100.0%, for the year ended December 31, 2020, compared to the same period in 2019. This change was due to an impairment of $0.8 million recorded in 2019 related to long-lived assets in the Telecom segment, and no such charge was recorded in 2020.

Impairment of Goodwill

Impairment of goodwill increased by $20.7 million, or 254.2%, for the year ended December 31, 2020, compared to the same period in 2019. This was due to an additional decrease to the projected future discounted cash flows for the Telecom segment, which resulted in a carrying value of goodwill in excess of the estimated fair value.

Depreciation and Amortization

Depreciation and amortization expenses increased by $6.4 million, or 15.9%, for the year ended December 31, 2020, compared to the same period in 2019. The increase was driven by a full year of depreciation and amortization recorded for the assets acquired in the 2019 acquisitions in our Telecom segment, as well as the strategic purchase of base camp equipment in our Renewables and Recovery Logistics segment in 2020 resulting in additional depreciation expense.

Interest Expense, Net

Interest expense increased by $4.3 million, or 12.8%, for the year ended December 31, 2020, compared to the same period in 2019. This was due to an increase in the Company’s Term Loan debt drawn in the fourth quarter of 2019 in order to finance the Vinculums and Aerial acquisitions.

Review of Operating Segments

Comparison of the Nine Months Ended October 2, 2021 and October 3, 2020

For the Nine Months Ended

 

(in thousands)

    

October 2, 2021

    

October 3, 2020

    

($) Change

    

(%) Change

 

Telecom

$

360,020

$

468,729

 

(108,709)

 

(23.2)

%

Renewables and Recovery Logistics

 

105,164

 

55,351

 

49,813

 

90.0

%

Total revenue

$

465,184

$

524,080

 

(58,896)

 

(11.2)

%

Adjusted EBITDA:

 

  

 

  

 

  

 

  

Telecom

 

26,907

 

16,028

 

10,879

 

67.9

%

Renewables and Recovery Logistics

 

42,181

 

24,227

 

17,954

 

74.1

%

Corporate & Eliminations

 

(13,097)

 

(13,628)

 

531

 

(3.9)

%

Total Adjusted EBITDA

$

55,991

$

26,627

 

29,364

 

110.3

%

Telecom

Revenue

Revenue decreased by $108.7 million, or 23.2%, for the nine months ended October 2, 2021 compared to the nine months ended October 3, 2020. The decrease was primarily driven by a $35.3 million decline in revenue attributable to the significant wind down of a large customer program and an $86.5$92.9 million decline in revenue due to the impact of the COVID-19 pandemic, delays of customers’ spend due to timing of Spectrum auctions, which delayed build plans in 2021, and delays in 3rd3rd party site acquisition providers meeting deadlines, which caused construction start date delays.dates to push into subsequent periods. These decreases were partially offset by the acquisitions of Renewables, Concurrent, Broken Arrow and Urban Cable in 2021, which contributed $67.9 million in revenues. In addition, revenues for our legacy portion of our Renewables & Recovery Logistics segment increased by approx. $15.9 million year over year.

Cost of Revenues

Cost of revenues decreased by $94.9 million, or 15.9%, for the year ended December 31, 2021 compared to the year ended December 31, 2020. Cost of revenues as a percentage of revenue decreased from 91.0% of revenue in 2020 to 82.1% of revenue in 2021. Of the $94.9 million decrease in cost of revenues, $41.0 million is attributable to lower revenue in 2021 and the Company right sizing its operations accordingly. The remaining decrease is attributable to a decline in year over year cost for the loss on an onerous contract in our Telecom segment in 2020, decreased costs caused by the alleviation of COVID-19 pandemic related permit delays, decreased crew-level COVID-19 mitigations costs, reduced government restrictions, and decrease of other inefficiencies in 2021 when compared to 2020.

General and Administrative

General and administrative expenses increased by $3.9 million, or 84%, for the year ended December 31, 2021 compared to 2020. This was largely due to a partial year of general and administrative expenses for our 2021 acquisitions of $3.2 million. There were no

89

acquisitions in 2020. The remaining increase was attributable to a higher bonus expense in our Renewables & Recovery Logistics segment.

Transaction Expenses

Transaction expenses increased by $2.8 million, or 287.2%, for the year ended December 31, 2021, compared to 2020. This increase is due to the fact that we closed four acquisitions in 2021 and no acquisitions closed in 2020.

Loss on legal settlement

Loss on legal settlement cost increased by $2.6 million, or 100%, for the year ended December 31, 2021, compared to 2020. This increase is due to the fact that we had one legal settlement with a customer in our Renewables & Recovery Logistics segment in 2021. There were no settlements in 2020.

Change in Fair Value of Contingent Consideration

Change in fair value of contingent consideration decreased by $2.3 million, or 32.5%, for the year ended December 31, 2021, compared to 2020 and is attributed to a decrease in the value of the contingent earnout liabilities related to acquisitions as compared to the original value of contingent consideration at acquisition date.

Impairment of Goodwill

Impairment of goodwill increased by $23.7 million, or 82.2%, for the year ended December 31, 2021, compared to 2020. This was due to an additional decrease to the projected future discounted cash flows for the Wireless reporting unit, which resulted in a carrying value of goodwill in excess of the estimated fair value.

Depreciation and Amortization

Depreciation and amortization expenses increased by $7.2 million, or 15.5%, for the year ended December 31, 2021, compared to 2020. The increase was driven by a partial year of depreciation and amortization recorded for the assets acquired in the four acquisitions in 2021.

Interest Expense

Interest expense increased by $12.8 million, or 34.0%, for the year ended December 31, 2021, compared to 2020. This was due to the addition of the convertible debt instruments in 2021 of $75.0 million. In addition, the Company had a higher average daily line of credit balance in 2021 when compared to 2021.

Review of Operating Segments

Comparison of the Years Ended December 31, 2021 and 2020

    

For the Years Ended December 31, 

 

    

    

($)

(%)

 

(in thousands)

 2021

 2020

Change

Change

Revenue:

Telecom

$

498,221

$

587,614

$

(89,393)

(15.2)

%

Renewables & Recovery Logistics

114,020

68,910

45,110

65.5

%

Total revenue

$

612,241

$

656,524

$

(44,283)

(6.7)

%

Adjusted EBITDA:

Telecom

$

32,542

$

2,409

$

30,133

1,250.9

%

Renewables & Recovery Logistics

44,869

28,943

15,926

55.0

%

Corporate

(17,376)

(18,213)

837

(4.6)

%

Total Adjusted EBITDA

$

60,035

$

13,139

$

46,896

356.9

%

90

Telecom

Revenue

Revenue decreased by $89.4 million, or 15.2%, for the year ended December 31, 2021 compared to 2020. The decrease was primarily driven by a $35.2 million decline in revenue attributable to the significantwind down and descoping of a large customer program and a $92.7 million decline in revenue due to the impact of the COVID-19 pandemic, delays of customers’ spend due to timing of Spectrum auctions, which delayed build plans in 2021, and delays in 3rd party site acquisition providers meeting deadlines, which caused construction start dates to push into subsequent periods. These decreases were partially offset by the acquisitions of Concurrent, and Broken Arrow and Urban Cable in 2021, which contributed $13.1$38.5 million in revenues.

60

Adjusted EBITDA

Telecom Adjusted EBITDA increased by $10.9$30.1 million, or 67.9%, for the nine months ended October 2, 2021 compared to the nine months ended October 3, 2020. The increase was driven cost savings measures to right size the Telecom segment with revenue volumes and the reduction in losses associated with the onerous contract period over period. In addition, the acquisitions of Concurrent and Broken Arrow in 2021 contributed $4.8 million of Adjusted EBITDA in 2021.

Renewables and Recovery Logistics

Revenue

Revenue increased by $49.8 million, or 90%, for the nine months ended October 2, 2021 compared to the nine months ended October 3, 2020. The increase was driven primarily by the addition of FNS in January 2021, which contributed $25.2 million of revenues for the nine months ended October 2, 2021. The remaining $24.6 million increase resulted from our legacy portion of our Renewables and Recovery Logistics segment.

Adjusted EBITDA

Renewables and Recovery Logistics Adjusted EBITDA increased by $18 million, or 74.1%, for the nine months ended October 2, 2021 compared to the nine months ended October 3, 2020. The increase was primarily driven by an increase in event-based revenue events with higher margins in the period ended October 2, 2021 of approximately $14.0 million. The remaining increase of approximately $4.0 million is attributed to the revenue and EBITDA generated from the FNS acquisition in 2021.

Comparison of the Years Ended December 31, 2020 and 2019

For the Years Ended December 31,

 

(in thousands)

    

2020

    

2019

    

($) Change

    

(%) Change

 

Revenue:

 

  

 

  

 

  

 

  

Telecom

$

587,614

$

568,342

$

19,272

 

3.4

%

Renewables and Recovery Logistics

 

68,910

 

30,926

$

37,984

 

122.8

%

Total revenue

$

656,524

$

599,268

$

57,256

 

9.6

%

Adjusted EBITDA:

 

  

 

  

 

  

 

  

Telecom

$

2,409

$

37,063

$

(34,654)

 

(93.5)

%

Renewables and Recovery Logistics

 

28,943

 

11,442

$

17,501

 

153.0

%

Corporate & Eliminations

 

(18,213)

 

(16,635)

$

(1,578)

 

9.5

%

Total Adjusted EBITDA

 

13,139

 

31,870

$

(18,731)

 

(58.8)

%

Telecom

Revenue

Revenue increased by $19.3 million, or 3.4%1,250.9%, for the year ended December 31, 20202021 compared to the same period in 2019.2020. The full year effect of 2019 acquisitions contributed $108.4$30.1 million of the revenue increase for 2020. This was offset by an organic revenue decrease of $89.1 million as compared with 2019. This decline in organic revenue wasis primarily related to COVID-19 delays,a $19.4 million improvement in Adjusted EBITDA for the delay of customers' spend dueyear ended December 31, 2021 when compared to timing of Spectrum auctions,2021 related to the wind down and the descoping of work from a large customer contract.

Adjusted EBITDA

Telecomprogram in 2021. The remainder of the increase in Adjusted EBITDA decreasedin 2021 is attributable to the Company’s focus on improving margin and right sizing of its cost profile to align with current revenue volumes.

Renewables and Recovery Logistics

Revenue

Revenue increased by $34.7$45.1 million, or 93.5%65.5%, for the year ended December 31, 20202021 compared to the same period in 2019.2020. The Adjusted EBITDA decreaseincrease was due primarily to higher cost of revenuespartially related to the COVID-19 pandemic (permit delays, crew-level COVID mitigations, government restrictions, other inefficiencies) and the effectsacquisition of the descopingRenewables in 2021 which had $29.4 million of work from a large customer contract.

61

Renewables and Recovery Logistics

Revenue

Revenue increased by $38.0revenue in 2021. The remaining $15.7 million or 122.8%, for the year ended December 31, 2020 compared to the same period in 2019. The increase was driven by customer expansion and additional events in 20202021 as well as the ability to capitalize on strategic capital investments.investments made in 2021 in the Recovery Logistics reporting unit.

Adjusted EBITDA

Renewables and& Recovery Logistics Adjusted EBITDA increased by $17.5$15.9 million, or 153.0%55.0%, for the year ended December 31, 20202021 compared to 2019.2020. The increase was partially related to the acquisition of Renewables in 2021 which had Adjusted EBITDA of $5.6 million in 2021 The remaining increase of $10.3 million was driven by an increase in event-based revenue events with higher margins in the year ended December 31, 2021, due to the return on investment from the strategic capital purchases made in 2020.

Liquidity and Capital Resources

We have historically financed our operations primarily through cash flows generated by operations and, as needed, with borrowings under our $103.5 million revolving credit facility with PNC Bank ("(“PNC Facility"Facility”), and Senior Secured Term Credit ("Guaranty Agreement with Citibank (“Term Loan"Loan”). Our uses of cash have been primarily to fund acquisitions, for the purchase of inventory, payroll, capital expenditures, and payment of our debt obligations and related interest expense. Our most significant contractual obligation for future uses of cash is our Term Loan.Loan and the senior unsecured convertible notes. As of OctoberJuly 2, 2021, $353.92022, $346.7 million was outstanding under our Term Loan.Loan and $124.7 million senior unsecured convertible notes were outstanding. On a quarterly basis, the Company is required to make principal payments of $2.4 million plus interest with all unpaid principal and interest due at maturity on July 17, 2025.2025, on the Term Loan and quarterly interest payments commencing June 15, 2022 on the senior unsecured convertible notes with all unpaid principal due at maturity on February 15, 2027. On July 2, 2022, we had cash of $0.3 million and net working capital of $100.4 million, and on December 31, 2021, we had cash of $0.6 million and net working capital of $78.8 million. On July 2, 2022, our net working capital had increased by $21.6 million compared to December 31, 2021, mainly as a result of timing differences resulting in higher unbilled revenues, lower accrued amounts for annual year-end activities (insurance and compensation related items), lower accrued interest, as well as SPAC convertible debt of $3.4 million.

We believe that cash expected to be generated from operations and the availability of borrowings under the PNC Facility will be sufficient to fund our working capital requirements and to meet our commitments in the ordinary course of business for at least the next 12 months. For additional information on the Company'sCompany’s future obligations and commitments see Note 7:8: Debt and Capital Lease Obligations and Note 11: Commitments and Contingencies, to in our auditedunaudited condensed consolidated financial statements included elsewhere in this prospectus.filing. As of OctoberJuly 2, 2021,2022, we had cash of $2.2$25.4 million available under our PNC Facility.

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The following table summarizes our cash flows for the periods presented:

    

For the Six Months Ended

(in thousands)

    

July 2, 2022

    

July 3, 2021

Net cash used in operating activities from continuing operations

$

(58,733)

$

(12,157)

Net cash used in investing activities from continuing operations

 

(62)

 

(21,208)

Net cash provided by financing activities from continuing operations

 

57,696

 

73,262

Effect of foreign currency exchange rate (translation) on cash

 

(310)

 

(13)

Net (decrease) increase in cash

$

(1,423)

$

37,628

For the Nine Months Ended

For the Years Ended December 31,

(in thousands)

    

October 2, 2021

    

October 3, 2020

    

2020

    

2019

Net cash (used in) provided by operating Activities from continuing operations

$

(32,959)

$

(7,576)

$

14,557

$

(2.541)

Net cash used in investing activities from continuing operations

 

(38,533)

 

(3,218)

 

(3,927)

 

(79,117)

Net cash provided by (used in) financing Activities from continuing operations

 

79,779

 

14,495

 

(8,751)

 

83,112

Effect of foreign currency exchange rate (translation) on cash

 

(35)

 

21

 

59

 

23

Net increase/(decrease) in cash

$

6,508

$

2,034

$

(159)

$

(633)

    

For the Years Ended

December 31,

(in thousands)

    

2021

    

2020

Net cash (used in) provided by operating Activities from continuing operations

$

(17,011)

$

14,557

Net cash used in investing activities from continuing operations

(48,030)

(3,927)

Net cash provided by (used in) financing Activities from continuing operations

66,119

(8,751)

Effect of foreign currency exchange rate (translation) on cash

83

59

Net increase (decrease) in cash

$

1,982

$

(159)

Note:

The following discussions related to our cash flows are presented on a continuing operations basis, which excludes the cash flows from our former operations associated with our Canadian subsidiary within the Telecom segment which are accounted for as discontinued operations. See Note 3 to the consolidated financial statements.

Following the consummation of the business combination, ROCR will be obligated to make payments under the Tax Receivable Agreement. The actual timing and amount of any payments that may be made under the Tax Receivable Agreement are unknown at this time and will vary based on a number of factors. For more information about these factors, see “Certain Relationships and Related Party TransactionsThe Combined Company’s Relationships and Related Party TransactionsTax Receivable Agreement.” However, the Company expects that the payments that it will be required to make in connection with the Tax Receivable Agreement will be substantial. Any payments made under the Tax Receivable Agreement will generally reduce the amount of cash that might have otherwise been available to ROCR or QualTek. For so long as ROCR is the Managing Member (as defined in the Third Amended and Restated LLCA) of QualTek, ROCR intends to cause QualTek to make ordinary distributions and tax distributions to the holders of QualTek Common Units on a pro rata basis in amounts sufficient to enable ROCR to cover payments under the Tax Receivable Agreement. However, QualTek’s ability to make such distributions may be subject to various limitations

62

and restrictions, including, but not limited to, retention of amounts necessary to satisfy the obligations of QualTek and its subsidiaries and restrictions on distributions that would violate any applicable restrictions contained in QualTek’s debt agreements, or any applicable law, or that would have the effect of rendering QualTek insolvent. To the extent ROCR is unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid. Additionally, nonpayment for a specified period and/or under certain circumstances may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments under the Tax Receivable Agreement, which could be substantial and as a result, could have a substantial negative impact on our liquidity or financial condition.

Comparison of the NineSix Months Ended OctoberJuly 2, 20212022, and Octoberthe Six Months Ended July 3, 2020 and Years Ended December 31, 2020 and 20192021

Operating Activities

Cash used in the Company'sCompany’s operating activities decreased to ($33.0)was $58.7 million for the ninesix months ended OctoberJuly 2, 20212022, compared to net cash used in operating activities of ($7.6)$12.2 million for the ninesix months ended OctoberJuly 3, 2021. The primary driver of this cash used in operating activities is attributed to an increase in working capital associated with our Telecom segment period over period as well as accrued transaction expense, settled at the close of the SPAC transaction.

Investing Activities

Net cash used in the Company’s investing activities was $0.1 million for the six months ended July 2, 2022, compared with net cash used of $21.2 million for the six months ended July 3, 2021. The primary driver of the change is attributed to cash paid related to the FNS acquisition for the prior year’s quarter.

92

Financing Activities

Net cash provided by the Company’s financing activities decreased to $57.7 million for the six months ended July 2, 2022, compared to net cash provided by financing activities of $73.3 million for the six months ended July 3, 2021. The primary driver of the change in cash inflows is attributable to the increase in repayments to the line of credit, payments to settle the acquisition related debt, along with payments related to the equity issuance costs, offset by activity related to the Business Combination that resulted in $124.7 million of proceeds from the issuance of the Senior unsecured convertible notes and the issuance of common stock.

Comparison of the Years Ended December 31, 2021 and 2020

Operating Activities

Cash used in the Company’s operating activities was $(17.0) million for the year ended December 31, 2021, compared to net cash provided operating activities of $14.6 million for the year ended December 31, 2020. The primary driver of this cash used in operating activities is attributed to an increase in accounts receivable due to the timing of revenues associated with our legacy portion of our Renewables and& Recovery Logistics segment period over period.period, as well as an increase in prepaid expenses related to prepaid equity issuance costs related to the 2022 Business Combination and a decrease in accounts payable and accrued expenses due to the reduction in liabilities attributable to the significant wind down and descoping of a large customer program in the Telecom segment as of December 31, 2021 when compared to December 31, 2020.

Cash provided byInvesting Activities

Net cash used in the Company's operatingCompany’s investing activities was $14.5increased to ($48.0) million for the year ended December 31, 2020 compared to net cash used in operating activities of2021, from ($2.5)3.9) million for the year ended December 31, 2019. The primary driver of cash inflow improvement is attributed to a decrease in current assets such as accounts receivable and inventory. The cash increase was further offset by decreases in current liabilities related to accounts payable and contract liabilities.

Investing Activities

Net cash used in the Company's investing activities increased to ($38.5) million for the nine months ended October 2, 2021, compared to the net cash used in investing activities of ($3.2) million for the nine months ended October 3, 2020. The primary driver of the change in cash outflow is attributed to the cash paid related to the FNS,Renewables, Broken Arrow, Concurrent, and Broken ArrowUrban Cable acquisitions.

Financing Activities

Net cash used inprovided by the Company's investingCompany’s financing activities decreasedincreased to ($3.9)$66.1 million for the year ended December 31, 2020 from2021 compared to net cash used in financing activities of ($79.1)8.8) million for the year ended December 31, 2019. The primary driver of the change in cash outflow is attributed to the cash paid in 2019 related to the Company's acquisitions.

Financing Activities

Net cash provided by the Company's financing activities increased to $79.8 million for the nine months ended October 2, 2021 compared to net cash provided by financing activities of $14.5 million for the nine months ended October 3, 2020. The primary driver of the change in cash inflow isinflows was attributed to $15.4 million in proceeds from the issuance of equity in conjunction with the FNSRenewables acquisition, $44.4 million in proceeds from convertible notes, and proceeds from the line of credit, net of repayments.

Net cash used in the Company's financing activities decreased to ($8.8) million for the year ended December 31, 2020 compared to net cash provided by financing activities of $83.1 million for the year ended December 31, 2019. The primary driver of the change in cash outflow is attributed to the cash borrowed on the Term Loan in 2019repayments to finance the Company'sCompany’s acquisitions. No such activity occurred in 2020.

Contractual Obligations

The following table includes aggregated information about contractual obligations that affect our liquidity and capital needs. As of December 31, 2020,2021, our contractual obligations over the next several periods were as set forth below. There have been no material changes to our contractual obligations from December 31, 2020, other than an additional $36.4 million borrowed under our line of credit, $24.1 million of additional acquisition debt, reclassed from contingent liabilities and issued in conjunction with the Concurrent acquisition, and $75.0 million of subordinated convertible notes issued in connection with our Business Combination.

    

Payments Due by Period

More

Less than

than 5

(in thousands)

    

Total

    

1 Year

    

1– 3 Years

    

3– 5 Years

    

Years

Line of credit

$

87,633

$

$

87,633

$

$

Term loan

351,481

9,564

19,128

322,789

Convertible notes

74,968

74,968

Capital lease obligations

35,163

13,760

17,495

3,837

71

Operating leases

32,066

9,699

12,213

5,030

5,124

Acquisition debt

34,718

34,718

Total

$

616,029

$

142,709

$

136,469

$

331,656

$

5,195

6393

As of December 31, 2020, our contractual obligations were as follows:

Payments Due by Period

Less than

More than

(in thousands)

    

Total

    

1 Year

    

1 — 3 Years

    

3 — 5 Years

    

5 Years

Line of credit

$

59,837

 

 

59,837

 

 

Term loan

 

361,045

 

9,564

 

19,128

 

332,353

 

Capital lease obligations

 

25,751

 

8,287

 

13,715

 

3,749

 

Operating leases

 

35,219

 

9,673

 

13,855

 

5,223

 

6,468

Acquisition debt

 

10,575

 

10,575

 

 

 

Total

$

492,427

 

38,099

 

106,535

 

341,325

 

6,468

Critical Accounting Policies and Estimates

The following is not intended to be a comprehensive list of all of our accounting policies. Our significant accounting policies are more fully described in Note 1: Nature of Business and Summary of Significant Accounting Policies to the condensed consolidated financial statements. The discussion and analysis of our financial conditions and results of operations is based on our condensed consolidated financial statements. These statements have been prepared in accordance with GAAP. In conformity with GAAP, the preparation of the financial statements requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Given that management estimates, by their nature, involve judgement regarding future uncertainties, actual results may differ from these estimates if conditions change or if certain key assumptions used in making these estimates ultimately proven to be inaccurate.

We believe the following critical accounting policies contain the more significant judgments and estimates used in the preparation of our condensed consolidated financial statements.

Revenue Recognition
Accounts Receivable
Concentration of Credit Risk
Business Combination
Earnouts
Impairment of Goodwill and Long-Lived Assets
Income Taxes

Revenue Recognition

The Company recognizes revenue from contracts with customers using the five-step model prescribed in ASC 606. Revenue for engineering, construction, project management, and site acquisition services are primarily recognized by the Company over time utilizing the cost-to-cost measure of progress, which is an input method, on contracts for specific projects, and for certain master service and other service agreements. Revenue for engineering, aerial and underground construction for projects with customer-specified service requirements are primarily performed under master service agreements and other contracts that contain customer-specified service requirements. These agreements include pricing for individual tasks, including, for example, the placement of underground or aerial fiber, directional boring, and fiber splicing, each based on a specific unit of measure. Revenue is recognized over time as services are performed and customers simultaneously receive and consume the benefits provided by the Company. Output measures such as units delivered are utilized to assess progress against specific contractual performance obligations Revenue from fulfillment, maintenance, compliance, and recovery services provided to the telecommunication, cable and utility industries is recognized as the services are rendered. These services are generally performed under master or other service agreements and billed on a contractually agreed price per unit on a work order basis.

64

Accounts Receivable

The Company'sCompany’s accounts receivable are due primarily from large telecommunication,telecommunications carriers, cable carriers,providers, and utility companies carriers operating in North America and are carried at original contract amount less an estimate for uncollectible amounts based on historical experience. Contract assets represent revenue recognized for work performed in excess of amounts invoiced to customers. Management determines the allowance for doubtful receivables by regularly evaluating individual customer receivables and considering a customer'scustomer’s financial conditions and current economic conditions. Accounts receivables are written off when deemed uncollectible. Recoveries of accounts receivables previously written off are recorded when received.

Concentration of Credit Risk

We have established relationships with many leading telecommunication,telecommunications carriers, cable carriersproviders and utility providers. companies.

94

2022 Interim Period and 2021 Interim Period

For the ninethree and six months ended OctoberJuly 2, 2022, our customer base was concentrated with the top three customers accounting for approximately 42%, 16% and 13% of our total revenues with related revenues of $77.3 million, $29.8 million and $24.7 million, respectively. These customers accounted for approximately 28.4%, 24.4%, and 15.6% of our total accounts receivables with related accounts receivable of $69.8 million, $60.0 million, and $38.2 million, respectively, as of July 2, 2022. For the year ended December 31, 2021, our customer base was concentrated with the top four customers accounting for approximately 41%, 15%11%, 13% and 11%12% of our total revenues with related revenues of $189.4$249.4 million, $67.8$69.3 million, $59.4$78.4 million and $51.8$72.6 million, respectively. These topThree of these four customers accounted for approximately 24.3%27.1%, 26.6%17.2% and 24.2% of our total accounts receivable with related accounts receivable of $56.3 million, $35.8 million and $50.2 million, respectively, as of December 31, 2021.

2021 Successor Period and 2020 Successor Period

For the years ended December 31, 2021, our customer base was concentrated with the top four customers accounting for approximately 41%, 13.5%11%, 13% and 12% of our total revenues with related revenues of $249.4 million, $69.3 million, $78.4 million, and $72.6 million, respectively. Three of these four customers accounted for approximately 27%, 17%, and 18.8%24% of our total accounts receivables with related accounts receivable of $61.8$56.3 million, $67.8 million, $34.4$35.8 million, and $47.9$50.2 million, respectively, as of October 2,December 31, 2021. For the year ended December 31, 2020, our customer base was concentrated with the top two customers accounting for approximately 54% and 18% of our total revenues with related revenues of $356.0 million and $116.4 million, respectively, during 2020. These top two customers accounted for approximately 45.8%46% and 36.6%37% of our total accounts receivable with related accounts receivable of $81.8 million and $65.3 million, respectively, as of December 31, 2020.

Business Combination

The Company accounts for acquired businesses using the acquisition method of accounting, which requires that any assets acquired, and liabilities assumed be at their respective fair values on the date of acquisition. Any excess between the purchase price and the fair value of acquired net assets and liabilities assumed is recognized as goodwill. The assumptions made in calculating the fair value of assets acquired and liability assumed in business combinations require a number ofseveral significant judgements and estimates and is subject to revision if additional information, which existed as of the date of acquisition, about the fair values become available during the measurement period of up to 12 months from the acquisition date. The Company will recognize any adjustments to preliminary amounts that are identified during the measurement period in the reporting period in which the adjustments are determined.

Impairment of Goodwill and Long-lived Assets

2022 Interim Period and 2021 Interim Period

Goodwill represents the excess purchase price paid to acquire a business over the fair value of net assets acquired. The Company has goodwill and long-lived intangible assets that have been recorded in connection with business acquisitions. We perform our annual impairment review of goodwill and long- lived intangible assets at the reporting unit level in the fourth quarter of each year or when changes in circumstances indicate that the carrying value may not be recoverable. Such circumstances include a significant adverse change in the business climate for one of our reporting units or a decision to dispose of a reporting unit or a significant portion of a reporting unit.

We perform a qualitative assessment to test goodwill for impairment on the first day of the fourth quarter, or more frequently if events or changes in the business warrant it, by determining whether it is more likely than not (a likelihood of greater than 50)%50%) that the fair value of a reporting unit is less than its carrying value. Qualitative factors that we consider include, but are not limited to, macroeconomics conditions, customer relations, market conditions, a significant adverse change in legal factors or in the business climate and reporting unit specific events. If, based on the qualitative assessment, we determine a quantitative assessment is necessary, we estimate the fair value of the reporting unit and compare that to its carrying value. To the extent the carrying value exceeds the fair value of a reporting unit, an impairment loss is recorded in an amount equal to that excess. Under our quantitative test, our estimate of fair value is primarily determined using a weighting of fair values derived in equal proportions from the income approach and market approach valuation methodologies. The income approach uses the discounted cash flow method, and the market approach uses the guideline company method. If any impairment exists, we record the impairment to the statement of operations in the period the impairment is recognized.

95

As of and for the three and six months ended July 2, 2022 and July 3, 2021, there were no indications that it was more likely than not that the fair value of a reporting unit was less than its carrying value. As such, there were no goodwill impairment charges. For additional information on goodwill, see Note 7: Goodwill and Intangible Assets, to our unaudited condensed consolidated financial statements included elsewhere in this document.

We review long-lived assets, which primarily includes finite-lived intangible assets and property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. This analysis is performed by comparing the respective carrying values of the assets to the current and expected future cash flows, on an undiscounted basis, to be generated from such assets. If such analysis indicates that the carrying value of these assets is not recoverable, the carrying value of such assets is reduced to fair value. No impairments have occurred during the three and six months ended July 2, 2022 and July 3, 2021. For additional information on the impairment charge, see Note 7: Goodwill and Intangible Assets, to our unaudited condensed consolidated financial statements included elsewhere in this document.

2021 Successor Period and 2020 Successor Period

Goodwill represents the excess purchase price paid to acquire a business over the fair value of net assets acquired. The Company has goodwill and long-lived intangible assets that have been recorded in connection with business acquisitions. We perform our annual impairment review of goodwill and long-lived intangible assets at the reporting unit level in the fourth quarter of each year or when changes in circumstances indicate that the carrying value may not be recoverable. Such circumstances include a significant adverse change in the business climate for one of our reporting units or a decision to dispose of a reporting unit or a significant portion of a reporting unit.

We perform a qualitative assessment to test goodwill for impairment on the first day of the fourth quarter by determining whether it is more likely than not (a likelihood of greater than 50%) that the fair value of a reporting unit is less than its carrying value. Qualitative factors that we consider include, but are not limited to, macroeconomics conditions, customer relations, market conditions, a significant adverse change in legal factors or in the business climate and reporting unit specific events. If, based on the qualitative assessment, we determine a quantitative assessment is necessary, we estimate the fair value of the reporting unit and compare that to its carrying value. To the extent the carrying value exceeds the fair value of a reporting unit, an impairment loss is recorded in an amount equal to that excess. Under our quantitative test, our estimate of fair value is primarily determined using a weighting of fair values derived in equal proportions from the income approach and market approach valuation methodologies. The income approach uses the discounted cash flow method, and the market approach uses the guideline company method. If any impairment exists, we record the impairment to the statement of operations in the period the impairment is recognized.

As of December 31,the first day of our fourth quarter in 2021 and 2020, and 2019, we completed quantitative assessments for our threefive reporting units and determined that the carrying value exceeded the fair value of twoone of reporting units in 2021 and two of our reporting units in 2020 within our Telecom segment. As a result, we recorded goodwill impairment charges of $52.5 million and $28.8 million in 2021 and $8.1 million in 2020, and 2019, respectively. The estimated fair value of the Company'sCompany’s third reporting unit substantially exceeded its carrying value during each reporting period. Significant assumptions used in the

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determination of the estimated fair values of the reporting units are the estimated future net annual cash flows for each reporting unit, the long-term inflationary growth rate and the discount rate. The estimated future net annual cash flows and long-term inflationary growth rates are dependent on overall market growth rates, the competitive environment, and business activities that impact market share. As a result, the growth rate could be adversely impacted by a sustained deceleration in growth or an increased competitive environment. As of December 31, 2020,October 3, 2021, the long-term inflationary growth rate utilized to value the reporting units for which we recorded an impairment was 3.0%. The discount rate, which is consistent with a weighted average cost of capital that is likely to be expected by a market participant, is based upon rates of return available from alternative investments of similar type and quality, including consideration of both debt and equity components of the capital structure. Our discount rate may be impacted by adverse changes in the macroeconomic environment and volatility in the equity and debt markets. As of December 31, 2020,October 3, 2021, the discount rates utilized to value the reporting units for which we recorded an impairment were approximately 15.25% and 14.50%12%, respectively, which werewas determined depending on the risk and uncertainty inherent in the respective reporting unit.

As a result of the goodwill impairment charges recorded in 2021 and 2020, goodwill assigned to onetwo reporting unit wasunits were fully impaired as of December 31, 2020. Following the goodwill impairment charges recorded in 2020, the carrying value of the second2021. The remaining reporting unit was equal to itsunits had adequate fair value asin excess of December 31, 2020. As such, anycarrying value. Any changes in operating plans or adverse changes in the future could reduce the underlying cash flows used to estimate fair values and would likely result in a decline in fair value that would trigger future impairment charges of thisthese reporting unit’s goodwill. As of December 31, 2020,2021, the aggregate carrying value of thisthese reporting unit’s goodwill was $44.9$28.7 million. As described above, the estimated fair value of the Company’s third reporting unit substantially exceeded its carrying value during each reporting period. For additional information on the impairment charge, see Note 6:7: Goodwill and Intangible Assets, to our audited consolidated financial statements included elsewhere in this prospectus.registration statement.

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We review long-lived assets, which primarily includes finite-lived intangible assets and property plant and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. This analysis is performed by comparing the respective carrying values of the assets to the current and expected future cash flows, on an undiscounted basis, to be generated from such assets. If such analysis indicates that the carrying value of these assets is not recoverable, the carrying value of such assets is reduced to fair value. For the year ended December 31, 2019, the Company recorded $0.8 million of impairment of long-lived assets. No impairments have occurred during the yearyears ended December 31, 2021 and 2020. For additional information on the impairment charge, see Note 6:7: Goodwill and Intangible Assets, to our audited consolidated financial statements included elsewhere in this prospectus.registration statement.

Income Taxes

For tax purposes, we have historically beenPrior to the Business Combination, QualTek HoldCo, is treated as a partnership for U.SU.S. federal and most applicable state and local income tax purposes. As a result, we have not beenpartnership, QualTek HoldCo’s taxable income and losses were passed through to and included in the taxable income of its members. Accordingly, amounts related to income taxes were zero for QualTek HoldCo prior to the Business Combination.

Following the Business Combination, the Company is subject to income taxes at the U.S. federal, state, and state income taxes in most jurisdictions. No provisionlocal levels for income taxes has been made in the consolidated financial statements since all items of income and loss are allocated to the members for inclusion in their respective tax returns. Following this transaction, we will be subject to U.S. federal and state income taxes, in addition to local and foreign income taxes,purposes, including with respect to ourits allocable share of any taxable income generatedof QualTek HoldCo.

Income taxes are accounted for using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequence on differences between the carrying amounts of assets and liabilities and their respective tax basis, using tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by the Partnershipa valuation allowance when it is “more-likely-than-not” that will flow through to its interest holders, including us.

GAAP requires us to recognize tax benefits in an amount that is more likely than not to be sustained by the relevant taxing authority upon examination. We analyze our tax filing positions insome portion or all of the U.S. federal, state, local and foreigndeferred tax jurisdictions where we are required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, we determine that uncertainties in tax positions exist that doassets will not meet the minimum threshold for recognitionbe realized. The realization of the relateddeferred tax benefit, a liabilityassets is recorded independent on the consolidated financial statements. Liabilities for uncertain tax positions are measured based upon the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. We recognize interest and penalties, if any, related to uncertain tax positions in our income tax expense.future taxable income.

Emerging Growth Company Status

We qualify as an emerging growth company ("EGC"(“EGC”) pursuant to the provisions of the JOBS Act. For as long as we are an EGC, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and registration statements, exemptions from the requirements of holding advisory "say-on-pay"“say-on-pay” votes on executive compensation and shareholder advisory votes on golden parachute compensation.

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In addition, under the JOBS Act, EGCs can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We intend to take advantage of the longer phase-in periods for the adoption of new or revised financial accounting standards under the JOBS Act until we are no longer an EGC. Our election to use the phase-in periods permitted by this election may make it difficult to compare our financial statements to those of non-EGCs and other EGCs that have opted out of the longer phase-in periods permitted under the JOBS Act and who will comply with new or revised financial accounting standards. If we were to subsequently elect instead to comply with public company effective dates, such election would be irrevocable pursuant to the JOBS Act.

Recent Accounting Pronouncements

See Note 1: Nature of Business and Summary of Significant Accounting Policiesto our unaudited condensed consolidated financial statements for more information regarding the 2022 Interim Period and 2021 Interim Period and Note 1: Nature of Business and Summary of Significant Accounting Policies to our consolidated financial statements for more information.information for more information regarding the 2021 Successor Period and 2020 Successor Period.

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Quantitative and Qualitative Disclosure of Market Risks

2022 Interim and 2021 Interim Period

Interest Rate Risk

Our credit facilities provide a $103.5 million revolving line of credit and $380.0 million of term loan debt. The revolving line of credit bears interest at a variable rate based on either LIBORBSBY Loan or a base rate plus an applicable margin with an unused commitment fee paid quarterly. Interest on the outstanding principal amount, payable in arrears monthly, is based on either an elected Base Rate plus an applicable margin (4.75%(6.25% at December 31, 2020)July 2, 2022), or an adjusted EurodollarBSBY rate, plus an applicable margin, (ranging from 2.77% to 2.87% at December 31, 2020), as defined in the agreement. On the term loan, the Company may elect either a Base Rate plus an applicable rate (8.50%(10.00% at December 31, 2020)July 2, 2022), or an adjusted Eurodollar rate, plus an applicable rate (7.25%(8.54% at December 31, 2020)July 2, 2022), as defined in the agreement. As of December 31, 2020,July 2, 2022, we had $59.8$39.6 million and $361.0$346.7 million of borrowings outstanding under the revolving facility and term loan, respectively. Further increases in the interest rate set by the Federal Reserve Bank will increase our interest rate risk.

Foreign Currency Exchange Risk

Our results of discontinued operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Substantially all of our revenue is generated in U.S. dollars. We have limited foreign currency risks related to our revenue and operating expenses denominated in the Canadian Dollar. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. Although we have experienced and will continue to experience fluctuations in our net income (loss) as a result of transaction gains (losses) related to revaluing certain cash balances, trade accounts receivable balances and intercompany balances that are denominated in currencies other than the U.S. dollar, we believe such a change will not have a material impact on our results of operations. At this time, we do not, but we may in the future, enter into derivatives or other financial instruments in an attempt to hedge our foreign currency exchange risk.

Credit Risk

We are party to agreements providing for various financial services and transactions that contain an element of risk in the event that the counterparties are unable to meet the terms of such agreements. In such agreements, we depend on the counterparty to make payment or otherwise perform. We generally seek to minimize our risk of exposure by limiting to reputable financial institutions the counterparties with which we enter into financial transactions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets.

2021 Successor Period and 2020 Successor Period

Interest Rate Risk

Our credit facilities provide a $103.5 million revolving line of credit and $380.0 million of term loan debt. The revolving line of credit bears interest at a variable rate based on either LIBOR or a base rate plus an applicable margin with an unused commitment fee paid quarterly. Interest on the outstanding principal amount, payable in arrears monthly, is based on either an elected Base Rate plus an applicable margin (4.75% at December 31, 2021), or an adjusted Eurodollar rate, plus an applicable margin (ranging from 2.60% to 2.63% at December 31, 2021), as defined in the agreement. On the term loan, the Company may elect either a Base Rate plus an applicable rate (8.50% at December 31, 2021), or an adjusted Eurodollar rate, plus an applicable rate (7.25% at December 31, 2021), as defined in the agreement. As of December 31, 2021, we had $87.6 million and $351.5 million of borrowings outstanding under the revolving facility and term loan, respectively.

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Foreign Currency Exchange Risk

Our results of discontinued operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Substantially all of our revenue is generated in U.S. dollars. We have limited foreign currency risks related to our revenue and operating expenses denominated in the Canadian Dollar. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. Although we have experienced and will continue to experience fluctuations in our net income (loss) as a result of transaction gains (losses) related to revaluing certain cash balances, trade accounts receivable balances and intercompany balances that are denominated in currencies other than the U.S. dollar, we believe such a change will not have a material impact on our results of operations. At this time, we do not, but we may in the future, enter into derivatives or other financial instruments in an attempt to hedge our foreign currency exchange risk.

Credit Risk

We are party to agreements providing for various financial services and transactions that contain an element of risk in the event that the counterparties are unable to meet the terms of such agreements In such agreements, we depend on the counterparty to make payment or otherwise perform. We generally seek to minimize our risk of exposure by limiting to reputable financial institutions the counterparties with which we enter into financial transactions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets.

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DESCRIPTION OF QUALTEK'S BUSINESS

Unless the context otherwise requires, all references in this section to “QualTek,” “we,” “us,” or “our” refer to BCP QualTek HoldCo, LLC and its subsidiaries prior to the consummation of the Business Combination and to the Combined Company following the consummation of the Business Combination.

Overview

We are a technology-driven, leading provider of communications infrastructure services and renewables solutions to the North American telecommunications and utilities industries. We provide a variety of mission- critical services across the telecom and renewable energy value chain, including wireline and fiber optic terminations, wireless, fiber-to-the-home (“FTTH”) and customer fulfillment activities. Our experienced management team has leveraged our technical expertise, rigorous quality and safety standards, and execution track record to establish and maintain long-standing relationships with blue-chip customers.

We operate out of two business segments: Telecom and Renewables & Recovery Logistics. Telecom consists of wireless and wireline, which represents 81% of our expected revenues for the fiscal year ending December 31, 2021. We recently entered the high-growth renewable infrastructure sector with our acquisition of Fiber Network Solutions (“FNS”) in January 2021, which represents 5% of our expected revenues for the fiscal year ending December 31, 2021. Recovery Logistics represents 14% of our expected revenues for the fiscal year ending December 31, 2021.

Telecommunications

We provide a full suite of services across the wireless and wireline telecom value chain, from site acquisition and permitting to initial engineering and design to installation, maintenance, program management and fulfillment. Our core offerings consist of:

Engineering services including the design of aerial and underground fiber optic and coaxial systems for homes, businesses, cell towers, and small cells.
Installation services including the placement and splicing of fiber and coaxial cable, in addition to upgrades and new site builds for cellular towers.
Site acquisition services to determine the location for new sites prior to new site builds.
We also provide cable and satellite fulfillment services for residential and commercial customers. These services are provided for telecom companies in connection with the maintenance or expansion of new and existing networks.

While the telecommunications industry is naturally concentrated, we maintain considerable customer diversification across our business segments. We have numerous long-established relationships with telephone companies, wireless carriers, cable multiple system operators and electric utilities companies, which have been built upon and cultivated through numerous Master Service Agreements (“MSAs”) that extend for periods of one or more years (majority are for three or more years, some of which have auto-renewal provisions). Blue-chip, investment grade customers including AT&T, Verizon, COX Communications, T-Mobile, Bell, Spectrum, and Comcast comprise a substantial portion of our revenue.

Renewables and Recovery Logistics

We recently entered the renewable infrastructure sector with our acquisition of FNS in January 2021. FNS is a full-service provider of fiber optic and electrical services, focusing primarily on renewable energy projects. Our capabilities in the space include expertise in wind and solar farm fiber, installation, and testing, optical ground wire (“OPGW”) & all-dielectric self-supporting (“ADSS”) aerial transmission line installation, and large-scale data com solutions and installation.

In serving both our Wind and Solar customers, we provide fiber optic terminations, optical time domain reflectometer (“OTDR”) and power meter testing, fusion splicing, fiber placement, extensive fiber optic and copper infrastructure installation, cable jetting, boring and trenching, industry specific maintenance and material procurement.

We also provide business continuity and disaster relief services to telecommunications and power utility companies, as well as business-as-usual (“BAU”) services such as generator storage and repair and cell maintenance services.

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Geographic Presence

Our consolidated business has a national footprint with approximately 85 service locations across the U.S., strategically located in close proximity to major customers and growing markets. Our geographic footprint has grown to its present state both organically and through our strategic M&A platform. QualTek serves markets locally through a dedicated in-house employee base of approximately 1,900 employees and a workforce of approximately 5,000 individuals (inclusive of in-house employees). Ultimately, we are a world class technology-driven provider of communications infrastructure services and solutions to the North American telecommunications and utilities industries, well-positioned to keep growing and flourish as a public company.

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Industry Overview

Telecommunications

Significant advances in technology and rapid innovation in service offerings to data consumers have substantially increased demand for faster and more reliable wireless and wireline/fiber communications network services. Cisco’s 2020 Annual Internet Report (the “2020 CISCO Report”) predicts that by 2023, North Americans will have 5 billion networked devices/connections, up from 3 billion in 2018, with broadband and wireless speeds both almost tripling in speed (measured in Mbps) over the same time period.

With the proliferation of mobile devices, advancements in the “internet of things,” or IoT, and segments of the workforce permanently shifting to remote work post-COVID-19, network traffic is at an all-time high and is expected to continue to grow, generating demand for both wired and wireless connectivity. Increased data usage is driven by two key dynamics: i) an increase in the number of internet-enabled devices per capita and ii) an increase in connection speed. The 2020 Cisco Report provides that devices and connections are growing faster (10% CAGR) than both the population (1% CAGR) and internet users (6% CAGR). As a result, devices and connections per household and per capita in North America are expected to grow 63%, up from 8.2 in 2018 to 13.4 by 2023.

COVID-19 has further catalyzed network traffic growth by creating permanent shifts away from the office and into the home. Per a 2020 Gartner report, 75% of companies are planning to permanently shift to remote work post COVID-19, which will continue to drive consumer demand for high-speed home office connectivity.

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Low levels of fiber penetration and the nascent state of North American 5G deployment currently present significant opportunities for sustained growth for businesses such as QualTek:

Wireless: Major carriers have continued to expand wireless network capacity and density with accelerated development and planned implementation of 5G wireless technologies. The increased speed and capacity that will result from deployment of 5G technology will require additional and improved tower capacity with higher data frequencies, as well as deployment of numerous higher bandwidth small cells to “densify” network performance. Wireless technology will need to be supported by fiber backbone and as a result, many carriers have committed to investing in the fiber infrastructure buildout.
Wired: Telecom companies have also deployed capital and initiatives to improve fiber connectivity. Only about 10-15% of total broadband connections in the U.S. are provisioned by fiber, as compared to over 50% in other developed countries such as South Korea, Sweden and Finland. Importantly, with only about 47 million U.S. homes (about 37% as per the Fiber Broadband Association) passed with fiber in 2019, over 100 million U.S. homes represent opportunities for fiber passing over the next several years, indicating a massive investment cycle that is still in early stages.

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Graphic

Renewable and Recovery Logistics

In 2017 and 2018, solar PV and onshore wind consolidated their dominance in the renewable energy market, representing on average 77% of total finance commitments in renewable energy. The highly modular nature of these technologies, their short project development lead times, increasing competitiveness driven by technology and manufacturing improvements, and government regulations play an important role in explaining these technologies’ large share of global renewable energy investment.

Investment in offshore wind has picked up, attracting, on average, $21 billion a year globally between 2013 and 2018, and representing 8% of the total renewable capacity addition in 2018. According to the International Renewable Energy Agency (IRENA), offshore wind holds considerable growth potential and will have a key role to play in achieving a level of deployment to support a decarbonized growth trajectory.

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According to Goldman Sachs, spending for renewable power projects will become the largest area of energy spending in 2021, surpassing upstream oil and gas for the first time in history. They also expect the clean energy sector to reach a $16 trillion investment volume through 2030, eclipsing fossil fuels. This increase in spending for renewable power projects will be amplified by the Biden administration. For example, since his first day in office, President Biden has rejoined the Paris Agreement, committed to investing $400 billion in the next ten years in clean energy and innovation, and set a goal to achieve a carbon pollution-free power sector by 2035. This will not only translate into significant government spending in renewables to meet this goal, but also government regulations and policies that promote spending in the renewables space across various sectors of the economy. The Biden administration’s commitment to renewable energy will create ripple effects across the nation and ultimately lead to more opportunities for us to expand our business with customers.

Competitive Strengths

Culture of Operational Excellence that Resonates with Established Blue-Chip Customer Base

QualTek analyzes and evaluates key performance metrics, from customer satisfaction to technical issues in the field, hiring processes and working capital management. We have fostered a culture of continuous improvement and our operational excellence is reflected in our ability to take market share. As previously mentioned, some of these customers include Fortune 500 companies such as AT&T, Verizon, Comcast, Blattner Energy, Kiewit, and Dish. Our decentralized operations create multiple points of contact with our customers, thereby generating numerous individual relationships and contract opportunities per customer.

Highly Scalable Shared Services Platform Driven by Tech-Enabled Capabilities

QualTek provides full turnkey services to its customers. Our significant investment over the years to optimize our platform and technology has created a highly scalable business ready to support continued growth. For example, a centralized shared services system provides us with a competitive advantage for operational execution of customer services, process consistency and cross division sharing of “best practices,” resulting in enhanced efficiency and scalability. To maintain this operational excellence, we conduct disciplined measuring of key performance indicators (“KPIs”) with quality control for every division to ensure industry-leading execution capabilities.

Significant Revenue and Backlog Visibility

Our backlog consists of the estimated amount of revenue we expect to realize from future work on uncompleted contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options. A significant portion of our 24-month backlog is attributable to master service agreements and other service agreements, none of which require our customers to purchase a minimum amount of services and are cancelable on short or no advance notice. Backlog amounts are determined based on estimates that incorporate historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers.

Our long-standing relationships with blue-chip, investment grade customers enable us to understand our customers’ needs and expand our backlog. Our backlog provides long-term visibility into a recurring and growing revenue base. QualTek has significant revenue visibility given our estimated $1.7 billion two- year backlog of which $1.6 billion relates to our Telecom segment and $0.1 billion relates to our Renewables & Recovery Logistics segment. Of the $1.7 billion in our two-year backlog, $0.4 billion represents committed work and $1.3 billion represents uncommitted work.

Backlog is not a measure defined by United States generally accepted accounting principles (“GAAP”) and should be considered in addition to, but not as a substitute for, GAAP results. Participants in our industry often disclose a calculation of their backlog; however, our methodology for determining backlog may not be comparable to the methodologies used by others. There can be no assurance as to our customers’ requirements or if actual results will be consistent with the estimates included in our forecasts. As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings.

Proven Acquisition Platform with Best-in-Class M&A Playbook

Our management team has demonstrated the success of its unique M&A strategy through the successful identification and integration of nine (9) add-ons in the last two and one-half years. QualTek’s successful M&A history demonstrates our extensive experience in identifying synergistic targets and successfully integrating them into our platform. QualTek enables a quick and

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seamless integration process by onboarding the target business onto QualTek’s supporting IT infrastructure, leveraging our QVision platform to standardize performance within the target business to meet the standard of quality that QualTek delivers.

Our M&A activity has also successfully diversified our revenue base across a number of high quality customers in both the telecommunication and renewable energy sectors, with continued emphasis on providing complementary service offerings to drive cross sell and capture market share. Our opportunities in the current M&A pipeline exceed an estimated $500 million in revenue with estimated potential EBITDA of approximately $70 million, and we expect to continue buying targets at highly accretive multiples.

World-Class Talent and Management Team

QualTek is led by highly experienced management team that is positioned to drive market share capture and capitalize on sector momentum. Our senior management team has an average of 25+ years of individual industry experience and has worked together for a considerable period of time. Our team is well suited to maximize our technical expertise, rigorous quality and safety standards, and execution track record to establish and maintain long-standing relationships with a blue-chip customers.

Strategic Regional Presence across the U.S.

QualTek has a national footprint with approximately 85 strategically located service locations across the U.S. in close proximity to our major customers, allowing us to respond to customer demand swiftly and efficiently. Our presence in multiple regions gives us valuable insight into local market drivers and customer demand, thereby enabling us to provide bespoke services in each market. Due to this presence, QualTek has also built deep relationships with local customers that help drive business development, project execution, and cross-sell opportunities. QualTek serves markets locally through a dedicated in-house employee base of over 1,400 technical and managerial personnel, and its activities provide work for over 3,200 people through the use of subcontracting firms to access a deeper and more flexible labor pool to efficiently deliver on engagements across the region.

Growth Strategy

Expand Service Offerings & Solutions while Leveraging Contract Opportunities

QualTek’s complementary service offering creates an opportunity for us to grow our business with customers in two core ways: by winning more contracts and cross-selling services. We anticipate that spectrum recently awarded to some of our customers will accelerate growth in our Telecom business beginning in the second half of 2021. Additionally, we plan to cross-sell our full-suite of wireless services to our existing customer base. We aim to continue advancing our relationship with T-Mobile for significant expansion opportunities, and to capitalize on the large expected Dish Networks buildout in 2021-2024 (estimated to be at least $10+ billion in spending).

In our Renewables & Infrastructure segment, we see significant opportunity to leverage existing customers and footprint for incremental projects. We also expect the Biden administration to promote more spending in renewables, not only through government contracts, but also in other sectors and businesses that will in turn reinvest in renewable energy solutions.

Scaled Growth Leader in the Early Stage of a Multi-Year Telecom and Renewables Infrastructure Spend Cycle

QualTek is poised to capitalize on attractive industry dynamics and tailwinds. Increasing data consumption across multiple platforms, continued growth of mobile data demand, increasing popularity of video streaming services, and continued expansion of fiber networks are all drivers of carrier demand for network infrastructure. This exponential increase in data traffic will require an upgraded network infrastructure and deeper fiber penetration to serve as the foundation for 5G wireless technology moving forward. Every major carrier, including Verizon and AT&T, has publicly committed to investing in the fiber and 5G build-out.

Continued Value Creation Through Strategic M&A

Since 2012, QualTek has successfully leveraged the experience and track record of our seasoned management team to identify and integrate tuck-in opportunities. In the past two-and-a-half years, we have successfully acquired and integrated nine targets. Currently, we have over 15 potential targets in our acquisition pipeline that we are carefully evaluating. Our origination process is largely centered on management’s deep relationships across the industry, which enable us to actively identify strategic targets in attractive markets or with complementary, value-added service capabilities. Thus, we have a continually evolving platform of high quality potential targets.

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QualTek also has a successful history of integrating tuck-ins and providing a conducive environment for target management to achieve earnouts. Over time, we often see a reduction in our acquisition multiple (between pre-acquisition EBITDA multiple and post-acquisition EBITDA multiple) as QualTek realizes significant growth synergies and expands its business with customers.

Our Services and Solutions

We are a leading, one-stop infrastructure solutions provider at the epicenter of the 5G and renewables buildout. To serve our customers, we operate in two distinct segments: i) Telecom, which includes our wireless and wireline services, and ii) Renewables & Recovery Logistics.

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Telecommunications

Our Telecom segment helps our clients build and maintain better, more reliable networks across the United States. We are able to provide technology-driven, field-based critical services across every stage of the network lifecycle for the telecommunications and power utility industries. This segment is composed of two main end markets: i) wireless and ii) wireline.

Wireless

This sub-segment operates under the brand QualTek Wireless as a turnkey provider of installation, project management, maintenance, real estate, and site acquisition to major wireless carriers. Some other services offered include:

Architecture and Engineering
Permitting
Program and Construction Management
Construction and Integration
Site Acquisition
Real Estate

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Wireline

This sub-segment provides fiber optic aerial and underground installation, fiber optic splicing, termination & testing, new installation, engineering, and fulfillment services to major telecommunication companies. Other Wireline services include:

Fiber Backhaul
Aerial Installation
Pole Upgrades
Fiber / Copper Splicing
Direction Drilling
Missile Boring
Trenching
OTDR Test / Certification
MDU Retro-Fits
MTU Builds

QualTek’s ability to implement smarter designs, increase utilization rates, and improve network performance all help lower operating expenses and increase profits for our customers. In the Telecom segment as a whole, QualTek has long-standing relationships with AT&T, Verizon, T-Mobile, Dish, Comcast, Altice, amongst many other blue-chip names.

Renewables & Recovery Logistics

Our Renewables & Recovery Logistics segment provides end-to-end services for clients in the renewable energy sector and supports business continuity and disaster relief for clients in the telecommunications, power utility, and renewable energy industries.

Renewables

This sub-segment operates under the brand QualTek Renewables and provides installation, testing, and maintenance for wind farms, solar farms, and fiber optic grids. Other Renewables services include:

Fiber Optic Terminations
OTDR and Power Meter Testing
Fusion Splicing
Fiber Replacement
Fiber Optic and Copper Infrastructure Installation
Cable Jetting
Boring & Trenching
Wind and Solar Farm fiber, installation, and testing

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Large scale data communications solutions and installation
OPGW & ADSS Aerial transmission line installation

Our Wind business comprises 90% of the expected revenue for our Renewables sub-segment for the fiscal year ending December 31, 2021. Advanced wind turbines include a large number of sensors whose signals are prone to contamination from electrical interference from lightning strikes. It is increasingly common to use fiber optics to galvanically isolate such interfaces, which is more difficult and costly with copper wires. This not only limits the damage of any lightning strikes but also can help reduce the effects of power line noise on sensitive sensor readings. Fiber optics are used for both galvanic isolation purposes and data communications. In addition, offshore turbines are often situated 5+ miles from the control center on land, making routine maintenance difficult and costly. As a result, wind turbine operators increasingly rely on complex sensors to monitor efficiently and schedule routine maintenance. Fiber optic cables are the preferred choice from a reliability and ease of maintenance perspective, especially at scale.

Our Solar business comprises 10% of the expected revenue for our Renewables sub-segment for the fiscal year ending December 31, 2021. Our services in this space help support solar power generation by ensuring that our clients’ farms are running safely and efficiently. In a solar farm power generation system, large amounts of current are generated from the heat of the sun. In order to protect the equipment from current leakage, galvanic insulation becomes important to ensure the power system’s quality and reliability. Fiber optics offer insulation protection from high-voltage/current glitches and unwanted signals into power equipment controls and communication. In addition, fiber optic communication can cover longer link distance connections compared to copper wire. As the solar farms grow in size, monitoring and controlling all the solar panels requires long link distance connections, which is only possible with fiber optics cable.

Recovery Logistics

This sub-segment operates under the brand QualTek Recovery Logistics and provides business continuity, restoration, and disaster relief services to its clients, including AT&T, Verizon, Duke Energy, Gulf Power, and Entergy, amongst others. QualTek Recovery Logistics is able to deploy recovery teams from any one of QualTek’s approximately 85 locations, enabling rapid responses across North America. Some other services offered include:

Recovery Management
Transport Logistics
Temporary Shelter
Network Recovery
Fleet Services
Energy Resources
Catering
Sanitation

Through our 2018 acquisition of Recovery Logistics, LLC (“RLI”), we transformed our recovery logistics sub-segment from a regional player with concentration in the Southeast to a fully national presence with a diversified customer base which can be served out of approximately 85 locations. RLI is a leading provider of business continuity and disaster recovery operations for the telecommunications and power utility sectors. RLI helps businesses recover from unplanned events, including hurricanes, winter storms and floods.

QualTek’s recent entry into the renewable energy space positions it well to further capitalize on sector tailwinds, such as the Biden administration’s goal to invest $400 billion in the next ten years in clean energy and innovation. Within Renewables, there is also significant opportunity for the company to leverage existing customer relationships, as well as its footprint, to gain traction and

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win incremental projects. This also applies to QualTek’s Recovery Logistics sub-segment, as the Company may be able to cross-sell recurring maintenance and recovery services to capture incremental revenue and deepen penetration with existing customer relationships. We anticipate our revenue in this sub-segment to organically grow to $102 million in the year ending December 31, 2023. Providing recovery logistics capabilities will offer another touchpoint for the Company to deliver high value-added services, underlining QualTek’s extensive repertoire of end-to- end services.

Revenue will continue to be propelled by the government’s focus and spending in the Renewables space, as well as QualTek’s commitment to expanding its service offerings and customer base, specifically in its Recovery Logistics sub-segment.

Contract Overview

QualTek has numerous Master Service Agreements (MSAs) with blue chip customers that extend for periods of one or more years, with a majority for three or more years, some of which have automatic renewals, providing meaningful revenue visibility. Generally, the Company maintains multiple agreements with each customer as different geographies and scopes of work are individually priced. Pricing is generally based on a fixed price per unit basis with up to hundreds of units priced in a single contract. Many contracts specify discrete billing milestones for each job to be performed. As an agreed-upon milestone is achieved, QualTek may bill for the work performed. Purchase Orders (POs) for discrete projects are generally issued under an MSA. This allows for quantity adjustments for the number of tasks/units that are performed with respect to a project. There are also other adjustments such as “rock adders” that accommodate changes in scope versus original engineering plans. As these adjustments are billed continuously throughout the job, they are known and often accepted by the customer as the work proceeds, substantially reducing QualTek’s risk of having cost overruns. MSAs have generally been renewed creating very sticky revenue.

QualTek utilizes a disciplined approach when bidding on new contracts and will decline to bid if management believes they cannot deliver the quality that meets their standards while achieving return targets. The Company’s approach in submitting a bid that meets target returns is based on a number of factors, including, but not limited to its:

Experience in understanding the true scope of the work and associated margin
Knowledge of local factors (i.e. resources, regional dynamics, work conditions, etc.) that will impact work performed
Ability to simultaneously “lock-in” labor rates with contracts for the work to be performed on fixed price per unit basis (“back-to-back” agreements with contractors)
Pass-through nature of material purchases

Due to the Company’s turnkey capabilities and high standard for quality control, QualTek often receives requests from customers to bid on new contract opportunities.

Backlog

Our backlog consists of the estimated amount of revenue we expect to realize from future work on uncompleted contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options. A significant portion of our 24-month backlog is attributable to master service agreements and other service agreements, none of which require our customers to purchase a minimum amount of services and are cancelable on short or no advance notice. Backlog amounts are determined based on estimates that incorporate historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers.

QualTek maintains strong visibility through its multi-year estimated backlog. Consistent with standard practice across the industry, QualTek calculates its estimated backlog for work under master service and other service agreements (including issued purchase orders) is determined based on historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers. We have a two-year aggregate backlog of $1.7 billion of which $1.6 billion relates to our Telecom segment and $0.1 billion relates to our Renewables & Recovery Logistics segment. Of the $1.7 billion in our two-year backlog, $0.4 billion represents committed work and $1.3 billion represents uncommitted work.

Backlog is not a measure defined by GAAP and should be considered in addition to, but not as a substitute for, GAAP results. Participants in our industry often disclose a calculation of their backlog; however, our methodology for determining backlog may not

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be comparable to the methodologies used by others. There can be no assurance as to our customers’ requirements or if actual results will be consistent with the estimates included in our forecasts. As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings.

M&A History & Strategy

QualTek was founded in 2012 by Christopher S. Hisey through the support of its then current investor. Mr. Hisey, a seasoned veteran of the telecom services industry, brought with him over 25 years of relevant experience, which included being a founder and serving as Chief Executive Officer of UniTek Global Services from its inception until 2011. Prior to UniTek, Mr. Hisey held multiple roles in positions of increasing responsibility, from field technician to President and COO of companies in both the cable and satellite communications industries. Mr. Hisey’s extensive experience in achieving strong organic growth and successfully integrating acquisitions across industry segments can be seen in QualTek’s evolution into a leading provider of telecom services.

Since QualTek’s founding, it has successfully executed many acquisitions, which have aided in its growth both organically and inorganically. QualTek is able to leverage its proprietary technology-driven and highly scalable shared services platform to seamlessly integrate and grow the acquisition targets. These acquisitions are often sourced by the Company’s current blue-chip customers, due to their preference for QualTek to service them in particular geographies. In the past two-and-a-half years, QualTek has been able to complete nine acquisitions.

In addition, in August 2021, QualTek acquired Broken Arrow and Concurrent. Broken Arrow is headquartered in Albuquerque, New Mexico and provides a wide variety of services for the installation, construction, and maintenance of wireless communication facilities. Broken Arrow is a trusted partner to major wireless carriers, tower companies, and construction management firms. Concurrent is headquartered in Miami, Florida and is a full-service provider of quality construction, maintenance and restoration services for utilities, electric membership co-ops and municipally owned power providers. In October 2021, QualTek acquired Urban Cable. Urban Cable is based in West Chester, Pennsylvania and is a regional telecom company in the Northeast region of the United States that specializes in a range of services, including aerial and underground construction, engineering, multiple dwelling unit (MDU) wiring and rewiring, and fiber placement to broadband and telecom cable operators. QualTek is also in negotiations with a number of other acquisition targets, but there can be no assurance these negotiations will lead to the execution of definitive agreements or completion of any acquisitions.

Facilities

QualTek’s headquarters are located in an approximately 39,000 square foot facility that we lease in Blue Bell, Pennsylvania. Our lease of this facility expires in 2031, and we have the option to extend the lease for an additional five-year period. QualTek has properties related to its operations in approximately 85 locations. QualTek’s management believes that its properties have been well maintained, are in good condition, and are adequate to meet our current needs.

Human Capital Resources

Our employees are critical to our success. In order to best service our customers, QualTek utilizes a hybrid in-house & contracted labor model to flex our workforce in real-time. As of September 30, 2021, the Company had a workforce of approximately 800 in the Midwest, 1,450 in the West, 650 in the Southwest, 880 in the Southeast, and 1,560 in the Northeast. The Northeast workforce included approximately 100 corporate employees that support all regions. Our executive leadership team averages over 25 years of industry or functional experience. To date, we have not experienced any work stoppages and consider our relationship with our employees to be in good standing.

Government Regulations

We are subject to state and federal laws that apply to businesses generally, including laws and regulations related to labor relations, wages, worker safety and environmental protection. While many of our customers operate in regulated industries (for example, utilities regulated by the public service commission or communications companies regulated by the Federal Communications Commission (“FCC”), we are not generally subject to such regulation and oversight.

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In addition to environmental laws and regulations, as a contractor, our operations are subject to various laws, including:

regulations related to worker safety and health, including those established by the Occupational Safety and Health Administration and state equivalents;
regulations related to vehicle registrations, including those of the states and the U.S. Department of Transportation (“DOT”);
contractor licensing requirements;
permitting and inspection requirements; and
building and electrical codes.

We are also subject to numerous environmental laws, regulations and programs, including the handling, transportation and disposal of non-hazardous and hazardous substances and wastes, laws governing emissions and discharges into the environment, including discharges into air, surface water, groundwater and soil, and programs related to the protection of endangered species and critical habitats. Our electrical transmission and distribution construction operations often require us to operate in remote areas involving environmentally sensitive habitats.

We also are subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment. Under certain of these laws and regulations, liabilities can be imposed for cleanup of properties, regardless of whether we directly caused the contamination or violated any law at the time of discharge or disposal. The presence of contamination from such substances or wastes could interfere with ongoing operations or adversely affect our business.

In addition, we could be held liable for significant penalties and damages under certain environmental laws and regulations. Our contracts with customers may also impose liabilities on us regarding environmental issues that arise through the performance of our services. From time to time, we may incur unanticipated and substantial costs and obligations related to environmental compliance and/or remediation matters.

We believe we have all material licenses and permits needed to conduct operations and that we are in material compliance with all applicable regulatory and environmental requirements. We could, however, incur significant liabilities if we fail to comply with such requirements.

The potential effects of climate change on our operations is highly uncertain. Climate change may result in, among other things, changes in rainfall patterns, storm patterns and intensities and temperature levels. Our operating results are significantly influenced by weather. Therefore, major changes in weather patterns could have a significant effect on our future operating results. For example, if climate change results in significantly more adverse weather conditions in a given period, we could experience reduced productivity, which could negatively affect our revenue and profitability. Climate change could also affect our customers and the projects that they award. Demand for power projects, underground pipelines or other projects could be negatively affected by significant changes in weather or from legislation or regulations governing climate change.

Legal Proceedings

We are from time to time subject to various claims, lawsuits and other legal and administrative proceedings arising in the ordinary course of business. Some of these claims, lawsuits and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, non-monetary sanctions or relief. We recognize provisions for claims or pending litigation when we determine that an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Due to the inherent uncertain nature of litigation, the ultimate outcome or actual cost of settlement may materially vary from estimates.

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MANAGEMENT OF THE COMBINED COMPANY

Overview of Executive Officers and Board of Directors

Following the consummation of the Business Combination, the business and affairs of the Combined Company will be managed by or under the direction of the board of directors of the Combined Company. The following persons are servingserve as our executive officers and directors of the Combined Company following the consummation of the Business Combination.directors:

Name

    

Age

    

Position

Christopher S. Hisey(1)

5657

Chief Executive Officer and Director

Elizabeth Downey

52

Chief Administrative Officer

Michael B. Williams

4445

Chief Business Officer

Adam Spittler

4243

Chief Financial Officer

Andrew Weinberg(1)

4748

Chairman

Matthew Allard

50

(1)

Director

Roger Bulloch

49

Director

Sam Chawla(2)

47

Director

Raul Deju(1)Jigisha Desai

7556

Director

Roger Bulloch(1)

49

Director

Maha Eltobgy(1)

51

Director

Renee Noto(1)Daniel Lafond

5553

Director

Jigisha Desai(3)Sam Totusek

5531

Director

(1)QualTek Designee
(2)ROCR Designee
(3)Joint Designee

Christopher S. Hisey, 56,57, a founder of QualTek LLC, will serve asis the Chief Executive Officer and director of the Combined Company following the consummation of the Business Combination.Company. Mr. Hisey serves ashas been the Chief Executive Officer of QualTek LLC since 2014 and a Membermember of the Board of Managers of BCP QualTek HoldCo, LLC.Holdco since 2018. Mr. Hisey has more than three decades of experience leading and organically growing telecommunications service companies. Prior to founding QualTek LLC, Mr. Hisey was a founder and Chief Executive Officerchief executive officer of Philadelphia- basedPhiladelphia-based Trident Advisors, a firm specializing in US and international acquisitions targeting the telecommunications industry. In 2004, he was a founder of UniTek Global Services and served as chief executive officer through 2011. Earlier in his career, Mr. Hisey ascended the ranks from field technician to president and chief operating officer in the cable and satellite communications industries. Mr. Hisey served in the U.S. Navy from 1983 to 1988 and is an Honorable Discharged Disabled Veteran.

Elizabeth Downey, 51, will be52, serves as the Company’s Chief Administrative Officer of the Combined Company following the consummation of the Business Combination.Officer. Ms. Downey has served as the Chief Administrative Officer of QualTek LLC since 2014. Ms. Downey brings more than 25 years of proven leadership and expertise in human resources with a niche in the telecommunications industry. Prior to joining QualTek, she was Chief Administrative Officerchief administrative officer of UniTek Global Services. Ms. Downey also held senior executive positions for a regional competitive local exchange carrier in the telecommunications sector and an international publishing company. Ms. Downey holds a Bachelor of Arts degree in Communications from Pennsylvania State University.

Michael B. Williams, 44, will be45, is the Chief Business Officer of the Combined Company following the consummation of the Business Combination.Company. Mr. Williams has served as the Chief Business Officer of QualTek LLC since January 2021 and previously served as the Company’s Chief Technology Officer from 2013 to January 2021. Mr. Williams contributes more than two decades of progressive IT, Marketing, and Operations experience to QualTek and is the primary visionary for technological development. He is respected as an expert in telecommunications information systems, implementation, business process re-engineering, strategic planning, marketing, and project management. Prior to joining QualTek, Mr. Williams was Vice Presidentvice president of Information Technologyinformation technology at UniTek Global Services. He holds a Bachelor of Science degree in Logistics/Supply Chain Management from Pennsylvania State University and a Master of Business Administration degree from Eastern University.

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Adam Spittler, 41, will be43, serves as the Chief Financial Officer of the Combined Company following the consummation of the Business Combination.Company. Mr. Spittler has served as the Chief Financial Officer of QualTek LLC since June 2021 and its Chief Strategy Officer since 2018. Mr. Spittler previously served as President of Velocitel from 2017 to 2018. Prior to this role, Mr. Spittler served as Senior Vice President of Finance for QualTek LLC from 2016 to 2017. Mr. Spittler is a Certified Public Accountant who brings more than 15 years of experience in the telecommunications industry. Mr. Spittler is the lead strategist behind QualTek’s advancement plan, ensuring its mission and objectives while supporting revenue, profitability, and growth. In addition to his focus on growth, Mr. Spittler puts strong emphasis on production efficiencies, quality, service, and cost-effective resource management. Mr. Spittler came to QualTek after spending four years at UniTek Global Services and three years at KPMG, LLC. Mr. Spittler earned a Bachelor of Science degree in Accounting from Kutztown University and a Master of Science degree in Finance from Drexel University.

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Andrew Weinberg, 47, will join the board of directors48, has served as a director of the Combined Company followingsince the consummation of the Business Combination.February 14, 2022. Mr. Weinberg has served as a Member of the Board of Managers of QualTek HoldCo since 2018. Mr. Weinberg is founder, managing partner, chief executive officer, and Chair of the Investment Committee at Brightstar Capital Partners. He currently serves as the board chair of Brightstar Corp., and serves on the boards of Gateway Dealer Network, Global Resale, Texas Water Supply Company, Capstone Nutrition and ERC, all Brightstar portfolio companies. Prior to Brightstar, Mr. Weinberg was a Partner at Lindsay Goldberg, a New York-based private equity firm, with extensive experience working on numerous large transactions. In addition, from 2008 to 2011, he served as Chief Operating Officer and Chief Strategy Officer of Brightstar Corp., a $10 billion global leader in mobility services including distribution, handset protection insurance, reverse logistics, buyback and leasing solutions spanning more than 100 countries and serving many of the major OEMs, carriers and retailers. Mr. Weinberg served on the boards of 13 portfolio companies during his tenure at Lindsay Goldberg. Prior to joining Lindsay Goldberg in 2003, Mr. Weinberg worked at Goldman Sachs in their Principal Investment Area. Mr. Weinberg started his career at Morgan Stanley in mergers and acquisitions and leveraged finance. He received his Master of Business Administration from Stanford GSB and a Bachelor of the Arts degree from Dartmouth College with a double major in History and Economics. He serves on the boards of CTIA, an organization representing the U.S. wireless industry, as well as The National Board of Review of Motion Pictures and The Dalton School. Mr. Weinberg is a member of the Young Presidents Organization. He is also a member of the World Economic Forum where he serves on the Global Future Council on Investing and the Stewardship Board of the Forum’s Platform on Shaping the Future of Investing.

Matthew Allard, 49, will join the board of directors50, has served as a director of the Combined Company following the consummation of the Business Combination.since February 14, 2022. Mr. Allard has served as a Member of the Board of Managers of QualTek HoldCo since 2018. Mr. Allard is a partner at Brightstar Capital Partners and a Member of its Investment Committee. He currently serves as Vice Chair of the Board of Amerit Fleet Solutions, and as a board member of Brightstar Corp. and Texas Water Supply Company, all Brightstar portfolio companies. Since 2003, Mr. Allard has worked closely with Andrew Weinberg and various partners while advising and financing transactions for EnergySolutions, Brock Group, and Brightstar Corp. among others. Prior to joining Brightstar, Mr. Allard was Head of Financial Sponsors at Stifel where he was responsible for leading the firmsfirm’s Private Equity client coverage and execution efforts, was a member of the Investment Bank Management Committee and had extensive merger & acquisition, capital markets and relationship management experience across a range of industries. Mr. Allard started his finance career with Citibank and Bank of America, and previously held positions in both consulting and operations. Mr. Allard received his Master of Business Administration from Columbia Business School, Beta Gamma Sigma honors, and a Bachelor of Science in Economics from the University of Michigan with a major in Industrial and Operations Engineering. He is a Trustee of the King School in Connecticut.

Sam Chawla, 46, will join the board of directors47, has served as a director of the Combined Company following the consummation of the Business Combination.since February 14, 2022. Mr. Chawla has been a member our Board of Directorsthe board of directors of ROCR since April 2021. Mr. Chawla has been a Portfolio Manager of Perceptive Advisors LLC, an investment fund focused on the healthcare sector, since 2013. Previously, Mr. Chawla served as a member of the board of directors of each of VBI Vaccines Inc. (NASDAQ: VBIV) from July 2014 to January 2018, and Great Basin Scientific, Inc. from December 2013 to December 2017. Prior to 2013, Mr. Chawla was a Managing Director in Investment Banking at UBS in the Global Healthcare Group. Prior to joining UBS in September 2010, Mr. Chawla was a Director (from January 2009 to September 2010) and a Vice President (from July 2007 to January 2009) in the Healthcare Investment Banking Group of Credit Suisse, which Mr. Chawla originally joined as an investment banker in 2002. Mr. Chawla also worked at Bloomberg L.P. and Pelican Life Sciences. Mr. Chawla received an M.B.A. from Georgetown University and a B.A. in Economics from Johns Hopkins University. We believe Mr. Chawla is well-qualified to serve as a director due to his significant investment banking and corporate finance expertise.

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Raul DejuRoger Bulloch, 75, will jointhe board of directors of the Combined Company following the consummation of the Business Combination. Dr. Deju is a Partner at Brightstar Capital Partners and a Member of the Investment Committee. He currently serves as Chair of the Board of Amerit Fleet Solutions, and as a Board member of Texas Water Supply Company and QualTek, all Brightstar portfolio companies. Since 2006, Dr. Deju has worked closely with Andrew Weinberg while serving as an advisor to both PSC and RECON (from 2008 to 2011) and as President and Chief Operating Officer of EnergySolutions, a Lindsay Goldberg portfolio company which generated more than $1.5 billion of proceeds from its initial public offering and follow on offerings. Prior to joining EnergySolutions in 2004, Dr. Deju was a Senior Vice President (1981) and President of Engineering (from 1983 to 1987) of IT Corporation, now Chicago Bridge & Iron; CEO of URS (from 1987 to 1989), which was acquired by AECOM, and President of several major entities within the Waste Management family of companies, including some international subsidiaries. He was also a Founder of Isadra, a technology venture sold to VerticalNet and ISG Resources, a construction materials company merged into Headwaters, a public company. Dr. Deju is a Board Member in a number of private companies in diverse fields and has created a program to help entrepreneurs, especially service-disabled veterans so they can succeed in their business ventures. He also serves as mentor to a number of Veteran-Owned businesses. Over 100 graduates of Dr. Deju’s university-level programs now own companies. Dr. Deju has extensive international experience managing European and Latin American subsidiaries and49, has served as Membera director of the Board of Governors of the World Nuclear Association (from 2004 to 2009). He also has served in Advisory Committees to the Secretary of Commerce (from 1994 to 2000) and the US EPA Administrator during the Clinton Administration. Dr. Deju has been named one of the 25 Most Influential Hispanics in the San Francisco Bay Area. Dr. Deju is also the recipient of the 2015 John F. Kennedy Lifetime of Entrepreneurship Award and recently published his 7th book, “We Got Mojo”, in 2016. He received both his B.S. degree in Mathematics and Physics and his Ph.D. degree in Engineering and Geosciences from the New Mexico Institute of Mining and Technology. Dr. Deju and his wife, Shari, are major donors at his alma mater where he has received a number of recognitions, including the name of their new university center. Dr. Deju is active in the professional, business and academic life in California and was recognized as one of the top 25 Hispanics in Northern California. We believe Dr. Deju’s experience on multiple boards of directors and operational expertise make him well-qualified to serve on our board of directors.

Roger Bulloch, 49, will join the board of directors of the Combined Company following the consummation of the Business Combination.since February 14, 2022. Mr. Bulloch has served as a Membermember of the Board of Managers of QualTek since 2018. Mr. Bulloch is a Partner at Brightstar Capital Partners. Prior to joining Brightstar Capital Partners, he was a Co-founder and Managing Principal of SPB Capital Partners. Mr. Bulloch also co-founded Wet ‘n’ Wild Las Vegas, a waterpark partnership with Village Roadshow Ltd, Howard Hughes Corporation, AgassiGraf, and other families to promote social impact investing and youth employment. From 2004 to 2010 Mr. Bulloch was the Co-founder and CEO of Sher Capital, a significant family office (heirs to Fortune 500 Company) and Sher Gaming, a licensed gaming partnership with interests in three hotel casinos totaling 2,300 hotel rooms. Prior to joining SPB Capital Partners and Sher Capital, Mr. Bulloch was a Senior Vice President (from 2002 to 2004) in the Private Bank of Bank of America. Mr. Bulloch also worked in the Investment Services Group of Credit Suisse (from 2001 to 2002) in Los Angeles, California and its predecessor firm, Donaldson, Lufkin, and Jenrette (DLJ) (from 1999 to 2001). Mr. Bulloch has been a member of Young Presidents Organization (YPO) since 2007. Mr. Bulloch received his BS in Business from the Marriott Business School at Brigham Young University and his MBA from the Goizueta Business School at Emory University. We believe Mr. Bulloch’s extensive investment and operational expertise makes him well-qualified to serve on our board of directors.Board.

Maha Eltobgy, 51, will join the board of directorshas served as a director of the Combined Company following the consummation of the Business Combination.since February 14, 2022. Ms. Eltobgy has over 20 years of experience in strategy, business development, finance and sustainability for large and global, blue chip companies. Currently, she is

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the Chief Sustainability Officer and Managing Director at Brightstar, a position she has held since September 2021. She is responsible for designing and implementing the firm'sfirm’s environmental, social and corporate governance ("ESG"(“ESG) strategy to support efforts to generate long-term value for portfolio companies, investors and stakeholders. Prior to Brightstar, Ms. Eltobgy was Head of Investors Industries and a Member of the Executive Committee at the World Economic Forum ("WEF"(“WEF) from March 2012 to September 2021. During her tenure at the WEF, she spearheaded the WEF'sWEF’s stakeholder capitalism and ESG activities and led a global team responsible for overseeing the WEF'sWEF’s community of asset owners and fund managers. Previously, she worked for nearly two decades in senior leadership roles in strategy, first as a consultant with the Monitor Group and subsequently as a member of in-house strategy teams with Pearson PLC and Louis Vuitton North America. Ms. Eltobgy also has experience working in government, having served as Vice President of Marketing and Strategy for the New York State Department of Economic Development for five years. Maha holds an MBA from INSEAD and an MA in International Relations, Economics and Middle East Studies from Johns Hopkins University. We believe that Ms. Eltobgy is well qualified to serve on our Board of Directors given her business development and ESG expertise as well as her experience in leadership positions.

Renee Noto, 55, will join the board of directors of the Combined Company following the consummation of the Business Combination. Ms. Noto has over 30 years of financial services and private equity experience. Ms. Noto is a Partner and the President of Brightstar, a position she has held since July 2015. Additionally, Ms. Noto is a member of the board of directors of each of Gateway Dealer Network, a position she has held since June 2019, and XLerate Group, a position she has held since September 2021.

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Prior to joining Brightstar, Ms. Noto was Head of Business Development for Fifth Street Finance and Balcony Partners, where she was responsible for capital raising, product development and strategic initiatives. She was Founding Partner and Chief Information Officer of Talon Advisors, a multimanager fund, and previously co-founded Narragansett Asset Management, a $1 billion fundamental long/short equity fund manager. Ms. Noto started her career as an analyst at Fidelity Investments. She received her MBA from Harvard Business School and her AB, magna cum laude, from Dartmouth College. We believe that Ms. Noto is well qualified to serve on our Board of Directors given her business development expertise and her experience serving on multiple boards of directors.

Jigisha Desai, 55, will join the board of directorshas served as a director of the Combined Company following the consummation of the Business Combination.since February 14, 2022. Ms. Desai has over 30 years of financial management, business leadership, and corporate strategy experience. From January 2021 to December 2021, Ms. Desai served as Executive Vice President and Chief Strategy Officer of Granite Construction Incorporated ("Granite"(“Granite). Ms. Desai joined Granite in 1993, and over her 29-year career at Granite, she served in various roles, including Senior Vice President and Chief Financial Officer from 2018 to 2021, Vice President of Corporate Finance, Treasurer & Assistant Financial Officer from 2013 to 2018, Vice President, Treasurer & Assistant Financial Officer from 2007 to 2013, Assistant Treasurer & Assistant Secretary from 2001 to 2007 and Treasury Manager from 1993 to 2001. As Chief Financial Officer, she was responsible for all of Granite'sGranite’s financial functions, including all corporate and operational finance teams, investor relations, internal audit, risk management, information technology, and corporate development. Ms. Desai was Granite'sGranite’s representative for Granite'sGranite’s Peruvian and Chilean Affiliates Board from 2018 to 2021. Additionally, Ms. Desai is a board member of 1st Capital Bank (since July 2020), Tutor Perini Corporation (since December 2021), and Element US (since January 2022). Formerly, she served on the boards of Pacific Collegiate School, Pajaro Valley Health Trust and Girls Inc. Ms. Desai is a member of the Association of Financial Professionals and a Certified Treasury Professional. Ms. Desai received a B.S. in Accounting from the University of Houston, an M.B.A. in Corporate Finance from Golden Gate University, and completed Harvard Business School'sSchool’s Advanced Management Program. We believe that Ms. Desai is well qualified to serve on our Board of Directors given her extensive financial and accounting experience, including as the Chief Financial Officer of Granite, and her experience in management of a public company.

ClassifiedDaniel Lafond, 53, has served as a director of the Company since March 2, 2022. Mr. Lafond joins the Board with more than 20 years of experience in the telecommunications and technology industries, including in many senior leadership roles at AT&T Inc., Comcast Corporation (“Comcast”) and QuadGen Wireless Solutions Inc. Most recently, Mr. Lafond served for seven years as Senior Vice President of Sales at Comcast. In this role, Mr. Lafond led the transformation strategy for Xfinity sales channels and operations. Mr. Lafond helped drive customer growth by investing in sales channel to better serve the customer, as well as creating a more centralized sales operations function to help support the employee serving the customers of Xfinity. Mr. Lafond graduate from LaSalle University with a B.S. in Accounting. We believe that Mr. Lafond is well qualified to serve on our Board of Directors given his experience in senior leadership roles in the telecommunications and technology industries.

Sam Totusek, 31, has served as a director of the Company since August 2022. Mr. Totusek is an investment professional and has served as Vice President at Brightstar Capital Partners since May 2020 and has served on the Board of Directors for each of Likewize Corp. (“Likewize”) since October 2020 and ERC Incorporated since May 2021, both Brightstar Capital Partners portfolio companies. Prior to this experience, Mr. Totusek was an operating executive and Associate at KKR Capstone from April 2017 to April 2020, working across multiple sectors, including manufacturing and healthcare, focusing on business unit integration, strategic sourcing and capital allocation. He received his B.B.A. in Accounting and Business from Texas A&M University in 2013. As an investment professional and operating executive, Mr. Totusek has experience in capital allocation, financial structuring, and board governance across a range of industries, and has worked in the telecommunications space in his role on the Board of Directors of Likewize. We believe Mr. Totusek is well qualified to serve on our board given his investment experience and his operational experience in the telecommunications industry.

Board Composition

The Combined Company’s boardbusiness affairs are managed under the direction of directors will consistthe Board. The Board consists of nine members following the consummationmembers.

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In accordance with the Charter, the board of directors of the Combined Company areBoard is divided into three classes. At each annual general meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following the election. The directors will be divided among the three classes as follows:

the Class I directors will beare Andrew Weinberg, Matthew Allard, and Jigisha Desai, and their terms will expire at the annual meeting of stockholders to be held in 2022;
the Class II directors will beare Sam Chawla, Christopher S. Hisey, and Roger Bulloch, and their terms will expire at the annual meeting of stockholders to be held in 2023; and
the Class III directors will beare Maha Eltobgy, Raul Deju,Sam Totusek, and Renee Noto,Daniel Lafond, and their terms will expire at the annual meeting of stockholders to be held in 2024.

The Combined Company expects that any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of the board of directors of the Combined CompanyBoard into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.

Family Relationships

There are no family relationships between any the Company’s directors or any of its executive officers.

Involvement in Certain Legal Proceedings

Pursuant to an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Exchange Act Making Findings, and Imposing a Cease-and-Desist Order dated August 25, 2022 (the “Order”), the SEC found that Ms. Desai had violated Section 304 of the Sarbanes-Oxley Act of 2002. The Order stemmed from the SEC’s finding that Granite Construction Inc. (“Granite”), a public company of which Ms. Desai was the Chief Financial Officer for a period of time, materially overstated revenue in certain reporting periods and understated revenue in other reporting periods. The SEC did not charge Ms. Desai with misconduct. On July 7, 2022, in connection with the Order, Desai reimbursed Granite a total of $176,100.51, which includes bonuses and the cash equivalent of 2,603 shares she received as incentive compensation based on the last closing price as of June 17, 2022. The SEC ordered Ms. Desai to cease and desist from committing or causing any future violations of Section 304(a) of the Sarbanes-Oxley Act of 2022. Other than the foregoing, there are currently no legal proceedings, and during the past 10 years, there have been no legal proceedings, that are material to the evaluation of the ability or integrity of any of our directors or director nominees.

Committees of the Board of Directors

The Combined Company’s board of directors will haveBoard has the authority to appoint committees to perform certain management and administration functions. Following the consummation of the Business Combination, the Combined Company will haveThe Board has the audit committee, the compensation committee and the nominating and corporate governance committee. In addition, from time to time, special committees may be established under the direction of the board of directors of the Combined CompanyBoard when necessary to address specific issues. The composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by the board of directors of the Combined Company. Following the consummation of the Business Combination, theBoard. The charters for each of these committees will beare available on QualTek’s website at

83

https://qualtekservices.com/corporate-governance/.investors.qualtekservices.com/investors/governance/governance-documents/default.aspx. Information contained on or accessible through QualTek’s website is not a part of this prospectus, and the inclusion of such website address in this prospectus is an inactive textual reference only.

Audit Committee

The Combined Company’s audit committee is expected to consistconsists of Sam Chawla, Matthew AllardDaniel Lafond and Jigisha Desai. The Board has determined each proposed member of Mr. Chawla, and Ms. Desai and Mr. Lafond is independent under the listing standards of Nasdaq and Rule 10A-3(b)(1) of the Exchange Act. The chairperson of the audit committee is Ms. Desai. The Board has determined that Ms. Desai is an “audit committee financial expert” within the meaning of SEC regulations. The Board has also determined that each member of the proposed audit committee has the requisite financial expertise required under the applicable requirements of Nasdaq. In arriving at this determination, the board of directorsBoard has examined each audit committee member’s scope of experience and the nature of their employment in the corporate finance sector.

The primary purpose of the audit committee is to discharge the responsibilities of the board of directorsBoard with respect to our accounting, financial, and other reporting and internal control practices and to oversee our independent registered accounting firm.

103

Specific responsibilities of our audit committee include:

selecting a qualified firm to serve as the independent registered public accounting firm to audit the Combined Company’s financial statements;
helping to ensure the independence and performance of the independent registered public accounting firm;
discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results;
developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;
reviewing policies on risk assessment and risk management;
reviewing related party transactions;
obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes the Combined Company’s internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and
approving (or, as permitted, pre-approving) all audit and all permissible non-audit service to be performed by the independent registered public accounting firm.firm or the audit committee.

Compensation Committee

The compensation committee is expected to consistconsists of Sam Chawla, Andrew Weinberg and Matthew Allard. The Board has determined each proposed member is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The chairperson of the compensation committee is expected to be Mr. Weinberg. The primary purpose of the compensation committee is to discharge the responsibilities of the board of directorsBoard to oversee its compensation policies, plans and programs and to review and determine the compensation to be paid to its executive officers, directors and other senior management, as appropriate.

Specific responsibilities of the compensation committee will include:

reviewing and approving, or recommending that our Board approve, the compensation of our executive officers;
reviewing and recommending to our Board the compensation of our directors;
reviewing and approving, or recommending that our Board approve, the terms of compensatory arrangements with our executive officers;

84

administering our stock and equity incentive plans;
selecting independent compensation consultants and assessing whether there are any conflicts of interest with any of the committee’s compensation advisors;
reviewing and approving, or recommending that our Board approve, incentive compensation and equity plans, severance agreements, change-of-control protections and any other compensatory arrangements for our executive officers and other senior management, as appropriate;
reviewing and establishing general policies relating to compensation and benefits of our employees; and
reviewing our overall compensation philosophy.

104

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee is expected to consistconsists of Sam Chawla, Raul DejuSam Totusek, Maha Eltobgy and Andrew Weinberg. The Board has determined each proposed member is independent under the listing standards of Nasdaq. The chairperson of our nominating and corporate governance committee is Mr. Deju.Ms. Eltobgy.

Specific responsibilities of our nominating and corporate governance committee include:

identifying, evaluating and selecting, or recommending that our Board approve, nominees for election to our Board;
evaluating the performance of our Board and of individual directors;
reviewing developments in corporate governance practices;
evaluating the adequacy of our corporate governance practices and reporting;
reviewing management succession plans; and
developing and making recommendations to our Board regarding corporate governance guidelines and matters.

Code of Business Conduct and Ethics

The Combined Company will adopthas adopted a Code of Ethics that applies to all of its employees, officers and directors, including those officers responsible for financial reporting. Following the Closing, theThe Code of Business Conduct and Ethics will beis available on QualTek’s website at https://qualtekservices.com/corporate-governance/.investors.qualtekservices.com/investors/governance/governance-documents/default.aspx. Information contained on or accessible through such website is not a part of this prospectus, and the inclusion of the website address in this prospectus is an inactive textual reference only. The Combined Company intends to disclose any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, on its website to the extent required by the applicable rules and exchange requirements.

Compensation Committee Interlocks and Insider Participation

No member of the Combined Company’s compensation committee has ever been an officer or employee of either company.any QualTek or ROCR entity. None of the Combined Company’s expected executive officers serve, or have served during the last year, as a member of the board of directors,Board, compensation committee, or other board committee performing equivalent functions of any other entity that has one or more executive officers serving as one of our directors or on either company’s compensation committee.

Non-Employee Director Compensation

Following the consummation of the Business Combination, the board of directors of the Combined CompanyThe Board intends to approve a non-employee director compensation program. Pursuant to this non- employeenon-employee director compensation program, the Combined Company’s non-employee directors will receive both cash and equity compensation for his or her service as a member of the

85

Combined Company’s board of directors. Board. See “Executive Compensation - Compensation of Executive Officers and Directors after the Business Combination” for additional information on the planned non-employee director compensation program.

Executive Compensation

Following the consummation of the Business Combination, the following individuals will serve as executive officers of the Combined Company: Mr. Hisey as the Chief Executive Officer, Ms. Downey as the Chief Administrative Officer, Mr. Williams as the Chief Business Officer and Mr. Spittler as the Chief Financial Officer. See “Executive Compensation” for historical compensation for Mr. Hisey, and Ms. Downey.

Following the consummation of the Business Combination, QualTek intends to develop an executive compensation program that is designed to align compensation with the Combined Company’s business objectives and the creation of stockholder value, while enabling the Combined Company to attract, retain, incentivize and reward individuals who contribute to the long-term success of the Combined Company. Decisions on the executive compensation program will be made by the Combined Company’s compensation committee.

86105

EXECUTIVE COMPENSATIONSELLING STOCKHOLDERS

ReferencesThis prospectus relates to the “Company,” “QualTek,” “our,” “us”resale by the Selling Stockholders from time to time of up to 3,589,000 shares of Class A Common Stock (including 306,000 shares issuable upon exercise of warrants held by the Selling Stockholders) and 306,000 warrants. The Selling Stockholders may from time to time offer and sell any or “we”all of the Class A Common Stock and warrants set forth below pursuant to this prospectus and any accompanying prospectus supplement. When we refer to the “Selling Stockholders” in this prospectus, we mean the persons listed in the table below, and the pledgees, donees, transferees, assignees, successors, designees and others who later come to hold any of the Selling Stockholders’ interest in the Class A Common Stock or warrants other than through a public sale.

The following section refertable sets forth, as of the date of this prospectus, the names of the Selling Stockholders, the aggregate number of shares of Class A Common Stock and warrants beneficially owned, the aggregate number of shares of Class A Common Stock and warrants that the Selling Stockholders may offer pursuant to QualTek prior tothis prospectus and the Business Combination.

Executive Compensationnumber of shares of Class A Common Stock and warrants beneficially owned by the Selling Stockholders after the sale of the securities offered hereby. We have based percentage ownership on 24,446,284 shares of Class A Common Stock outstanding as of September 15, 2022.

We are currently considered an “emerging growth Company” withinhave determined beneficial ownership in accordance with the meaningrules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all securities that they beneficially own, subject to community property laws where applicable.

We cannot advise you as to whether the Selling Stockholders will in fact sell any or all of such Class A Common Stock or warrants. In addition, the Selling Stockholders may sell, transfer or otherwise dispose of, at any time and from time to time, the Class A Common Stock and warrants in transactions exempt from the registration requirements of the Securities Act for purposesafter the date of the SEC’s executive compensation disclosure rules. Accordingly, we are required to provide a Summary Compensation Table, as well as limited narrative disclosures regarding executive compensation for our last two completed fiscal years and an Outstanding Equity Awards at Fiscal Year End Table for our last completed fiscal year. These reporting obligations extend only to the following “Named Executive Officers,” who are the individuals who served as our principal executive officer and the next two most highly compensated executive officers at the end of the fiscal years 2021 and 2020.

Name

Principal Position

Christopher S. Hisey

Chief Executive Officer, QualTek LLC

Elizabeth Downey

Chief Administrative Officer, QualTek LLC

Kevin Doran

Chief Executive Officer, QualTek Wireless LLC

This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt in the future may differ materially from the currently planned programs summarized in this discussion.

2020 and 2021 Summary Compensation Table

The following table summarizes the compensation awarded to, earned by or paid to our Named Executive Officers for the fiscal year ended December 31, 2020.

Name and Principal Position (a)

   

Year

 

Salary ($)(2)(3)

    

Total ($)(4)

Christopher S. Hisey, Chief Executive Officer, QualTek LLC(1)

 

2021

$

500,000

$

500,000

 

2020

$

501,154

$

501,154

Elizabeth Downey, Chief Administrative Officer, QualTek LLC

 

2021

$

375,000

$

375,000

 

2020

$

375,433

$

375,433

Kevin Doran, Chief Executive Officer, QualTek Wireless LLC

 

2021

$

450,500

$

450,500

 

2020

$

450,520

$

450,520

(1)Mr. Hisey served on the Board of QualTek for the years ended in December 31, 2021 and 2020. He earned no compensation for his role as a director.
(2)Amounts represent annualized base salary earned for the years ended December 31, 2021 and 2020.
(3)As a result of COVID-19, each of Mr. Hisey, Ms. Downey and Mr. Doran deferred a percentage of their base salaries (100% for Mr. Hisey and 50% for each of Ms. Downey and Mr. Doran) for the second quarter of the fiscal year ended December 31, 2020 due to the impact of the COVID-19 pandemic in exchange for 1% interest on such deferred salary. Mr. Hisey, Ms. Downey and Mr. Doran earned $1,154, $433 and $520, respectively, in interest as a result of such deferral.
(4)No Named Executive Officer earned compensation other than salary for the years ended December 31, 2021 and 2020.

Executive Services Agreements

Each of the Named Executive Officers is a party to an employment agreement (styled as executive services agreements) with QualTek USA, LLC (“QualTek,” which forprospectus. For purposes of this section does not refer totable, we have assumed that the Company) that provides for annual base salary, target bonus opportunity, paid vacation, reimbursement of reasonable business expenses and eligibility to participate in our benefit plans generally. Messrs. Hisey’s and Doran’s and Ms. Downey’s annualized base salaries at the endSelling Stockholders will have sold all of the 2020 fiscal year were $500,000, $450,500 and $375,000, respectively, and their target annual bonuses were 100%, 50% and 50% of base salary, respectively. Messrs. Hisey’s and Doran’s and Ms. Downey’s annualized base salaries atsecurities covered by this prospectus upon the endcompletion of the 2020 fiscal year wereoffering.

87106

$501,154, $450,520Selling Stockholder information for each additional Selling Stockholder, if any, will be set forth by prospectus supplement to the extent required prior to the time of any offer or sale of such Selling Stockholder’s shares pursuant to this prospectus. Any prospectus supplement may add, update, substitute, or change the information contained in this prospectus, including the identity of each Selling Stockholder and $375,433, respectively, and their target annual bonuses were 100%, 50% and 50%the number of base salary, respectively. Forshares registered on its behalf. A Selling Stockholder may sell or otherwise transfer all, some or none of such shares in this offering. See “Plan of Distribution.”

    

Shares Beneficially
Owned Prior to
the Offering

    

Shares
Being
Offered

    

Warrants
Being
Offered

    

Shares Beneficially
Owned After the
Offering

 

Name of Selling Stockholder

Shares

%(1)

Shares

%

Byron Roth(1)

490,055

2.0

%

490,055

52,938

Aaron M. Gurewitz, as Trustee of the AMG Trust established January 23, 2007(2)

130,683

*

130,683

41,783

Gordon J. Roth(3)

100,960

*

100,960

11,143

John Lipman(4)

764,569

3.1

%

764,569

65,188

Andrew Costa(5)

75,000

*

75,000

Theodore Roth(6)

57,172

*

57,172

4,874

Daniel M. Friedberg(7)

43,983

*

43,983

3,750

Adam Rothstein(8)

43,983

*

43,983

3,750

Sam Chawla(9)

99,694

*

99,694

8,500

James Gold(10)

99,694

*

99,694

8,500

Molly Hemmeter(11)

43,983

*

43,983

3,750

Mike Anderson(12)

48,963

*

48,963

4,175

Christian Schwab(13)

24,481

*

24,481

2,087

Donald Ryan Hultstrand(14)

73,446

*

73,446

6,263

Steve Dyer(15)

48,963

*

48,963

4,175

George Sutton(16)

48,963

*

48,963

4,175

Brad Baker(17)

97,926

*

97,926

8,349

Dan Kapke(18)

24,481

*

24,481

2,087

William F. Hartfiel III(19)

97,926

*

97,926

8,349

Kevin Harris(20)

97,926

*

97,926

8,349

James Zavoral(21)

48,963

*

48,963

4,175

Lou Ellis(22)

9,076

*

9,076

774

Nazan Akdeniz(23)

9,076

*

9,076

774

Matthew Day(24)

14,093

*

14,093

CR Financial Holdings(25)

620,899

2.5

%

620,899

52,938

Roth Capital Partners, LLC(26)

22,125

*

22,125

9,482

Rx3, LLC(27)

199,389

*

199,389

17,000

Craig-Hallum Capital Group LLC(28)

152,531

*

152,531

13,005

*

Less than 1%.

(1)The address of Byron Roth is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(2)The address of Aaron M. Gurewitz, as Trustee of the AMG Trust established 1/23/2007 is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(3)The address of Gordon J. Roth is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(4)The address of John Lipman is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(5)The address of Andrew Costa is is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.

107

(6)The address of Theodore D. Roth is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(7)The address of Daniel M. Friedberg is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(8)The address of Adam Rothstein is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(9)The address of Sam Chawla is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(10)The address of James Gold is is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(11)The address of Molly Hemmeter is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(12)The address of Mike Anderson is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(13)The address of Christian Schwab is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(14)The address of Donald Ryan Hulstrand is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(15)The address of Steve Dyer is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(16)The address of George Sutton is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(17)The address of Brad Baker is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(18)The address of Dan Kapke is c/o Craig Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(19)The address of William F. Hartfiel III is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402. Mr. Hartfiel and at least three other individuals each have voting and dispositive power over the shares owned by Craig-Hallum Capital Group LLC. Under the so-called “rule of three,” if voting and dispositive decisions regarding an entity’s securities are made by three or more individuals, and a voting or dispositive decision requires the approval of a majority of those individuals, then none of the individuals is deemed a beneficial owner of the entity’s securities. Based upon the foregoing analysis, the aforementioned individuals do not exercise voting or dispositive control over any of the securities held by Craig-Hallum Capital Group LLC, even those in which he directly holds a pecuniary interest. Accordingly, none of them will be deemed to have or share beneficial ownership of such shares. The address is c/o Craig-Hallum, 222 S 9th Street, Suite 350, Minneapolis, MN 55402.
(20)The address of Kevin Harris is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(21)The address of James Zavoral is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(22)The address of Lou Ellis is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(23)The address of Nazan Akdeniz is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(24)The address of Matthew Day is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(25)Byron Roth and Gordon Roth have voting and dispositive power over the shares owned by CR Financial Holdings, Inc. The address of CR Financial Holdings, Inc. is 1601 Washington Ave., Suite 320, Miami Beach, FL 33139.

108

(26)Byron Roth and Gordon Roth, both members of Roth Capital Partners, LLC, have voting and dispositive power over the shares held by Roth Capital Partners, LLC. The address of Roth Capital Partners, LLC is 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(27)Byron Roth and Nate Raabe have voting and dispositive power over the shares held by Rx3, LLC. The address of Rx3, LLC is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(28)The address of Craig-Hallum Capital Group LLC is 222 South 9th Street, Suite 350, Minneapolis, MN 55402.

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SELLING NOTEHOLDERS

The following table sets forth the 2020 and 2021 fiscal years, Messrs. Hisey and Doran and Ms. Downey did not receive any bonus payments, as described in more detail below.

In the event that a Named Executive Officer’s employment is terminated either by QualTek without “Cause,” by the Named Executive Officer for “Good Reason” (each as defined below) or due to QualTek’s non- renewalnames of the initial term, subject toSelling Noteholders, the Named Executive Officer’s executionaggregate principal amount of 2027 Convertible Notes held by each Selling Noteholder, the amount of 2027 Convertible Notes that may be sold by each Selling Noteholder under this prospectus, the number of shares of Class A Common Stock issuable upon conversion of the 2027 Convertible Notes and non-revocationthat may be sold by each Selling Noteholder under this prospectus and the number of a general release2027 Convertible Notes and shares of claims and continued compliance with restrictive covenant obligations,Class A Common Stock underlying the 2027 Convertible Notes that each Named Executive Officer would be entitled to salary continuation for 24 months and Mr. Hisey would also be entitled to (i) a pro-rata portion of his bonus earned through the termination date and (ii) payment for 24 months’ of Mr. Hisey’s premiums incurred for participation in COBRA coverage pursuant to a QualTek sponsored group health plan.

Selling Noteholder will beneficially own after this offering. For purposes of the employment agreements:

“Cause” means the Named Executive Officer’stable below, we have assumed that (i) failure to materially perform and discharge the duties and responsibilitiesafter termination of this offering none of the employee under his2027 Convertible Notes or her employment agreement after written noticethe shares of Class A Common Stock issuable upon the conversion of the 2027 Convertible Notes and allowingcovered by this prospectus will be beneficially owned by the Named Executive Officer 10 business daysSelling Noteholders and (ii) the Selling Noteholders will not acquire beneficial ownership of any additional securities during the offering. In addition, we assume that the Selling Noteholders have not sold, transferred or otherwise disposed of, our securities in transactions exempt from the registration requirements of the Securities Act. When we refer to cure such failures, (ii) failurethe “Selling Noteholders” in this prospectus, we mean the persons listed in the table below, and the pledgees, donees, transferees, assignees, successors, designees and others who later come to observe any material policies ofhold any of the company entities after receiving written notice and allowing the Named Executive Officer 10 business days to cure such failures, (iii) gross negligence, willful misconduct or intentional violation of lawSelling Noteholders’ interest in the performance2027 Convertible Notes or shares of Class A Common Stock issuable upon conversion of the Named Executive Officer’s duties to any2027 Convertible Notes other than through a public sale.

We have determined beneficial ownership in accordance with the rules of the companySEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Unless otherwise indicated below, to our knowledge, the persons and entities (iv)named in the commission of any act of fraud, intentional misrepresentation, dishonesty, misappropriation or embezzlementtables have sole voting and sole investment power with respect to any of the company entities or the Named Executive Officer’s unethical, immoral or illegal act which could damage any of the company entities (or the reputation of any of the company entities), (v) breach of (A) any agreement or contract between the Named Executive Officer and any of the company entities (including the employment agreement), which breach has not been cured within 10 business days of the Named Executive Officer’s receipt of written notice thereof, or (B) sexual relationship with any other employee of any of the company entities, or (C) falsification of expense reports or requests for reimbursement, (vi) the conviction of, or pleading of guilty or nolo contendere to, any felony or any crime involving moral turpitude, or (vii) misappropriation, improper disclosure or improper use of materials or confidential information belonging to a former employer of the Named Executive Officer.

“Good Reason” means the occurrence of one or more of the following,all securities that they beneficially own, subject to QualTek’s right to cure the circumstances giving rise to such occurrence within 20 business days of QualTek’s receipt of written notice: (i) assignment to the Named Executive Officer of any duties inconsistent, in the aggregate, in any material respect with the employment agreement, or (ii) a reduction in or the failure to pay the base compensation of the Named Executive Officer (other than a reduction of base salary of all of QualTek’s senior management due to poor financial performance of QualTek or any of its affiliates); provided, that the Named Executive Officer gives written notice to QualTek of the termination of employment for Good Reason within 30 days of the occurrence of the event constituting Good Reason, and such event remains uncured for 30 days following QualTek’s receipt of such written notice by the Named Executive Officer.

Each employment agreement with our Named Executive Officers provides that upon a “Change of Control” (which is defined as a “Sale of the Company” as further defined in the Amended and Restated Limited Liability Agreement of the Company), the employment agreements with our Named Executive Officers will terminate and the Named Executive Officers will not be eligible to receive any severance payments or benefits.

Annual Bonus Plan

The QualTek Annual Bonus Plan (“Annual Bonus Plan”) provides for the payments of annual cash incentives based on the achievement of Company EBITDA and free cash flow goals and individual performance objectives. The participants in the Annual Bonus Plan are determined based on an employee’s position and employment status, and include each of our Named Executive Officers.

Bonus levels are set as a percentage of the participant’s base salary and are established based upon the participant’s job-related responsibilities and corresponding impact on overall Company performance. Assuming achievement of the Company’s designated performance goals as described above and satisfactory performance of the participant, the Board makes the final determination of participant bonus awards.

None of our Named Executive Officer earned a bonus under the Annual Bonus Plan for the years ended December 31, 2021 and 2020 as the Company did not meet the applicable Company goals.community property laws where applicable.

88110

Equity IncentivesThe Selling Noteholders may sell or otherwise transfer all, some or none of such shares in this offering. See “Plan of Distribution.”

Shares of Class A

Common Stock

2027 Convertible Notes

Issuable Upon

Beneficially Owned Prior to

Conversion of the

2027

this Offering

Principal

Principal Amount

Convertible

Principal

Amount of 2027

of 2027

Notes

Amount of 2027

Convertible

Convertible Notes

Beneficially

Convertible

Notes to be sold

That May be

Owned After

Name of Selling Noteholder

Notes

%

in this offering

Sold(1)

this Offering

CVI Investments, Inc.(2)

    

$

5,000,000.00

    

4.01

%  

$

5,000,000.00

    

1,247,304

    

DS Liquid Div RVA MON LLC(3)

$

1,688,000.00

 

1.35

%  

$

1,688,000.00

 

421,089

 

Monashee Solitario Fund LP(3)

$

2,812,000.00

 

2.25

%  

$

2,812,000.00

 

701,484

 

Granite Point Capital Master Fund, LP(4)

$

1,000,000.00

 

*

$

1,000,000.00

 

249,460

 

Granite Point Capital Scorpion Focused Ideas Fund(4)

$

500,000.00

 

*

$

500,000.00

 

124,730

 

Arieh Coll(5)

$

2,000,000.00

 

1.60

%  

$

2,000,000.00

 

498,921

 

David S. Zelman(6)

$

500,000.00

 

*

$

500,000.00

 

124,730

 

Daniel Alpert Trust UAD 12/27/90(7)(8)

$

50,000.00

 

*

$

50,000.00

 

12,473

 

Falan Harriman Alpert(8)

$

50,000.00

 

*

$

50,000.00

 

12,473

 

Hillary Alpert(8)

$

50,000.00

 

*

$

50,000.00

 

12,473

 

Robert Alpert(8)

$

350,000.00

 

*

$

350,000.00

 

87,311

 

Eric Andell(8)

$

25,000.00

 

*

$

25,000.00

 

6,236

 

George Ball(8)

$

50,000.00

 

*

$

50,000.00

 

12,473

 

Mia Scarlet Batistick 2016 Trust UAD 12/23/16(8)(9)

$

20,000.00

 

*

$

20,000.00

 

4,989

 

Jim Berger(8)

$

50,000.00

 

*

$

50,000.00

 

12,473

 

Katherine Bousquet Cain(8)

$

20,000.00

 

*

$

20,000.00

 

4,989

 

Eileen V. Christmas(8)

$

150,000.00

 

*

$

150,000.00

 

37,419

 

James W. Christmas(8)

$

500,000.00

 

*

$

500,000.00

 

124,730

 

Daniel J. Clark(8)

$

300,000.00

 

*

$

300,000.00

 

74,838

 

Sheldrake Holdings LLC(8)(10)

$

150,000.00

 

*

$

150,000.00

 

37,419

 

William Roger Clemens & Debbie Lynn Clemens JT WROS(8)

$

100,000.00

 

*

$

100,000.00

 

24,946

 

Morton A. Cohn Private Equity(8)

$

200,000.00

 

*

$

200,000.00

 

49,892

 

Eileen Colgin 2015 Grandchildren’s TRU UAD 12/03/15(8)(11)

$

30,000.00

 

*

$

30,000.00

 

7,483

 

Kirk L. Covington(8)

$

300,000.00

 

*

$

300,000.00

 

74,838

 

Summer Lynn Cunningham 2015 Children’s Trust(8)(12)

$

25,000.00

 

*

$

25,000.00

 

6,236

 

Dillard Group of Texas LTD(8)(13)

$

100,000.00

 

*

$

100,000.00

 

24,946

 

Dillco Inc.(8)(14)

$

150,000.00

 

*

$

150,000.00

 

37,419

 

Luke J. Drury Non-Exempt Trust(8)(15)

$

150,000.00

 

*

$

150,000.00

 

37,419

 

Matthew J. Drury Non-Exempt Trust(8)(16)

$

150,000.00

 

*

$

150,000.00

 

37,419

 

Tanya J. Drury(8)

$

500,000.00

 

*

$

500,000.00

 

124,730

 

Tanya Jo Drury Trust(8)(17)

$

400,000.00

 

*

$

400,000.00

 

99,784

 

Leigh Ellis & Mimi G. Ellis JTWROS(8)

$

50,000.00

 

*

$

50,000.00

 

12,473

 

Diego Fernandez & Mallory Fernandez JT TEN

$

20,000.00

 

*

$

20,000.00

 

4,989

 

Vincent D. Foster(8)

$

100,000.00

 

*

$

100,000.00

 

24,946

 

Ariana J. Gale 2006 Trust DTD 03/26/2006(8)(18)

$

100,000.00

 

*

$

100,000.00

 

24,946

 

James Gale(8)

$

100,000.00

 

*

$

100,000.00

 

24,946

 

Russell Hardin Jr.(8)

$

300,000.00

 

*

$

300,000.00

 

74,838

 

Steve Harter(8)

$

200,000.00

 

*

$

200,000.00

 

49,892

 

Wolf Canyon LTD  – Special(8) (19)

$

200,000.00

 

*

$

200,000.00

 

49,892

 

Keenan Limited Partnership(8)(20)

$

150,000.00

 

*

$

150,000.00

 

37,419

 

Kosberg Holdings LLC(8)(21)

$

500,000.00

 

*

$

500,000.00

 

124,730

 

Kevin Matocha & Sarah Matocha(8)

$

75,000.00

 

*

$

75,000.00

 

18,709

 

Paul Mitcham(8)

$

250,000.00

 

*

$

250,000.00

 

62,365

 

111

Shares of Class A

Common Stock

2027 Convertible Notes

Issuable Upon

Beneficially Owned Prior to

Conversion of the

2027

this Offering

Principal

Principal Amount

Convertible

Principal

Amount of 2027

of 2027

Notes

Amount of 2027

Convertible

Convertible Notes

Beneficially

Convertible

Notes to be sold

That May be

Owned After

Name of Selling Noteholder

Notes

%

in this offering

Sold(1)

this Offering

Michael Mitchell(8)

$

50,000.00

 

*

$

50,000.00

 

12,473

 

Gary Petersen(8)

$

300,000.00

 

*

$

300,000.00

 

74,838

 

Christine M. Patterson(8)

$

150,000.00

 

*

$

150,000.00

 

37,419

 

Proto Investments Ltd.(8)(22)

$

150,000.00

 

*

$

150,000.00

 

37,419

 

Russell Hardin Jr. Grandchildren’s TRU UAD 12/03/15(8)(23)

$

25,000.00

 

*

$

25,000.00

 

6,236

 

Nolan Ryan(8)

$

100,000.00

 

*

$

100,000.00

 

24,946

 

Don A. Sanders Children’s Trust DTD 2003(8)(24)

$

300,000.00

 

*

$

300,000.00

 

74,838

 

2009 Sanders Children’s Trust UAD 10/21/09 FBO Christopher Collmer(8)(25)

$

30,000.00

 

*

$

30,000.00

 

7,483

 

2009 Sanders Children’s Trust UAD 10/21/09 FBO Chelsea Collmer(8)(26)

$

40,000.00

 

*

$

40,000.00

 

9,978

 

Albert Sanders Keller TR U/T/D 02/11/97(8)(27)

$

50,000.00

 

*

$

50,000.00

 

12,473

 

Sela Rivas Sanders 2003 U/A/D 06/16/03(8)(28)

$

40,000.00

 

*

$

40,000.00

 

9,978

 

Nolan Bradly Sanders 2005 U/A/D 06/16/03(8)(29)

$

40,000.00

 

*

$

40,000.00

 

9,978

 

  

Don A. Sanders(8)

$

650,000.00

 

*

$

650,000.00

 

162,149

 

Katherine U. Sanders(8)

$

650,000.00

 

*

$

650,000.00

 

162,149

 

Laura K. Sanders(8)

$

400,000.00

 

*

$

400,000.00

 

99,784

 

Quincy Catalina Sanders 2009 TR(8)(30)

$

40,000.00

 

*

$

40,000.00

 

9,978

 

Andrew Schatte & Annette Schatte JT TEN(8)

$

100,000.00

 

*

$

100,000.00

 

24,946

 

Steve Scott(8)

$

400,000.00

 

*

$

400,000.00

 

99,784

 

Melanie E. Shaw 2015 Children’s Trust UAD 12/07/15(8)(31)

$

25,000.00

 

*

$

25,000.00

 

6,236

 

Shawn Paul Kettler 2015 Children’s Trusts UAD 12/07/15(8)(32)

$

25,000.00

 

*

$

25,000.00

 

6,236

 

A. Haag Sherman(8)

$

125,000.00

 

*

$

125,000.00

 

31,182

 

Julia Grace Sherman Trust UAD 03/11/01(8)(33)

$

25,000.00

 

*

$

25,000.00

 

6,236

 

Carson Alaina Sherman Trust UAD 03/11/01(8)(34)

$

25,000.00

 

*

$

25,000.00

 

6,236

 

Janet E. Sikes(8)

$

25,000.00

 

*

$

25,000.00

 

6,236

 

Howard Silverman & Phyllis Silverman TEN COM(8)

$

200,000.00

 

*

$

200,000.00

 

49,892

 

Craig Smith & Lisa Smith JTWROS

$

125,000.00

 

*

$

125,000.00

 

31,182

 

Platinum Business Investment(8)(35)

$

400,000.00

 

*

$

400,000.00

 

99,784

 

Matthew Swarts(8)

$

25,000.00

 

*

$

25,000.00

 

6,236

 

Tanglewood Family LTD Partnership(8)(36)

$

100,000.00

 

*

$

100,000.00

 

24,946

 

David Towery(8)

$

100,000.00

 

*

$

100,000.00

 

24,946

 

John Whitmire(8)

$

75,000.00

 

*

$

75,000.00

 

18,709

 

John Whitmire Campaign(8)

$

200,000.00

 

*

$

200,000.00

 

49,892

 

John Harris Whitmire 2015 Grandchildren’s Trust(8)(37)

$

30,000.00

 

*

$

30,000.00

 

7,483

 

John W. Johnson(8)

$

250,000.00

 

*

$

250,000.00

 

62,365

 

BCP QualTek, LLC(38)

$

10,000,000.00

 

8.02

%  

$

10,000,000.00

 

2,494,609

 

Drawbridge DSO Securities LLC(39)

$

40,000,000.00

 

32.08

%  

$

40,000,000.00

 

9,978,436

 

Fortress Lending II Holdings L.P.(40)

$

26,575,000.00

 

21.31

%  

$

26,575,000.00

 

6,629,423

 

Fortress Lending Fund II MA-CRPTF LP(41)

$

2,790,000.00

 

2.24

%  

$

2,790,000.00

 

695,995

 

Fortress Lending III Holdings L.P. (42)

$

20,635,000.00

 

16.50

%  

$

20,635,000.00

 

5,147,625

 

*

Less than 1%.

112

(1)Calculated based on an initial conversion rate of 100.000 shares of Common Stock per $1,000 principal amount of 2027 Convertible Notes. The initial conversion rate may be adjusted to up to 249.4609 per $1,000 principal amount of the 2027 Convertible Notes. The 2027 Convertible Notes are initially convertible into 12,468,500 shares of Common Stock, which may be increased to up to 31,104,034 in certain circumstances that are more fully described in this prospectus.
(2)Heights Capital Management, Inc. is the authorized agent of CVI Investments, Inc. and may be deemed to have investment discretion and voting power over the shares held by CVI Investments, Inc. Martin Kobinger, in his capacity as Investment Manager of Heights Capital Management, Inc., may also be deemed to have investment discretion and voting power over the shares held by CVI Investments, Inc. The business address of Martin Kobinger and the entity is C/O Heights Capital Management, Inc., 101 California Street, Suite 3250, San Francisco, California 94111.
(3)Monashee Investment Management LLC is the Investment Advisor of the entity and may be deemed to have investment discretion and voting power over the shares held by the entity. Jeff Muller, in his capacity as Chief Compliance Officer of Monashee Investment Management LLC, may also be deemed to have investment discretion and voting power over the shares held by the entity. The business address of Jeff Muller and the entity is C/O Monashee Investment Management LLC, 75 Park Plaza, 4th Floor, Boston, Massachusetts 02116.
(4)Warren B. Lammert is the control person of Granite Point Capital Master Fund, LP and Granite Point Scorpion Focused Ideas Fund. The address of the foregoing individual and entities is 109 State Street, 5th Floor, Boston, MA 02109.
(5)The business address for this person is 103 Stanton Avenue, Auburndale, Massachusetts 02466.
(6)The business address for this person is 27101 East Oviatt Road, Suite 14, Bay Village, Ohio 44140.
(7)Linda Stanley, in her capacity as trustee of the Daniel Alpert Trust UAD 12/27/90, may be deemed to have investment discretion and voting power over the shares held by the Daniel Alpert Trust UAD 12/27/90.
(8)The business address for this person is Sanders Morris Harris LLC, 600 Travis Street, Suite 5900, Houston, Texas 77002.
(9)Susan Ashley Batistick, in her capacity as trustee of the Mia Scarlet Batistick 2016 Trust UAD 12/23/16, may be deemed to have investment discretion and voting power over the shares held by the Mia Scarlet Batistick 2016 Trust UAD 12/23/16.
(10)Adam R. Draizin is the sole member of Sheldrake Holdings LLC and may be deemed to have investment discretion and voting power over the shares held by Sheldrake Holdings LLC.
(11)Eileen Colgin, in her capacity as trustee of the Eileen Colgin 2015 Grandchildren’s TRU UAD 12/03/15, may be deemed to have investment discretion and voting power over the shares held by the Eileen Colgin 2015 Grandchildren’s TRU UAD 12/03/15.
(12)Summer Cunningham, in her capacity as trustee of the Summer Lynn Cunningham 2015 Children’s Trust, may be deemed to have investment discretion and voting power over the shares held by the Summer Lynn Cunningham 2015 Children’s Trust.
(13)Max Dillard is the partner of the Dillard Group of Texas LTD and may be deemed to have investment discretion and voting power over the shares held by Dillard Group of Texas LTD.
(14)Max Dillard is the managing partner of Dillco Inc. and may be deemed to have investment discretion and voting power over the shares held by Dillco Inc.
(15)Luke Drury, in his capacity as trustee of the Luke J. Drury Non-Exempt Trust, may be deemed to have investment discretion and voting power over the shares held by the Luke J. Drury Non-Exempt Trust.
(16)Matthew J. Drury, in his capacity as trustee of the Matthew J. Drury Non-Exempt Trust, may be deemed to have investment discretion and voting power over the shares held by the Matthew J. Drury Non-Exempt Trust.
(17)Don A. Sanders, in his capacity as trustee of the Tanya Jo Drury Trust, may be deemed to have investment discretion and voting power over the shares held by the Tanya Jo Drury Trust.

113

(18)Don A. Sanders, in his capacity as trustee of the Ariana J. Gale 2006 Trust DTD 03/26/2006, may be deemed to have investment discretion and voting power over the shares held by the Ariana J. Gale 2006 Trust DTD 03/26/2006.
(19)Carolyn Keenan is the partner of Wolf Canyon LTD — Special and may be deemed to have investment discretion and voting power over the shares held by Wolf Canyon LTD — Special.
(20)Carolyn Keenan is the partner of Keenan Limited Partnership and may be deemed to have investment discretion and voting power over the shares held by Keenan Limited Partnership.
(21)Livingston Kosberg is the manager partner of Kosberg Holdings LLC and may be deemed to have investment discretion and voting power over the shares held by Kosberg Holdings LLC.
(22)Rod Proto is the authorized signer of Proto Investments Ltd. and may be deemed to have investment discretion and voting power over the shares held by Proto Investments Ltd.
(23)Russell Hardin, in his capacity as trustee of the Russell Hardin Jr. Grandchildren’s TRU UAD 12/03/15, may be deemed to have investment discretion and voting power over the shares held by the Russell Hardin Jr. Grandchildren’s TRU UAD 12/03/15.
(24)Donald V. Weir, in his capacity as trustee of the Don A. Sanders Children’s Trust DTD 2003, may be deemed to have investment discretion and voting power over the shares held by the Don A. Sanders Children’s Trust DTD 2003.
(25)Bret Sanders, in his capacity as trustee of the 2009 Sanders Children’s Trust UAD 10/21/09 FBO Christopher Collmer, may be deemed to have investment discretion and voting power over the shares held by the 2009 Sanders Children’s Trust UAD 10/21/09 FBO Christopher Collmer.
(26)Bret Sanders, in his capacity as trustee of the 2009 Sanders Children’s Trust UAD 10/21/09 FBO Christopher Collmer, may be deemed to have investment discretion and voting power over the shares held by the 2009 Sanders Children’s Trust UAD 10/21/09 FBO Chelsea Collmer.
(27)Donald V. Weir, in his capacity as trustee of the Albert Sanders Keller TR U/T/D 02/11/97, may be deemed to have investment discretion and voting power over the shares held by the Albert Sanders Keller TR U/T/D 02/11/97.
(28)Brad Sanders, in his capacity as trustee of the Sela Rivas Sanders 2003 U/A/D 06/16/03, may be deemed to have investment discretion and voting power over the shares held by the Sela Rivas Sanders 2003 U/A/D 06/16/03.
(29)Brad Sanders, in his capacity as trustee of the Nolan Bradly Sanders 2005 U/A/D 06/16/03, may be deemed to have investment discretion and voting power over the shares held by the Nolan Bradly Sanders 2005 U/A/D 06/16/03.
(30)Brad Sanders, in his capacity as trustee of the Quincy Catalina Sanders 2009 TR, may be deemed to have investment discretion and voting power over the shares held by the Quincy Catalina Sanders 2009 TR.
(31)Melanie Shaw, in her capacity as trustee of the Melanie E. Shaw 2015 Children’s Trust UAD 12/07/15, may be deemed to have investment discretion and voting power over the shares held by the Melanie E. Shaw 2015 Children’s Trust UAD 12/07/15.
(32)Shawn P. Kettler, in his capacity as trustee of the Shawn Paul Kettler 2015 Children’s Trusts UAD 12/07/15, may be deemed to have investment discretion and voting power over the shares held by the Shawn Paul Kettler 2015 Children’s Trusts UAD 12/07/15.
(33)Robert A. Sherman, in his capacity as trustee of the Julia Grace Sherman Trust UAD 03/11/01, may be deemed to have investment discretion and voting power over the shares held by the Julia Grace Sherman Trust UAD 03/11/01.
(34)Robert A. Sherman, in his capacity as trustee of the Carson Alaina Sherman Trust UAD 03/11/01, may be deemed to have investment discretion and voting power over the shares held by the Carson Alaina Sherman Trust UAD 03/11/01.
(35)Matthew Stuller is the partner of Platinum Business Investment and may be deemed to have investment discretion and voting power over the shares held by Platinum Business Investment.

114

(36)J.M. Burley is the president and general partner of Tanglewood Family LTD Partnership and may be deemed to have investment discretion and voting power over the shares held by Tanglewood Family LTD Partnership.
(37)John Whitmire, in his capacity as trustee of the John Harris Whitmire 2015 Grandchildren’s Trust, may be deemed to have investment discretion and voting power over the shares held by the John Harris Whitmire 2015 Grandchildren’s Trust.
(38)Andrew Weinberg is the managing member of Brightstar GP Investors, LLC, a Delaware limited liability company (“Brightstar GP”). Brightstar GP is the general partner of Brightstar Associates, L.P., a Delaware limited partnership (“Brightstar Associates”). Brightstar Associates is the general partner of Brightstar Capital Partners QualTek Holdings, L.P., a Delaware limited partnership, which in turn is the sole member of BCP QualTek, LLC, a Delaware limited liability company. Andrew Weinberg may be deemed to have investment discretion and voting power over the shares held by BCP QualTek, LLC. The business address for Andrew Weinberg and BCP QualTek, LLC is C/O Brightstar Capital Partners, 650 Fifth Avenue, 29th Floor, New York, New York 10019.
(39)Drawbridge DSO Securities LLC is wholly-owned by Drawbridge Special Opportunities Fund LP (“DSBO LP”). Drawbridge Special Opportunities Advisors LLC, a Delaware limited liability company (“DBSO Advisors”), is the investment manager of DBSO LP. FIG LLC is the 100% owner of DBSO Advisors. Fortress Operating Entity I LP (“FOE I”) is the sole managing member of FIG LLC. FIG Corp. is the general partner of FOE I. FIG Corp. is a wholly-owned subsidiary of Fortress Investment Group LLC (“Fortress”). As the Co-Chief Investment Officers of Drawbridge DSO Securities LLC, each of Peter L. Briger, Jr., Constantine M. Dakolias, Andrew McKnight and Joshua Pack participates in the voting and investment decisions with respect to the shares held by Drawbridge DSO Securities LLC. The business address for this person is C/O Fortress Investment Group LLC, Attention: General Counsel, 1345 Avenue of the Americas, 46th Floor, New York, New York 10105.
(40)The investment manager of Fortress Lending II Holdings L.P. is Fortress Lending Advisors II LLC (“FLA Advisors II”). FIG LLC, a Delaware limited liability company, is the holder of all of the issued and outstanding equity interests of FLA Advisors II. Fortress Operating Entity I LP, a Delaware limited partnership (“FOE I”) is the Class A member of FIG LLC. FIG Corp. is the general partner of FOE I. Fortress Investment Group LLC, a Delaware limited liability company (“Fortress”) is the holder of all of the issued and outstanding shares of FIG Corp. As the Co-Chief Investment Officers of Fortress Lending II Holdings L.P., each of Andrew McKnight, Joshua Pack, Dominick Ruggiero and Aaron Blanchette participates in the voting and investment decisions with respect to the shares held by Fortress Lending II Holdings L.P. The business address for this person is C/O Fortress Investment Group LLC, Attention: General Counsel, 1345 Avenue of the Americas, 46th Floor, New York, New York 10105.
(41)The investment manager of Fortress Lending Fund II MA-CRPTF LP is FLF II MA-CRPTF Advisors LLC (“FLF II Advisors”), a Delaware limited liability company. FIG LLC, a Delaware limited liability company, is the holder of all of the issued and outstanding equity interests of FLF II Advisors. Fortress Operating Entity I LP, a Delaware limited partnership (“FOE I”) is the Class A member of FIG LLC. FIG Corp. is the general partner of FOE I. Fortress Investment Group LLC, a Delaware limited liability company (“Fortress”) is the holder of all of the issued and outstanding shares of FIG Corp. As the Co-Chief Investment Officers of Fortress Lending Fund II MA-CRPTF LP, each of Andrew McKnight, Joshua Pack, Dominick Ruggiero and Aaron Blanchette participates in the voting and investment decisions with respect to the shares held by Fortress Lending Fund II MA-CRPTF LP. The business address for this person is C/O Fortress Investment Group LLC, Attention: General Counsel, 1345 Avenue of the Americas, 46th Floor, New York, New York 10105.
(42)The investment manager of Fortress Lending III Holdings L.P. is Fortress Lending Advisors III LLC (“FLA Advisors III”). FIG LLC, a Delaware limited liability company, is the holder of all of the issued and outstanding equity interests of FLA Advisors III. Fortress Operating Entity I LP, a Delaware limited partnership (“FOE I”) is the Class A member of FIG LLC. FIG Corp. is the general partner of FOE I. Fortress Investment Group LLC, a Delaware limited liability company (“Fortress”) is the holder of all of the issued and outstanding shares of FIG Corp. As the Co-Chief Investment Officers of Fortress Lending III Holdings L.P., each of Andrew McKnight, Joshua Pack, Dominick Ruggiero and Aaron Blanchette participates in the voting and investment decisions with respect to the shares held by Fortress Lending III Holdings L.P. The business address for this person is C/O Fortress Investment Group LLC, Attention: General Counsel, 1345 Avenue of the Americas, 46th Floor, New York, New York 10105.

115

DESCRIPTION OF SECURITIES

The following summary of the material terms of the Company’s securities is not intended to be a complete summary of the rights and preferences of such securities. The Certificate of Incorporation is attached as an exhibit to this prospectus. We urge you to read the Certificate of Incorporation in its entirety for a complete description of the rights and preferences of the Company’s Class A Common Stock, the Warrant Agreement and the Indenture for the 2027 Convertible Notes.

General

The Company’s majority-owned subsidiary, BCP QualTek Holdco LLCtotal number of shares of all classes of stock that we are authorized to issue pursuant to the Certificate of Incorporation is 1,001,000,000 shares, consisting of: (i) 1,000,000 shares of preferred stock, par value $0.0001 per share (“HoldcoPreferred Stock”), (ii) 500,000,000 shares of Class A Common Stock, par value $0.0001 per share, and (iii) 500,000,000 shares of Class B Common Stock, par value $0.0001 per share. As of September 15, 2022, there were 24,446,284 shares of Class A Common Stock outstanding, held of record by approximately 41 holders of Class A Common Stock, no shares of preferred stock outstanding and 2,977,000 warrants outstanding held of record by approximately 27 holders of warrants. Such numbers do not include DTC participants or beneficial owners holding shares through nominee names.

Class A Common Stock

All shares of Class A Common Stock are fully paid and non-assessable.

Voting Rights

Each holder of Class A Common Stock is authorizedentitled to one vote for each share of Class A Common Stock held by such holder on all matters on which stockholders generally are entitled to vote. Holders of Class A Common Stock will vote together with holders of Class A Common Stock as a single class on all matters presented to the Company’s stockholders for their vote or approval. Except as described below, all matters to be voted on by stockholders must be approved by a majority of the votes entitled to be cast by all stockholders present in person (which would include presence at the discretionvirtual special meeting) or represented by proxy, voting together as a single class. Notwithstanding the foregoing, to the fullest extent permitted by law, holders of Class A Common Stock, as such, will have no voting power with respect to, and will not be entitled to vote on, any amendment to the boardCertificate of managersIncorporation (including any certificate of Holdco, under its Seconddesignations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such securities, to vote thereon pursuant to the Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.

Pursuant to the Certificate of Incorporation (i) the vote of holders of Class A Common Stock will not be required to amend, alter, change, add to or repeal the Amended and Restated Limited Liability CompanyBylaws so long as any such amendment, alteration, change, addition or repeal is consistent with Delaware law or the Certificate of Incorporation and, in each case, subject to the rights of the parties to the Investor Rights Agreement datedand (ii) a vote of at least 80% of the total voting power of the Company’s stock entitled to vote generally in the election of directors, voting together as a single class, is required to alter, amend, add to or repeal any of October 4, 2019 (the “Holdco LLC Agreement”),the provisions in Article X (Competition and Corporate Opportunities) of the Certificate of Incorporation.

Dividends

Subject to issuepreferences that may be applicable to any outstanding Preferred Stock, the holders of shares of Class P UnitsA Common Stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the Board out of Holdco (“funds legally available therefor.

Rights upon Liquidation

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company’s affairs, the holders of Class P Units”).A Common Stock are entitled to share ratably in all assets remaining after payment of the Company’s debts and other liabilities, subject to prior distribution rights of Preferred Stock or any class or series of stock having preference over the Class P UnitsA Common Stock, then outstanding, if any.

116

Rights and Preferences

The holders of Class A Common Stock have no preemptive or conversion rights or other subscription rights. There are grantedno redemption or sinking fund provisions applicable to service providersthe Class A Common Stock. The rights, preferences and privileges of holders of the Class A Common Stock will be subject to those of the holders of any shares of Preferred Stock of the Company including our Named Executive Officers, who immediately contribute themthat the Company may issue in the future.

Class B Common Stock

All shares of Class B Common Stock are fully paid and non-assessable.

Voting Rights

Each holder of Class B Common Stock is entitled to BCP QualTek Management, LLC (“Management Holdco”),one vote for each share of Class B Common Stock held by such holder on all matters on which stockholders generally are entitled to vote. Holders of Class B Common Stock will vote together with holders of Class A Common Stock as a single class on all matters presented to the Company’s stockholders for their vote or approval. Except as described below, all matters to be voted on by stockholders must be approved by a majority of the votes entitled to be cast by all stockholders present in turn grantsperson (which would include presence at the virtual special meeting) or represented by proxy, voting together as a single class. Notwithstanding the foregoing, to the fullest extent permitted by law, holders of Class B Common Stock, as such, service providerswill have no voting power with respect to, and will not be entitled to vote on, any amendment to the same numberCertificate of correspondingIncorporation (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such securities, to vote thereon pursuant to the Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.

Pursuant to the Certificate of Incorporation (i) the vote of holders of Class P Tracking UnitsB Common Stock will not be required to amend, alter, change, add to or repeal the Amended and Restated Bylaws so long as any such amendment, alteration, change, addition or repeal is consistent with Delaware law or the Certificate of Management Holdco (“Incorporation and, in each case, subject to the rights of the parties to the Investor Rights Agreement and (ii) a vote of at least 80% of the total voting power of the Company’s stock entitled to vote generally in the election of directors, voting together as a single class, is required to alter, amend, add to or repeal any of the provisions in Article X (Competition and Corporate Opportunities) of the Certificate of Incorporation.

Dividends

The holders of the Class P Tracking Units”). The Class P Tracking Units are structured to provide the participating individuals with an opportunity to indirectlyB Common Stock will not participate in Holdco’s future income and appreciation andany dividends declared by the Board.

Rights upon Liquidation

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company’s affairs, the holders of Class B Common Stock are not entitled to enhance our ability to attract and retain talented individuals to contribute to the sustained progress, growth, and profitabilityreceive any assets of the Company.

Rights and Preferences

The holders of shares of Class P TrackingB Common Stock do not have preemptive, subscription, redemption or conversion rights. There will be no redemption or sinking fund provisions applicable to the Class B Common Stock.

Issuance and Retirement of Class B Common Stock

In the event that any outstanding share of Class B Common Stock ceases to be held directly or indirectly by a holder of the QualTek Common Units, representsuch share will automatically be transferred to the Company for no consideration and thereupon will be retired. The Company does not plan to issue additional shares of Class B Common Stock other than in connection with the valid issuance or transfer of a QualTek Common Unit in accordance with the governing documents of the Company.

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Warrants

Each whole Warrant entitles the registered holder to purchase one share of our Common Stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing 30 days after the completion of our initial business combination. Pursuant to the warrant agreement, a Warrant holder may exercise its Warrants only for a whole number of shares of Common Stock. This means that only a whole Warrant may be exercised at any given time by a Warrant holder. However, no Warrants issued pursuant to the ROCR IPO (the “Public Warrants”) will be exercisable for cash unless we have an indirecteffective and current registration statement covering the shares of Common Stock issuable upon exercise of the Warrants and a current prospectus relating to such shares of Common Stock. Notwithstanding the foregoing, if the registration statement is not available and a new registration statement covering the shares of Common Stock issuable upon exercise of the Public Warrants is not effective within 120 days from the closing of our initial business combination, Warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. The Warrants will expire on February 14, 2027 at 5:00 p.m., New York City time.

The Company may call the outstanding Warrants (excluding the Warrants underlying the Private Units (the “Private Warrants”)) for redemption, in whole and not in part, at a price of $0.01 per Warrant: (i) at any time after the Warrants become exercisable, (ii) upon not less than 30 days’ prior written notice of redemption to each Warrant holder, (iii) if, and only if, the reported last sale price of the shares of Common Stock equals or exceeds $18.00 per share, for any 20 trading days within a 30-day trading period commencing after the Warrants become exercisable and ending on the third business day prior to the notice of redemption to Warrant holders, and (iv) if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying such Warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

The right to exercise will be forfeited unless the Warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of a Warrant will have no further rights except to receive the redemption price for such holder’s Warrant upon surrender of such Warrant.

The redemption criteria for our Warrants have been established at a price which is intended to provide Warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the Warrant exercise price so that if the share price declines as a result of our redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants.

If we call the Warrants for redemption as described above, our management will have the option to require all holders that wish to exercise Warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the difference between the exercise price of the Warrants and the “fair market value” by (y) the fair market value. The “fair market value” for this purpose shall mean the average reported last sale price of our Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of Warrants. Whether we will exercise our option to require all holders to exercise their Warrants on a “cashless basis” will depend on a variety of factors including the price of shares of our Common Stock at the time the Warrants are called for redemption, our cash needs at such time and concerns regarding dilutive share issuances.

The Warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as Warrant agent, and us. The warrant agreement 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 written consent or vote, of the holders of a majority of the then outstanding Warrants in order to make any change that adversely affects the interests of the registered holders.

The exercise price and number of shares of Common Stock issuable on exercise of the Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, the Warrants will not be adjusted for issuances of shares of Common Stock at a price below their respective exercise prices.

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The Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to us, for the number of Warrants being exercised. The Warrant holders do not have the rights or privileges of holders of shares of Common Stock and any voting rights until they exercise their Warrants and receive shares of Common Stock. After the issuance of shares of Common Stock upon exercise of the Warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

Except as described above, no Public Warrants will be exercisable for cash and we will not be obligated to issue shares of Common Stock unless at the time a holder seeks to exercise such Warrant, a prospectus relating to the shares of Common Stock issuable upon exercise of the warrants is current and the shares of Common Stock have been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the Warrants. Under the terms of the warrant agreement, we have agreed to use our best efforts to meet these conditions and to maintain a current prospectus relating to the shares of Common Stock issuable upon exercise of the Warrants until the expiration of the Warrants. However, we cannot assure you that we will be able to do so and, if we do not maintain a current prospectus relating to the shares of Common Stock issuable upon exercise of the Warrants, holders will be unable to exercise their Warrants, and we will not be required to settle any such Warrant exercise. If the prospectus relating to the shares of Common Stock issuable upon the exercise of the Warrants is not current or if the Common Stock is not qualified or exempt from qualification in the jurisdictions in which the holders of the Warrants reside, we will not be required to net cash settle or cash settle the Warrant exercise, the Warrants may have no value, the market for the Warrants may be limited and the warrants may expire worthless.

Warrant holders may elect to be subject to a restriction on the exercise of their Warrants such that an electing Warrant holder would not be able to exercise their Warrants to the extent that, after giving effect to such exercise, such holder would beneficially own in excess of 9.9% of the shares of Common Stock outstanding.

No fractional shares will be issued upon exercise of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the future appreciationnearest whole number the number of Holdco and are intendedshares of Common Stock to be treated as “profits interests” forissued to the Warrant holder.

The Company has agreed that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. This provision applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal income tax purposes, meaningdistrict courts of the United States of America are the sole and exclusive forum.

Preferred Stock

We have no Preferred Stock outstanding.

Anti-Takeover Provisions

The Company’s Certificate of Incorporation and Amended and Restated Bylaws, the Investor Rights Agreement and the DGCL contain provisions that could have the Class P Tracking Units generally entitleeffect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our Board. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the holder onlymembers of our Board or taking other corporate actions, including effecting changes in our management. For instance, our Board will be empowered to valueelect a director to fill a vacancy created by the future appreciationexpansion of the Board or profitsthe resignation, death, or removal of Holdco.

Holdco has granted each Named Executive Officer Class P Units, which they have contributed to Management Holdco, whicha director in turn has granted the Named Executive Officers corresponding Class P Tracking Units. The Class P Tracking Units issued to each Named Executive Officer,certain circumstances; and the underlyingCompany’s advance notice provisions in the Amended and Restated Bylaws require that stockholders must comply with certain procedures in order to nominate candidates to our Board or to propose matters to be acted upon at a stockholders’ meeting.

The Company’s authorized but unissued Common Stock and Preferred Stock is available for future issuances without stockholder approval and may be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved Common Stock and Preferred Stock could render more difficult or discourage an attempt to obtain control of the Company by means of a proxy contest, tender offer, merger or otherwise.

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Registration Rights

We are subject to an Investor Rights Agreement, dated February 14, 2022 with certain Sellers, BCP QualTek, the Sponsors, Sponsor Representative, and certain Other Holders (all as defined therein), which obligates us to grant to the Holders (as defined therein) certain registration rights, including customary piggyback registration rights and demand registration rights immediately after the closing of the Business Combination, which are subject to customary terms and conditions, including with respect to cooperation and reduction of underwritten shelf takedown provisions (subject to lock-up restrictions for six months after the closing date of the Business Combination). Additionally, the Investor Rights agreement sets forth certain corporate governance rights relating to the Company.

Listing

Our Class P Units, vestA Common Stock and Warrants are listed on the Nasdaq Capital Market under the symbols “QTEK” And “QTEKW,” respectively.

Transfer Agent and Warrant Agent

The transfer agent for our shares of common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company, 1 State Street, 30th Floor, New York, New York 10004.

2027 Convertible Notes

The 2027 Convertible Notes are governed by the Indenture. The 2027 Convertible Notes bear interest as follows: 20% ondescribed immediately below, are payable quarterly, are convertible into shares of Class A Common Stock at an initial vesting date set forthconversion price (subject to adjustment as described in each award agreement, and an additional 20%the Indenture) of the lowest of (i) $10.00; (ii) 115% of the arithmetic average of the Daily VWAPs for the 10-Trading Day period commencing on eachthe first Trading Day after the public release of the Company’s first quarterly earnings announcement following the Issue Date; (iii) 115% of the arithmetic average of the Daily VWAPs for the 10-Trading Day period commencing on the first Trading Day after the public release of the Company’s second quarterly earnings announcement following the Issue Date; (iv) 115% of the arithmetic average of the Daily VWAPs for the 10-Trading Day period commencing on the first Trading Day immediately following the first anniversary of the initial vesting date of the Indenture and (v) 115% of the arithmetic average of the Daily VWAPs for the 10-Trading Day period commencing on the first Trading Day after the closing date of the applicable Conversion Reset Offering by the Company, and shall mature on February 15, 2027. The 2027 Convertible Notes may not be redeemed or repaid by the Company prior to maturity. Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Indenture.

Maturity and Interest

The 2027 Convertible Notes will mature on February 15, 2027, unless earlier converted or repurchased.

The 2027 Convertible Notes provide for an interest rate that is set quarterly based on gross leverage, with a minimum interest rate of 9.50% per annum and up to 80%, with the final 20% vesting immediately prior to a Salemaximum of the Company (as defined in the Holdco LLC Agreement). Each Named Executive Officer was granted Class P Tracking Units and underlying Class P Units, with an initial vesting date of December 26, 2019. The Class P Tracking Units, and the underlying Class P Units are designated11.75% per annum as Class P-1 Units, Class P-2 Units or Class P-3 Units. Vested Class P-1 Units, Class P-2 Units and Class P-3 Units, are eligible to participate in dividends/proceeds upon a Sale of the Company once Class A Members of Holdco (as defined in the Holdco LLC Agreement) receive a 1X, 2X or 3X cash return on their investment (on a fully diluted basis), respectively.

Outstanding Equity Awards at 2021 Fiscal Year-End

The following table summarizes, for each of the Named Executive Officers, the number of Class P Tracking Units held as of December 31, 2021.follows:

Applicable Interest Rate

Total Leverage Ratio (as defined in the Indenture)

(as defined in the Indenture)

Less than 4.5x

9.50

%

4.5x or greater but less than 5.0x

10.00

%

5.0x or greater but less than 5.25x

10.75

%

5.25x or greater

11.75

%

Interest accrues from the issue date or from the most recent date on which interest has been paid. Interest is payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, commencing on June 15, 2022. Accrued interest on the 2027 Notes shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.

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Ranking

The 2027 Convertible Notes are general senior obligations of the Company and:

rank pari passu in right of payment with all existing and future senior indebtedness of the Company;
are effectively senior to all of the Company’s subordinated indebtedness; and
are guaranteed on a senior basis by the Guarantors (as defined below).

The Guarantees (as defined below) are general senior obligations of each Guarantor and:

rank pari passu in right of payment with all existing and future senior indebtedness of such Guarantor; and
are effectively senior to all of such Guarantor’s subordinated indebtedness.

Certain Covenants

The 2027 Convertible Notes are subject to various covenants that restrict the Company’s and its Subsidiaries’ ability to, among other things:

make restricted payments;
incur or guarantee indebtedness or issue disqualified stock;
create, incur or assume any Lien;
make any payment to, or sell, lease, transfer or otherwise dispose of properties or assets or enter into transactions with any Affiliate of the Company;
sell or transfer interest in its Material Intellectual Property; or
merge or consolidate with other companies or transfer all or substantially all of the Company’s assets.

Limitation on Certain Restricted Payments

The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly:

(i)declare or pay any dividend or make any payment or distribution (x) on account of the Company’s or any of its Restricted Subsidiaries’ Capital Stock (including any payment made in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or (y) to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Capital Stock in their capacity as holders, other than (A) dividends, payments or distributions by the Company payable solely in Capital Stock (other than Disqualified Stock) of the Company or (B) dividends, payments or distributions by a Restricted Subsidiary to the Company or another Restricted Subsidiary (and in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Capital Stock in such class or series of securities);
(ii)purchase, redeem, defease or otherwise acquire or retire for value (including any payment made in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) any Capital Stock of the Company held by Persons other than the Company or any Restricted Subsidiary;
(iii)purchase, repay, prepay, repurchase, redeem, defease, acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Indebtedness, other than (A) Indebtedness permitted under clause (ii) of Section 4.09(b) of the Indenture or (B) the purchase, repurchase or other acquisition of Subordinated

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Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or
(iv)make any Restricted Investment;

(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”).

Notwithstanding anything to the contrary contain herein, so long as no Default shall have occurred and be continuing or would occur as a consequence thereof, the provisions of this covenant will not prohibit any of the following:

(i)the payment of any dividend or distribution or consummation of any redemption within sixty (60) days after the date of declaration thereof or the giving of a redemption notice related thereto, if at the date of declaration or notice such payment would have complied with any provision of this covenant; provided that the making of such payment will reduce capacity for Restricted Payments pursuant such provisions when so made;
(ii)a Restricted Payment to pay for the prepayment, purchase, repurchase, redemption, defeasance, discharge, retirement or other acquisition of Capital Stock of the Company held by any future, present or former employee, director, officer, member of management, operating partner, manager, contractor, service provider, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries pursuant to any management equity plan, stock option plan, phantom equity plan or any other management, employee benefit or other compensatory plan or agreement (and any successor plans or arrangements thereto), employment, termination or severance agreement, or any stock subscription or equityholder agreement (including, for the avoidance of doubt, any principal and interest payable on any Indebtedness issued by the Company in connection with such prepayment, purchase, repurchase, redemption, defeasance, discharge, retirement or other acquisition), including any Capital Stock rolled over, accelerated or paid out by or to any employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries in connection with any transaction; providedhowever, that the aggregate Restricted Payments made under this clause do not exceed $5,500,000 in any fiscal year (with unused amounts in any fiscal year being carried over to succeeding fiscal years); providedfurther, that such amount in any calendar year may be increased by an amount not to exceed:
(A)the cash proceeds from the sale of Capital Stock (other than Disqualified Stock) of the Company to any future, present or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries or any of its direct or indirect parent companies that occurs after the Issue Date to the extent the cash proceeds from the sale of such Capital Stock have not otherwise been applied to the making of Restricted Payments pursuant to this covenant; plus the cash proceeds of key man life insurance policies received by the Company or any Restricted Subsidiary of the Company after the Issue Date; and in addition, cancellation of Indebtedness owing to the Company or any Restricted Subsidiary from any future, present or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries (or any permitted transferees thereof) of the Company or any Restricted Subsidiary of the Company in connection with a repurchase of Capital Stock of the Company or any Restricted Subsidiary of the Company from such Persons will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provisions of the Indenture;
(iii)cashless repurchases of Capital Stock deemed to occur upon the exercise of stock options, warrants or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represent a portion of the exercise, conversion or exchange price thereof;
(iv)each Restricted Subsidiary of the Company may make Restricted Payments to the Company or any Guarantor or to another Restricted Subsidiary of the Company which is the immediate parent of the Restricted Subsidiary making such Restricted Payment;
(v)payments made or expected to be made by the Company or any Subsidiary in respect of withholding or similar taxes payable in connection with the exercise or vesting of Capital Stock or any other equity award by any future, present or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any Subsidiary and purchases, repurchases, redemptions, defeasances or other acquisitions or retirements of

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Capital Stock deemed to occur upon the exercise, conversion or exchange of stock options, warrants, equity-based awards or other rights in respect thereof if such Capital Stock represents payments in respect of withholding or similar taxes payable upon exercise or vesting thereof;
(vi)the making of cash payments in connection with any conversion or redemption of the Notes, in each case, pursuant to the terms of the Indenture;
(vii)any non-Wholly Owned Subsidiary of the Company may make Restricted Payments (which may be in cash) to its shareholders, members or partners generally, so long as the Company or the Restricted Subsidiary which owns the Capital Stock in the Restricted Subsidiary making such Restricted Payment receives at least its proportionate share thereof (based upon its relative holding of the Capital Stock in the Restricted Subsidiary making such Restricted Payment and taking into account the relative preferences, if any, of the various classes of Capital Stock of such Restricted Subsidiary);

(viii)

any payments made pursuant to the Tax Receivable Agreement;

(ix)

(a) any prepayment, purchase, repurchase, redemption, defeasance, discharge, retirement or other acquisition of Capital Stock, including any accrued and unpaid dividends thereon (“Treasury Capital Stock”) or Subordinated Indebtedness made by exchange (including any such exchange pursuant to the exercise of a conversion right or privilege in connection with which cash is paid in lieu of the issuance of fractional shares) for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (in each case, other than Disqualified Stock or Designated Preferred Stock) (“Refunding Capital Stock”), and (b) the declaration and payment of dividends on Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to a Restricted Subsidiary of the Company or to an employee stock ownership plan or any trust established by the Company or any of its Restricted Subsidiaries) of Refunding Capital Stock;

(x)any prepayment, purchase, repurchase, exchange, redemption, defeasance, discharge, retirement or other acquisition of Subordinated Indebtedness made by exchange for, or out of the proceeds of the substantially concurrent sale of, Refinancing Indebtedness permitted to be incurred pursuant to Section 4.09 of the Indenture;
(xi)payments or distributions to dissenting stockholders pursuant to applicable law (including in connection with, or as a result of, exercise of dissenters’ or appraisal rights and the settlement of any claims or action (whether actual, contingent or potential)), pursuant to or in connection with a merger, amalgamation, consolidation or transfer of assets not prohibited by the Indenture;
(xii)the payment by QualTek Holdco, LLC or any of its Subsidiaries of any dividend or distribution described in Section 6.2 of the Amended and Restated Limited Liability Company Agreement of QualTek Holdco, LLC (and any successor thereto) (in each case as determined without reference to any restrictions applicable to tax distributions contained in any then applicable bank financing agreements), as in effect on the Issue Date; and

(xiii)

any Restricted Payment provided that (i) no Event of Default shall have occurred and be continuing or would result therefrom and (ii) immediately after giving effect to the making thereof on a Pro Forma Basis (including any related incurrence of Indebtedness), the Total Net Leverage Ratio, determined as of the last day of the then most recently ended Four Quarter Period (or in the case of any Restricted Payment of the type described in clause (a) of the definition thereof, the Four Quarter Period most recently ended prior to the time of the declaration thereof), shall not exceed 2.50:1.00.

For purposes of determining compliance with this covenant, if any Restricted Payment (or portion thereof) would be permitted pursuant to one or more provisions described above, the Company may divide such Restricted Payment in any manner that complies with this covenant.

Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock or Disqualified Stock

The Company will not, and will not permit any of its Restricted Subsidiaries, in each case, to, directly or indirectly, create, incur, issue, assume, enter into a guarantee of or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Indebtedness), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock.

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Notwithstanding anything to the contrary therein, this covenant will not prohibit the incurrence of any of the following items of Indebtedness or the issuance of any of the following Disqualified Stock or Preferred Stock (collectively, “Permitted Indebtedness”):

(i)(A) the incurrence of Indebtedness pursuant to Credit Facilities by the Company or any Restricted Subsidiary; provided that, immediately after giving effect to any such incurrence and the use of proceeds thereof, on a Pro Forma Basis, the aggregate principal amount of all Indebtedness incurred under this provision (including any Permitted Refinancing Indebtedness in respect thereof) does not exceed the sum of $483,500,000 plus (A) if such Indebtedness is secured by Liens, an amount equal to the maximum principal amount of Indebtedness that could be incurred such that after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, the Secured Net Leverage Ratio of the Company for the most recently ended Four Quarter Period as of such date would not exceed 4.75:1.00 or (B) if such Indebtedness is unsecured, an amount equal to the maximum principal amount of Indebtedness that could be incurred such that after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, the Total Net Leverage Ratio for the most recently ended Four Quarter Period as of such date would not exceed 5.25:1.00; provided that the aggregate principal amount of Indebtedness then outstanding under this clause (i) incurred by Restricted Subsidiaries that are not Guarantors, together with the aggregate principal amount of Refinancing Indebtedness then outstanding under clause (xv) below, shall not exceed the greater of (x) $15,000,000 and (y) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period, and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(ii)Indebtedness of the Company or any Restricted Subsidiary owing to the Company or any Restricted Subsidiary; provided that (i) such Indebtedness shall not have been transferred to any Person other than the Company or any Restricted Subsidiary, (ii) such Indebtedness owing by the Company or any Guarantor to a Restricted Subsidiary that is not a Guarantor shall be unsecured and subordinated in right of payment to the payment in full of the Notes and (iii) such Indebtedness owing by any Restricted Subsidiary that is not a Guarantor to any Guarantor or the Company is permitted as an Investment under Section 4.08 of the Indenture;
(iii)Guarantees incurred in compliance with clause (n) of the definition of “Permitted Investments” (as defined in the Indenture);
(iv)(A) Indebtedness existing on the Issue Date, or incurred pursuant to Credit Facilities existing on the Issue Date (in an aggregate amount not greater than the aggregate amount outstanding or available for borrowing under such Credit Facilities on the Issue Date), (B) the Notes and the Guarantees, and (C) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clauses (A) or (B) above or under this clause (C);
(v)(A) Indebtedness of the Company or any Restricted Subsidiary (a) incurred to finance the acquisition, construction, repair, replacement or improvement of any fixed or capital assets of the Company or any Restricted Subsidiary, including Capitalized Lease Obligations, provided that such Indebtedness is incurred prior to or within 270 days after such acquisition or the completion of such construction or improvement and the principal amount of such Indebtedness does not exceed the cost of acquiring, constructing or improving such fixed or capital assets, or (b) assumed in connection with the acquisition of any fixed or capital assets of the Company or any Restricted Subsidiary, provided, in the case of this clause (A), that at the time of incurrence or assumption of such Indebtedness and after giving pro forma effect thereto and the use of the proceeds thereof, the aggregate principal amount of Indebtedness then outstanding under this clause (A), together with the aggregate principal amount of Permitted Refinancing Indebtedness then outstanding under clause (B) below, shall not exceed the greater of (x) $20,000,000 and (y) 33.4% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period; and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(vi)(A) Indebtedness, Disqualified Stock or Preferred Stock of any Person that becomes (other than as a result of a redesignation of an Unrestricted Subsidiary) a Restricted Subsidiary (or of any Person not previously a Subsidiary that is merged or consolidated with or into a Restricted Subsidiary in a transaction permitted hereunder) after the Issue Date, or Indebtedness of any Person that is assumed after the Issue Date by any Restricted Subsidiary in connection with an acquisition of assets by such Restricted Subsidiary in an Acquisition or other Investment permitted hereunder, provided that (a) such Indebtedness, Disqualified Stock or Preferred exists at the time such Person becomes a Restricted Subsidiary (or is so merged or consolidated) or such assets are acquired and is not created in contemplation of or in connection with such Person becoming a Restricted Subsidiary (or such merger or consolidation) or such assets being acquired, and (b) immediately after giving effect to the Company or any Restricted Subsidiary becoming liable with respect to such Indebtedness, Disqualified Stock or Preferred Stock (whether as a result of such Person becoming a Restricted Subsidiary (or such merger or consolidation) or

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such assumption), and after giving pro forma effect thereto, (x) if such Indebtedness is secured by Liens, the Secured Net Leverage Ratio of the Company for the most recently ended Four Quarter Period as of such date would not exceed the greater of 4.75:1.00 and the Secured Net Leverage Ratio of the Company in effect immediately prior to the assumption or incurrence of such Indebtedness or (y) if such Indebtedness is unsecured, the Total Net Leverage Ratio for the most recently ended Four Quarter Period as of such date would not exceed the greater of 5.25:1.00 and the Total Net Leverage Ratio of the Company in effect immediately prior to the assumption or incurrence of such Indebtedness, and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(vii)Indebtedness of the Company or any Restricted Subsidiary arising from any agreement in the form of purchase price adjustments, earn-outs, non-competition agreements, indemnification obligations or other arrangements representing Acquisition Consideration or deferred payments of a similar nature incurred in connection with any Acquisition or other Investment permitted by Section 4.08 or any Disposition permitted by Section 11.01, and Indebtedness arising from guarantees, letters of credit, bank guarantees, surety bonds, performance bonds or similar instruments securing the performance of the Company or any such Restricted Subsidiary pursuant to any such agreement; provided that, with respect to any Indebtedness existing or incurred pursuant to this clause (vii) with respect to unpaid earn-outs, the amount of any unpaid earn-out shall not exceed 35% of the Acquisition Consideration of the Acquisition or Investment to which such unpaid earn-out relates;
(viii)(A) Indebtedness of Restricted Subsidiaries that are not Guarantors, provided that at the time of incurrence of such Indebtedness and after giving pro forma effect thereto and the use of the proceeds thereof, the aggregate principal amount of Indebtedness then outstanding under this clause (A), together with the aggregate principal amount of Permitted Refinancing Indebtedness then outstanding under clause (B) below, shall not exceed the greater of (x) $15,000,000 and (y) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period; and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(ix)(A) Indebtedness of the Company and the Restricted Subsidiaries, provided that at the time of incurrence of such Indebtedness and after giving pro forma effect thereto and the use of the proceeds thereof, the aggregate principal amount of Indebtedness then outstanding under this clause (A), together with the aggregate principal amount of Permitted Refinancing Indebtedness then outstanding under clause (B) below, shall not exceed the greater of (x) $15,000,000 and (y) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period; and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(x)Indebtedness in respect of netting services, overdraft protections and otherwise arising from treasury, depository, credit card, debit cards and cash management services or in connection with any automated clearing-house transfers of funds, overdraft or any similar services, in each case in the ordinary course of business;
(xi)Indebtedness incurred in respect of letters of credit, bank guarantees, bankers’ acceptances, surety bonds, performance bonds or similar instruments issued or created by the Company or any Restricted Subsidiary in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations, including in respect of workers’ compensation claims, unemployment insurance (including premiums related thereto), vacation pay, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims;
(xii)Indebtedness in respect of, or in respect of letters of credit, bank guarantees, surety bonds, performance bonds or similar instruments relating to, tenders, statutory obligations, performance, bid, appeal, stay, customs, surety and return-of-money bonds, performance and completion guarantees and similar obligations of the Company or any Restricted Subsidiary incurred in the ordinary course of business (including relating to any litigation being contested in good faith and not constituting an Event of Default hereunder) and not in connection with the borrowing of money or any Hedging Obligations;
(xiii)Indebtedness owed to current or former officers, directors or employees of the Company or any Restricted Subsidiary (or their respective estates, heirs, family members, spouses and former spouses, domestic partners and former domestic partners or beneficiaries under their respective estates) to finance the purchase or redemption of Capital Stock in the Company permitted by Section 4.08 of the Indenture;
(xiv)Indebtedness consisting of the financing of insurance premiums or take or pay obligations contained in supply arrangements that do not constitute Guarantees, in each case, incurred in the ordinary course of business;

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(xv)(A) Indebtedness of the Company and/or any Restricted Subsidiary incurred in connection with an Acquisition or other Investment permitted hereunder, provided that, immediately after giving effect to the Company or any Restricted Subsidiary becoming liable with respect to such Indebtedness, Disqualified Stock or Preferred Stock (whether as a result of such Person becoming a Restricted Subsidiary (or such merger or consolidation) or such assumption), and after giving pro forma effect thereto, (x) if such Indebtedness is secured by Liens, the Secured Net Leverage Ratio of the Company for the most recently ended Four Quarter Period as of such date would not exceed the greater of 4.75:1.00 and the Secured Net Leverage Ratio of the Company in effect immediately prior to the assumption or incurrence of such Indebtedness or (y) if such Indebtedness is unsecured, the Total Net Leverage Ratio for the most recently ended Four Quarter Period as of such date would not exceed the greater of 5.25:1.00 and the Total Net Leverage Ratio of the Company in effect immediately prior to the assumption or incurrence of such Indebtedness; provided that the aggregate principal amount of Indebtedness then outstanding under this clause (xv) incurred by Restricted Subsidiaries that are not Guarantors, together with the aggregate principal amount of Refinancing Indebtedness then outstanding under clause ((i) above, shall not exceed the greater of (x) $15,000,000 and (y) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period, and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(xvi)(A) Capitalized Lease Obligations arising under any Sale/Leaseback Transaction permitted under Section 4.10(n) of the Indenture; provided that at the time of consummation of such Sale/Leaseback Transaction and after giving pro forma effect thereto, the aggregate principal amount of Indebtedness then outstanding under this clause (A), together with the aggregate principal amount of Permitted Refinancing Indebtedness then outstanding under clause (B) below, shall not exceed the greater of (x) $5,000,000 and (y) 8.4% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period; and (ii) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(xvii)Indebtedness consisting of obligations of the Company or any Restricted Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with the Transactions, Permitted Acquisitions or any other Investment expressly permitted hereunder;
(xviii)to the extent constituting Indebtedness, all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in this covenant;
(xix)(A) Guarantees by the Company or any Restricted Subsidiary of the obligations of suppliers, customers and licensees in the ordinary course of business, (B) Indebtedness incurred in the ordinary course of business in respect of obligations of the Company or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (C) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guarantees or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(xx)Indebtedness of the Company or any Restricted Subsidiary consisting of obligations owing under incentive, supply, license or similar agreements entered into in the ordinary course of business;
(xxi)Indebtedness of the Company or any Restricted Subsidiary representing deferred compensation to current or former directors, officers, employees, members of management, managers and consultants of the Company (or any direct or indirect parent thereof) or any Restricted Subsidiary in the ordinary course of business;
(xxii)unfunded pension fund and other employee benefit plan obligations and liabilities incurred by the Company or any Restricted Subsidiary in the ordinary course of business to the extent that the unfunded amounts would not otherwise cause an Event of Default hereunder;
(xxiii)to the extent constituting Indebtedness, obligations arising under agreements governing any Permitted Factoring Transactions; and
(xxiv)the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of Preferred Stock; providedhowever, that: (x) any subsequent issuance or transfer of Capital Stock that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary; and (y) any sale or other transfer of any such Preferred Stock to a Person that is not the Company or a Restricted Subsidiary, will be deemed, in each

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case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (xxiv).

Limitation on Liens

Neither the Company nor any Restricted Subsidiary will, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any asset of the Company or any Restricted Subsidiary, whether now owned or hereafter acquired or licensed, or assign or sell any income, profits or revenues (including accounts receivable and royalties) or rights in respect of any thereof, except:

(i)in the case of Liens securing Subordinated Indebtedness, the Notes and related Guarantees are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens; and
(ii)in all other cases, the 2027 Convertible Notes or the Guarantees are equally and ratably secured.

The foregoing provisions of this covenant shall not apply to:

(a)(i) Liens securing the Notes and the related Guarantees and (ii) Liens securing Indebtedness and other Obligations permitted to be incurred under (or secured pursuant to) Credit Facilities, including any letter of credit facility relating thereto, that was incurred pursuant to Section 4.09(b)(i) of the Indenture;
(b)Permitted Encumbrances;
(c)any Lien on any asset of the Company or any Restricted Subsidiary existing on the Issue Date, and any extensions, renewals and replacements thereof; provided that (i) such Lien shall not apply to any other asset of the Company or any Restricted Subsidiary, other than to proceeds and products of, and after-acquired property that is affixed or incorporated into, the assets covered by such Lien (it being understood that individual financings of the type permitted under Section 4.09(b)(v) of the Indenture provided by any Person (or its Affiliates) may be cross-collateralized to other such financings provided by such Person (or its Affiliates)), and (ii) such Lien shall secure only those obligations that it secures on the Issue Date and any extensions, renewals and refinancings thereof that do not increase the outstanding principal amount thereof (except by an amount not greater than accrued and unpaid interest on such obligations, any original issue discount and any reasonable fees, premiums and expenses relating to such extension, renewal or refinancing) and, in the case of any such obligations constituting Indebtedness, that are permitted under Section 4.09(b)(iv) of the Indenture as Permitted Refinancing Indebtedness in respect thereof;
(d)Liens on fixed or capital assets acquired, constructed, repaired, replaced or improved by the Company or any Restricted Subsidiary; provided that (i) such Liens secure only Indebtedness permitted by Section 4.09(b)(v) of the Indenture and obligations relating thereto not constituting Indebtedness and (ii) such Liens shall not apply to any other asset of the Company or any Restricted Subsidiary, other than to proceeds and products of, and after-acquired property that is affixed or incorporated into, the assets covered by such Liens; provided further that individual financings of equipment or other fixed or capital assets otherwise permitted to be secured hereunder provided by any Person (or its Affiliates) may be cross-collateralized to other such financings provided by such Person (or its Affiliates);
(e)any Lien existing on any asset prior to the acquisition thereof by the Company or any Subsidiary or existing on any asset of any Person that becomes (other than as a result of a redesignation of an Unrestricted Subsidiary) a Restricted Subsidiary (or of any Person not previously a Subsidiary that is merged or consolidated with or into a Restricted Subsidiary in a transaction permitted hereunder) after the Issue Date prior to the time such Person becomes a Restricted Subsidiary (or is so merged or consolidated), and any extensions, renewals and replacements thereof; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Restricted Subsidiary (or such merger or consolidation), (ii) such Lien shall not apply to any other asset of the Company or any Restricted Subsidiary (other than, in the case of any such merger or consolidation, the assets of any special purpose merger Restricted Subsidiary that is a party thereto), other than to proceeds and products of, and after-acquired property that is affixed or incorporated into, the assets covered by such Lien or becomes subject to such Lien pursuant to an after-acquired property clause as in effect on the date of such acquisition or the date such Person becomes a Restricted Subsidiary (or is so merged or consolidated) (it being understood that individual financings of the type permitted under Section 4.09(b)(v) of the Indenture provided by any Person (or its Affiliates) may be cross-collateralized to other such financings provided by such Person (or its Affiliates)), and

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(iii) such Lien shall secure only those obligations that it secures on the date of such acquisition or the date such Person becomes a Restricted Subsidiary (or is so merged or consolidated), and any extensions, renewals and refinancing thereof that do not increase the outstanding principal amount thereof (except by an amount not greater than accrued and unpaid interest on such obligations, any original issue discount or upfront fees and any fees, premiums and expenses relating to such extension, renewal or refinancing);
(f)in connection with any Disposition permitted under Section 11.01 of the Indenture, customary rights and restrictions contained in agreements relating to such Disposition pending the completion thereof;
(g)in the case of (A) any Restricted Subsidiary that is not a Wholly Owned Subsidiary or (B) the Capital Stock in any Person that is not a Restricted Subsidiary (including any Unrestricted Subsidiary), any encumbrance, restriction or other Lien, including any put and call arrangements, related to the Capital Stock in such Restricted Subsidiary or such other Person set forth in (a) its Organizational Documents or any related joint venture, shareholders’ or similar agreement, in each case so long as such encumbrance or restriction is applicable to all holders of the same class of Capital Stock or is otherwise of the type that is customary for agreements of such type, or (b) in the case of any Person that is not a Restricted Subsidiary, in any agreement or document governing Indebtedness of such Person;
(h)any Lien on assets and Capital Stock of Restricted Subsidiaries that are not Guarantors (including Capital Stock owned by such Persons); provided that such Lien shall secure only Indebtedness or other obligations of Restricted Subsidiaries that are not Guarantors;
(i)Liens solely on any cash earnest money deposits, escrow arrangements or similar arrangements made by the Company or any Restricted Subsidiary in connection with any letter of intent or purchase agreement for any Acquisition or Investment permitted hereunder;
(j)nonexclusive outbound licenses of Intellectual Property granted by the Company or any Restricted Subsidiary in the ordinary course of business that do not materially detract from the value of the affected asset or interfere with the ordinary conduct of business of the Company or any Restricted Subsidiary;
(k)any Lien in favor of the Company or any Restricted Subsidiary (other than Liens on assets of the Company or any Guarantor in favor of a Restricted Subsidiary that is not a Guarantor);
(l)(A) deposits made in the ordinary course of business to secure obligations to insurance carriers providing casualty, liability or other insurance to the Company and the Subsidiaries and (B) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(m)receipt of progress payments and advances from customers in the ordinary course of business to the extent the same creates a Lien;
(n)Liens on fixed or capital assets subject to any Sale/Leaseback Transaction; provided that (i) such Liens secure only Indebtedness permitted by Section 4.09(b)(xvi) and obligations relating thereto not constituting Indebtedness and (ii) such Liens shall not apply to any other asset of the Company or any Restricted Subsidiary, other than to proceeds and products of, and after-acquired property that is affixed or incorporated into, the assets covered by such Liens;
(o)Liens on cash and Cash Equivalents securing obligations in respect of any Hedging Obligations permitted hereunder and entered into in the ordinary course of business; provided that at the time of the incurrence of such Liens, the aggregate amount of cash and Cash Equivalents secured by Liens permitted by this clause does not exceed the greater of (i) $7,500,000 and (ii) 12.5% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period;
(p)Liens securing Permitted Ratio Indebtedness and obligations relating thereto not constituting Indebtedness;
(q)Liens securing Permitted Incurred Acquisition Indebtedness and obligations relating thereto not constituting Indebtedness;
(r)Liens on the Capital Stock of joint ventures or Unrestricted Subsidiaries securing capital contributions to, or obligations of, such Persons;

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(s)Liens on receivables and related assets incurred in connection with Permitted Factoring Transactions (including Liens on such receivables resulting from precautionary UCC filings or from recharacterization or any such with Permitted Factoring Transactions as a financing or a loan); and
(t)other Liens securing Indebtedness or other obligations, provided that at the time of the incurrence of such Liens and the related Indebtedness and other obligations and after giving pro forma effect thereto and the use of proceeds thereof, the aggregate outstanding amount of Indebtedness and other obligations secured by Liens permitted by this clause does not exceed the greater of (i) $15,000,000 and (ii) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period.

Transactions with Affiliates

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Company (each, an “Affiliate Transaction”) involving aggregate payments or consideration in excess of $2,000,000, unless:

(1)the Affiliate Transaction is on terms that are substantially as favorable to the Company or the relevant Restricted Subsidiary, taken as a whole, as those that would have been obtained at the time in a comparable arms-length transaction by the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the Company or any of its Restricted Subsidiaries;
(2)the Company delivers to the Trustee, with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $10,000,000, a resolution of the Board accompanied by an Officer’s Certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board; and
(3)with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $25,000,000, the Company obtains a written opinion from an Independent Financial Advisor to the effect that the consideration to be paid or received in connection with such Affiliate Transaction or Affiliate Transactions is fair, from a financial point of view, to the Company and its Subsidiaries, taken as a whole.

The following will not be deemed Affiliate Transactions under the Indenture, and are therefore not subject to the above limitations:

(1)any collective bargaining, consulting or employment agreement or compensation plan, stock option, stock ownership plan, management equity plan, phantom equity plan or any other management, employee benefit or other compensatory plan or agreement (and any successor plans or arrangements thereto), termination or severance agreement, or officer or director indemnification arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business for the benefit of any future, current or former employee, director, officer, member of management, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries and payments and transactions pursuant thereto, including (A) any issuance, transfer or sale of Capital Stock, options, other equity-related interests or other securities, or other payments, awards or grants in cash, securities or otherwise to any future, current or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members,) of the Company or any of its Restricted Subsidiaries; (B) the payment of compensation, fees, costs and expenses to, and indemnities (including under insurance policies) and reimbursements, employment and severance arrangements, and employee benefit and pension expenses provided on behalf of, or for the benefit of, future, current or former employees, directors, officers, members of management, managers, contractors, consultants, distributors or advisors (or their respective Immediate Family Members) of the Company or any Restricted Subsidiary (whether directly or indirectly and including by their Immediate Family Members); (C) any subscription agreement or similar agreement pertaining to the repurchase of Capital Stock pursuant to put/call rights or similar rights with current or former officers, directors, members of management, managers, employees, consultants or independent contractors; and (D) transactions pursuant to any employee compensation, benefit plan, stock option plan or arrangement, any health, disability or similar insurance plan which covers current or former officers, directors, members of management, managers, employees, consultants or independent contractors or any employment contract or arrangement;

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(2)transactions between or among the Company and/or its Restricted Subsidiaries (or a Person that becomes a Restricted Subsidiary as a result of such transaction);
(3)payment of fees and reimbursement of expenses and indemnities provided to any future, current or former employee, director, officer, member of management, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries;
(4)any transaction in which the only consideration paid by the Company or any Restricted Subsidiary consists of Capital Stock (other than Disqualified Stock) of the Company or any contribution of capital to the Company;
(5)any payments made pursuant to the Tax Receivable Agreement;
(6)Restricted Payments that do not violate the provisions of Section 4.08 of the Indenture;
(7)transactions pursuant to agreements or arrangements as in effect on the Issue Date, or any amendment, modification, or supplement thereto or replacement thereof (so long as such agreement or arrangement, as so amended, modified or supplemented or replaced, is not materially more disadvantageous, taken as a whole, than such agreement or arrangement as in effect on the Issue Date, as determined in good faith by the Company);
(8)purchases or sales of goods and/or services with customers, clients, suppliers, joint ventures, purchasers, sales agents or sellers of goods and services or providers of employees or other labor entered into in the ordinary course of business on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained at the time in a comparable transaction by the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the Company;
(9)(A) if such Affiliate Transaction is with an Affiliate in its capacity as a holder of Indebtedness of the Company or any Restricted Subsidiary, a transaction in which such Affiliate is treated no more favorably than the other holders of Indebtedness of the Company or such Restricted Subsidiary; (B) any purchases by the Company’s Affiliates of Indebtedness or Disqualified Stock of the Company or any of the Restricted Subsidiaries, the majority of which Indebtedness or Disqualified Stock is purchased by Persons who are not the Company’s Affiliates; provided that such purchases by the Company’s Affiliates are on the same terms as such purchases by such Persons who are not the Company’s Affiliates; and (C) (i) investments by Affiliates in securities or loans of the Company or any of the Restricted Subsidiaries so long as the investment is being offered by the Company or such Restricted Subsidiary generally to other non-affiliated third party investors on the same or more favorable terms and (ii) payments to Affiliates in respect of securities or loans of the Company or any of the Restricted Subsidiaries contemplated in the foregoing subclause (i) or that were acquired from Persons other than the Company and its Restricted Subsidiaries, in each case, in accordance with the terms of such securities or loans;
(10)the formation and maintenance of any consolidated group or subgroup for tax, accounting or cash pooling or management purposes in the ordinary course of business or transactions undertaken in good faith for the purpose of improving the consolidated tax efficiency of the Company or any Restricted Subsidiary and not for the purpose of circumventing any provision of this Indenture;
(11)to the extent permitted under this Indenture, including in compliance with Article 11 of the Indenture, any merger, consolidation or reorganization of the Company with an Affiliate of the Company solely for the purpose of (i) forming or collapsing a holding company structure or (ii) reincorporating the Company in a new jurisdiction;
(12)entering into and the payment of costs and expenses and indemnities pursuant to one or more agreements that provide registration rights to the security holders of the Company or any direct or indirect parent of the Company or amending such agreement with security holders of the Company or any direct or any indirect parent of the Company and the performance of such agreements on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained at the time in a comparable transaction by the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the Company and that have been approved by the Board;
(13)fees, indemnities and reimbursements may be paid to directors, officers, employees, members of management, managers, consultants independent contractors of the Company and its Restricted Subsidiaries;

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(14)Restricted Subsidiaries of the Company may pay management fees, licensing fees and similar fees to the Company or to any Guarantor;
(15)advances to employees of the Company or any Restricted Subsidiary made in the ordinary course of business, in a manner that is consistent with past practice;
(16)the existence of, or the performance by the Company or any Restricted Subsidiary of its obligations under the terms of, any equityholders, limited liability company agreement, limited partnership agreement, investor rights or similar agreement (including any registration rights agreement or purchase agreements related thereto) to which it is party as of the Issue Date and any similar agreement that it may enter into thereafter; provided that the existence of, or the performance by the Company or any Restricted Subsidiary of its obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date will only be permitted under this clause to the extent that the terms of any such amendment or new agreement are not otherwise, when taken as a whole, more disadvantageous to the Holders in any material respect in the reasonable determination of the Company than those in effect on the Issue Date;
(17)transactions in which the Company or any Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Subsidiary from a financial point of view or meets the requirements of the Transactions with Affiliates covenant in the Indenture.
(18)transactions in which the Company or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Restricted Subsidiary from a financial point of view or meets the requirements of Section 4.11(a)(i) of the Indenture; and
(19)transactions entered into by an Unrestricted Subsidiary with an Affiliate prior to the designation of any such Unrestricted Subsidiary as a Restricted Subsidiary pursuant to the definition of “Unrestricted Subsidiary”, provided that such transactions were not entered into in contemplation of or in connection with such designation.

In addition, if the Company or any of its Restricted Subsidiaries (i) purchases or otherwise acquires assets or properties from a Person which is not an Affiliate, the purchase or acquisition by an Affiliate of the Company of an interest in all or a portion of the assets or properties acquired shall not be deemed an Affiliate Transaction (or cause such purchase or acquisition by the Company or a Restricted Subsidiary to be deemed an Affiliate Transaction) or (ii) sells or otherwise disposes of assets or other properties to a Person who is not an Affiliate, the sale or other disposition by an Affiliate of the Company of an interest in all or a portion of the assets or properties sold shall not be deemed an Affiliate Transaction (or cause such sale or other disposition by the Company or a Restricted Subsidiary to be deemed an Affiliate Transaction).

Material Intellectual Property

Interests in the Material Intellectual Property shall be held at all times by the Company or a Guarantor and the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, a) sell or transfer its interest, in one or a series of transactions, in any of the Material Intellectual Property to a Person that is not the Company or a Guarantor, (b) exclusively or co-exclusively licenses any Material Intellectual Property to a Person that is not the Company or a Guarantor (other than (i) non-perpetual licenses that are exclusive solely with respect to a customized software or software enhancement entered into in the ordinary course of business and in connection with the provision of services by the Company or any of its Restricted Subsidiaries or the provision, directly or together with the Company, of services by any third party with whom the Company or any of its Restricted Subsidiaries has a commercial arrangement to provide services or technology to enable the provision of such services to its customers; provided that, (i) at the time such license is entered into, in the judgment of the Company, the granting of such license does not materially and adversely affect the business or condition (financial or otherwise) of the Company and its Restricted Subsidiaries, taken as a whole), or (c) sell or transfer any interest in any Guarantor holding interests in Material Intellectual Property to a Person that is not the Company or a Guarantor, provided that, in each case, any Lien permitted by this Indenture shall not be prohibited by this covenant.

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Merger, Consolidation or Sale of Assets

Subject to certain provisions of the Indenture, the Company shall not consolidate with, merge with or into, or sell, convey, transfer or lease, all or substantially all of the consolidated assets of the Company and the Company’s Subsidiaries, taken as a whole, to another Person, unless:

(i)the resulting, surviving or transferee Person, if not the Company, shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and the Successor Company (if not the Company) shall expressly assume, by supplemental indenture all of the obligations of the Company under 2027 Convertible Notes and the Indenture;
(ii)immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing under the Indenture; and
(iii)if the Company is not the Successor Company, the Successor Company shall have delivered to the Trustee an Officer’s Certificate and Opinion of Counsel, each stating that such consolidation, merger, sale, conveyance, transfer or lease complies with the Indenture and that such supplemental indenture is authorized or permitted by the Indenture and an Opinion of Counsel stating that the supplemental indenture is the valid and binding obligation of the Successor Company, subject to customary exceptions and qualifications.

Subject to certain provisions of the Indenture, no Guarantor shall consolidate with, merge with or into, or sell, convey, transfer or lease, all or substantially all of its assets to, another Person, unless:

(i)the other Person is the Company or a Guarantor or becomes a Guarantor concurrently with the transaction;
(ii)either (x) the Company or a Guarantor is the continuing Person or (y) the resulting, surviving or transferee Person expressly assumes all of the obligations of the Guarantor under the Indenture by the execution of a supplemental indenture; or
(iii)the transaction constitutes a sale or other disposition or transfer (including by way of consolidation, merger or amalgamation) of the Guarantor or the sale, conveyance, transfer or lease of all or substantially all the assets of the Guarantor (in each case other than to the Company or a Guarantor) otherwise not prohibited by the Indenture.

Notes Guarantees

Certain subsidiaries of the Company (each a “Guarantor” and collectively, the “Guarantors”) have jointly and severally, fully and unconditionally guaranteed the obligations under the 2027 Convertible Notes as to payment of principal of and premium, if any, and interest when and as the same shall become due and payable (the “Guarantees”).

A Guarantee will be automatically and unconditionally terminated, and the relevant Guarantor will be automatically and unconditionally released and relieved of any obligations under its Guarantee and the Indenture in the event of:

upon a sale, transfer, exchange or other disposition (including by way of consolidation or merger) of Capital Stock of such Guarantor following which the applicable Guarantor ceases to be a Subsidiary or the sale, transfer, exchange or other disposition of all or substantially all the properties and assets of the applicable Guarantor (other than to the other Guarantors) otherwise not prohibited by the Indenture;
upon the release or discharge of such Guarantor’s obligations under the Credit Agreements or other Indebtedness that resulted in the creation of such Guarantee other than, in each case, a release or discharge through payment thereon;
upon the merger, amalgamation or consolidation of any Guarantor with and into the Company or another Guarantor or upon the liquidation of such Guarantor, in each case, in compliance with the Indenture;
upon the satisfaction and discharge of the 2027 Convertible Notes; or
as permitted by Article 10 of the Indenture.

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Company’s Mandatory Conversion Option

On or after February 14, 2024 and prior to the close of business on December 12, 2026, the Company may, at its option, elect to convert the outstanding Notes, in whole or in part, if (x) the Last Reported Sale Price of the Class A Common Stock (i) for at least twenty (20) Trading Days (whether or not consecutive) during the period of thirty (30) consecutive Trading Days ending on, and including, the Trading Day immediately preceding the date the Company sends a Mandatory Conversion Notice (the “Mandatory Conversion Notice Date”) and (ii) on the Trading Day immediately preceding the Mandatory Conversion Notice Date is greater than or equal to $14.00 per share; (y) the 60-Day ADTV ending on, and including, the Trading Day immediately preceding the Mandatory Conversion Notice Date is greater than or equal to $15,000,000; and (z) the shares of Class A Common Stock to be delivered upon such conversion, together with all shares of Class A Common Stock previously delivered in connection with the conversion of any Notes, equal no more than 20% of the free-float of the Class A Common Stock on a pro forma basis taking into account such conversion (together, the “Company Mandatory Conversion Condition”); provided that the Company may not elect to convert Notes under Section 14.03 of the Indenture in part unless it converts the same proportion of the principal amount of all outstanding Notes across all Holders.

To exercise the Company Mandatory Conversion Right, the Company will send notice of the Company’s election (a “Mandatory Conversion Notice”) to Holders, the Trustee and the Conversion Agent.

Such Mandatory Conversion Notice must state:

(i)that the 2027 Convertible Notes have been called for Mandatory Conversion, briefly describing the Company Mandatory Conversion Right under the Indenture;
(ii)the Mandatory Conversion Date;
(iii)the current Conversion Rate;
(iv)the name and address of the Paying Agent and the Conversion Agent; and
(v)the CUSIP and ISIN numbers, if any, of the 2027 Convertible Notes.

If the Company exercises the Company Mandatory Conversion Right in accordance with the Indenture, then a Conversion Date will automatically, and without the need for any action on the part of any Holder, the Trustee or the Conversion Agent, be deemed to occur, with respect to each Note then outstanding, on the Mandatory Conversion Date. The Mandatory Conversion Date will be a Business Day of the Company’s choosing that is no more than thirty (30), nor less than ten (10), Business Days after the Company sends the Mandatory Conversion Notice; provided that the Mandatory Conversion Date shall be no later than the second Scheduled Trading Day prior to the Maturity Date. The Company shall pay or deliver, as the case may be, the consideration due in respect of the Conversion Obligation on the second (2nd) Business Day immediately following the Mandatory Conversion Date.

Each share of Class A Common Stock delivered upon a Mandatory Conversion of any Note will be a newly issued or treasury share and will be duly and validly issued, fully paid, non-assessable, free from preemptive rights and free of any lien or adverse claim. If the Class A Common Stock is then listed on any securities exchange and has been registered on an effective registration statement with the Commission, then the Company will cause each share of Class A Common Stock, when delivered upon a Mandatory Conversion of any Note, to be admitted for listing on such exchange. Notwithstanding anything herein to the contrary, the Company (1) shall not be permitted to effect any Company Mandatory Conversion hereunder unless as of such Mandatory Conversion Date no Equity Conditions Failure then exists.

Adjustment of Conversion Rate

The Conversion Rate shall be adjusted from time to time by the Company if any of the following events occurs, except that the Company shall not make any adjustments to the Conversion Rate if Holders of the Notes participate (other than in the case of (x) a share split or share combination or (y) a tender or exchange offer), at the same time and upon the same terms as holders of the Class A Common Stock and solely as a result of holding the Notes, in any of the transactions described in the Indenture, without having to convert their Notes, as if they held a number of shares of Class A Common Stock equal to the Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.

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(a)

If the Company exclusively issues shares of Class A Common Stock as a dividend or distribution on shares of the Class A Common Stock, or if the Company effects a share split or share combination, the Conversion Rate shall be adjusted based on the following formula:

OS1

CR1 = CR0 ×

Option Awards(1)

Number of  

Number of

OS0

where,

CR0=the Conversion Rate in effect immediately prior to the open of business on the Record Date of such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as applicable;

CR1=the Conversion Rate in effect immediately after the open of business on such Record Date or Effective Date, as applicable;

OS0=the number of shares of Class A Common Stock outstanding immediately prior to the open of business on such Record Date or Effective Date, as applicable, before giving effect to such dividend, distribution, share split or share combination; and

OS1=the number of shares of Class A Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination, as applicable.

Any adjustment made under this section shall become effective immediately after the open of business on the Record Date for such dividend or distribution, or immediately after the open of business on the Effective Date for such share split or share combination, as applicable. If any dividend or distribution of the type described in this section is declared but not so paid or made, or any share split or combination of the type described in this section is announced but the outstanding shares of Class A Common Stock are not split or combined, as the case may be, the Conversion Rate shall be immediately readjusted, effective as of the date the Board determines in good faith not to pay such dividend or distribution, or not to split or combine the outstanding shares of Class A Common Stock, as the case may be, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared or such share split or combination had not been announced.

If the Company issues to all or substantially all holders of the Class A Common Stock any rights, options or warrants (other than pursuant to a stockholders rights plan) entitling them, for a period of not more than forty-five (45) calendar days after the announcement date of such issuance, to subscribe for or purchase shares of the Class A Common Stock at a price per share that is less than the average of the Last Reported Sale Prices of the Class A Common Stock for the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

Securities 

Securities

OS0 + X

OS0 + Y

where,

CR0=the Conversion Rate in effect immediately prior to the open of business on the Record Date for such issuance;

CR1=the Conversion Rate in effect immediately after the open of business on such Record Date;

OS0=the number of shares of Class A Common Stock outstanding immediately prior to the open of business on such Record Date;

X=the total number of shares of Class A Common Stock issuable pursuant to such rights, options or warrants; and

Y=the number of shares of Class A Common Stock equal to (i) the aggregate price payable to exercise such rights, options or warrants, divided by (ii) the average of the Last Reported Sale Prices of the Class A Common Stock over the ten

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(10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants.

Any increase made under this section shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the open of business on the Record Date for such issuance. To the extent that shares of the Class A Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Class A Common Stock actually delivered. If such rights, options or warrants are not so issued, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such Record Date for such issuance had not occurred.

For purposes of this section, in determining whether any rights, options or warrants entitle the holders of Class A Common Stock to subscribe for or purchase shares of the Class A Common Stock at a price per share that is less than such average of the Last Reported Sale Prices of the Class A Common Stock for the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, and in determining the aggregate offering price of such shares of Class A Common Stock, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board in good faith.

If the Company distributes shares of its Capital Stock, evidences of its indebtedness, other assets or property of the Company or rights, options or warrants to acquire its Capital Stock or other securities, to all or substantially all holders of the Class A Common Stock, excluding (i) dividends, distributions or issuances (including share splits) as to which an adjustment was effected pursuant to the Indenture, (ii) except as otherwise described in the Indenture, rights issued pursuant to any stockholders rights plan of the Company then in effect, (iii) dividends or distributions paid exclusively in cash as to which the provisions set forth in Section 14.04(d) of the Indenture shall apply, (iv) dividends or distributions of Reference Property in exchange for or upon conversion of the Class A Common Stock in a Share Exchange Event, and (v) Spin-Offs as to which the provisions set forth below in this Section 14.04(c) of the Indenture shall apply (any of such shares of Capital Stock, evidences of indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities, the “Distributed Property”), then the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

Underlying

Underlying

Option

SP0

SP0 - FMV

where,

CR0=the Conversion Rate in effect immediately prior to the open of business on the Record Date for such distribution;

CR1=the Conversion Rate in effect immediately after the open of business on such Record Date;

SP0=the average of the Last Reported Sale Prices of the Class A Common Stock over the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Record Date for such distribution; and

FMV=the fair market value (as determined by the Board in good faith) of the Distributed Property with respect to each outstanding share of the Class A Common Stock on the Record Date for such distribution.

Any increase made under the portion of this section above shall become effective immediately after the open of business on the Record Date for such distribution. If such distribution is not so paid or made, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such distribution had not been declared. If the Company issues rights, options or warrants to acquire Capital Stock or other securities that are exercisable only upon the occurrence of certain triggering events, the Company shall not adjust the conversion rate pursuant to the clauses above until the earliest of these triggering events occurs. Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), then, in lieu of the foregoing increase, each Holder of a Note shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of the Class A Common Stock receive the Distributed Property, the amount and kind of Distributed Property such Holder would have received if such Holder owned a number of shares of Class A Common Stock equal to the Conversion Rate in effect immediately prior to the open of business on the Record Date for the distribution. If the Board determines in good faith the “FMV” (as defined above) of any distribution for purposes of this section by reference to the actual or when-issued trading market for

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any securities, it shall in doing so consider the prices in such market over the same period used in computing the Last Reported Sale Prices of the Class A Common Stock over the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Record Date for such distribution.

With respect to an adjustment pursuant to this section where there has been a payment of a dividend or other distribution on the Class A Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit of the Company, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

Unexercised

Unexercised

 Exercise

OptionFMV0 + MP0

MP0

where,

CR0=the Conversion Rate in effect immediately prior to the end of the Valuation Period;

CR1=the Conversion Rate in effect immediately after the end of the Valuation Period;

FMV0=the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Class A Common Stock applicable to one share of the Class A Common Stock (determined by reference to the definition of Last Reported Sale Price as set forth in the Definitions section of the Indenture as if references therein to Class A Common Stock were to such Capital Stock or similar equity interest) over the first ten (10) consecutive Trading Day period after, and including, the Record Date of the Spin-Off (the “Valuation Period”); and

MP0=the average of the Last Reported Sale Prices of the Class A Common Stock over the Valuation Period.

The increase to the Conversion Rate under the preceding paragraph shall occur at the close of business on the last Trading Day of the Valuation Period; provided that if the relevant Conversion Date occurs during the Valuation Period, references to “10” in the preceding paragraph shall be deemed to be replaced with such lesser number of Trading Days as have elapsed between the Record Date of such Spin-Off and the Conversion Date in determining the Conversion Rate. If any dividend or distribution that constitutes a Spin-Off is declared but not so paid or made, the Conversion Rate shall be immediately decreased, effective as of the date the Board determines in good faith not to pay or make such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared or announced.

For purposes of this section (and subject in all respect to Section 14.11 of the Indenture), rights, options or warrants distributed by the Company to all holders of the Class A Common Stock entitling them to subscribe for or purchase shares of the Company’s Capital Stock, including Class A Common Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (“Trigger Event”):

(i)are deemed to be transferred with such shares of the Class A Common Stock;
(ii)are not exercisable; and
(iii)are also issued in respect of future issuances of the Class A Common Stock,

shall be deemed not to have been distributed for purposes of this section (and no adjustment to the Conversion Rate under this section will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this section. If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Record Date with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other event (of

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the type described in the immediately preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this section was made:

(1)in the case of any such rights, options or warrants that shall all have been redeemed or purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by a holder or holders of Class A Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Class A Common Stock as of the date of such redemption or purchase, and
(2)in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights, options and warrants had not been issued.

For purposes of Section 14.04(a), Section 14.04(b) and this section of the Indenture, if any dividend or distribution to which this section is applicable also includes one or both of:

(A)a dividend or distribution of shares of Class A Common Stock to which Section 14.04(a) of the Indenture is applicable (the “Clause A Distribution”); or
(B)a dividend or distribution of rights, options or warrants to which Section 14.04(b) of the Indenture is applicable (the “Clause B Distribution”),

then, in either case,

(1)

such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a dividend or distribution to which this section is applicable (the “Clause C Distribution”) and any Conversion Rate adjustment required by this section with respect to such Clause C Distribution shall then be made, and

(2)

the Clause A Distribution and Clause B Distribution shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 14.04(a) and Section 14.04(b) of the Indenture with respect thereto shall then be made, except that, if determined by the Company (I) the “Record Date” of the Clause A Distribution and the Clause B Distribution shall be deemed to be the Record Date of the Clause C Distribution and (II) any shares of Class A Common Stock included in the Clause A Distribution or Clause B Distribution shall be deemed not to be “outstanding immediately prior to the open of business on such Record Date or Effective Date” within the meaning of Section 14.04(a) of the Indenture or “outstanding immediately prior to the open of business on such Record Date” within the meaning of Section 14.04(b) of the Indenture.

If the Company pays or makes any cash dividend or distribution to all or substantially all holders of the Class A Common Stock, the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

 Options (#)

Options (#)

Price

ExpirationSP0

SP0 – C

where,

CR0=the Conversion Rate in effect immediately prior to the open of business on the Record Date for such dividend or distribution;

CR1=the Conversion Rate in effect immediately after the open of business on the Record Date for such dividend or distribution;

SP0=the Last Reported Sale Price of the Class A Common Stock on the Trading Day immediately preceding the Record Date for such dividend or distribution; and

C=the amount in cash per share the Company distributes to all or substantially all holders of the Class A Common Stock.

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Any increase pursuant to this section shall become effective immediately after the open of business on the Record Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Rate shall be decreased, effective as of the date the Board determines in good faith not to make or pay such dividend or distribution, to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall receive, for each $1,000 principal amount of Notes, at the same time and upon the same terms as holders of shares of the Class A Common Stock, the amount of cash that such Holder would have received if such Holder owned a number of shares of Class A Common Stock equal to the Conversion Rate in effect on the Record Date for such cash dividend or distribution.

(ii)

Grant DateIf the Company or any of its Subsidiaries make a payment in respect of a tender or exchange offer for the Class A Common Stock that is subject to the then-applicable tender offer rules under the Exchange Act (other than an odd lot tender offer), to the extent that the cash and value of any other consideration included in the payment per share of the Class A Common Stock exceeds the average of the Last Reported Sale Prices of the Class A Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

Exercisable

Unexercisable

($AC + (SP1 x OS1)(2)

Date(2)

Christopher S, Hisey

April 15, 2019

18,457

12,305(3)

April 15, 2019

20,508

13,672(4)

April 15, 2019

22,921

15,280(5)

Elizabeth Downey

April 15, 2019

3,384

2,256(3)

April 15, 2019

3,760

2,506(4)

OS0 x SP1

where,

CR0=the Conversion Rate in effect immediately prior to the close of business on the tenth (10th) Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires (the date such tender offer or exchange offer expires, the “Expiration Date”);

CR1=the Conversion Rate in effect immediately after the close of business on the tenth (10th) Trading Day immediately following, and including, the Trading Day next succeeding the Expiration Date;

AC=the aggregate value of all cash and any other consideration (as determined by the Board in good faith) paid or payable for shares of Class A Common Stock purchased in such tender or exchange offer;

OS0=the number of shares of Class A Common Stock outstanding immediately prior to the Expiration Date (prior to giving effect to the purchase of all shares of Class A Common Stock accepted for purchase or exchange in such tender or exchange offer);

OS1=the number of shares of Class A Common Stock outstanding immediately after the Expiration Date (after giving effect to the purchase of all shares of Class A Common Stock accepted for purchase or exchange in such tender or exchange offer); and

SP1=the average of the Last Reported Sale Prices of the Class A Common Stock over the ten (10) consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the Expiration Date.

The increase to the Conversion Rate under this section shall occur at the close of business on the tenth (10th) Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that if the relevant Conversion Date occurs during the ten (10) Trading Days immediately following, and including, the Trading Day next succeeding the Expiration Date of any tender or exchange offer, references to “ten (10)” or “tenth (10th)” in the preceding paragraph shall be deemed replaced with such lesser number of Trading Days as have elapsed between the Expiration Date of such tender or exchange offer and the Conversion Date in determining the Conversion Rate. In addition, if the Trading Day next succeeding the date such tender or exchange offer expires is after the tenth (10th) Trading Day immediately preceding, and including, the date immediately preceding the relevant Conversion Date in respect of a conversion of Notes, references to “ten (10)” or “tenth (10th)” in the preceding paragraph and this paragraph shall be deemed to be replaced, solely in respect of that conversion of Notes, with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the date such tender or exchange offer expires to, and including, the last Trading Day immediately preceding the relevant Conversion Date.

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Upon the occurrence of Reset Date, the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

April 15, 2019

4,202

2,801(5)

Kevin Doran

April 15, 2019

4,307

2,871(3)

$1,000 / CR0

April 15, 2019

4,785

3,190(4)

April 15, 2019

5,348

3,566(5)

ACP

where,

CR0=the Conversion Rate in effect immediately prior to the close of business on the Trading Day immediately preceding the Reset Date;

CR1=the Conversion Rate in effect immediately after the open of business on Reset Date;

ACP=the Applicable Conversion Price.

For the avoidance of doubt, the Conversion Rate may not be decreased pursuant to this section.

Notwithstanding this section or any other provision of this Indenture or the Notes, if a Conversion Rate adjustment becomes effective on any Record Date, and a Holder that has converted its Notes on or after such Record Date and on or prior to the related Record Date would be treated as the record holder of the shares of Class A Common Stock as of the related Conversion Date as described under Section 14.02(i) of the Indenture based on an adjusted Conversion Rate for such Record Date, then, notwithstanding the Conversion Rate adjustment provisions in this Section 14.04 of the Indenture, the Conversion Rate adjustment relating to such Record Date shall not be made for such converting Holder. Instead, such Holder shall be treated as if such Holder were the record owner of the shares of Class A Common Stock on an unadjusted basis and participate in the related dividend, distribution or other event giving rise to such adjustment.

Except as stated herein, the Company shall not adjust the Conversion Rate for the issuance of shares of the Class A Common Stock or any securities convertible into or exchangeable for shares of the Class A Common Stock or the right to purchase shares of the Class A Common Stock or such convertible or exchangeable securities.

In addition to those adjustments required by clauses (a), (b), (c), (d), (e) and (f) of this Section 14.04 of the Indenture, the Company from time to time may increase the Conversion Rate by any amount for a period of at least twenty (20) Business Days if the Board determines in good faith that such increase would be in the Company’s best interest. In addition, the Company may (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Class A Common Stock or rights to purchase Class A Common Stock in connection with a dividend or distribution of shares of Class A Common Stock (or rights to acquire shares of Class A Common Stock) or similar event. Whenever the Conversion Rate is increased pursuant to either of the preceding two sentences, the Company shall deliver to the Holder of each Note a notice of the increase at least fifteen (15) days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

Except as stated in the Indenture, the Company shall not adjust the Conversion Rate for the issuance of shares of Class A Common Stock or any securities convertible into or exchangeable for shares of Class A Common Stock or the right to purchase shares of Class A Common Stock or such convertible or exchangeable securities. For illustrative purposes only and without limiting the generality of the preceding sentence, the Conversion Rate shall not be adjusted:

(1)(i)This table reflects information regardingupon the issuance of any shares of Class A Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in shares of Class A Common Stock under any plan;
(ii)upon the issuance of any shares of Class A Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of the Company’s Subsidiaries;
(iii)upon the issuance of any shares of the Class P Tracking UnitsA Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in Management Holdco to our Named Executive Officers that wereclause (ii) of this subsection and outstanding as of December 31, 2021. For more information on these incentive units, see “Executive CompensationEquity Incentives” above.
(2)The Class P Tracking Units are not traditional options and, therefore, there is no exercise price or option expirationthe date associated with them.the 2027 Convertible Notes were first issued;

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(3)(iv)These Class P Tracking Units are composedupon the repurchase of any shares of Class P-1 Units, which will vest accordingA Common Stock pursuant to an open market share repurchase program or other buy-back transaction, including structured or derivative transactions, that is not a tender or exchange offer of the time- vesting schedulenature described above in Executive CompensationEquity Incentives”, subject toSection 14.04(e) of the Named Executive Officer’s continued employment with us throughIndenture;
(v)solely for a change in the applicable vesting date, and only participate in distributions ifpar value (or lack of par value) of the Class A Members of BCP QualTek Holdco LLC achieve a 1X cash return on their investment (on a fully diluted basis).Common Stock; or
(4)(vi)These Class P Tracking Units are composedfor accrued and unpaid interest, if any.

In addition, for the avoidance of doubt, none of the foregoing shall constitute a Conversion Reset Offering.

All calculations and other determinations under the Conversion of Notes article in the Indenture shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000th) of a share.

Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly deliver to the Trustee (and the Conversion Agent if not the Trustee) an Officer’s Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a written notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall deliver such notice of such adjustment of the Conversion Rate to each Holder (with a copy to the Trustee). Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

For purposes of this section, the number of shares of Class A Common Stock at any time outstanding shall not include shares of Class A Common Stock held in the treasury of the Company so long as the Company does not pay any dividend or make any distribution on shares of Class A Common Stock held in the treasury of the Company, but shall include shares of Class A Common Stock issuable in respect of scrip certificates issued in lieu of fractions of shares of Class A Common Stock.

For the avoidance of doubt, the closing of the transactions contemplated by the BCA to occur on the date of the Indenture shall not result in any adjustment of the Conversion Rate, Conversion Price or any other terms of the 2027 Convertible Notes.

Adjustment of Prices

Whenever any provision of the Indenture requires the Company to calculate the Last Reported Sale Prices or the Daily VWAPs over a span of multiple days, the Board shall make appropriate adjustments (without duplication in respect of any adjustment made pursuant to Section 14.04 of the Indenture) to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date, Record Date, Effective Date or Expiration Date, as the case may be, of the event occurs, at any time during the period when the Last Reported Sale Prices or the Daily VWAPs are to be calculated.

Effect of Recapitalizations, Reclassifications and Changes of the Class A Common Stock

(a)

In the case of:

(i)any recapitalization, reclassification or similar change of Class P-2 Units, which will vest according to the time- vesting schedule described above in “Executive CompensationEquity Incentives”, subject to the Named Executive Officer’s continued employment with us through the applicable vesting date, and only participate in distributions if the Class A Members of BCP QualTek Holdco LLC achieveCommon Stock (other than changes in par value or resulting from a 2X cash return on their investment (on a fully diluted basis).subdivision or combination),
(5)(ii)These Class P Tracking Units are composedany consolidation, merger, combination or similar transaction involving the Company,
(iii)any sale, lease or other transfer to a third party of Class P-3 Units, which will vest according toall or substantially all of the time- vesting schedule described above in “Executive CompensationEquity Incentives”, subject toconsolidated assets of the Named Executive Officer’s continued employment with us throughCompany and the applicable vesting date, and only participate in distributions if the Class A Members of BCP QualTek Holdco LLC achieveCompany’s Subsidiaries, taken as a 3X cash return on their investment (on a fully diluted basis).whole, or
(iv)any statutory share exchange,

Additional Narrative Disclosure

Retirement Benefits

We do not have a U.S. defined benefit pension plan or nonqualified deferred compensation plan. We currently maintain a defined contribution retirement plan intended to provide benefits under Section 401(k) of the Code, pursuant to which employees, including the Named Executive Officers, can make voluntary pre- tax contributions. We have the option to make discretionary employer matching and/or non-elective contributions to all participants. All contributions under the plan are subject to certain annual dollar limitations, which are periodically adjusted based on cost-of-living announcements by the Internal Revenue Services. The Company does not make these discretionary contributions.

Potential Payments Upon Termination or Change in Control

Each Named Executive Officer’s unvested Class P Tracking Units will vest immediately prior to a Sale of the Company (as defined in the Holdco LLC Agreement), subject to the Named Executive Officer’s continued employment with us through the consummation of a Sale of the Company, and each Named Executive Officer will become entitled to distributions with respect to all vested Class P Tracking Units upon a Sale of the Company to the extent the applicable return on investment criteria are met, see “Executive Compensation — Equity Incentives” above.

See “Executive Compensation — Executive Employment Agreements” for a description of potential severance payment due to each of our Named Executive Officers upon a change in control.

Director Compensation

Our non-employee directors received no compensation for the year ending December 31, 2021.

Following the consummation of this Business Combination, our independent non-employee directors who are not affiliated with Brightstar, Jigisha Desai and Sam Chawla, will each be paid an annual retainer of $70,000 for their servicecase, as a memberresult of our Board. Mr. Desai will also receive an additional annual retainer of $55,000which the Class A Common Stock would be converted into, or exchanged for, serving as the chair of our audit committee. Mr. Chawla will also receive an additional annual retainer of $12,500 ($37,500 in the aggregate) for serving on each of our audit committee, compensation committee,stock, other securities, other property or assets (including cash or any combination thereof) (any such event, a “Share Exchange Event”), then at and nominating/governance committee. Finally, each of our independent non-employee directors who are not affiliated with Brightstar will receive, following the consummation of this Business Combination, an annual grant of stock options, with a grant date value (determined using the Black-Scholes method) of $105,000 that vest on the one-year anniversary of the date of grant, subject to the non-employee director’s continued service on the Board through the applicable vesting date.

Compensation of Executive Officers and Directors after the Business Combination

Followingeffective time of such Share Exchange Event, the consummationright to convert each $1,000 principal amount of the Business Combination, the following individuals will serve as executive officers of the Combined Company: Mr. Hisey as the Chief Executive Officer, Ms. Downey as the Chief Administrative Officer, Mr. Williams as the Chief Business Officer and Mr. Spittler as the Chief Financial Officer.Notes shall be changed into a

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Upon consummationright to convert such principal amount of Notes into the Business Combination, the Company intends to develop an executive compensation program that is consistent with Company’s existing compensation policieskind and philosophies, which are designed to align compensation with the Company’s business objectives and the creation of stockholder value, while enabling the Company to attract, motivate and retain individuals who contribute to the long-term success of the company. It is currently anticipated that any newly hired executive officers of the Combined Company will enter into employment agreements consistent with the terms of the existing employment agreements with executive officers of QualTek. See “Executive Services Agreements” above for a description of the terms of these employment agreements.

Decisions on the specific terms of the executive compensation program will be made by a compensation committee of the Board of Directors, which will be established at the closing of the Business Combination, and are not currently known at this time. The executive compensation program actually adopted will depend on the judgment of the members of the compensation committee and may differ from that set forth in this discussion.

We anticipate that decisions regarding executive compensation will reflect our belief that the executive compensation program must be competitive in order to attract and retain our executive officers. We anticipate that the compensation committee will seek to implement our compensation policies and philosophies by linking a significant portion of our executive officers’ cash compensation to performance objectives and by providing a portion of their compensation as long-term incentive compensation in the form of equity awards.

We anticipate that compensation for our executive officers will continue to have three primary components: base salary, an annual cash incentive bonus and long-term incentive based compensation in the form of stock-based awards.

Management Equity Incentive Plan

Background and Overview

Our Board has approved the BCP QualTek HoldCo, LLC 2022 Long-Term Incentive Plan (the “2022 LTIP”), subject to the approval of our stockholders, pursuant to which our and our affiliates’ employees, consultants and directors will be eligible to receive incentive awards. We anticipate that the 2022 LTIP will provide for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, dividend equivalents, other stock-based awards, substitute awards, annual incentive awards and performance awards, in each case intended to align the interests of participants with those of our stockholders. The following description of the 2022 Plan is based on the form we anticipate will be adopted, but since the 2022 Plan has not yet been adopted, the provisions remain subject to change.

Summary of the 2021 LTIP

Share Reserve

In connection with its adoption by our Board and approval by our stockholders, we will reserve equal to 12.5% of the fully diluted capitalization of the Company shares of Class A Common Stock for issuance under the 2022 LTIP. In addition, on each January 1 beginning on January 1, 2023 and ending on January 1, 2032, the aggregate number of shares reserved for issuance under the 2022 LTIP will be increased automatically by the number of shares equal to the lesser of (i) the lesser of (x) 2% of the total number of all classes of our outstanding shares of Class A Common Stock on the immediately preceding December 31 and (y) such numberamount of shares of common stock, other securities or other property or assets (including cash or any combination thereof) that would result in thea holder of a number of shares of Class A Common Stock equal to the Conversion Rate immediately prior to such Share Exchange Event would have owned or been entitled to receive (the “Reference Property,” with each “unit of Reference Property” meaning the kind and amount of Reference Property that a holder of one share of Class A Common Stock is entitled to receive) upon such Share Exchange Event and, prior to or at the effective time of such Share Exchange Event, the Company or the successor or acquiring Person, as the case may be, shall execute with the Trustee a supplemental indenture permitted under Section 10.01(g) of the Indenture providing for such change in the share reserve being equalright to 12.5%convert each $1,000 principal amount of Notes; providedhowever, that at and after the effective time of the aggregateShare Exchange Event (I) any amount payable in cash upon conversion of the Notes in accordance with Section 14.02 of the Indenture shall continue to be payable in cash, (II) any shares of Class A Common Stock that the Company would have been required to deliver upon conversion of the Notes in accordance with Section 14.02 of the Indenture shall instead be deliverable in the amount and type of Reference Property that a holder of that number of shares of common stock outstanding asClass A Common Stock would have been entitled to receive in such Share Exchange Event and (III) the Daily VWAP shall be calculated based on the value of a unit of Reference Property.

If the Share Exchange Event causes the Class A Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), then (i) the Reference Property into which the Notes will be convertible shall be deemed to be the weighted average of the final daytypes and amounts of consideration actually received by the holders of Class A Common Stock, and (ii) the unit of Reference Property for purposes of the immediately preceding calendar year, and (ii)paragraph shall refer to the consideration referred to in clause (i) attributable to one share of Class A Common Stock. If the holders of the Class A Common Stock receive only cash in such lesser number asShare Exchange Event, then for all conversions for which the relevant Conversion Date occurs after the effective date of such Share Exchange Event (A) the consideration due upon conversion of each $1,000 principal amount of Notes shall be solely cash in an amount equal to the Conversion Rate in effect on the Conversion Date (as may be determinedincreased by any Additional Shares pursuant to Section 14.14 of the compensation committee.Indenture), multiplied by the price paid per share of Class A Common Stock in such Share Exchange Event and (B) the Company shall satisfy the Conversion Obligation by paying such cash amount to converting Holders on the second (2nd) Business Day immediately following the relevant Conversion Date. The Company shall notify in writing Holders, the Trustee and the Conversion Agent (if other than the Trustee) of such weighted average as soon as reasonably practicable after such determination is made.

AdministrationIf the Reference Property in respect of any Share Exchange Event includes, in whole or in part, shares of common equity, such supplemental indenture described in the second immediately preceding paragraph shall provide for anti-dilution and other adjustments that shall be as nearly equivalent as is possible to the adjustments provided for in this Article 14 of the Indenture with respect to the portion of the Reference Property consisting of such common equity. If, in the case of any Share Exchange Event, the Reference Property includes shares of stock, securities or other property or assets (including any combination thereof), other than cash and/or Cash Equivalents, of a Person other than the Company or the successor or purchasing corporation, as the case may be, in such Share Exchange Event, then such supplemental indenture shall also be executed by such other Person, if such other Person is an affiliate of the Company or the successor or acquiring company, and shall contain such additional provisions to protect the interests of the Holders of the Notes as the Board shall reasonably consider necessary by reason of the foregoing, including the provisions providing for the purchase rights set forth in Section 15.02 of the Indenture.

When the Company executes a supplemental indenture pursuant to this section, the Company shall promptly deliver to the Trustee an Officer’s Certificate briefly stating the reasons therefor, the kind or amount of cash, securities or property or asset that will comprise a unit of Reference Property after any such Share Exchange Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with, and shall promptly deliver notice thereof to all Holders. The Company shall cause notice of the execution of such supplemental indenture to be delivered to each Holder promptly and in any event within twenty (20) days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

The 2022 LTIP will be administered by our compensation committee. The compensation committee will have the authorityCompany shall not become a party to construe and interpret the 2022 LTIP, grant awards, and make all other determinations necessary or advisable for the administrationany Share Exchange Event unless its terms are consistent with this Section 14.07 of the plan. Awards underIndenture. None of the 2022 LTIP may be made subjectforegoing provisions shall affect the right of a holder of Notes to “performance conditions”convert its Notes into shares of Class A Common Stock, as set forth in Section 14.01 of the Indenture and any other terms and conditions thatSection 14.02 of the compensation committee deems necessary or advisable.Indenture prior to the effective date of such Share Exchange Event.

The above provisions of this section shall similarly apply to successive Share Exchange Events.

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EligibilityFundamental Change

Our employees, consultants, and directors, andIf a Fundamental Change (as defined in the employees, consultants and directors of our affiliates, will be eligibleIndenture) occurs prior to receive awards under the 2021 LTIP. The compensation committee will determine who will receive awards and the terms and conditions of such awards. Asmaturity date, holders of the date2027 Convertible Notes will have the right to require the Company to repurchase all or any portion of this filing, we anticipate that approximately 1,950 QualTek employees, two directors and no consultants will be eligible to participatetheir 2027 Convertible Notes in the 2022 LTIP.

Term

The 2022 LTIP will terminate 10 years from the date our Board adopts the plan, unless it is terminated earlier by our Board.

Award Forms and Limitations

The 2022 LTIP will authorize the grantprincipal amounts of stock awards, performance awards and other cash-based awards. An aggregate of shares will be available for issuance under the 2022 LTIP. The maximum number of shares subject to stock options that are intended to qualify as incentive stock options,$1,000 or ISOs, under Section 422 of the Code, will bean integral multiple thereof, at a repurchase price equal to the initial share reserve.principal amount of the 2027 Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

Stock OptionsFollowing certain corporate events that occur prior to the maturity date or if the Company exercises its mandatory conversion right in connection with such corporate events, the Company will in certain circumstances increase the conversion rate for a holder who elects to convert its 2027 Convertible Notes in connection with such corporate events or has been forced to convert its 2027 Convertible Notes in connection with such corporate events, as the case may be.

Governing Law

The 2022 LTIPIndenture, the 2027 Convertible Notes and the Security Agreement are governed by, and construed in accordance with, the laws of the State of New York.

Certain Anti-Takeover Provisions of Delaware Law, the Company’s Certificate of Incorporation and Amended and Restated Bylaws

Our Certificate of Incorporation provides that the Board is classified into three classes of directors of approximately equal size. As a result, in most circumstances, a person can gain control of the board only by successfully engaging in a proxy contest at three or more annual meetings. Furthermore, because the Board will be classified, directors may be removed only with cause by a majority of our outstanding shares.

In addition, the Certificate of Incorporation does not provide for cumulative voting in the grantelection of ISOs only to employees. All options other than ISOs may be granted to employees, directors, and consultants. The exercise price of each option to purchase stock must be at least equal to the fair market value ofdirectors. Our authorized but unissued Class A Common Stock on the date of grant. The exercise price of ISOs granted to 10% or more stockholders mustand preferred stock are available for future issuances without stockholder approval and could be at least equal to 110% of that value. Options granted under the 2022 LTIP may be exercisable at such times and subject to such terms and conditions as the Compensation and Nominating Committee determines. The maximum term of options granted under the 2021 LTIP will be 10 years (five years in the case of ISOs granted to 10% or more stockholders).

Stock Appreciation Rights

Stock appreciation rights will provideutilized for a payment, or payments, in cash or common stock,variety of corporate purposes, including future offerings to the holder based upon the difference between the fair market valueraise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved Class A Common Stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

Special Meeting of Stockholders

The Certificate of Incorporation provides that special meetings of our stockholders may be called only by the Chairman of the Board or the QualTek Board pursuant to a resolution adopted by a majority of the Board. Stockholders of QualTek will not be eligible and has no right to call a special meeting.

Advance Notice Requirements for Stockholder Proposals and Director Nominations

Our Amended and Restated Bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders, must provide timely notice of their intent in writing. To be timely, a stockholder’s notice will need to be received by the Company’s Secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the open of business on the 120th day prior to the anniversary date of exercisethe immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained in the annual proxy statement. The Certificate of Incorporation specifies certain requirements as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders. Our Amended and Restated Bylaws also specify certain requirements as to the form and content of a stockholder’s notice for an annual meeting. Specifically, a stockholder’s notice must include: (i) a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event such business includes a proposal to amend the Amended and Restated Bylaws, the language of the proposed amendment) and the stated exercise pricereasons for conducting such business at the annual meeting, (ii) the name and record address of such stockholder and the name and address of the stock appreciation right. The exercise price must be at least equal tobeneficial owner, if any, on whose behalf the fair market value of Class A Common Stock onproposal is made, (iii) the date the stock appreciation right is granted. Stock appreciation rights may vest based on timeclass or achievement of performance conditions, as determined by the compensation committee.

Restricted Stock

The compensation committee may grant awards consistingseries and number of shares of Class A Common Stock subject to restrictions on saleour capital stock that are owned beneficially and transfer. The price (if any) paidof record by a participant for a restricted stock award will be determinedsuch stockholder and by the compensation committee. Unless otherwise determined bybeneficial owner, if any, on whose behalf the compensation committee atproposal is made, (iv) a description of all arrangements or understandings between such stockholder and the time of award, vesting will ceasebeneficial owner, if any, on whose behalf the date the participant no longer provides services to usproposal is made and unvested shares will be forfeited toany other person or repurchased by us. The compensation committee may condition the grant or vesting of shares of restricted stock on the achievement of performance conditions and/or the satisfaction of a time-based vesting schedule.

Other Stock-Based and Other Cash-Based Awards

The compensation committee may grant other stock-based awards and other cash-based awards to participants under the 2022 LTIP in amounts and on terms and conditions determined by the compensation committee in its discretion. Such awards may be granted subject to vesting and other conditions or restrictions, or granted without being subject to any conditions or restrictions.

Additional Provisions

Awards granted under the 2022 LTIP will not be transferable other than by will or by the laws of descent and distribution, or as determined by the compensation committee. In the event of a change in control (as defined in the 2022 LTIP), the compensation committee will have the discretion to provide for any or all of the following actions: (i) awards may be continued, assumed, or substituted with new rights, (ii) awards may be purchased for cash equal to the excess (if any) of the highest price per share of common stock paid in the change in control transaction over the aggregate exercise price of such awards, (iii) outstanding andpersons (including their

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unexercised stock optionsnames) in connection with the proposal of such business by such stockholder, (v) any material interest of such stockholder and stock appreciation rights may be terminatedthe beneficial owner, if any, on whose behalf the proposal is made in such business and (vi) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the annual meeting to bring such business before the change in control (in which case holdersmeeting. These notice requirements will be deemed satisfied by a stockholder as to any proposal (other than nominations) if the stockholder has notified the Company of such unvested awards would be given notice and the opportunitystockholder’s intention to exercisepresent such awards), or (iv) vesting or lapse of restrictions may be accelerated. All 2022 LTIP awards will be equitably adjustedproposal at an annual meeting in the casecompliance with Rule 14a-8 (or any successor thereof) of the division of stockExchange Act, and similar transactions.

Form S-8

After 60 days following the consummation of the Business Combination, we intend to filesuch stockholder has complied with the SECrequirements of such rule for inclusion of such proposal in a registrationproxy statement on Form S-8 covering Class A Common Stock issuable under the 2022 LTIP.prepared by us to solicit proxies for such annual meeting. The foregoing provisions may limit our stockholders’ ability to bring matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.

United States Federal Income Tax ConsequencesSecurities Eligible for Future Sale

The following summary is based on an analysis of the Code as currently in effect, existing laws, judicial decisions, administrative rulings, regulations and proposed regulations, all of which are subject to change (possibly retroactively). Moreover, the following is only a summary of United States federal income tax consequences. No attemptCompany has been made to discuss any potential foreign, state, or local tax consequences. Actual tax consequences to participants may be either more or less favorable than those described below depending on the participants’ particular circumstances.

In addition, nonstatutory stock options and SARs with an exercise price less than the fair market value of24,446,284 shares of Class A Common Stock onoutstanding as of September 15, 2022. Of these shares, 6,136,283 public shares are freely tradable without restriction or further registration under the dateSecurities Act, except for any shares purchased by one of grant, SARs payableour affiliates within the meaning of Rule 144 under the Securities Act (“Rule 144”). All of the remaining 18,310,001 outstanding shares are, and any shares of Class A Common Stock issued upon conversion of the 2027 Convertible Notes will be, restricted securities under Rule 144, in cash,that they were issued in private transactions not involving a public offering.

Rule 144

Pursuant to Rule 144 under the Securities Act, a person who has beneficially owned restricted shares of our Class A Common Stock or warrants for at least six months would be entitled to sell his, her or its securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and certain other awards that may be granted pursuant(ii) we are subject to the 2022 LTIP couldExchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.

Persons who have beneficially owned restricted shares of our Class A Common Stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional taxes unless they are designed to comply with certain restrictions, set forth in Section 409A of the Code and guidance promulgated thereunder.

The 2022 LTIP is not subject to the Employee Retirement Income Security Act of 1974, as amended, and is not intended to be qualified under Section 401(a) of the Code.

Incentive Stock Options

No income will be recognized by a participant for United States federal income tax purposes upon the grant or exercise of an ISO. The basis of shares transferred to a participant upon exercise of an ISO (“ISO Shares”) is the price paid for the shares. If the participant holds the shares for at least one year after the transfer of the shares to the participant and two years after the grant of the stock option, the participant will recognize capital gain or loss upon sale of the shares received upon exercise equal to the difference between the amount realized on the sale and the basis of the stock. Generally, if the shares are not held for that period, the participant will recognize ordinary income upon disposition (a “Disqualifying Disposition”) in an amount equal to the excess of the fair market value of the shares on the date of exercise over the amount paid for the shares, or if less (and if the disposition is a transaction in which loss, if any, will be recognized), the gain on disposition. Any additional gain realized by the participant upon the disposition will be a capital gain. The excess of the fair market value of the ISO Shares over the stock option price for the shares is an item of adjustment for the participant for purposes of the alternative minimum tax. Therefore, although no income is recognized upon exercise of an ISO, a participant may be subject to alternative minimum tax as a result of the exercise. An employer will generally notsuch person would be entitled to sell within any federal income tax deduction uponthree-month period only a number of securities that does not exceed the grant or exercisegreater of:

1% of the total number of shares of Class A Common Stock then outstanding; or
the average weekly reported trading volume of the Class A Common Stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales by our affiliates under Rule 144 are also limited by manner of an ISO, unless a participant makes a Disqualifying Disposition of the ISO Stock. If a participant makes a Disqualifying Disposition, the employer will then, subjectsale provisions and notice requirements and to the deduction limitations described below, be entitled to a tax deduction that corresponds as to timing and amount with the compensation income recognized by the participant.availability of current public information about us.

Nonstatutory Stock Options

No income is expected to be recognized by a participant for United States federal income tax purposes upon the grant of a nonstatutory stock option. Upon exercise of a nonstatutory stock option, the participant will recognize ordinary income in an amount equal to the excess of the fair market value of the sharesRestrictions on the dateUse of exercise over the amount paidRule 144 by Shell Companies or Former Shell Companies

Rule 144 is not available for the shares. Income recognized uponresale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the exercise of a nonstatutory option will be considered compensation subject to withholding at the time the income is recognized and, therefore, the participant’s employer must make the necessary arrangements with the participant to ensure that the amount of the tax required to be withheld is available for payment. Nonstatutory stock optionsfollowing conditions are designed to provide the employer with a deduction equal to the amount of ordinary income recognized by the participant at the time of the recognition by the participant, subject to the deduction limitations described below.met:

the issuer of the securities that was formerly a shell company has ceased to be a shell company;
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
at least one year has elapsed from the time that the issuer filed current Form 10-type information with the SEC reflecting its status as an entity that is not a shell company.

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Stock AppreciationAs a result, our Initial Stockholders are able to sell their Founder Shares and Private Warrants, as applicable, pursuant to Rule 144 without registration one year after the closing of the Business Combination.

Investor Rights Agreement

No income is expectedIn connection with the closing of our Business Combination, QualTek, certain Sellers as set forth therein, BCP QualTek, the Sponsors, Sponsor Representative, and certain Other Holders (all as defined therein) entered into an Investor Rights Agreement, pursuant to be recognized by a participant for United States federal income tax purposes uponwhich the Registration Rights Agreement, dated as of March 2, 2021, between the Other Holders (as defined therein) and ROCR was terminated and whereby we agreed to grant to the Holders (as defined therein), which includes certain equityholders of SARs. Generally,QualTek as well as the participant will recognize ordinary incomeSponsors, certain registration rights, including customary piggyback registration rights and demand registration rights immediately after the closing of our Business Combination, which are subject to withholding upon the receipt of payment pursuant to SARs in an amount equal to the aggregate amount of cashcustomary terms and the fair market value of any property (including common stock) received. Subject to the deduction limitations described below, the employer generally will be entitled to a corresponding tax deduction equal to the amount includible in the participant’s income.

Restricted Stock

If the restrictions on an award of shares of restricted stock are of a nature that the shares are both subject to a substantial risk of forfeiture and are not freely transferable (within the meaning of Section 83 of the Code), the participant will not recognize income for United States federal income tax purposes at the time of the award unless the participant affirmatively elects to include the fair market value of the shares of restricted stock on the date of the award, less any amount paid for the shares, in gross income for the year of the award pursuant to Section 83(b) of the Code. In the absence of this election, the participant will be required to include in income for United States federal income tax purposes on the date the shares either become freely transferable or are no longer subject to a substantial risk of forfeiture (within the meaning of Section 83 of the Code), the fair market value of the shares of restricted stock on such date, less any amount paid for the shares. The employer will be entitled to a deduction at the time of income recognition to the participant in an amount equal to the amount the participant is required to include in incomeconditions, including with respect to cooperation and reduction of underwritten shelf takedown provisions (subject to lock-up restrictions for six months after the closing of the Business Combination). Additionally, the Investor Rights Agreement sets forth certain corporate governance standards relating to QualTek.

2027 Convertible Note Subscription Agreements

The Company is obligated to register the resale of the 2027 Convertible Notes and the shares subject toissuable upon the deduction limitations described below. If a Section 83(b) election is made within 30 days after the date the restricted stock is received, the participant will recognize ordinary income at the timeconversion of the receipt2027 Convertible Notes. The Company agreed that, the Company will file with a registration statement registering the resale of the restricted stock, and the employer will be entitled to a corresponding deduction, equal to the fair market value of the shares at the time, less the amount paid, if any, by the participant for the restricted stock. If a Section 83(b) election is made, no additional income will be recognized by the participant upon the lapse of restrictions on the restricted stock, but, if the restricted stock is subsequently forfeited, the participant may not deduct the income that was recognized pursuant to the Section 83(b) election at the time of the receipt of the restricted stock but may recognize a loss in an amount equal to the excess, if any, of the amount paid for the restricted stock over the amount received upon such forfeiture (which loss will ordinarily be a capital loss).

Dividends paid to a participant holding restricted stock before the expiration of the restriction period will be additional compensation taxable as ordinary income to the participant subject to withholding, unless the participant made an election under Section 83(b). Subject to the deduction limitations described below, the employer generally will be entitled to a corresponding tax deduction equal to the dividends includible in the participant’s income as compensation. If the participant has made a Section 83(b) election, the dividends will be dividend income, rather than additional compensation, to the participant.

If the restrictions on an award of restricted stock are not of a nature that the shares are both subject to a substantial risk of forfeiture and are not freely transferable, within the meaning of Section 83 of the Code, then the participant will recognize ordinary income for United States federal income tax purposes at the time of the transfer of the shares in an amount equal to the fair market value of the shares of restricted stock on the date of the transfer, less any amount paid therefore. The employer will be entitled to a deduction at that time in an amount equal to the amount the participant is required to include in income with respect to the shares, subject to the deduction limitations described below.

Restricted Stock Units

There will be no United States federal income tax consequences to either the participant or the employer upon the grant of restricted stock units. Generally, the participant will recognize ordinary income subject to withholding upon the receipt of cash and/or transfer of shares of Class A Common Stock in paymentissuable upon conversion of the restricted stock units in an amount equal2027 Convertible Notes. The Company will use its commercially reasonable efforts to maintain the continuous effectiveness of such registration statement, and to be supplemented and amended to the aggregateextent necessary to ensure that such prospectus is available or, if not available, that another registration statement is available for the resale of the cash received2027 Convertible Notes, until the earliest of (i) the date on which the 2027 Convertible Notes may be resold without volume or manner of sale limitations pursuant to Rule 144 promulgated under the Securities Act, (ii) the date on which such 2027 Convertible Notes have actually been sold and (iii) the fair market valuedate which is three years after the closing of the Class A Common Stock so transferred. SubjectBusiness Combination.

Notwithstanding anything to the deduction limitations described below,contrary in the employer generally willConvertible Note Subscription Agreements, the Company shall be entitled to a corresponding tax deduction equaldelay or postpone the effectiveness of the registration statement, and from time to time to require any Selling Securityholder not to sell under the amount includibleregistration statement or to suspend the effectiveness thereof, if (i) it determines that in the participant’s income.

Generally, a participant will recognize ordinary income subject to withholding upon the payment of any dividend equivalents paid with respect to an award in an amount equal to the cash the participant receives. Subject to the deduction limitations described below, the employer generally will be entitled to a corresponding tax deduction equal to the amount includible in the participant’s income.

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Limitation on the Employer’s Compensation Deduction

In order for the amounts described aboveregistration statement not to contain a material misstatement or omission, an amendment or supplement thereto would be deductibleneeded or (ii) the negotiation or consummation of a transaction by the employer, such amounts must constituteCompany or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event, the Board reasonably believes, upon the advice of legal counsel, would require additional disclosure by the Company in the Registration Statement of material information that the Company has a bona fide business purpose for keeping confidential and the non-disclosure of which in the registration statement would be expected, in the reasonable compensation for services rendered or to be rendered and must be ordinary and necessary business expenses. In addition, Section 162(m)determination of the Code limitsBoard, upon the deduction certain employers may take for otherwise deductible compensation payableadvice of legal counsel, to certain executive officerscause the Registration Statement to fail to comply with applicable disclosure requirements.

Section 203 of the employer to the extent the compensation paid to such an officer for the year exceeds $1 million.DGCL

Excess Parachute Payments

Our ability (or the ability of one of our subsidiaries) to obtain a deduction for future payments under the 2022 LTIP could also be limited by the golden parachute rules of Section 280G of the Code, which prevent the deductibility of certain excess parachute payments made in connection with a change in control of an employer-corporation.

New 2022 LTIP Benefits

No determination has yet been made as to the awards, if any, that any eligible individuals will be granted in the future and no awards have been granted that are contingent on the approval of the 2022 LTIP and, therefore, the benefits to be awarded under the 2022 LTIP, which are determined in the compensation committee’s sole discretion, are not determinable at this time. Because future awards are in the sole discretion of the compensation committee, the number of sharesQualTek is subject to future awards could increase or decrease and the type and terms of future awards could change as well, all without the need for future shareholder approval.

ESPP

Background

Our Board has approved the QualTek 2022 Employee Stock Purchase Plan (the “ESPP”), subject to the approval of our stockholders.

We strongly believe in improving opportunities for our employees to reap the benefits of increases in our stock’s value. In addition, the ability to contribute a portion of earnings to purchase our shares, would represent a key benefit for our employee. We believe that such a program improves our ability to attract, retain and incentivize our talent, and ultimately, better aligns the interests of our employees with those of our shareholders. As of the date of this filing, we anticipate that approximately 1,600 employees will be eligible to participate in the ESPP.

Summary of the 2022 ESPP

The following general description of material features of the ESPP is qualified in its entirety by reference to the provisions of the ESPP.

Purpose and Eligibility

The ESPP is intended to assist employeesSection 203 of the Combined CompanyDGCL regulating corporate takeovers. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in acquiring share ownership interest in QualTek, and to help such employees provide for their future security and to encourage them to remain in the employment of the Combined Company or its subsidiaries. The ESPP is intended to have two components: a component intended to qualify as an “employee stock purchase plan” under Section 423 of the Code (the “423 Component”) and a component that is not intended to so qualify (the “Non-423 Component”). Except as otherwise provided, the Non-423 Component will be operated and administered in the same manner as the 423 Component, except where prohibited by law.

Our executive officers and all of our other employees who have worked at QualTek for at least six months will be allowed to participate in the ESPP, provided that the administrator, in its discretion, may also exclude any or all of the following unless prohibited by applicable law, so long as, for offerings under the 423 Component, any such exclusion is applied uniformly to all employees:“business combination” with:

Any employeea stockholder who is customarily scheduled to work 20 hoursowns 15% or less per week;more of our outstanding voting stock (otherwise known as an “interested stockholder”);
any employee whose customary employment is notan affiliate of an interested stockholder; or
an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.

A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:

the Board approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than five months in a calendar year;statutorily excluded shares of Class A Common Stock; or

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any employee who is not employed by QualTek prioron or subsequent to the applicable exercise date occurs; and
any employee who is a highly compensated employee (within the meaning of Section 414(q) of the Code) or any highly compensated employee with compensation abovetransaction, the business combination is approved by the Board and authorized at a specified level, who ismeeting of our stockholders, and not by written consent, by an officer, or who is subject to the disclosure requirementsaffirmative vote of Section 16(a)at least two-thirds of the Exchange Act; or
any employee who is a citizen or resident of a jurisdiction outsideoutstanding voting stock not owned by the United States if the grant of the option is prohibited under the laws of the jurisdiction governing such Employee or compliance with the laws of the jurisdiction would cause the Section 423 Component or any offering or option granted thereunder to violate the requirements of Section 423 of the Code.interested stockholder.

Notwithstanding the foregoing, any employee who, after the grantingListing of the option, would possess 5% or more of the total combined voting power or value of all classes of shares of QualTek shall not be eligible. In addition, no employee shall be granted an option under the Section 423 Component which permits the employee to purchase shares under all of our “employee stock purchase plans” that would accrue at a rate which exceeds $25,000 of fair market value of ourSecurities

The Company’s Class A Common Stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time.

Administration

The ESPP will be administered by the Board or a committee appointed by the Board, subject to applicable laws. The administrator will have full and exclusive authority to interpret the terms of the ESPP and determine eligibility, subject to the conditions of the ESPP, as described below.

Share Reserve

The maximum aggregate number of shares that may be issued pursuant to the ESPP will be equal to 2% of the fully diluted capitalization of the Company. In addition,warrants are listed on each January 1 beginning on January 1, 2023 and ending on January 1, 2032, the aggregate number of shares reserved for issuanceNasdaq under the ESPP will be increased automatically by the lesser of (x) a number of shares equal to 1% of the total number of all classes of our outstanding shares of Class A Common Stock on the immediately preceding December 31symbol “QTEK” and (y) such number of shares that would result in the number of shares in the share reserve being equal to 2% of the aggregate number of shares of outstanding on the final day of the immediately preceding calendar year; except that the administrator may in its sole discretion reduce the amount of the increase in any particular year.

Contributions and Purchases

“QTEKW,” respectively. The ESPP will permit participants to purchase Class A Common Stock through contributions (in the form of payroll deductions or otherwise to the extent permitted by the administrator) of up to 15% of their eligible compensation, which includes a participant’s regular and recurring straight time gross earnings, payments for overtime and shift premium, bonuses, equity compensation and other similar compensation. Subject to the eligibility requirements discussed above, a participant may purchase a maximum of 1,000 shares of Class A Common Stock during each six-month offering period. The ESPP initially will have purchase periods approximately 6 months in duration commencing with the first trading day after one exercise date and ending with the next exercise date. The administrator may, in its discretion, modify the terms of future purchase periods and offering periods, provided that no offering period may be longer than 27 months.

Amounts contributed and accumulated by the participant during any offering period will be used to purchase shares of Class A Common Stock at the end of each six-month purchase period. The purchase price of the shares will be 85% of the lower of the fair market value of Class A Common Stock on the first trading day of the offering period or on the last trading day of the offering period.

Withdrawal and Termination of Participation

A participant may withdraw from the ESPP voluntarily at any time by filing a notice of withdrawal prior to the close of business on the date established by the administrator. A participant will be deemed to have elected to withdraw from the Plan upon the termination of the participant’s employment for any reason or in the event the participant is no longer eligible to participate in the ESPP.

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Restriction on Transfers

A participant may not transfer rights granted under the ESPP other than by will, the laws of descent and distribution or as otherwise provided under the ESPP.

Adjustments

In the event of certain changes in our capitalization, to prevent dilution or enlargement of the benefits or potential benefits available under the ESPP, the administrator will make adjustments, as it may deem equitable, to the number and class of shares that may be delivered, the applicable purchase price for shares, and/or the numerical share limits, pursuant to the ESPP.

Dissolution or Liquidation

In the event of our proposed liquidation or dissolution, any offering period then in progress will be shortened by setting a new exercise date, and will terminate immediately prior to such liquidation or dissolution unless otherwise determined by the administrator. The administrator will notify participants of the new exercise date in writing or electronically, at which time any participant’s purchase rights will be automatically exercised, unless the participant has earlier withdrawn from the offering period.

Certain Transactions

In the event of a merger, consolidation or similar transaction, an acquiring or successor corporation may assume or substitute each outstanding option. If the successor corporation refuses to assume or substitute for the outstanding option, the offering period then in progress will be shortened by setting a new exercise date. The administrator will notify each participant in writing or electronically that the exercise date has been changed and that the participant’s option will be exercised automatically on the new exercise date, unless the participant has already withdrawn from the offering period. Notwithstanding any other provision to the contrary, the ESPP will be automatically terminated following a change in control (as defined in our 2022 LTIP).

Summary of Material U.S. Federal Income Tax Considerations

Section 423 Component

The following summary is intended only as a general guide to the material U.S. federal income tax consequences of participation in the ESPP under the 423 Component. The summary is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s death, or the provisions of the income tax laws of any municipality, state or foreign country in which the participant may reside. As a result, tax consequences for any particular participant may vary based on individual circumstances.

The rights of participants to make purchases under the ESPP are intended to qualify under the provisions of Section 423 of the Code. Assuming such qualification, no income will be taxable to a participant until the sale or other disposition of shares purchased under the ESPP. Upon such sale or disposition, the participant will generally be subject to tax in an amount that depends upon the holding period of such shares prior to disposing of them.

If the shares are sold or disposed of more than two years from the first day of the offering period during which the shares were purchased and more than one year from the date of purchase, or if the participant dies while holding the shares, the participant (or his or her estate) will recognize ordinary income generally measured as the lesser of (i) the excess of the fair market value of the shares at the time such sale or disposition over the purchase price of such shares or (ii) an amount equal to 15% of the fair market value of the shares on the first day of the offering period. Any additional gain will be treated as long-term capital gain. If the shares are held for at least the holding periods described above but are sold for a price that is less than the purchase price, there will be no ordinary income and the difference will be a long-term capital loss. We2027 Convertible Notes will not be entitled to an income tax deduction with respect to the grant or exercise of a right to purchase our shares, or the sale of such shares by a participant, where such participant holds such shares for at least the holding periods described above.

Any sale or other disposition of shares before the expiration of the holding periods described above will be a “disqualifying disposition,” and the participant will recognize ordinary income generally measured as the excess of the fair market value of the shareslisted on the date the shares are purchased over the purchase price, and we will be entitled to an income tax deduction for such ordinaryany securities exchange.

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income. Any additional gain or loss on such sale or disposition will be a long-term or short-term capital gain or loss, depending on the holding period following the date the shares were purchased by the participant prior to such sale or disposition, and we will not be entitled to an income tax deduction for any such capital gain.

Non-423 Component

The following summary is intended only as a general guide to the material U.S. federal income tax consequences of participation in the ESPP under the Non-423 Component. Rights granted under the Non- 423 Component are not intended to qualify for favorable U.S. federal income tax treatment associated with rights granted under an “employee stock purchase plan” that qualifies under provisions of Section 423 of the Code. Under this component, a participant will have compensation income equal to the value of the shares at the time of purchase, less the purchase price. When a participant sells shares purchased under the ESPP, he or she also will have a capital gain or loss equal to the difference between the sales proceeds and the value of shares at the time of purchase. Any capital gain or loss will be short-term or long-term, depending on how long the shares have been held.

Any compensation income that a participant receives upon sale of shares that he or she purchased under the Non- 423 Component is subject to withholding for income, Medicare and social security taxes, as applicable.

New Plan Benefits

Participation in the ESPP is voluntary and each eligible employee will make his or her own decision whether and to what extent to participate in the ESPP. It is therefore not possible to determine the benefits or amounts that will be received in the future by individual employees or groups of employees under the ESPP.

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PRINCIPAL STOCKHOLDERS

PLAN OF DISTRIBUTION

The Selling Securityholders, which, as used herein, includes their permitted transferees, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of Class A Common Stock and/or warrants on Nasdaq or any other stock exchange, market or trading facility on which such securities are traded or in private transactions. In addition, the Selling Securityholders, which, as used herein, includes their permitted transferees, may, from time to time, sell, transfer or otherwise dispose of any or all of their 2027 Convertible Notes on any market or trading facility on which such securities are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale or at negotiated prices.

The Selling Securityholders may use any one or more of the following methods when disposing of their shares of our Class A Common Stock, our warrants and/or our 2027 Convertible Notes:

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
an exchange distribution in accordance with the rules of the applicable exchange;
privately negotiated transactions;
in underwritten transactions;
short sales;
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
broker-dealers may agree with the Selling Securityholders to sell a specified number of such shares at a stipulated price;
distribution to members, limited partners or stockholders of Selling Securityholders;
“at the market” or through market makers or into an existing market for the shares;
a combination of any such methods of sale; and
any other method permitted pursuant to applicable law.

The Selling Securityholders may, from time to time, pledge or grant a security interest in some or all of the shares of our Class A Common Stock, our warrants or our 2027 Convertible Notes owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell their shares, warrants or 2027 Convertible Notes, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b) or other applicable provision of the Securities Act amending the list of Selling Securityholders to include the pledgee, transferee or other successors in interest as Selling Securityholders under this prospectus. The Selling Securityholders also may transfer their securities in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of our Class A Common Stock, our warrants, 2027 Convertible Notes or interests therein, the Selling Securityholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of our securities in the course of hedging the positions they assume. The Selling Securityholders may also sell their securities short and deliver these securities to close out their short positions, or loan or pledge such securities to broker-dealers that in turn may sell these securities. The Selling Securityholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other

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financial institution of the shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The aggregate proceeds to the Selling Securityholders from the sale of our Class A Common Stock, warrants or 2027 Convertible Notes offered by them will be the purchase price less discounts or commissions, if any. The Selling Securityholders reserve the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of our Class A Common Stock, warrants or 2027 Convertible Notes to be made directly or through agents. We will not receive any of the proceeds from any offering by the Selling Securityholders.

The Selling Securityholders also may in the future resell a portion of our Class A Common Stock, warrants or 2027 Convertible Notes in open market transactions in reliance upon Rule 144 under the Securities Act, provided that they meet the criteria and conform to the requirements of that rule, or pursuant to other available exemptions from the registration requirements of the Securities Act.

The Selling Securityholders and any underwriters, broker-dealers or agents that participate in the sale of our Class A Common Stock, warrants or 2027 Convertible Notes or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of our Class A Common Stock, warrants or 2027 Convertible Notes may be underwriting discounts and commissions under the Securities Act. If any selling security holder is an “underwriter” within the meaning of Section 2(11) of the Securities Act, then the selling security holder will be subject to the prospectus delivery requirements of the Securities Act. Underwriters and their controlling persons, dealers and agents may be entitled, under agreements entered into with us and the Selling Securityholders, to indemnification against and contribution toward specific civil liabilities, including liabilities under the Securities Act.

To the extent required, our Class A Common Stock, warrants or 2027 Convertible Notes to be sold, the respective purchase prices and public offering prices, the names of any agent, dealer or underwriter, and any applicable discounts, commissions, concessions or other compensation with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the prospectus that includes this prospectus.

To facilitate an offering of the securities, certain persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involves the sale by persons participating in the offering of more securities than we sold to them. In these circumstances, these persons would cover the over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.

We have agreed to maintain the effectiveness of this prospectus until all such securities have been sold under this prospectus or Rule 144 under the Securities Act or are no longer outstanding. We are required to pay all fees and expenses incident to the registration of the shares of our Class A Common Stock, warrants or 2027 Convertible Notes to be offered and sold pursuant to this prospectus. The Selling Securityholders will bear all commissions and discounts, if any, attributable to their sale of shares of our Class A Common Stock or warrants.

The Selling Securityholders may use this prospectus in connection with resales of our Class A Common Stock, warrants or 2027 Convertible Notes. This prospectus and any accompanying prospectus supplement will identify the Selling Securityholders, the terms of our Class A Common Stock, warrants or 2027 Convertible Notes and any material relationships between us and the Selling Securityholders. The Selling Securityholders may be deemed to be underwriters under the Securities Act in connection with our Class A Common Stock, warrants or 2027 Convertible Notes they resell and any profits on the sales may be deemed to be underwriting discounts and commissions under the Securities Act. Unless otherwise set forth in a prospectus supplement, the Selling Securityholders will receive all the net proceeds from the resale of our Class A Common Stock, warrants or 2027 Convertible Notes.

A Selling Securityholder that is an entity may elect to make an in-kind distribution of Class A Common Stock, warrants or 2027 Convertible Notes to its members, partners or stockholders pursuant to the registration statement of which this prospectus is a part by delivering a prospectus. To the extent that such members, partners or stockholders are not affiliates of ours, such members, partners or stockholders would thereby receive freely tradable Class A Common Stock, warrants or 2027 Convertible Notes pursuant to the distribution through a registration statement.

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BENEFICIAL OWNERSHIP OF SECURITIES

The following table sets forth information regarding the beneficial ownership of shares of ROCR Common Stock as of February 1, 2022 (pre-Business Combination) and ofthe Company’s Class A Common Stock and Class B Common Stock (the Class A Common Stock and Class B Common Stock together, are referred to in this section as the “Combined Company Common Stock” immediately after the consummation of the Business Combination (post-Business Combination), assuming that no Public Shares are redeemed and, alternatively, that the maximum number of Public Shares is redeemed and that none of the Convertible Notes have been converted, by:September 15, 2022:

each person or “group” (as such term is used in Section 13(d)(3) of the Exchange Act) known by ROCRthe Company to be the beneficial owner of more than 5% of shares of ROCR Common Stock or of the Combined Companyour Common Stock;
each of ROCR’s current executive officers and directors;
each person who will (or is expected to) become an executive officer or director of the Combined Company upon the closing of the Business Combination;
all of our current executive officers and directors as a group;of the Company; and
all executive officers and directors of the Combined Company as a group upon the closing of the Business Combination.group.

Beneficial ownership is determined in accordance withaccording to the rules of the SEC, rules and includeswhich generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Company stock issuable upon exercise of options and warrants currently exercisable within 60 days are deemed outstanding solely for purposes of calculating the percentage of total voting power of the beneficial owner thereof.

In connection with respect to securities. Except as indicated by the footnotes below, ROCR believes, based on the information furnished to it, that the persons and entities named in the table below have, or will have immediately after the consummationclosing of the Business Combination, sole voting and investment power with respect to all shares of ROCR Common Stock that they beneficially own, subject to applicable community property laws. Any shares of ROCR Common Stock subject to options or warrants exercisable within 60 days of the consummation of the Business Combination are deemed to be outstanding and beneficially owned by the persons holding those options or warrants for the purpose of computing the number of shares beneficially owned and the percentage ownership of that person. They are not, however, deemed to be outstanding and beneficially owned for the purpose of computing the percentage ownership of any other person.

The beneficial ownership of shares of ROCR Common Stock pre-Business Combination is based on 14,783,000 issued and outstanding shares of ROCR Common Stock as of February 1, 2022. The beneficial ownership of(i) 2,274,934 shares of Class A Common Stock post-Business Combination assumes (i)issued to certain BCP Sellers (ii) 3,836,177 QualTek Common Units issued to the issuance of the shares as merger consideration, (ii) the issuance of 4,676,500 shares in the PIPE Investment,QualTek Equityholders (the “Earnout Common Units”) and (iii) the issuance of 6,937,500 shares upon automatic conversion of the Pre-PIPE Notes issued in the Pre-PIPE Investment, and (iv) none of the Convertible Notes have been converted. The beneficial ownershipan equal number of shares of Class B Common Stock post-Business Combination is based on 25,702,398 shares to be outstanding, which includes shares of Class B Common stock held by Flow-Through Sellers equalissued to the number of Common Units heldQualTek Equityholders by such Flow-Through Sellers.

The expected beneficial ownership of shares of Combinedthe Company Common Stock post-Business Combination has been determined based upon((i) and (iii) collectively, the following: (i) no ROCR stockholder has exercised its redemption rights to receive cash from the Trust Account in exchange for its ROCR Common Stock and we have not issued any additional ROCR Common Stock and (ii) thereEarnout Shares”), will be an aggregatesubject to certain restriction on transfer and voting and potential forfeiture pending the achievement (if any) of 31,383,439 sharesthe following earnout targets pursuant to the terms of the Business Combination Agreement: (A) if, on or any time prior to the fifth anniversary of the date of the closing of the Business Combination, the closing sale price per share of Class A Common Stock and 25,702,398 sharesequals or exceeds $15.00 per share for 20 trading days of Class B issued and outstanding at Closing (after accounting for certain de minimis rounding adjustments that may occur inany 30 consecutive trading day period following the allotmentclosing of shares as merger consideration).

The expected beneficial ownershipthe Business Combination, 50% of shares of Combined Company Common Stock post-Business Combination assumes the maximum of 11,500,000 Public Shares have been redeemed has been determined based on the following: (i) ROCR stockholders (other than the stockholders listed in the table below) have exercised their redemption rights with respect 11,500,000 PublicEarnout Shares and (ii) thereEarnout Common Units will be an aggregateearned and no longer subject to the applicable restrictions on transfer and voting; and (B) if, on or any time prior to the fifth anniversary of 19,883,439 sharesthe date of the closing of the Business Combination, the closing sale price per share of Class A Common Stock issuedequals or exceeds $18.00 per share for 20 trading days of any 30 consecutive trading day period following the closing of the Business Combination, 50% of the Earnout Shares and outstanding at ClosingEarnout Common Units will be earned and 25,702,398no longer subject to the applicable restrictions on transfer and voting.

The beneficial ownership of our Common Stock, which includes the Earnout Shares, is based on 24,446,284 shares of our Class A Common Stock, which number excludes shares issuable upon exercise of outstanding warrants, 26,663,575 shares of our Class B Common Stock issued and outstanding at Closing (after accounting for certain de minimis rounding adjustments that may occur in the allotmentas of the shares as merger consideration).

The beneficial ownership information below excludes: (i) the shares underlying the Warrants because those securities are not exercisable within 60 days of this prospectus and are contingent upon the consummation of the Business Combination; (ii) the Earnout Shares; and (iii) shares expected to be issued or reserved under the Management Equity Incentive Plan.September 15, 2022.

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The expected beneficial ownership information below excludes the Earnout Shares, other than in the calculation of Class Athe percentage of Common Stock and Class B Common Stock post- Business Combination under the header “Post-Business Combination — Assuming No Redemption” assumes none of the Public Shares having been redeemed.beneficially owned.

Pre-Business Combination

Post-Business Combination

 

Common Stock

Assuming No Redemption

Assuming 100% Redemption

% of

Number of

Number of

Number of

Number of

Number of

Outstanding

 Shares

Shares

% of

 Shares

Shares

% of

 Shares

Shares of

of Class A

of Class B

Total

of Class A

of Class B

Total

Beneficially

Common

Common

Common

Voting

Common

Common

Voting

Name and Address of Beneficial Owner

    

Owned

    

Stock

    

Stock

    

Stock

    

Power

    

Stock

    

Stock

    

Power

 

Directors and Executive Officers of ROCR:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Byron Roth(1)(2)

 

1,028,876

 

7.0

%  

1,623,464

 

 — 

 

2.8

%  

1,623,464

 

 — 

 

3.6

%

Aaron Gurewitz(1)(3)

 

119,540

 

0.8

%  

136,202

 

 — 

 

*

 

136,202

 

 — 

 

*

Gordon Roth(1)(2)

 

672,956

 

4.6

%  

1,275,044

 

 — 

 

2.2

%  

1,275,044

 

 — 

 

2.8

%

John Lipman(1)

 

699,381

 

4.7

%  

796,862

 

 — 

 

1.4

%  

796,862

 

 — 

 

1.7

%

Rick Hartfiel(1)

 

89,577

 

*

 

102,062

 

 — 

 

*

 

102,062

 

 — 

 

*

Molly Montgomery(1)

 

40,233

 

*

 

40,233

 

 — 

 

*

 

40,233

 

 — 

 

*

Daniel M. Friedberg(1)(4)

 

40,233

 

*

 

40,233

 

 — 

 

*

 

40,233

 

 — 

 

*

Adam Rothstein(1)

 

40,233

 

*

 

40,233

 

 — 

 

*

 

40,233

 

 — 

 

*

Sam Chawla(1)

 

91,194

 

*

 

91,194

 

 — 

 

*

 

91,194

 

 — 

 

*

James Gold(1)

 

91,194

 

*

 

91,194

 

 — 

 

*

 

91,194

 

 — 

 

*

All Directors and Executive Officers of ROCR as a Group (8 Individuals)

 

2,332,813

 

15.8

%  

3,061,529

 

 — 

 

5.4

%  

3,061,529

 

 — 

 

6.7

%

Five Percent Holders ROCR:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Weiss Asset Management(5)

1,253,902

8.4

%  

1,253,902

— 

2.2

%  

1,253,902

2.8

%

Byron Roth(1)(6)

 

1,028,876

 

7.0

%  

1,623,464

 

 — 

 

2.8

%  

1,623,464

 

 — 

 

3.6

%

Sanders Morris Harris LLC(7)

 

873,035

 

5.9

%  

873,035

 

 — 

 

3.5

%  

873,035

 

 — 

 

4.4

%

Glazer Capital, LLC(8)

 

740,954

 

5.0

%  

740,954

 

 — 

 

1.3

%  

740,954

 

 — 

 

1.6

%

Directors and Executive Officers of Combined Company After Consummation of the Business Combination:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Christopher S. Hisey(9)

 

 — 

 

 — 

 

 

798,771

 

1.4

%  

 

798,771

 

1.8

%

Elizabeth Downey(9)

 

 — 

 

 — 

 

 

157,441

 

*

 

 

157,441

 

*

Michael B. Williams(9)

 

 — 

 

 — 

 

 

70,449

 

*

 

 

70,449

 

*

Adam Spittler(9)

 

 — 

 

 — 

 

 

89,306

 

*

 

 

89,306

 

*

Andrew Weinberg(10)(11)

 

 — 

 

 — 

 

12,673,940

 

13,939,005

 

46.6

%  

12,673,940

 

13,939,005

 

58.4

%

Matthew Allard(10)

 

 — 

 

 — 

 

 

 

 

 

 

Sam Chawla(1)

 

91,194

 

*

 

91,194

 

 

*

 

91,194

 

 

*

Raul Deju(10)

 

 — 

 

 — 

 

 

 

 

 

 

Roger Bulloch(10)

Maha Eltobgy(10)

Renee Noto(10)

Jigisha Desai(9)

All Directors and Executive Officers of Combined Company as a Group (12 Individuals)

12,765,134

15,054,972

48.7

%

12,765,134

15,054,972

61.0

%

Five Percent Holders of Combined Company After Consummation of the Business Combination:

Brightstar(10)(12)

12,673,940

13,939,005

46.6

%

12,673,940

13,939,005

58.4

%

    

Number of Shares

    

Number of Shares

    

Percentage

 

of Class A

of Class B

Of Common Stock

Name and Address of Beneficial Owners(1)

Common Stock

Common Stock(2)

Beneficially Owned

5% Holders

  

  

  

 

BCP GP Investors, LLC(3)(4)

 

12,673,939

 

13,939,005

 

52.07

%

QualTek Management HoldCo, LLC(5)

 

 

4,825,893

 

9.44

%

Victoria Partners L.P.

 

 

2,656,250

 

5.20

%

Named Executive Officers and Directors

 

  

 

  

 

  

Christopher S. Hisey(5)(6)

 

96,250

 

4,825,893

 

9.63

%

Elizabeth Downey(7)

 

40,500

 

 

*

Michael B. Williams(8)

 

31,250

 

 

*

Adam Spittler(9)

 

56,500

 

 

*

Andrew Weinberg(3)(4)

 

12,673,939

 

13,939,005

 

52.07

%

Matthew Allard(3)

 

 

 

Sam Chawla

 

91,194

 

 

*

Robert Bulloch(3)

 

 

 

Maha Eltobgy(3)

 

 

 

Jigisha Desai

 

 

 

Daniel Lafond

 

10,000

 

 

*

Sam Totusek

All Named Executive Officers and Directors of the Company as a group (7 individuals)

 

12,999,633

 

18,764,898

 

62.12

%

*

Less than 1%.

(1)TheUnless otherwise noted, the business address for this person is c/o Roth CH Acquisition III Co., 888 San Clemente Drive, Newport Beach, CA 92660.

100

(2)Includes shares owned by the Sponsor and Roth Capital Partners, over which Byron Roth and Gordon Roth have voting and dispositive power.
(3)Consists of shares owned by the AMG Trust Established January 23, 2007, for which Aaron Gurewitz is trustee.
(4)Consists of shares owned by Hampstead Park Capital Management LLC, of which Mr. Friedberg is the managing member.
(5)792,162 of these shares are beneficially owned by BIP GP LLC (“BIP GP”). Shares reported for BIP GP include shares beneficially owned by a private investment partnership (the “Partnership”) of which BIP GP is the sole general partner. Weiss Asset Management is the sole investment manager to the Partnership. WAM GP is the sole general partner of Weiss Asset Management. Andrew Weiss is the managing member of WAM GP and BIP GP. Shares reported for WAM GP, Andrew Weiss and Weiss Asset Management include shares beneficially owned by the Partnership.
(6)Byron Roth and Gordon Roth have voting and dispositive power over the shares owned by the Sponsor
(7)These shares of Common Stock are held by certain funds and accounts to which Sanders Morris Harris LLC served as broker-dealer. Don A. Sanders is a control person of Sanders Morris Harris LLC. Each of Sanders Morris Harris LLC and Mr. Sanders disclaims beneficial ownershipeach of the securities reported herein except to the extent of such persons’ pecuniary interest therein. The address for Sanders Morris Harris LLC is 600 Travis Street, Houston, Texas 77002.
(8)These shares of Common Stock are held by certain funds and accounts to which Glazer Capital, LLC serves as investment manager. Mr. Paul J. Glazer serves as the Managing Member of Glazer Capital, LLC. Each of Glazer Capital, LLC and Mr. Paul J. Glazer disclaims beneficial ownership of the securities reported herein except to the extent of such persons’ pecuniary interest therein. The address for Glazer Capital, LLC is 1049 Park Ave. 14A, New York, New York 10028.
(9)The business address for this personfollowing entities or individuals is c/o QualTek, 475 Sentry Parkway E, Suite 200 Blue Bell, PA 19422.
(10)(2)In the Business Combination, existing equityholders of QualTek HoldCo were issued new HoldCo common units and an equal number of shares of Class B Common Stock. A holder of a HoldCo common unit may convert one HoldCo common unit and one share of Class B Common Stock into one share of Class A Common Stock.
(3)The business address for this person is c/o Brightstar, 650 Fifth Avenue, 29th Floor, New York, NY 10019.
(11)(4)Beneficial ownership reported includes 12,673,940Represents (1) 3,642,750 shares of Class A Common Stock and 13,939,005 shares of Class B Common Stock beneficially owned by Brightstar. Mr. Weinberg may be deemed to be a beneficial owner of the shares beneficially owned by Brightstar. Mr. Weinberg, however, disclaims any beneficial ownership of such shares, except to the extent of his pecuniary interests therein.
(12)Represents (1) 3,737,553 shares of Class A Common Stock to be held of record by BCP AIV Investor Holdings-3, L.P. (“Blocker 1”BCP AIV-3”), (2) 4,293,1914,184,290 shares of Class A Common Stock to be held of record by BCP Strategic AIV Investor Holdings-2, L.P. (“Blocker 2”BCP AIV-2”), (3) 4,237,6524,096,901 shares of Class A Common Stock to be held of record by BCP QualTek Investor Holdings, L.P. (“Blocker 3”BCP L.P.”), (4) 405,54311,780,782 shares of Class AB Common Stock to be held of record by BCP QualTek, LLC (“BCP QualTek” and together with Blocker 1, Blocker 2 and Blocker 3, the “Blockers”), (5) 11,780,782 shares of Class B Common Stock to be held of record by BCP QualTek and (6) 2,158,223 shares of Class B Common Stock to be held of record by BCP QualTek II, LLC (“BCP QualTek II”).LLC. Brightstar Associates L.P. (“Brightstar Associates”) is the general partner of each Blockerof BCP AIV-3, BCP AIV-2 and BCP L.P., and each of BCP QualTek, LLC and BCP QualTek II, LLC is controlled by Brightstar Associates, its managing member. Brightstar GP Investors, LLC (“Brightstar GP”) is the general partner of Brightstar Associates. Brightstar GP is controlled by its sole managing member, Andrew Weinberg. Each of the foregoing disclaims beneficial ownership of the securities held directly or indirectly by such entities,entities.
(5)Represents 4,825,893 shares of Class B Common Stock held of record by QualTek Management HoldCo, LLC (“QualTek Management”). Christopher S. Hisey is the managing member of QualTek Management and as such could be deemed to have voting and dispositive power with respect to the shares held by QualTek Management. Mr. Hisey disclaims beneficial ownership of such shares except to the extent of itshis pecuniary interestsinterest therein. The table does not reflect 1,157,803 shares of Class B Common Stock held of record by QualTek Management that constitute Earnout Shares.
(6)Includes options to purchase 81,250 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Hisey has an indirect beneficial interest in 798,771 HoldCo common units and 798,771 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Hisey are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(7)Includes options to purchase 37,500 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Ms. Downey has an indirect beneficial interest in 166,693 HoldCo common units and 166,693 shares of Class B Common Stock. Pursuant to the

149

Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Ms. Downey are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(8)Includes options to purchase 31,250 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Williams has an indirect beneficial interest in 82,013 HoldCo common units and 82,013 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Williams are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(9)Includes options to purchase 43,750 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Spittler has an indirect beneficial interest in 107,947 HoldCo common units and 107,947 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Spittler are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.

101150

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Certain Relationships and Related Person Transactions — ROCR Founder Shares

In February 2019, the CR Financial Holdings, Inc. (the “Sponsor”), an entity affiliated with Roth, purchased an aggregate of 100 shares from us for an aggregate purchase price of $25,000. On May 26, 2020, we effected a dividend of 28,750 shares for each share outstanding resulting in there being an aggregate of 2,875,000 shares outstanding. On May 29, 2020, Craig-Hallum Capital Group LLC and certain of our directors, officers and affiliates of our management team purchased from the Sponsor an aggregate of 2,059,019 shares for an aggregate purchase price of $17,904.51. On January 19, 2021 and February 3, 2021, certain affiliates of our management team purchased from the Sponsor and Craig-Hallum an aggregate of 239,583 shares for an aggregate purchase price of $2,083.33. On February 9, 2021, certain of our Initial Stockholdersinitial stockholders of ROCR sold an aggregate of 417,080 shares back to us, which shares were cancelled, and Craig-Hallum and certain of our directors and affiliates of our management team purchased from us an aggregate of 417,080 shares, in each case, for an aggregate purchase price of $2,417.86. That same date, Craig-Hallum purchased from the Sponsor 39,931 shares for a purchase price of $231.48. Also on February 9, 2021, we effected a dividend of 0.50 share for each share outstanding, which dividend was rescinded and cancelled on February 24, 2021. As of the date hereof, there are an aggregate of 2,875,000 outstanding shares of our Common Stock held by the Sponsor and its affiliates (the “Founder Shares.Shares”).

Private PlacementInvestor Rights Agreement

SimultaneouslyIn connection with the closing of our Business Combination, QualTek, certain Sellers as set forth therein, BCP QualTek, the IPO,Sponsors, Sponsor Representative, and certain Other Holders (all as defined therein) entered into an Investor Rights Agreement, pursuant to which the Registration Rights Agreement, dated as of March 2, 2021, between the Other Holders (as defined therein) and ROCR was terminated and whereby we consummatedagreed to grant to the saleHolders (as defined therein), which includes certain equityholders of 408,000 units (the “Private Units”) at a priceQualTek as well as the Sponsors, certain registration rights, including customary piggyback registration rights and demand registration rights immediately after the closing of $10.00 per Private Unit in a private placementour Business Combination, which are subject to its stockholders, generating gross proceedscustomary terms and conditions, including with respect to cooperation and reduction of $4,080,000. These purchases took place on a private placement basis simultaneously with the consummation of the IPO. If we do not complete our initial business combination within 24underwritten shelf takedown provisions (subject to lock-up restrictions for six months fromafter the closing of the IPO,Business Combination). Additionally, the proceedsInvestor Rights Agreement sets forth certain corporate governance standards relating to QualTek.

2027 Convertible Note Subscription Agreements

The Company is obligated to register the resale of the 2027 Convertible Notes and the shares issuable upon the conversion of the 2027 Convertible Notes. The Company agreed that, the Company will file with a registration statement registering the resale of the shares of Class A Common Stock issuable upon conversion of the 2027 Convertible Notes. The Company will use its commercially reasonable efforts to maintain the continuous effectiveness of such registration statement, and to be supplemented and amended to the extent necessary to ensure that such prospectus is available or, if not available, that another registration statement is available for the resale of the 2027 Convertible Notes, until the earliest of (i) the date on which the 2027 Convertible Notes may be resold without volume or manner of sale limitations pursuant to Rule 144 promulgated under the Securities Act, (ii) the date on which such 2027 Convertible Notes have actually been sold and (iii) the date which is three years after the closing of the Business Combination.

Notwithstanding anything to the contrary in the Convertible Note Subscription Agreements, the Company shall be entitled to delay or postpone the effectiveness of the registration statement, and from time to time to require any Selling Securityholder not to sell under the registration statement or to suspend the effectiveness thereof, if (i) it determines that in order for the registration statement not to contain a material misstatement or omission, an amendment or supplement thereto would be needed or (ii) the negotiation or consummation of a transaction by the Company or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event, the Board reasonably believes, upon the advice of legal counsel, would require additional disclosure by the Company in the Registration Statement of material information that the Company has a bona fide business purpose for keeping confidential and the non-disclosure of which in the registration statement would be expected, in the reasonable determination of the Board, upon the advice of legal counsel, to cause the Registration Statement to fail to comply with applicable disclosure requirements.

Section 203 of the DGCL

QualTek is subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:

a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
an affiliate of an interested stockholder; or
an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.

A “business combination” includes a merger or sale of the Private Units will be included in the liquidating distribution to the holdersmore than 10% of our public shares. assets. However, the above provisions of Section 203 do not apply if:

the Board approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of Class A Common Stock; or

144

on or subsequent to the date of the transaction, the business combination is approved by the Board and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.

Listing of Securities

The Private UnitsCompany’s Class A Common Stock and warrants are identical tolisted on Nasdaq under the units soldsymbol “QTEK” and “QTEKW,” respectively. The 2027 Convertible Notes will not be listed on any securities exchange.

145

PLAN OF DISTRIBUTION

The Selling Securityholders, which, as part of the public units in this offering except that the (i) warrants included in the Private Units are non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers orused herein, includes their permitted transferees, and (ii)may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of Class A Common Stock and/or warrants on Nasdaq or any other stock exchange, market or trading facility on which such securities are traded or in private transactions. In addition, the Private UnitsSelling Securityholders, which, as used herein, includes their permitted transferees, may, notfrom time to time, sell, transfer or otherwise dispose of any or all of their 2027 Convertible Notes on any market or trading facility on which such securities are traded or in private transactions. These dispositions may be transferred prior to the close of a business combination (except on the same terms as the Founder Shares would be transferable). Our stockholders approved the issuance of the Private Units and underlying securities upon conversion of such notes, to the extent the holder wishes to so convert themat fixed prices, at prevailing market prices at the time of sale, at prices related to the consummationprevailing market price, at varying prices determined at the time of sale or at negotiated prices.

The Selling Securityholders may use any one or more of the following methods when disposing of their shares of our initial business combination.Class A Common Stock, our warrants and/or our 2027 Convertible Notes:

Promissory Note — Related Party

On December 15, 2020, we issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $200,000. As of December 31, 2020, there was $200,000 outstanding under the Promissory Note. The Promissory Note was non-interest bearing and was paid in-full in connection with the IPO.

Registration Rights

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
an exchange distribution in accordance with the rules of the applicable exchange;
privately negotiated transactions;
in underwritten transactions;
short sales;
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
broker-dealers may agree with the Selling Securityholders to sell a specified number of such shares at a stipulated price;
distribution to members, limited partners or stockholders of Selling Securityholders;
“at the market” or through market makers or into an existing market for the shares;
a combination of any such methods of sale; and
any other method permitted pursuant to applicable law.

The holders of our Founder Shares, as well as the holders of the Private Units (and all underlying securities), are entitled to registration rights entered into on March 5, 2021. The holders of a majority of these securities are entitled to make up to two demands that we register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units can elect to exercise these registration rights at any time after we consummate a business combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our consummation of a business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. Notwithstanding the foregoing, theySelling Securityholders may, not exercise demand or piggyback rights after five (5) and seven (7) years, respectively, from the effective date of this offering and may not exercise demand rights on more than one occasion in respect of all registrable securities.

Related Party Loans

In order to meet our working capital needs our Initial Stockholders, officers and directors and their respective affiliates may, but are not obligated to, loan us funds, from time to time, pledge or at any time,grant a security interest in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would be paid upon consummationsome or all of the shares of our initial business combination, without. If we do not complete a business combination, the loans will only be repaid with funds not heldClass A Common Stock, our warrants or our 2027 Convertible Notes owned by them and, if they default in the trust account,performance of their secured obligations, the pledgees or secured parties may offer and sell their shares, warrants or 2027 Convertible Notes, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b) or other applicable provision of the extent available.Securities Act amending the list of Selling Securityholders to include the pledgee, transferee or other successors in interest as Selling Securityholders under this prospectus. The Selling Securityholders also may transfer their securities in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of our Class A Common Stock, our warrants, 2027 Convertible Notes or interests therein, the Selling Securityholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of our securities in the course of hedging the positions they assume. The Selling Securityholders may also sell their securities short and deliver these securities to close out their short positions, or loan or pledge such securities to broker-dealers that in turn may sell these securities. The Selling Securityholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other

102146

On November 3, 2021, we issued an unsecured promissory note infinancial institution of the shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The aggregate principal amount of $500,000proceeds to certain payees including certainthe Selling Securityholders from the sale of our directors and officers, the Sponsor, Craig-Hallum, and affiliates of our management team. The note does not bear interest and matures upon closing of our initial business combination. In the event that we do not consummate a business combination, the noteClass A Common Stock, warrants or 2027 Convertible Notes offered by them will be repaid only from amounts remaining outside of the Trust Account,purchase price less discounts or commissions, if any. The note is not convertible into ROCR securities.

Selling Securityholders reserve the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of our Class A Common Stock, warrants or 2027 Convertible Notes to be made directly or through agents. We will reimbursenot receive any of the proceeds from any offering by the Selling Securityholders.

The Selling Securityholders also may in the future resell a portion of our Initial Stockholders, officersClass A Common Stock, warrants or 2027 Convertible Notes in open market transactions in reliance upon Rule 144 under the Securities Act, provided that they meet the criteria and directorsconform to the requirements of that rule, or pursuant to other available exemptions from the registration requirements of the Securities Act.

The Selling Securityholders and any underwriters, broker-dealers or agents that participate in the sale of our Class A Common Stock, warrants or 2027 Convertible Notes or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of our Class A Common Stock, warrants or 2027 Convertible Notes may be underwriting discounts and commissions under the Securities Act. If any selling security holder is an “underwriter” within the meaning of Section 2(11) of the Securities Act, then the selling security holder will be subject to the prospectus delivery requirements of the Securities Act. Underwriters and their controlling persons, dealers and agents may be entitled, under agreements entered into with us and the Selling Securityholders, to indemnification against and contribution toward specific civil liabilities, including liabilities under the Securities Act.

To the extent required, our Class A Common Stock, warrants or 2027 Convertible Notes to be sold, the respective purchase prices and public offering prices, the names of any agent, dealer or underwriter, and any applicable discounts, commissions, concessions or other compensation with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the prospectus that includes this prospectus.

To facilitate an offering of the securities, certain persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involves the sale by persons participating in the offering of more securities than we sold to them. In these circumstances, these persons would cover the over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option. In addition, these persons may stabilize or maintain the price of the securities by bidding for any reasonable out-of-pocket business expenses incurredor purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection with certain activities onstabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.

We have agreed to maintain the effectiveness of this prospectus until all such securities have been sold under this prospectus or Rule 144 under the Securities Act or are no longer outstanding. We are required to pay all fees and expenses incident to the registration of the shares of our behalf such as identifyingClass A Common Stock, warrants or 2027 Convertible Notes to be offered and investigating possible target businessessold pursuant to this prospectus. The Selling Securityholders will bear all commissions and business combinations. There is no limitdiscounts, if any, attributable to their sale of shares of our Class A Common Stock or warrants.

The Selling Securityholders may use this prospectus in connection with resales of our Class A Common Stock, warrants or 2027 Convertible Notes. This prospectus and any accompanying prospectus supplement will identify the Selling Securityholders, the terms of our Class A Common Stock, warrants or 2027 Convertible Notes and any material relationships between us and the Selling Securityholders. The Selling Securityholders may be deemed to be underwriters under the Securities Act in connection with our Class A Common Stock, warrants or 2027 Convertible Notes they resell and any profits on the amountsales may be deemed to be underwriting discounts and commissions under the Securities Act. Unless otherwise set forth in a prospectus supplement, the Selling Securityholders will receive all the net proceeds from the resale of out-of-pocket expenses reimbursable by us; provided, however,our Class A Common Stock, warrants or 2027 Convertible Notes.

A Selling Securityholder that is an entity may elect to make an in-kind distribution of Class A Common Stock, warrants or 2027 Convertible Notes to its members, partners or stockholders pursuant to the registration statement of which this prospectus is a part by delivering a prospectus. To the extent that such expenses exceedmembers, partners or stockholders are not affiliates of ours, such members, partners or stockholders would thereby receive freely tradable Class A Common Stock, warrants or 2027 Convertible Notes pursuant to the available proceeds not deposited indistribution through a registration statement.

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BENEFICIAL OWNERSHIP OF SECURITIES

The following table sets forth information regarding the trust accountbeneficial ownership of the Company’s Class A Common Stock and Class B Common Stock as of September 15, 2022:

each person or “group” (as such term is used in Section 13(d)(3) of the Exchange Act) known by the Company to be the beneficial owner of more than 5% of shares of our Common Stock;
each of the executive officers and directors of the Company; and
all executive officers and directors of the Company as a group.

Beneficial ownership is determined according to the interest income earned onrules of the amounts held inSEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Company stock issuable upon exercise of options and warrants currently exercisable within 60 days are deemed outstanding solely for purposes of calculating the trust account, such expenses would not be reimbursedpercentage of total voting power of the beneficial owner thereof.

In connection with the closing of the Business Combination, (i) 2,274,934 shares of Class A Common Stock issued to certain BCP Sellers (ii) 3,836,177 QualTek Common Units issued to the QualTek Equityholders (the “Earnout Common Units”) and (iii) an equal number of shares of Class B Common Stock issued to the QualTek Equityholders by us unless we consummate an initial business combination. Our audit committee will reviewthe Company ((i) and approve all reimbursements and payments made to any initial stockholder or member of our management team, or our or their respective affiliates, and any reimbursements and payments made to members of our audit committee(iii) collectively, the “Earnout Shares”), will be reviewedsubject to certain restriction on transfer and approved by our Boardvoting and potential forfeiture pending the achievement (if any) of Directors, withthe following earnout targets pursuant to the terms of the Business Combination Agreement: (A) if, on or any interested director abstaining from such review and approval.

No compensation or fees of any kind, including finder’s fees, consulting fees or other similar compensation, will be paid to any of our Initial Stockholders, officers or directors who owned our shares of common stocktime prior to the IPO,fifth anniversary of the date of the closing of the Business Combination, the closing sale price per share of Class A Common Stock equals or exceeds $15.00 per share for 20 trading days of any 30 consecutive trading day period following the closing of the Business Combination, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting; and (B) if, on or any of their respective affiliates,time prior to the fifth anniversary of the date of the closing of the Business Combination, the closing sale price per share of Class A Common Stock equals or with respectexceeds $18.00 per share for 20 trading days of any 30 consecutive trading day period following the closing of the Business Combination, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the business combination (regardless of the type of transaction that it is) except as described in this prospectus.applicable restrictions on transfer and voting.

We entered into indemnity agreements with eachThe beneficial ownership of our officers and directors. These agreements require us to indemnify these individuals toCommon Stock, which includes the fullest extent permitted under Delaware law and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

All ongoing and future transactions between us and anyEarnout Shares, is based on 24,446,284 shares of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions, including the paymentClass A Common Stock, which number excludes shares issuable upon exercise of any compensation, will require prior approval by a majorityoutstanding warrants, 26,663,575 shares of our disinterested independent directors (to the extent we have any) or the membersClass B Common Stock issued and outstanding as of our Board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our disinterested independent directors (or, if there are no independent directors, our disinterested directors) determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties.

Related Party Policy

Our Code of Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except under guidelines approved by the Board of Directors (or the audit committee). Related-party transactions are defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) we or any of our subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner of our common stock, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives personal benefits as a result of his or her position.

Our audit committee, pursuant to its written charter, is responsible for reviewing and approving related- party transactions to the extent we enter into such transactions. All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions will require prior approval by our audit committee and a majority of our disinterested independent directors, or the members of our Board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our audit committee and a majority of our disinterested independent directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties. Additionally, we require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.September 15, 2022.

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The beneficial ownership information below excludes the Earnout Shares, other than in the calculation of the percentage of Common Stock beneficially owned.

    

Number of Shares

    

Number of Shares

    

Percentage

 

of Class A

of Class B

Of Common Stock

Name and Address of Beneficial Owners(1)

Common Stock

Common Stock(2)

Beneficially Owned

5% Holders

  

  

  

 

BCP GP Investors, LLC(3)(4)

 

12,673,939

 

13,939,005

 

52.07

%

QualTek Management HoldCo, LLC(5)

 

 

4,825,893

 

9.44

%

Victoria Partners L.P.

 

 

2,656,250

 

5.20

%

Named Executive Officers and Directors

 

  

 

  

 

  

Christopher S. Hisey(5)(6)

 

96,250

 

4,825,893

 

9.63

%

Elizabeth Downey(7)

 

40,500

 

 

*

Michael B. Williams(8)

 

31,250

 

 

*

Adam Spittler(9)

 

56,500

 

 

*

Andrew Weinberg(3)(4)

 

12,673,939

 

13,939,005

 

52.07

%

Matthew Allard(3)

 

 

 

Sam Chawla

 

91,194

 

 

*

Robert Bulloch(3)

 

 

 

Maha Eltobgy(3)

 

 

 

Jigisha Desai

 

 

 

Daniel Lafond

 

10,000

 

 

*

Sam Totusek

All Named Executive Officers and Directors of the Company as a group (7 individuals)

 

12,999,633

 

18,764,898

 

62.12

%

*

Less than 1%.

(1)Unless otherwise noted, the business address of each of the following entities or individuals is c/o QualTek, 475 Sentry Parkway E, Suite 200 Blue Bell, PA 19422.
(2)In the Business Combination, existing equityholders of QualTek HoldCo were issued new HoldCo common units and an equal number of shares of Class B Common Stock. A holder of a HoldCo common unit may convert one HoldCo common unit and one share of Class B Common Stock into one share of Class A Common Stock.
(3)The business address for this person is c/o Brightstar, 650 Fifth Avenue, 29th Floor, New York, NY 10019.
(4)Represents (1) 3,642,750 shares of Class A Common Stock held of record by BCP AIV Investor Holdings-3, L.P. (“BCP AIV-3”), (2) 4,184,290 shares of Class A Common Stock held of record by BCP Strategic AIV Investor Holdings-2, L.P. (“BCP AIV-2”), (3) 4,096,901 shares of Class A Common Stock held of record by BCP QualTek Investor Holdings, L.P. (“BCP L.P.”), (4) 11,780,782 shares of Class B Common Stock held of record by BCP QualTek, LLC and (5) 2,158,223 shares of Class B Common Stock held of record by BCP QualTek II, LLC. Brightstar Associates is the general partner of each of BCP AIV-3, BCP AIV-2 and BCP L.P., and each of BCP QualTek, LLC and BCP QualTek II, LLC is controlled by Brightstar Associates, its managing member. Brightstar GP is the general partner of Brightstar Associates. Brightstar GP is controlled by its sole managing member, Andrew Weinberg. Each of the foregoing disclaims beneficial ownership of the securities held directly or indirectly by such entities.
(5)Represents 4,825,893 shares of Class B Common Stock held of record by QualTek Management HoldCo, LLC (“QualTek Management”). Christopher S. Hisey is the managing member of QualTek Management and as such could be deemed to have voting and dispositive power with respect to the shares held by QualTek Management. Mr. Hisey disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The table does not reflect 1,157,803 shares of Class B Common Stock held of record by QualTek Management that constitute Earnout Shares.
(6)Includes options to purchase 81,250 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Hisey has an indirect beneficial interest in 798,771 HoldCo common units and 798,771 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Hisey are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(7)Includes options to purchase 37,500 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Ms. Downey has an indirect beneficial interest in 166,693 HoldCo common units and 166,693 shares of Class B Common Stock. Pursuant to the

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Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Ms. Downey are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(8)Includes options to purchase 31,250 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Williams has an indirect beneficial interest in 82,013 HoldCo common units and 82,013 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Williams are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(9)Includes options to purchase 43,750 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Spittler has an indirect beneficial interest in 107,947 HoldCo common units and 107,947 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Spittler are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Relationships and Related Person Transactions — QualTekFounder Shares

On July 18, 2018, QualTek entered into an advisory services agreementIn February 2019, the CR Financial Holdings, Inc. (the “Advisory Services Agreement”Sponsor) with Brightstar Advisors, L.P., an affiliateentity affiliated with Roth, purchased an aggregate of Brightstar, its majority member. The Advisory Services Agreement requires quarterly advisory fees100 shares from us for an aggregate purchase price of $125,000 paid at$25,000. On May 26, 2020, we effected a dividend of 28,750 shares for each share outstanding resulting in there being an aggregate of 2,875,000 shares outstanding. On May 29, 2020, Craig-Hallum Capital Group LLC and certain of our directors, officers and affiliates of our management team purchased from the beginningSponsor an aggregate of 2,059,019 shares for an aggregate purchase price of $17,904.51. On January 19, 2021 and February 3, 2021, certain affiliates of our management team purchased from the Sponsor and Craig-Hallum an aggregate of 239,583 shares for an aggregate purchase price of $2,083.33. On February 9, 2021, certain of initial stockholders of ROCR sold an aggregate of 417,080 shares back to us, which shares were cancelled, and Craig-Hallum and certain of our directors and affiliates of our management team purchased from us an aggregate of 417,080 shares, in each quarter. QualTek incurred $500,000 in advisory fees duringcase, for an aggregate purchase price of $2,417.86. That same date, Craig-Hallum purchased from the Sponsor 39,931 shares for a purchase price of $231.48. Also on February 9, 2021, we effected a dividend of 0.50 share for each share outstanding, which dividend was rescinded and cancelled on February 24, 2021. As of the fiscal years ended December 31, 2020date hereof, there are an aggregate of 2,875,000 outstanding shares of our Common Stock held by the Sponsor and December 31, 2019.its affiliates (the “Founder Shares”).

The Combined Company’s Relationships and Related Party Transactions

Investor Rights Agreement

AtIn connection with the Closing, the Combined Company,closing of our Business Combination, QualTek, certain Sellers as set forth therein, the Equity Representative,BCP QualTek, the Sponsors, Sponsor Representative, and certain Other Holders (all as defined therein) will enterentered into an Investor Rights Agreement, pursuant to which the Registration Rights Agreement, dated as of March 2, 2021, between the Other Holders (as defined therein) and ROCR will bewas terminated and whereby the Buyer will agreewe agreed to grant to the Holders (as defined therein), which includes certain equityholders of QualTek as well as the Sponsors, certain registration rights, including customary piggyback registration rights and demand registration rights immediately after the Closing,closing of our Business Combination, which are subject to customary terms and conditions, including with respect to cooperation and reduction of underwritten shelf takedown provisions (subject to lock-up restrictions for six months after the Closing Date)closing of the Business Combination). Additionally, the Investor Rights Agreement will setsets forth certain corporate governance standards relating to QualTek.

2027 Convertible Note Subscription Agreements

The Company is obligated to register the Combinedresale of the 2027 Convertible Notes and the shares issuable upon the conversion of the 2027 Convertible Notes. The Company agreed that, the Company will file with a registration statement registering the resale of the shares of Class A Common Stock issuable upon conversion of the 2027 Convertible Notes. The Company will use its commercially reasonable efforts to maintain the continuous effectiveness of such registration statement, and to be supplemented and amended to the extent necessary to ensure that such prospectus is available or, if not available, that another registration statement is available for the resale of the 2027 Convertible Notes, until the earliest of (i) the date on which the 2027 Convertible Notes may be resold without volume or manner of sale limitations pursuant to Rule 144 promulgated under the Securities Act, (ii) the date on which such 2027 Convertible Notes have actually been sold and (iii) the date which is three years after the closing of the Business Combination.

Notwithstanding anything to the contrary in the Convertible Note Subscription Agreements, the Company shall be entitled to delay or postpone the effectiveness of the registration statement, and from time to time to require any Selling Securityholder not to sell under the registration statement or to suspend the effectiveness thereof, if (i) it determines that in order for the registration statement not to contain a material misstatement or omission, an amendment or supplement thereto would be needed or (ii) the negotiation or consummation of a transaction by the Company or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event, the Board reasonably believes, upon the advice of legal counsel, would require additional disclosure by the Company in the Registration Statement of material information that the Company has a bona fide business purpose for keeping confidential and the non-disclosure of which in the registration statement would be expected, in the reasonable determination of the Board, upon the advice of legal counsel, to cause the Registration Statement to fail to comply with applicable disclosure requirements.

Section 203 of the DGCL

QualTek is subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:

a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
an affiliate of an interested stockholder; or
an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.

A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:

the Board approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of Class A Common Stock; or

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on or subsequent to the date of the transaction, the business combination is approved by the Board and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.

Listing of Securities

The Company’s Class A Common Stock and warrants are listed on Nasdaq under the symbol “QTEK” and “QTEKW,” respectively. The 2027 Convertible Notes will not be listed on any securities exchange.

145

PLAN OF DISTRIBUTION

The Selling Securityholders, which, as used herein, includes their permitted transferees, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of Class A Common Stock and/or warrants on Nasdaq or any other stock exchange, market or trading facility on which such securities are traded or in private transactions. In addition, the Selling Securityholders, which, as used herein, includes their permitted transferees, may, from time to time, sell, transfer or otherwise dispose of any or all of their 2027 Convertible Notes on any market or trading facility on which such securities are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale or at negotiated prices.

The Selling Securityholders may use any one or more of the following methods when disposing of their shares of our Class A Common Stock, our warrants and/or our 2027 Convertible Notes:

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
an exchange distribution in accordance with the rules of the applicable exchange;
privately negotiated transactions;
in underwritten transactions;
short sales;
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
broker-dealers may agree with the Selling Securityholders to sell a specified number of such shares at a stipulated price;
distribution to members, limited partners or stockholders of Selling Securityholders;
“at the market” or through market makers or into an existing market for the shares;
a combination of any such methods of sale; and
any other method permitted pursuant to applicable law.

The Selling Securityholders may, from time to time, pledge or grant a security interest in some or all of the shares of our Class A Common Stock, our warrants or our 2027 Convertible Notes owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell their shares, warrants or 2027 Convertible Notes, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b) or other applicable provision of the Securities Act amending the list of Selling Securityholders to include the pledgee, transferee or other successors in interest as Selling Securityholders under this prospectus. The Selling Securityholders also may transfer their securities in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of our Class A Common Stock, our warrants, 2027 Convertible Notes or interests therein, the Selling Securityholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of our securities in the course of hedging the positions they assume. The Selling Securityholders may also sell their securities short and deliver these securities to close out their short positions, or loan or pledge such securities to broker-dealers that in turn may sell these securities. The Selling Securityholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other

146

financial institution of the shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The aggregate proceeds to the Selling Securityholders from the sale of our Class A Common Stock, warrants or 2027 Convertible Notes offered by them will be the purchase price less discounts or commissions, if any. The Selling Securityholders reserve the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of our Class A Common Stock, warrants or 2027 Convertible Notes to be made directly or through agents. We will not receive any of the proceeds from any offering by the Selling Securityholders.

The Selling Securityholders also may in the future resell a portion of our Class A Common Stock, warrants or 2027 Convertible Notes in open market transactions in reliance upon Rule 144 under the Securities Act, provided that they meet the criteria and conform to the requirements of that rule, or pursuant to other available exemptions from the registration requirements of the Securities Act.

The Selling Securityholders and any underwriters, broker-dealers or agents that participate in the sale of our Class A Common Stock, warrants or 2027 Convertible Notes or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of our Class A Common Stock, warrants or 2027 Convertible Notes may be underwriting discounts and commissions under the Securities Act. If any selling security holder is an “underwriter” within the meaning of Section 2(11) of the Securities Act, then the selling security holder will be subject to the prospectus delivery requirements of the Securities Act. Underwriters and their controlling persons, dealers and agents may be entitled, under agreements entered into with us and the Selling Securityholders, to indemnification against and contribution toward specific civil liabilities, including liabilities under the Securities Act.

To the extent required, our Class A Common Stock, warrants or 2027 Convertible Notes to be sold, the respective purchase prices and public offering prices, the names of any agent, dealer or underwriter, and any applicable discounts, commissions, concessions or other compensation with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the prospectus that includes this prospectus.

To facilitate an offering of the securities, certain persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involves the sale by persons participating in the offering of more securities than we sold to them. In these circumstances, these persons would cover the over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.

We have agreed to maintain the effectiveness of this prospectus until all such securities have been sold under this prospectus or Rule 144 under the Securities Act or are no longer outstanding. We are required to pay all fees and expenses incident to the registration of the shares of our Class A Common Stock, warrants or 2027 Convertible Notes to be offered and sold pursuant to this prospectus. The Selling Securityholders will bear all commissions and discounts, if any, attributable to their sale of shares of our Class A Common Stock or warrants.

The Selling Securityholders may use this prospectus in connection with resales of our Class A Common Stock, warrants or 2027 Convertible Notes. This prospectus and any accompanying prospectus supplement will identify the Selling Securityholders, the terms of our Class A Common Stock, warrants or 2027 Convertible Notes and any material relationships between us and the Selling Securityholders. The Selling Securityholders may be deemed to be underwriters under the Securities Act in connection with our Class A Common Stock, warrants or 2027 Convertible Notes they resell and any profits on the sales may be deemed to be underwriting discounts and commissions under the Securities Act. Unless otherwise set forth in a prospectus supplement, the Selling Securityholders will receive all the net proceeds from the resale of our Class A Common Stock, warrants or 2027 Convertible Notes.

A Selling Securityholder that is an entity may elect to make an in-kind distribution of Class A Common Stock, warrants or 2027 Convertible Notes to its members, partners or stockholders pursuant to the registration statement of which this prospectus is a part by delivering a prospectus. To the extent that such members, partners or stockholders are not affiliates of ours, such members, partners or stockholders would thereby receive freely tradable Class A Common Stock, warrants or 2027 Convertible Notes pursuant to the distribution through a registration statement.

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BENEFICIAL OWNERSHIP OF SECURITIES

The following table sets forth information regarding the beneficial ownership of the Company’s Class A Common Stock and Class B Common Stock as of September 15, 2022:

each person or “group” (as such term is used in Section 13(d)(3) of the Exchange Act) known by the Company to be the beneficial owner of more than 5% of shares of our Common Stock;
each of the executive officers and directors of the Company; and
all executive officers and directors of the Company as a group.

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Company stock issuable upon exercise of options and warrants currently exercisable within 60 days are deemed outstanding solely for purposes of calculating the percentage of total voting power of the beneficial owner thereof.

In connection with the closing of the Business Combination, (i) 2,274,934 shares of Class A Common Stock issued to certain BCP Sellers (ii) 3,836,177 QualTek Common Units issued to the QualTek Equityholders (the “Earnout Common Units”) and (iii) an equal number of shares of Class B Common Stock issued to the QualTek Equityholders by the Company ((i) and (iii) collectively, the “Earnout Shares”), will be subject to certain restriction on transfer and voting and potential forfeiture pending the achievement (if any) of the following earnout targets pursuant to the terms of the Business Combination Agreement: (A) if, on or any time prior to the fifth anniversary of the date of the closing of the Business Combination, the closing sale price per share of Class A Common Stock equals or exceeds $15.00 per share for 20 trading days of any 30 consecutive trading day period following the closing of the Business Combination, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting; and (B) if, on or any time prior to the fifth anniversary of the date of the closing of the Business Combination, the closing sale price per share of Class A Common Stock equals or exceeds $18.00 per share for 20 trading days of any 30 consecutive trading day period following the closing of the Business Combination, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting.

The beneficial ownership of our Common Stock, which includes the Earnout Shares, is based on 24,446,284 shares of our Class A Common Stock, which number excludes shares issuable upon exercise of outstanding warrants, 26,663,575 shares of our Class B Common Stock issued and outstanding as of September 15, 2022.

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The beneficial ownership information below excludes the Earnout Shares, other than in the calculation of the percentage of Common Stock beneficially owned.

    

Number of Shares

    

Number of Shares

    

Percentage

 

of Class A

of Class B

Of Common Stock

Name and Address of Beneficial Owners(1)

Common Stock

Common Stock(2)

Beneficially Owned

5% Holders

  

  

  

 

BCP GP Investors, LLC(3)(4)

 

12,673,939

 

13,939,005

 

52.07

%

QualTek Management HoldCo, LLC(5)

 

 

4,825,893

 

9.44

%

Victoria Partners L.P.

 

 

2,656,250

 

5.20

%

Named Executive Officers and Directors

 

  

 

  

 

  

Christopher S. Hisey(5)(6)

 

96,250

 

4,825,893

 

9.63

%

Elizabeth Downey(7)

 

40,500

 

 

*

Michael B. Williams(8)

 

31,250

 

 

*

Adam Spittler(9)

 

56,500

 

 

*

Andrew Weinberg(3)(4)

 

12,673,939

 

13,939,005

 

52.07

%

Matthew Allard(3)

 

 

 

Sam Chawla

 

91,194

 

 

*

Robert Bulloch(3)

 

 

 

Maha Eltobgy(3)

 

 

 

Jigisha Desai

 

 

 

Daniel Lafond

 

10,000

 

 

*

Sam Totusek

All Named Executive Officers and Directors of the Company as a group (7 individuals)

 

12,999,633

 

18,764,898

 

62.12

%

*

Less than 1%.

(1)Unless otherwise noted, the business address of each of the following entities or individuals is c/o QualTek, 475 Sentry Parkway E, Suite 200 Blue Bell, PA 19422.
(2)In the Business Combination, existing equityholders of QualTek HoldCo were issued new HoldCo common units and an equal number of shares of Class B Common Stock. A holder of a HoldCo common unit may convert one HoldCo common unit and one share of Class B Common Stock into one share of Class A Common Stock.
(3)The business address for this person is c/o Brightstar, 650 Fifth Avenue, 29th Floor, New York, NY 10019.
(4)Represents (1) 3,642,750 shares of Class A Common Stock held of record by BCP AIV Investor Holdings-3, L.P. (“BCP AIV-3”), (2) 4,184,290 shares of Class A Common Stock held of record by BCP Strategic AIV Investor Holdings-2, L.P. (“BCP AIV-2”), (3) 4,096,901 shares of Class A Common Stock held of record by BCP QualTek Investor Holdings, L.P. (“BCP L.P.”), (4) 11,780,782 shares of Class B Common Stock held of record by BCP QualTek, LLC and (5) 2,158,223 shares of Class B Common Stock held of record by BCP QualTek II, LLC. Brightstar Associates is the general partner of each of BCP AIV-3, BCP AIV-2 and BCP L.P., and each of BCP QualTek, LLC and BCP QualTek II, LLC is controlled by Brightstar Associates, its managing member. Brightstar GP is the general partner of Brightstar Associates. Brightstar GP is controlled by its sole managing member, Andrew Weinberg. Each of the foregoing disclaims beneficial ownership of the securities held directly or indirectly by such entities.
(5)Represents 4,825,893 shares of Class B Common Stock held of record by QualTek Management HoldCo, LLC (“QualTek Management”). Christopher S. Hisey is the managing member of QualTek Management and as such could be deemed to have voting and dispositive power with respect to the shares held by QualTek Management. Mr. Hisey disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The table does not reflect 1,157,803 shares of Class B Common Stock held of record by QualTek Management that constitute Earnout Shares.
(6)Includes options to purchase 81,250 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Hisey has an indirect beneficial interest in 798,771 HoldCo common units and 798,771 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Hisey are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(7)Includes options to purchase 37,500 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Ms. Downey has an indirect beneficial interest in 166,693 HoldCo common units and 166,693 shares of Class B Common Stock. Pursuant to the

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Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Ms. Downey are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(8)Includes options to purchase 31,250 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Williams has an indirect beneficial interest in 82,013 HoldCo common units and 82,013 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Williams are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(9)Includes options to purchase 43,750 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Spittler has an indirect beneficial interest in 107,947 HoldCo common units and 107,947 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Spittler are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Relationships and Related Person Transactions — Founder Shares

In February 2019, the CR Financial Holdings, Inc. (the “Sponsor”), an entity affiliated with Roth, purchased an aggregate of 100 shares from us for an aggregate purchase price of $25,000. On May 26, 2020, we effected a dividend of 28,750 shares for each share outstanding resulting in there being an aggregate of 2,875,000 shares outstanding. On May 29, 2020, Craig-Hallum Capital Group LLC and certain of our directors, officers and affiliates of our management team purchased from the Sponsor an aggregate of 2,059,019 shares for an aggregate purchase price of $17,904.51. On January 19, 2021 and February 3, 2021, certain affiliates of our management team purchased from the Sponsor and Craig-Hallum an aggregate of 239,583 shares for an aggregate purchase price of $2,083.33. On February 9, 2021, certain of initial stockholders of ROCR sold an aggregate of 417,080 shares back to us, which shares were cancelled, and Craig-Hallum and certain of our directors and affiliates of our management team purchased from us an aggregate of 417,080 shares, in each case, for an aggregate purchase price of $2,417.86. That same date, Craig-Hallum purchased from the Sponsor 39,931 shares for a purchase price of $231.48. Also on February 9, 2021, we effected a dividend of 0.50 share for each share outstanding, which dividend was rescinded and cancelled on February 24, 2021. As of the date hereof, there are an aggregate of 2,875,000 outstanding shares of our Common Stock held by the Sponsor and its affiliates (the “Founder Shares”).

Private Placement

Simultaneously with the closing of the ROCR IPO, we consummated the sale of 408,000 units (the “Private Units”) at a price of $10.00 per Private Unit in a private placement to its stockholders, generating gross proceeds of $4,080,000. These purchases took place on a private placement basis simultaneously with the consummation of the IPO. The Private Units are identical to the units sold to the public except that the (i) warrants included in the Private Units are non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees, and (ii) the Private Units may be transferred following the closing of the Business Combination. Our stockholders approved the issuance of the Private Units and underlying securities upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation of our Business Combination.

Promissory Note — Related Party

On December 15, 2020, we issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $200,000. The Promissory Note was non-interest bearing and was paid in-full in connection with the IPO.

On November 3, 2021, we issued an unsecured promissory note in the aggregate principal amount of $500,000 to certain payees including certain of our directors and officers, the Sponsor, Craig-Hallum, and affiliates of our management team. The note does not bear interest and matured upon closing of the Business Combination. The note is not convertible into ROCR securities.

Registration Rights

The holders of our Founder Shares, as well as the holders of the Private Units (and all underlying securities), are entitled to registration rights entered into on March 5, 2021. The holders of a majority of these securities are entitled to make up to two demands that we register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units can elect to exercise these registration rights at any time. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements. Notwithstanding the foregoing, they may not exercise demand or piggyback rights after five (5) and seven (7) years, respectively, from the effective date of this offering and may not exercise demand rights on more than one occasion in respect of all registrable securities.

Related Party Loans

In order to meet our working capital needs our initial stockholders, officers and directors and their respective affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes were paid upon consummation of the Business Combination, without interest.

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On November 3, 2021, we issued an unsecured promissory note in the aggregate principal amount of $500,000 to certain payees including certain of our directors and officers, the Sponsor, Craig-Hallum, and affiliates of our management team. The note does not bear interest and matured upon closing of the Business Combination. The note was repaid upon the closing of the Business Combination.

We have reimbursed our Initial Stockholders, officers and directors for reasonable out-of-pocket business expenses incurred by them in connection with certain activities on our behalf, including identifying and investigating the Business Combination. There is no limit on the amount of out-of-pocket expenses reimbursable by us. The audit committee reviews and approves all reimbursements and payments made to any initial stockholder or member of our management team, or our or their respective affiliates, and any reimbursements and payments made to members of our audit committee will be reviewed and approved by our Board of Directors, with any interested director abstaining from such review and approval.

No compensation or fees of any kind, including finder’s fees, consulting fees or other similar compensation, will be paid to any of our Initial Stockholders, officers or directors who owned our shares of common stock prior to the IPO, or to any of their respective affiliates, prior to or with respect to the Business Combination except as described in this prospectus.

We entered into indemnity agreements with each of our officers and directors. These agreements require us to indemnify these individuals to the fullest extent permitted under Delaware law and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions, including the payment of any compensation, will require prior approval by a majority of our disinterested independent directors (to the extent we have any) or the members of our Board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our disinterested independent directors (or, if there are no independent directors, our disinterested directors) determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties.

Related Party Policy

Our Code of Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except under guidelines approved by the Board of Directors (or the audit committee). Related-party transactions are defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) we or any of our subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner of our common stock, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives personal benefits as a result of his or her position.

Our audit committee, pursuant to its written charter, is responsible for reviewing and approving related-party transactions to the extent we enter into such transactions. All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions will require prior approval by our audit committee and a majority of our disinterested independent directors, or the members of our Board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our audit committee and a majority of our disinterested independent directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties. Additionally, we require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions. These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.

Advisory Services Agreement

On July 18, 2018, QualTek HoldCo entered into an advisory services agreement (the “Advisory Services Agreement”) with Brightstar Advisors, L.P., an affiliate of Brightstar Capital Partners, its majority member. The Advisory Services Agreement requires

152

quarterly advisory fees of $125,000 paid at the beginning of each quarter. QualTek HoldCo incurred $126,000 and $622,000 in advisory fees for the six months ended July 2, 2022 and July 3, 2021, respectively. Effective as of the date of the Business Combination, the advisory fees were suspended.

Investor Rights Agreement

The Company, certain Sellers as set forth therein, the BCP QualTek, the Sponsors, Sponsor Representative, and certain Other Holders have entered into an Investor Rights Agreement, pursuant to which the Registration Rights Agreement, dated as of March 2, 2021, between the Other Holders and the Company was terminated and whereby the Company agreed to grant to the Holders (as defined therein), which includes certain equityholders of QualTek HoldCo as well as the Sponsors, certain registration rights, including customary piggyback registration rights and demand registration rights immediately after the closing of the Business Combination, which are subject to customary terms and conditions, including with respect to cooperation and reduction of underwritten shelf takedown provisions (subject to lock-up restrictions for six months after the closing of the Business Combination). Additionally, the Investor Rights Agreement sets forth certain corporate governance standards relating to the Company.

Founder Shares Forfeiture and Lock-Up Agreement

Contemporaneously with the execution of the Business Combination Agreement, ROCRthe Company entered into a Founder Shares Forfeiture and Lock-Up Agreement with QualTek HoldCo and each of the holders of shares of ROCR Common Stockcommon stock issued prior to the IPO (the “FounderFounder Shares Agreement”Agreement), pursuant to which such holders agreed to (i) forfeit up to an aggregate amount of 575,000 shares of their ROCR Common Stockcommon stock for no consideration, on a pro rata basis, based on the level of the amount of funds remaining in the Trust Account following all redemptions by public stockholders prior to the Closing,closing of the Business Combination, and (ii) lock up an aggregate amount of up to 575,000 shares of ROCR Common Stockcommon stock for no consideration, on a pro rata basis, similarly based on the level of the amount of funds remaining in the Trust Account following all redemptions by public stockholders prior to the Closingclosing of the Business Combination (the “lock-up shares”lock-up shares). The lock-up shares will be released on the date on which the closing price of the Class A Common Stock on Nasdaq equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any consecutive 30-trading day period commencing after the Closing Dateclosing of the Business Combination (the “lock-up release”lock-up release). If the requirements for the lock-up release are not satisfied within five (5) years following the Closing Date,closing of the Business Combination, the holders have agreed to forfeit the lock-up shares for no consideration.

On January 14, 2022, in connection with the Pre-PIPE Amendment, PIPE Amendment, PIPE Waiver, and the Convertible Note Investment, ROCR,the Company, QualTek HoldCo, and the holders mutually agreed to terminate the Founder Shares Agreement, such that there will be no forfeiture or lock up of any of the shares of ROCR Common Stockcommon stock pursuant to the terms of the Founder Shares Agreement, and all rights, benefits and obligations thereunder terminated effective as of the that date. Accordingly, the Initial Stockholders will continue to hold all 2,875,000 Founder Shares. Pursuant to the Investor Rights Agreement, the Founder Shares will be locked up for a period of six months following the Closingclosing of the Business Combination compared to the up to five year lockup period under the Founder Shares Agreement. The lock-up under the Investor Rights Agreement does not contemplate a potential forfeiture of the shares at the expiration of the lock-up period, as was set forth in the Founder Shares Agreement for up to 575,000 shares prior to its termination. Following the termination of the Founder Shares Agreement, the Initial Stockholders are no longer at risk of forfeiting up to an aggregate of 1,150,000 Founder Shares, and the benefit to the Initial Stockholders equates to up to $11,408,000 based on the closing price of ROCR Common Stockcommon stock on February 1, 2022 of $9.97 per share. Following the lock-up, it is anticipated that the Initial Stockholders will be permitted to sell such shares pursuant to a resale registration statement to be initially filed within 30 days following the Closing Date.statement. The sale of the Founder Shares will cause immediate dilution to existing holders of Class A Common Stock upon such sale.

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PIPE Subscription Agreements and PIPE Registration Rights Agreement

In connection with the proposed Business Combination, ROCR has obtained commitments from certain accredited investors (each a “Subscriber”Subscriber), including BCP QualTek LLC,HoldCo, Roth, Craig-Hallum, and certain officers and directors of ROCR, to purchase shares of Class A Common Stock which will be issued in connection with the Closingclosing of the Business Combination (the “PIPE Shares”PIPE Shares), for an aggregate cash amount of $66.1 million initially at a purchase price of $10.00 per share, in a private placement (the “PIPE Investment”PIPE Investment). Such commitments are being made by way of the pursuant to certain subscription agreements, by and between each Subscriber and ROCR (collectively, the “SubscriptionSubscription Agreements

104

Agreements”). On January 14, 2022, the terms of the PIPE Investment were amended to reduce the purchase price per share from $10.00 to $8.00 per share, and to allow Subscribers to invest in the Convertible Note Investment in lieu of all or a portion of their PIPE Investment. A total of approximately $24.7 million of the PIPE Investment elected to invest in the Convertible Note Investment in lieu of the PIPE Investment. On that same date, QualTek HoldCo, the Sponsor, Craig-Hallum, Roth, directors and officers of ROCRthe Company and affiliates of ROCR’sthe Company’s management waived their rights to the reduced per share price and eligibility to participate in the Convertible Note Investment. Accordingly these Subscribers will continue to paypaid $10.00 per share pursuant to the terms of the SusbcriptionSubscription Agreements, which amount in the aggregate represents $20,015,000 or 2,001,500 shares. Following that certain amendment to the PIPE Amendment,Investment, dated as of January 14, 2022, the aggregate number of shares to be issued pursuant to the Subscription Agreements iswas 4,676,500 shares of Class A Common Stock for gross proceeds of $41.4 million (or 7,145,000 shares of Class A Common Stock for gross proceeds of $66.1 million including the impact from PIPE investorsSubscribers who elected to participate in the Convertible Note Investment in lieu of the PIPE Investment). Certain offering-related expenses arewere payable by ROCR,the Company, including customary fees payable to the placement agents, Roth and Craig-Hallum, aggregating $5,150,000. The purpose of the sale of the PIPE Shares iswas to raise additional capital for use in connection with the Business Combination and to meet the minimum cash requirements provided in the Business Combination Agreement.

ROCRThe Company has also entered into the a registration rights agreement (the “PIPE Registration Rights Agreement”) with the PIPE Investors.each Subscriber. Pursuant to the PIPE Registration Rights Agreement, ROCR has agreed to filethe Company filed (at ROCR’sthe Company’s sole cost and expense) the PIPE Resale Registration Statement registering the resale of the shares of Class A Common Stock purchased in the private placement PIPE Investment with the SEC no later than the 10th business day following the date ROCR first filed the proxy statement with the SEC, or August 25, 2021. ROCR must use its commercially reasonable efforts to have the PIPE Resale Registration Statement declaredthat went effective no later than the 60th calendar day following the Closing Date (or, in the event the SEC notifies ROCR that it will “review” the PIPE Resale Registration Statement, the 90th calendar day following the Closing Date (as defined in the PIPE Registration Rights Agreement)). The registration statement of which this prospectus forms a part was filed pursuant to the exercise of such rights.on February 14, 2022.

Indemnification Agreements

The Charter will containCertificate of Incorporation contains provisions limiting the liability of the members of the Board, and the Amended and Restated Bylaws will provide that the Combined Companywe will indemnify each of the members of the Combined Company’s board of directorsour Board and officers and certain other persons who provide services to the Combined Companyus to the fullest extent permitted under Delaware law.

The Combined Company intends to enterWe entered into indemnification agreements with each of itsour directors and executive officers and certain other key employees. The indemnification agreements willeach provide that the Combined Companywe will indemnify each of itsour directors and executive officers and such other key employees against any and all expenses incurred by such director, executive officer or other key employee because of his or her status as one of the Combined Company’sour directors, executive officers or other key employees, to the fullest extent permitted by Delaware law, the CharterCertificate of Incorporation and the Amended and Restated Bylaws. In addition, the indemnification agreements willeach provide that, to the fullest extent permitted by Delaware law, the Combined Companywe will advance all expenses incurred by itsour directors, executive officers and other key employees in connection with a legal proceeding involving his or her status as a director, executive officer or key employee.

Tax Receivable Agreement

AtIn connection with the Closingclosing of the Business Combination, ROCR, QualTek,we, the TRA Holders (as defined in the Tax Receivable Agreement) and the TRA Holder Representative (as defined in the Tax Receivable Agreement) will enterentered into the Tax Receivable Agreement.

Pursuant to the Tax Receivable Agreement, ROCR generally will bewe are required to pay the TRA Holders 85% of the amount of savings, if any, in U.S. federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that ROCRwe (and applicable consolidated, unitary, or combined Subsidiaries thereof, if any) realizes,realize, or is deemed to realize, as a result of certain tax attributes, including:

existing tax basis in certain assets of QualTek and certain of its direct or indirect Subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service, attributable to QualTek Common Units acquired by ROCRus at the Closingclosing of the Business Combination or from a TRA Holder (including QualTek Common Units held by the Blocker, which is acquired by ROCRus in a Reorganization Transaction (as defined in the Tax Receivable Agreement));

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tax basis adjustments resulting from the acquisition of QualTek Common Units by ROCRus at the Closingclosing of the Business Combination and taxable exchanges of QualTek Common Units (including any such adjustments resulting from certain payments made by ROCR

105

us under the Tax Receivable Agreement) acquired by ROCRus from a TRA Holder pursuant to the terms of the Third Amended and Restated LLCA;
tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement; and
certain tax attributes of the Blocker, which holds QualTek Common Units that are acquired directly or indirectly by ROCRus pursuant to a Reorganization Transaction (each of the foregoing, collectively, the “Tax Attributes”).

Under the Tax Receivable Agreement, the Tax Group generally will beis treated as realizing a tax benefit from the use of a Tax Attribute on a “with and without” basis, thereby generally treating the Tax Attributes as the last item used, subject to several exceptions. Payments under the Tax Receivable Agreement generally will beare based on the tax reporting positions that ROCR determineswe determine (with the amount of subject payments determined in consultation with an advisory firm and subject to the TRA Holder Representative’s review and consent), and the IRS or another taxing authority may challenge all or any part of position taken with respect to Tax Attributes or the utilization thereof, and a court may sustain such a challenge. In the event that any tax benefits initially claimed by the Tax Group are disallowed, the TRA Holders will not be required to reimburse ROCRus for any excess payments that may previously have been made pursuant to the Tax Receivable Agreement, for example, due to adjustments resulting from examinations by taxing authorities. Rather, any excess payments made to such TRA Holders will be applied against and reduce any future cash payments otherwise required to be made by ROCRus under the Tax Receivable Agreement, if any, after the determination of such excess. As a result, in certain circumstances ROCRwe could be required to make payments under the Tax Receivable Agreement in excess of the Tax Group’s actual savings in respect of the Tax Attributes.

The Tax Receivable Agreement will provideprovides that, in the event (such events collectively, “Early Termination Events”) that (i) ROCR exercises itswe exercise our early termination rights under the Tax Receivable Agreement, (ii) certain changes of control of ROCR or QualTek occur (as described in the Third Amended and Restated LLCA), (iii) ROCRQualTek in certain circumstances, fails to make a payment required to be made pursuant to the Tax Receivable Agreement by its final payment date, which non-payment continues for 60 days following such final payment date or (iv) ROCRQualTek materially breaches (or is deemed to materially breach) any of its material obligations under the Tax Receivable Agreement other than as described in the foregoing clause (iii) and, in the case of clauses (iii) and (iv), unless certain liquidity related or restrictive covenant related exceptions apply, ROCR’sQualTek’s obligations under the Tax Receivable Agreement will accelerate (if the TRA Holder Representative so elects in the case of clauses (ii)-(iv)) and ROCRQualTek will be required to make a lump-sum cash payment to all the TRA Holders equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement, which lump-sum payment would be based on certain assumptions, including those relating to there being sufficient future taxable income of the Tax Group to fully utilize the Tax Attributes over certain specified time periods and that all QualTek Common Units (including QualTek Common Units held by Blocker) that had not yet been exchanged for Common Stock or cash are deemed exchanged for cash. The lump-sum payment could be material and could materially exceed any actual tax benefits that the Tax GroupTRA Holder realizes subsequent to such payment.

As a result of the foregoing, in some circumstances (i) ROCRQualTek could be required to make payments under the Tax Receivable Agreement that are greater than or less than the actual tax savings that the Tax Group realizes in respect of the Tax Attributes and (ii) it is possible that ROCRQualTek may be required to make payments years in advance of the actual realization of tax benefits (if any, and may never actually realize the benefits paid for) in respect of the Tax Attributes (including if any Early Termination Events occur).

ROCR will beQualTek is required to notify and keep the TRA Holder Representative reasonably informed regarding tax audits or other proceedings the outcome of which is reasonably expected to reduce or defer payments to any TRA Holder under the Tax Receivable Agreement and the TRA Holder Representative and any affected TRA Holder has the right to (i) discuss with the ROCR,QualTek, and provide input and comment to ROCRQualTek regarding any portion of any such tax audit or proceeding and (ii) participate in, at the affected TRA Holders’ and TRA Holder Representative’s expense, any such portion of any such tax audit or other tax proceeding to the extent it relates to issues the resolution of which would reasonably be expected to reduce or defer payments to any TRA Holder under the Tax Receivable Agreement. ROCR willQualTek is not be permitted to settle or fail to contest any issue pertaining to income taxes that is reasonably expected to materially and adversely affect the TRA Holders’ rights and obligations under the Tax Receivable Agreement without the consent of the TRA Holder Representative (which is not to be unreasonably withheld or delayed).

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Under the Tax Receivable Agreement, ROCR will beQualTek is required to provide the TRA Holder Representative with a schedule showing the calculation of payments that are due under the Tax Receivable Agreement with respect to each taxable year. This calculation will be based upon the advice of our tax advisors and an advisory firm. Payments under the Tax Receivable Agreement generally will be required to be made to the TRA Holders a short period of time after this schedule becomes final pursuant to the procedures set forth in the Tax Receivable Agreement, although interest on such payments will begin to accrue at from the due date

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(without (without extensions) of the U.S. federal income tax return of ROCR.QualTek. Any late payments that may be made under the Tax Receivable Agreement will continue to accrue interest (generally at a default rate) until such payments are made.

Related Party Transactions Policy

Effective upon the consummation of the Business Combination, the Combined Company’s board of directors expects to adopt a written policy on transactions with related parties that is in conformity with the requirements for issuers having publicly held common stock that is listed on Nasdaq. Related party transactions are defined as transactions in which (i) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (ii) we or any of our subsidiaries is a participant, and (iii) any (x) executive officer, director or nominee for election as a director, (y) greater than 5% beneficial owner of the Combined Company’sClass B Common Stock or (z) immediate family member of the persons referred to in clauses (x) and (y) has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity). Under the policy, the Combined Company’s general counsel will be primarily responsible for developing and implementing processes and procedures to obtain information regarding related parties with respect to potential related party transactions and then determining, based on the facts and circumstances, whether such potential related party transactions do, in fact, constitute related party transactions requiring compliance with the policy. If the Combined Company’s general counsel determines that a transaction or relationship is a related party transaction requiring compliance with the policy, the Combined Company’s general counsel will be required to present to the Combined Company’s audit committee all relevant facts and circumstances relating to the related party transaction. The Combined Company’s audit committee will be required to review the relevant facts and circumstances of each related party transaction, including if the transaction is on terms comparable to those that could be obtained in arm’s-length dealings with an unrelated third party and the extent of the related party’s interest in the transaction, take into account the conflicts of interest and corporate opportunity provisions of the Combined Company’s code of ethics (which will also be put in place in connection with the consummation of the Business Combination), and either approve or disapprove the related party transaction. If the Combined Company’s audit committee’s approval of a related party transaction requiring the Combined Company’s audit committee’s approval is not feasible in advance of such related party transaction, then the transaction may be preliminarily entered into upon prior approval of the transaction by the chair of the Combined Company’s audit committee, subject to ratification of the transaction by the Combined Company’s audit committee at the Combined Company’s audit committee’s next regularly scheduled meeting; provided, however, that, if the ratification is not forthcoming, the Combined Company’s management will make all reasonable efforts to cancel or annul the related party transaction. If a transaction was not initially recognized as a related party transaction, then, upon such recognition, the related party transaction will be presented to the Combined Company’s audit committee for ratification at the Combined Company’s audit committee’s next regularly scheduled meeting; provided, however, that, if the ratification is not forthcoming, the Combined Company’s management will make all reasonable efforts to cancel or annul the related party transaction. The Combined Company’s management will update the Combined Company’s audit committee as to any material changes to any approved or ratified related party transaction and will provide a status report at least annually of all then current related party transactions. No member of the Combined Company’s board of directors will be permitted to participate in approval of a related party transaction for which he or she is a related party.

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DESCRIPTION OF CAPITAL STOCK

The following summary sets forth the material terms of our securities following the Business Combination. The following summary is not intended to be a complete summary of the rights and preferences of such securities, and is qualified by reference to the Charter, a copy of which is filed as an exhibit to the registration statement of which this prospectus forms a part, and the Combined Company’s amended and restated bylaws, a copy of which is filed as an exhibit to the registration statement of which this prospectus forms a part. We urge you to read the Charter and the Combined Company’s amended and restated bylaws in their entirety for a complete description of the rights and preferences of our securities following the consummation of the Business Combination.

Authorized and Outstanding Stock

The Charter authorizes the issuance of up to 1,001,000,000 shares, consisting of:

1,000,000 shares of preferred stock, par value $0.0001 per share;
500,000,000 shares of Class A Common Stock, par value $0.0001 per share; and
500,000,000All shares of Class B Common Stock, par value $0.0001 per share.

Class A Common Stock

Upon completion of the Business Combination, we expect that there will be 33,658,373 shares of Class A Common Stock outstanding, assuming that (1) none of the holders of public shares of Class A Common Stock exercise their redemption rights, (2) the Earnout Shares are excluded unless and until such shares become earned in accordance with the Business Combination Agreement, (3) there is no exercise at the Closing of the Sponsor’s 102,000 private placement warrants at an exercise price of $11.50 per share (which warrants are not exercisable until the later of 12 months from the closing of the IPO and 30 days after the completion of the Business Combination), and (4) there are no other issuances of equity interests of ROCR prior to or in connection with the Closing. All shares of Class A Common Stock are fully paid and non-assessable. In connection with the Business Combination, the shares of Common Stock will automatically convert into shares of Class A Common Stock on a one-to-one basis in accordance with the Current Charter.

Voting Rights

Each holder of Class AB Common Stock is entitled to one vote for each share of Class AB Common Stock held by such holder on all matters on which stockholders generally are entitled to vote. Holders of Class AB Common Stock will vote together with holders of Class BA Common Stock as a single class on all matters presented to ROCR’sthe Company’s stockholders for their vote or approval. Except as described below, all matters to be voted on by stockholders must be approved by a majority of the votes entitled to be cast by all stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy, voting together as a single class. Notwithstanding the foregoing, to the fullest extent permitted by law, holders of Class AB Common Stock, as such, will have no voting power with respect to, and will not be entitled to vote on, any amendment to the CharterCertificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such securities, to vote thereon pursuant to the Proposed Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.

Pursuant to the CharterCertificate of Incorporation (i) the vote of holders of Class AB Common Stock iswill not be required to amend, alter, change, add to or repeal the bylawsAmended and Restated Bylaws so long as any such amendment, alteration, change, addition or repeal is consistent with Delaware law or the CharterCertificate of Incorporation and, in each case, subject to the rights of the parties to the Investor Rights Agreement and (ii) a vote of at least 80% of the total voting power of QSI’sthe Company’s stock entitled to vote generally in the election of directors, voting together as a single class, is required to alter, amend, add to or repeal any of the provisions in Article X (Competition and Corporate Opportunities) of the Charter.Certificate of Incorporation.

Dividend Rights. Subject to preferences that may be applicable to any outstanding Preferred Stock, theDividends

The holders of shares ofthe Class AB Common Stock are entitled to receive ratably suchwill not participate in any dividends if any, as may be declared from time to time by the Board out of funds legally available therefor.Board.

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Rights upon Liquidation.

In the event of any voluntary or involuntary liquidation, dissolution or winding up of ROCR’sthe Company’s affairs, the holders of Class AB Common Stock are not entitled to share ratably in allreceive any assets remaining after payment of ROCR’s debtsthe Company.

Rights and other liabilities, subject to prior distribution rights of Preferred Stock or any class or series of stock having preference over the Class A Common Stock, then outstanding, if any.Preferences

Other Rights. The holders of shares of Class AB Common Stock do not have no preemptive, subscription, redemption or conversion rights or other subscription rights. There arewill be no redemption or sinking fund provisions applicable to the Class B Common Stock.

Issuance and Retirement of Class B Common Stock

In the event that any outstanding share of Class B Common Stock ceases to be held directly or indirectly by a holder of the QualTek Common Units, such share will automatically be transferred to the Company for no consideration and thereupon will be retired. The Company does not plan to issue additional shares of Class B Common Stock other than in connection with the valid issuance or transfer of a QualTek Common Unit in accordance with the governing documents of the Company.

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Warrants

Each whole Warrant entitles the registered holder to purchase one share of our Common Stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing 30 days after the completion of our initial business combination. Pursuant to the warrant agreement, a Warrant holder may exercise its Warrants only for a whole number of shares of Common Stock. This means that only a whole Warrant may be exercised at any given time by a Warrant holder. However, no Warrants issued pursuant to the ROCR IPO (the “Public Warrants”) will be exercisable for cash unless we have an effective and current registration statement covering the shares of Common Stock issuable upon exercise of the Warrants and a current prospectus relating to such shares of Common Stock. Notwithstanding the foregoing, if the registration statement is not available and a new registration statement covering the shares of Common Stock issuable upon exercise of the Public Warrants is not effective within 120 days from the closing of our initial business combination, Warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. The Warrants will expire on February 14, 2027 at 5:00 p.m., New York City time.

The Company may call the outstanding Warrants (excluding the Warrants underlying the Private Units (the “Private Warrants”)) for redemption, in whole and not in part, at a price of $0.01 per Warrant: (i) at any time after the Warrants become exercisable, (ii) upon not less than 30 days’ prior written notice of redemption to each Warrant holder, (iii) if, and only if, the reported last sale price of the shares of Common Stock equals or exceeds $18.00 per share, for any 20 trading days within a 30-day trading period commencing after the Warrants become exercisable and ending on the third business day prior to the notice of redemption to Warrant holders, and (iv) if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying such Warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

The right to exercise will be forfeited unless the Warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of a Warrant will have no further rights except to receive the redemption price for such holder’s Warrant upon surrender of such Warrant.

The redemption criteria for our Warrants have been established at a price which is intended to provide Warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the Warrant exercise price so that if the share price declines as a result of our redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants.

If we call the Warrants for redemption as described above, our management will have the option to require all holders that wish to exercise Warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the difference between the exercise price of the Warrants and the “fair market value” by (y) the fair market value. The “fair market value” for this purpose shall mean the average reported last sale price of our Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of Warrants. Whether we will exercise our option to require all holders to exercise their Warrants on a “cashless basis” will depend on a variety of factors including the price of shares of our Common Stock at the time the Warrants are called for redemption, our cash needs at such time and concerns regarding dilutive share issuances.

The Warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as Warrant agent, and us. The warrant agreement 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 written consent or vote, of the holders of a majority of the then outstanding Warrants in order to make any change that adversely affects the interests of the registered holders.

The exercise price and number of shares of Common Stock issuable on exercise of the Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, the Warrants will not be adjusted for issuances of shares of Common Stock at a price below their respective exercise prices.

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The Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to us, for the number of Warrants being exercised. The Warrant holders do not have the rights or privileges of holders of shares of Common Stock and any voting rights until they exercise their Warrants and receive shares of Common Stock. After the issuance of shares of Common Stock upon exercise of the Warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

Except as described above, no Public Warrants will be exercisable for cash and we will not be obligated to issue shares of Common Stock unless at the time a holder seeks to exercise such Warrant, a prospectus relating to the shares of Common Stock issuable upon exercise of the warrants is current and the shares of Common Stock have been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the Warrants. Under the terms of the warrant agreement, we have agreed to use our best efforts to meet these conditions and to maintain a current prospectus relating to the shares of Common Stock issuable upon exercise of the Warrants until the expiration of the Warrants. However, we cannot assure you that we will be able to do so and, if we do not maintain a current prospectus relating to the shares of Common Stock issuable upon exercise of the Warrants, holders will be unable to exercise their Warrants, and we will not be required to settle any such Warrant exercise. If the prospectus relating to the shares of Common Stock issuable upon the exercise of the Warrants is not current or if the Common Stock is not qualified or exempt from qualification in the jurisdictions in which the holders of the Warrants reside, we will not be required to net cash settle or cash settle the Warrant exercise, the Warrants may have no value, the market for the Warrants may be limited and the warrants may expire worthless.

Warrant holders may elect to be subject to a restriction on the exercise of their Warrants such that an electing Warrant holder would not be able to exercise their Warrants to the extent that, after giving effect to such exercise, such holder would beneficially own in excess of 9.9% of the shares of Common Stock outstanding.

No fractional shares will be issued upon exercise of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of Common Stock to be issued to the Warrant holder.

The Company has agreed that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. This provision applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district courts of the United States of America are the sole and exclusive forum.

Preferred Stock

We have no Preferred Stock outstanding.

Anti-Takeover Provisions

The Company’s Certificate of Incorporation and Amended and Restated Bylaws, the Investor Rights Agreement and the DGCL contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our Board. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the members of our Board or taking other corporate actions, including effecting changes in our management. For instance, our Board will be empowered to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death, or removal of a director in certain circumstances; and the Company’s advance notice provisions in the Amended and Restated Bylaws require that stockholders must comply with certain procedures in order to nominate candidates to our Board or to propose matters to be acted upon at a stockholders’ meeting.

The Company’s authorized but unissued Common Stock and Preferred Stock is available for future issuances without stockholder approval and may be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved Common Stock and Preferred Stock could render more difficult or discourage an attempt to obtain control of the Company by means of a proxy contest, tender offer, merger or otherwise.

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Registration Rights

We are subject to an Investor Rights Agreement, dated February 14, 2022 with certain Sellers, BCP QualTek, the Sponsors, Sponsor Representative, and certain Other Holders (all as defined therein), which obligates us to grant to the Holders (as defined therein) certain registration rights, including customary piggyback registration rights and demand registration rights immediately after the closing of the Business Combination, which are subject to customary terms and conditions, including with respect to cooperation and reduction of underwritten shelf takedown provisions (subject to lock-up restrictions for six months after the closing date of the Business Combination). Additionally, the Investor Rights agreement sets forth certain corporate governance rights relating to the Company.

Listing

Our Class A Common Stock. Stock and Warrants are listed on the Nasdaq Capital Market under the symbols “QTEK” And “QTEKW,” respectively.

Transfer Agent and Warrant Agent

The transfer agent for our shares of common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company, 1 State Street, 30th Floor, New York, New York 10004.

2027 Convertible Notes

The 2027 Convertible Notes are governed by the Indenture. The 2027 Convertible Notes bear interest as described immediately below, are payable quarterly, are convertible into shares of Class A Common Stock at an initial conversion price (subject to adjustment as described in the Indenture) of the lowest of (i) $10.00; (ii) 115% of the arithmetic average of the Daily VWAPs for the 10-Trading Day period commencing on the first Trading Day after the public release of the Company’s first quarterly earnings announcement following the Issue Date; (iii) 115% of the arithmetic average of the Daily VWAPs for the 10-Trading Day period commencing on the first Trading Day after the public release of the Company’s second quarterly earnings announcement following the Issue Date; (iv) 115% of the arithmetic average of the Daily VWAPs for the 10-Trading Day period commencing on the first Trading Day immediately following the first anniversary of the date of the Indenture and (v) 115% of the arithmetic average of the Daily VWAPs for the 10-Trading Day period commencing on the first Trading Day after the closing date of the applicable Conversion Reset Offering by the Company, and shall mature on February 15, 2027. The 2027 Convertible Notes may not be redeemed or repaid by the Company prior to maturity. Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Indenture.

Maturity and Interest

The 2027 Convertible Notes will mature on February 15, 2027, unless earlier converted or repurchased.

The 2027 Convertible Notes provide for an interest rate that is set quarterly based on gross leverage, with a minimum interest rate of 9.50% per annum and up to a maximum of 11.75% per annum as follows:

Applicable Interest Rate

Total Leverage Ratio (as defined in the Indenture)

(as defined in the Indenture)

Less than 4.5x

9.50

%

4.5x or greater but less than 5.0x

10.00

%

5.0x or greater but less than 5.25x

10.75

%

5.25x or greater

11.75

%

Interest accrues from the issue date or from the most recent date on which interest has been paid. Interest is payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, commencing on June 15, 2022. Accrued interest on the 2027 Notes shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.

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Ranking

The 2027 Convertible Notes are general senior obligations of the Company and:

rank pari passu in right of payment with all existing and future senior indebtedness of the Company;
are effectively senior to all of the Company’s subordinated indebtedness; and
are guaranteed on a senior basis by the Guarantors (as defined below).

The Guarantees (as defined below) are general senior obligations of each Guarantor and:

rank pari passu in right of payment with all existing and future senior indebtedness of such Guarantor; and
are effectively senior to all of such Guarantor’s subordinated indebtedness.

Certain Covenants

The 2027 Convertible Notes are subject to various covenants that restrict the Company’s and its Subsidiaries’ ability to, among other things:

make restricted payments;
incur or guarantee indebtedness or issue disqualified stock;
create, incur or assume any Lien;
make any payment to, or sell, lease, transfer or otherwise dispose of properties or assets or enter into transactions with any Affiliate of the Company;
sell or transfer interest in its Material Intellectual Property; or
merge or consolidate with other companies or transfer all or substantially all of the Company’s assets.

Limitation on Certain Restricted Payments

The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly:

(i)declare or pay any dividend or make any payment or distribution (x) on account of the Company’s or any of its Restricted Subsidiaries’ Capital Stock (including any payment made in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or (y) to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Capital Stock in their capacity as holders, other than (A) dividends, payments or distributions by the Company payable solely in Capital Stock (other than Disqualified Stock) of the Company or (B) dividends, payments or distributions by a Restricted Subsidiary to the Company or another Restricted Subsidiary (and in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Capital Stock in such class or series of securities);
(ii)purchase, redeem, defease or otherwise acquire or retire for value (including any payment made in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) any Capital Stock of the Company held by Persons other than the Company or any Restricted Subsidiary;
(iii)purchase, repay, prepay, repurchase, redeem, defease, acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Indebtedness, other than (A) Indebtedness permitted under clause (ii) of Section 4.09(b) of the Indenture or (B) the purchase, repurchase or other acquisition of Subordinated

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Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or
(iv)make any Restricted Investment;

(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”).

Notwithstanding anything to the contrary contain herein, so long as no Default shall have occurred and be continuing or would occur as a consequence thereof, the provisions of this covenant will not prohibit any of the following:

(i)the payment of any dividend or distribution or consummation of any redemption within sixty (60) days after the date of declaration thereof or the giving of a redemption notice related thereto, if at the date of declaration or notice such payment would have complied with any provision of this covenant; provided that the making of such payment will reduce capacity for Restricted Payments pursuant such provisions when so made;
(ii)a Restricted Payment to pay for the prepayment, purchase, repurchase, redemption, defeasance, discharge, retirement or other acquisition of Capital Stock of the Company held by any future, present or former employee, director, officer, member of management, operating partner, manager, contractor, service provider, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries pursuant to any management equity plan, stock option plan, phantom equity plan or any other management, employee benefit or other compensatory plan or agreement (and any successor plans or arrangements thereto), employment, termination or severance agreement, or any stock subscription or equityholder agreement (including, for the avoidance of doubt, any principal and interest payable on any Indebtedness issued by the Company in connection with such prepayment, purchase, repurchase, redemption, defeasance, discharge, retirement or other acquisition), including any Capital Stock rolled over, accelerated or paid out by or to any employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries in connection with any transaction; providedhowever, that the aggregate Restricted Payments made under this clause do not exceed $5,500,000 in any fiscal year (with unused amounts in any fiscal year being carried over to succeeding fiscal years); providedfurther, that such amount in any calendar year may be increased by an amount not to exceed:
(A)the cash proceeds from the sale of Capital Stock (other than Disqualified Stock) of the Company to any future, present or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries or any of its direct or indirect parent companies that occurs after the Issue Date to the extent the cash proceeds from the sale of such Capital Stock have not otherwise been applied to the making of Restricted Payments pursuant to this covenant; plus the cash proceeds of key man life insurance policies received by the Company or any Restricted Subsidiary of the Company after the Issue Date; and in addition, cancellation of Indebtedness owing to the Company or any Restricted Subsidiary from any future, present or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries (or any permitted transferees thereof) of the Company or any Restricted Subsidiary of the Company in connection with a repurchase of Capital Stock of the Company or any Restricted Subsidiary of the Company from such Persons will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provisions of the Indenture;
(iii)cashless repurchases of Capital Stock deemed to occur upon the exercise of stock options, warrants or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represent a portion of the exercise, conversion or exchange price thereof;
(iv)each Restricted Subsidiary of the Company may make Restricted Payments to the Company or any Guarantor or to another Restricted Subsidiary of the Company which is the immediate parent of the Restricted Subsidiary making such Restricted Payment;
(v)payments made or expected to be made by the Company or any Subsidiary in respect of withholding or similar taxes payable in connection with the exercise or vesting of Capital Stock or any other equity award by any future, present or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any Subsidiary and purchases, repurchases, redemptions, defeasances or other acquisitions or retirements of

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Capital Stock deemed to occur upon the exercise, conversion or exchange of stock options, warrants, equity-based awards or other rights in respect thereof if such Capital Stock represents payments in respect of withholding or similar taxes payable upon exercise or vesting thereof;
(vi)the making of cash payments in connection with any conversion or redemption of the Notes, in each case, pursuant to the terms of the Indenture;
(vii)any non-Wholly Owned Subsidiary of the Company may make Restricted Payments (which may be in cash) to its shareholders, members or partners generally, so long as the Company or the Restricted Subsidiary which owns the Capital Stock in the Restricted Subsidiary making such Restricted Payment receives at least its proportionate share thereof (based upon its relative holding of the Capital Stock in the Restricted Subsidiary making such Restricted Payment and taking into account the relative preferences, if any, of the various classes of Capital Stock of such Restricted Subsidiary);

(viii)

any payments made pursuant to the Tax Receivable Agreement;

(ix)

(a) any prepayment, purchase, repurchase, redemption, defeasance, discharge, retirement or other acquisition of Capital Stock, including any accrued and unpaid dividends thereon (“Treasury Capital Stock”) or Subordinated Indebtedness made by exchange (including any such exchange pursuant to the exercise of a conversion right or privilege in connection with which cash is paid in lieu of the issuance of fractional shares) for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (in each case, other than Disqualified Stock or Designated Preferred Stock) (“Refunding Capital Stock”), and (b) the declaration and payment of dividends on Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to a Restricted Subsidiary of the Company or to an employee stock ownership plan or any trust established by the Company or any of its Restricted Subsidiaries) of Refunding Capital Stock;

(x)any prepayment, purchase, repurchase, exchange, redemption, defeasance, discharge, retirement or other acquisition of Subordinated Indebtedness made by exchange for, or out of the proceeds of the substantially concurrent sale of, Refinancing Indebtedness permitted to be incurred pursuant to Section 4.09 of the Indenture;
(xi)payments or distributions to dissenting stockholders pursuant to applicable law (including in connection with, or as a result of, exercise of dissenters’ or appraisal rights and the settlement of any claims or action (whether actual, contingent or potential)), pursuant to or in connection with a merger, amalgamation, consolidation or transfer of assets not prohibited by the Indenture;
(xii)the payment by QualTek Holdco, LLC or any of its Subsidiaries of any dividend or distribution described in Section 6.2 of the Amended and Restated Limited Liability Company Agreement of QualTek Holdco, LLC (and any successor thereto) (in each case as determined without reference to any restrictions applicable to tax distributions contained in any then applicable bank financing agreements), as in effect on the Issue Date; and

(xiii)

any Restricted Payment provided that (i) no Event of Default shall have occurred and be continuing or would result therefrom and (ii) immediately after giving effect to the making thereof on a Pro Forma Basis (including any related incurrence of Indebtedness), the Total Net Leverage Ratio, determined as of the last day of the then most recently ended Four Quarter Period (or in the case of any Restricted Payment of the type described in clause (a) of the definition thereof, the Four Quarter Period most recently ended prior to the time of the declaration thereof), shall not exceed 2.50:1.00.

For purposes of determining compliance with this covenant, if any Restricted Payment (or portion thereof) would be permitted pursuant to one or more provisions described above, the Company may divide such Restricted Payment in any manner that complies with this covenant.

Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock or Disqualified Stock

The Company will not, and will not permit any of its Restricted Subsidiaries, in each case, to, directly or indirectly, create, incur, issue, assume, enter into a guarantee of or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Indebtedness), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock.

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Notwithstanding anything to the contrary therein, this covenant will not prohibit the incurrence of any of the following items of Indebtedness or the issuance of any of the following Disqualified Stock or Preferred Stock (collectively, “Permitted Indebtedness”):

(i)(A) the incurrence of Indebtedness pursuant to Credit Facilities by the Company or any Restricted Subsidiary; provided that, immediately after giving effect to any such incurrence and the use of proceeds thereof, on a Pro Forma Basis, the aggregate principal amount of all Indebtedness incurred under this provision (including any Permitted Refinancing Indebtedness in respect thereof) does not exceed the sum of $483,500,000 plus (A) if such Indebtedness is secured by Liens, an amount equal to the maximum principal amount of Indebtedness that could be incurred such that after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, the Secured Net Leverage Ratio of the Company for the most recently ended Four Quarter Period as of such date would not exceed 4.75:1.00 or (B) if such Indebtedness is unsecured, an amount equal to the maximum principal amount of Indebtedness that could be incurred such that after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, the Total Net Leverage Ratio for the most recently ended Four Quarter Period as of such date would not exceed 5.25:1.00; provided that the aggregate principal amount of Indebtedness then outstanding under this clause (i) incurred by Restricted Subsidiaries that are not Guarantors, together with the aggregate principal amount of Refinancing Indebtedness then outstanding under clause (xv) below, shall not exceed the greater of (x) $15,000,000 and (y) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period, and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(ii)Indebtedness of the Company or any Restricted Subsidiary owing to the Company or any Restricted Subsidiary; provided that (i) such Indebtedness shall not have been transferred to any Person other than the Company or any Restricted Subsidiary, (ii) such Indebtedness owing by the Company or any Guarantor to a Restricted Subsidiary that is not a Guarantor shall be unsecured and subordinated in right of payment to the payment in full of the Notes and (iii) such Indebtedness owing by any Restricted Subsidiary that is not a Guarantor to any Guarantor or the Company is permitted as an Investment under Section 4.08 of the Indenture;
(iii)Guarantees incurred in compliance with clause (n) of the definition of “Permitted Investments” (as defined in the Indenture);
(iv)(A) Indebtedness existing on the Issue Date, or incurred pursuant to Credit Facilities existing on the Issue Date (in an aggregate amount not greater than the aggregate amount outstanding or available for borrowing under such Credit Facilities on the Issue Date), (B) the Notes and the Guarantees, and (C) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clauses (A) or (B) above or under this clause (C);
(v)(A) Indebtedness of the Company or any Restricted Subsidiary (a) incurred to finance the acquisition, construction, repair, replacement or improvement of any fixed or capital assets of the Company or any Restricted Subsidiary, including Capitalized Lease Obligations, provided that such Indebtedness is incurred prior to or within 270 days after such acquisition or the completion of such construction or improvement and the principal amount of such Indebtedness does not exceed the cost of acquiring, constructing or improving such fixed or capital assets, or (b) assumed in connection with the acquisition of any fixed or capital assets of the Company or any Restricted Subsidiary, provided, in the case of this clause (A), that at the time of incurrence or assumption of such Indebtedness and after giving pro forma effect thereto and the use of the proceeds thereof, the aggregate principal amount of Indebtedness then outstanding under this clause (A), together with the aggregate principal amount of Permitted Refinancing Indebtedness then outstanding under clause (B) below, shall not exceed the greater of (x) $20,000,000 and (y) 33.4% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period; and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(vi)(A) Indebtedness, Disqualified Stock or Preferred Stock of any Person that becomes (other than as a result of a redesignation of an Unrestricted Subsidiary) a Restricted Subsidiary (or of any Person not previously a Subsidiary that is merged or consolidated with or into a Restricted Subsidiary in a transaction permitted hereunder) after the Issue Date, or Indebtedness of any Person that is assumed after the Issue Date by any Restricted Subsidiary in connection with an acquisition of assets by such Restricted Subsidiary in an Acquisition or other Investment permitted hereunder, provided that (a) such Indebtedness, Disqualified Stock or Preferred exists at the time such Person becomes a Restricted Subsidiary (or is so merged or consolidated) or such assets are acquired and is not created in contemplation of or in connection with such Person becoming a Restricted Subsidiary (or such merger or consolidation) or such assets being acquired, and (b) immediately after giving effect to the Company or any Restricted Subsidiary becoming liable with respect to such Indebtedness, Disqualified Stock or Preferred Stock (whether as a result of such Person becoming a Restricted Subsidiary (or such merger or consolidation) or

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such assumption), and after giving pro forma effect thereto, (x) if such Indebtedness is secured by Liens, the Secured Net Leverage Ratio of the Company for the most recently ended Four Quarter Period as of such date would not exceed the greater of 4.75:1.00 and the Secured Net Leverage Ratio of the Company in effect immediately prior to the assumption or incurrence of such Indebtedness or (y) if such Indebtedness is unsecured, the Total Net Leverage Ratio for the most recently ended Four Quarter Period as of such date would not exceed the greater of 5.25:1.00 and the Total Net Leverage Ratio of the Company in effect immediately prior to the assumption or incurrence of such Indebtedness, and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(vii)Indebtedness of the Company or any Restricted Subsidiary arising from any agreement in the form of purchase price adjustments, earn-outs, non-competition agreements, indemnification obligations or other arrangements representing Acquisition Consideration or deferred payments of a similar nature incurred in connection with any Acquisition or other Investment permitted by Section 4.08 or any Disposition permitted by Section 11.01, and Indebtedness arising from guarantees, letters of credit, bank guarantees, surety bonds, performance bonds or similar instruments securing the performance of the Company or any such Restricted Subsidiary pursuant to any such agreement; provided that, with respect to any Indebtedness existing or incurred pursuant to this clause (vii) with respect to unpaid earn-outs, the amount of any unpaid earn-out shall not exceed 35% of the Acquisition Consideration of the Acquisition or Investment to which such unpaid earn-out relates;
(viii)(A) Indebtedness of Restricted Subsidiaries that are not Guarantors, provided that at the time of incurrence of such Indebtedness and after giving pro forma effect thereto and the use of the proceeds thereof, the aggregate principal amount of Indebtedness then outstanding under this clause (A), together with the aggregate principal amount of Permitted Refinancing Indebtedness then outstanding under clause (B) below, shall not exceed the greater of (x) $15,000,000 and (y) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period; and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(ix)(A) Indebtedness of the Company and the Restricted Subsidiaries, provided that at the time of incurrence of such Indebtedness and after giving pro forma effect thereto and the use of the proceeds thereof, the aggregate principal amount of Indebtedness then outstanding under this clause (A), together with the aggregate principal amount of Permitted Refinancing Indebtedness then outstanding under clause (B) below, shall not exceed the greater of (x) $15,000,000 and (y) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period; and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(x)Indebtedness in respect of netting services, overdraft protections and otherwise arising from treasury, depository, credit card, debit cards and cash management services or in connection with any automated clearing-house transfers of funds, overdraft or any similar services, in each case in the ordinary course of business;
(xi)Indebtedness incurred in respect of letters of credit, bank guarantees, bankers’ acceptances, surety bonds, performance bonds or similar instruments issued or created by the Company or any Restricted Subsidiary in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations, including in respect of workers’ compensation claims, unemployment insurance (including premiums related thereto), vacation pay, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims;
(xii)Indebtedness in respect of, or in respect of letters of credit, bank guarantees, surety bonds, performance bonds or similar instruments relating to, tenders, statutory obligations, performance, bid, appeal, stay, customs, surety and return-of-money bonds, performance and completion guarantees and similar obligations of the Company or any Restricted Subsidiary incurred in the ordinary course of business (including relating to any litigation being contested in good faith and not constituting an Event of Default hereunder) and not in connection with the borrowing of money or any Hedging Obligations;
(xiii)Indebtedness owed to current or former officers, directors or employees of the Company or any Restricted Subsidiary (or their respective estates, heirs, family members, spouses and former spouses, domestic partners and former domestic partners or beneficiaries under their respective estates) to finance the purchase or redemption of Capital Stock in the Company permitted by Section 4.08 of the Indenture;
(xiv)Indebtedness consisting of the financing of insurance premiums or take or pay obligations contained in supply arrangements that do not constitute Guarantees, in each case, incurred in the ordinary course of business;

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(xv)(A) Indebtedness of the Company and/or any Restricted Subsidiary incurred in connection with an Acquisition or other Investment permitted hereunder, provided that, immediately after giving effect to the Company or any Restricted Subsidiary becoming liable with respect to such Indebtedness, Disqualified Stock or Preferred Stock (whether as a result of such Person becoming a Restricted Subsidiary (or such merger or consolidation) or such assumption), and after giving pro forma effect thereto, (x) if such Indebtedness is secured by Liens, the Secured Net Leverage Ratio of the Company for the most recently ended Four Quarter Period as of such date would not exceed the greater of 4.75:1.00 and the Secured Net Leverage Ratio of the Company in effect immediately prior to the assumption or incurrence of such Indebtedness or (y) if such Indebtedness is unsecured, the Total Net Leverage Ratio for the most recently ended Four Quarter Period as of such date would not exceed the greater of 5.25:1.00 and the Total Net Leverage Ratio of the Company in effect immediately prior to the assumption or incurrence of such Indebtedness; provided that the aggregate principal amount of Indebtedness then outstanding under this clause (xv) incurred by Restricted Subsidiaries that are not Guarantors, together with the aggregate principal amount of Refinancing Indebtedness then outstanding under clause ((i) above, shall not exceed the greater of (x) $15,000,000 and (y) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period, and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(xvi)(A) Capitalized Lease Obligations arising under any Sale/Leaseback Transaction permitted under Section 4.10(n) of the Indenture; provided that at the time of consummation of such Sale/Leaseback Transaction and after giving pro forma effect thereto, the aggregate principal amount of Indebtedness then outstanding under this clause (A), together with the aggregate principal amount of Permitted Refinancing Indebtedness then outstanding under clause (B) below, shall not exceed the greater of (x) $5,000,000 and (y) 8.4% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period; and (ii) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(xvii)Indebtedness consisting of obligations of the Company or any Restricted Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with the Transactions, Permitted Acquisitions or any other Investment expressly permitted hereunder;
(xviii)to the extent constituting Indebtedness, all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in this covenant;
(xix)(A) Guarantees by the Company or any Restricted Subsidiary of the obligations of suppliers, customers and licensees in the ordinary course of business, (B) Indebtedness incurred in the ordinary course of business in respect of obligations of the Company or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (C) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guarantees or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(xx)Indebtedness of the Company or any Restricted Subsidiary consisting of obligations owing under incentive, supply, license or similar agreements entered into in the ordinary course of business;
(xxi)Indebtedness of the Company or any Restricted Subsidiary representing deferred compensation to current or former directors, officers, employees, members of management, managers and consultants of the Company (or any direct or indirect parent thereof) or any Restricted Subsidiary in the ordinary course of business;
(xxii)unfunded pension fund and other employee benefit plan obligations and liabilities incurred by the Company or any Restricted Subsidiary in the ordinary course of business to the extent that the unfunded amounts would not otherwise cause an Event of Default hereunder;
(xxiii)to the extent constituting Indebtedness, obligations arising under agreements governing any Permitted Factoring Transactions; and
(xxiv)the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of Preferred Stock; providedhowever, that: (x) any subsequent issuance or transfer of Capital Stock that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary; and (y) any sale or other transfer of any such Preferred Stock to a Person that is not the Company or a Restricted Subsidiary, will be deemed, in each

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case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (xxiv).

Limitation on Liens

Neither the Company nor any Restricted Subsidiary will, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any asset of the Company or any Restricted Subsidiary, whether now owned or hereafter acquired or licensed, or assign or sell any income, profits or revenues (including accounts receivable and royalties) or rights preferencesin respect of any thereof, except:

(i)in the case of Liens securing Subordinated Indebtedness, the Notes and related Guarantees are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens; and
(ii)in all other cases, the 2027 Convertible Notes or the Guarantees are equally and ratably secured.

The foregoing provisions of this covenant shall not apply to:

(a)(i) Liens securing the Notes and the related Guarantees and (ii) Liens securing Indebtedness and other Obligations permitted to be incurred under (or secured pursuant to) Credit Facilities, including any letter of credit facility relating thereto, that was incurred pursuant to Section 4.09(b)(i) of the Indenture;
(b)Permitted Encumbrances;
(c)any Lien on any asset of the Company or any Restricted Subsidiary existing on the Issue Date, and any extensions, renewals and replacements thereof; provided that (i) such Lien shall not apply to any other asset of the Company or any Restricted Subsidiary, other than to proceeds and products of, and after-acquired property that is affixed or incorporated into, the assets covered by such Lien (it being understood that individual financings of the type permitted under Section 4.09(b)(v) of the Indenture provided by any Person (or its Affiliates) may be cross-collateralized to other such financings provided by such Person (or its Affiliates)), and (ii) such Lien shall secure only those obligations that it secures on the Issue Date and any extensions, renewals and refinancings thereof that do not increase the outstanding principal amount thereof (except by an amount not greater than accrued and unpaid interest on such obligations, any original issue discount and any reasonable fees, premiums and expenses relating to such extension, renewal or refinancing) and, in the case of any such obligations constituting Indebtedness, that are permitted under Section 4.09(b)(iv) of the Indenture as Permitted Refinancing Indebtedness in respect thereof;
(d)Liens on fixed or capital assets acquired, constructed, repaired, replaced or improved by the Company or any Restricted Subsidiary; provided that (i) such Liens secure only Indebtedness permitted by Section 4.09(b)(v) of the Indenture and obligations relating thereto not constituting Indebtedness and (ii) such Liens shall not apply to any other asset of the Company or any Restricted Subsidiary, other than to proceeds and products of, and after-acquired property that is affixed or incorporated into, the assets covered by such Liens; provided further that individual financings of equipment or other fixed or capital assets otherwise permitted to be secured hereunder provided by any Person (or its Affiliates) may be cross-collateralized to other such financings provided by such Person (or its Affiliates);
(e)any Lien existing on any asset prior to the acquisition thereof by the Company or any Subsidiary or existing on any asset of any Person that becomes (other than as a result of a redesignation of an Unrestricted Subsidiary) a Restricted Subsidiary (or of any Person not previously a Subsidiary that is merged or consolidated with or into a Restricted Subsidiary in a transaction permitted hereunder) after the Issue Date prior to the time such Person becomes a Restricted Subsidiary (or is so merged or consolidated), and any extensions, renewals and replacements thereof; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Restricted Subsidiary (or such merger or consolidation), (ii) such Lien shall not apply to any other asset of the Company or any Restricted Subsidiary (other than, in the case of any such merger or consolidation, the assets of any special purpose merger Restricted Subsidiary that is a party thereto), other than to proceeds and products of, and after-acquired property that is affixed or incorporated into, the assets covered by such Lien or becomes subject to such Lien pursuant to an after-acquired property clause as in effect on the date of such acquisition or the date such Person becomes a Restricted Subsidiary (or is so merged or consolidated) (it being understood that individual financings of the type permitted under Section 4.09(b)(v) of the Indenture provided by any Person (or its Affiliates) may be cross-collateralized to other such financings provided by such Person (or its Affiliates)), and

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(iii) such Lien shall secure only those obligations that it secures on the date of such acquisition or the date such Person becomes a Restricted Subsidiary (or is so merged or consolidated), and any extensions, renewals and refinancing thereof that do not increase the outstanding principal amount thereof (except by an amount not greater than accrued and unpaid interest on such obligations, any original issue discount or upfront fees and any fees, premiums and expenses relating to such extension, renewal or refinancing);
(f)in connection with any Disposition permitted under Section 11.01 of the Indenture, customary rights and restrictions contained in agreements relating to such Disposition pending the completion thereof;
(g)in the case of (A) any Restricted Subsidiary that is not a Wholly Owned Subsidiary or (B) the Capital Stock in any Person that is not a Restricted Subsidiary (including any Unrestricted Subsidiary), any encumbrance, restriction or other Lien, including any put and call arrangements, related to the Capital Stock in such Restricted Subsidiary or such other Person set forth in (a) its Organizational Documents or any related joint venture, shareholders’ or similar agreement, in each case so long as such encumbrance or restriction is applicable to all holders of the same class of Capital Stock or is otherwise of the type that is customary for agreements of such type, or (b) in the case of any Person that is not a Restricted Subsidiary, in any agreement or document governing Indebtedness of such Person;
(h)any Lien on assets and Capital Stock of Restricted Subsidiaries that are not Guarantors (including Capital Stock owned by such Persons); provided that such Lien shall secure only Indebtedness or other obligations of Restricted Subsidiaries that are not Guarantors;
(i)Liens solely on any cash earnest money deposits, escrow arrangements or similar arrangements made by the Company or any Restricted Subsidiary in connection with any letter of intent or purchase agreement for any Acquisition or Investment permitted hereunder;
(j)nonexclusive outbound licenses of Intellectual Property granted by the Company or any Restricted Subsidiary in the ordinary course of business that do not materially detract from the value of the affected asset or interfere with the ordinary conduct of business of the Company or any Restricted Subsidiary;
(k)any Lien in favor of the Company or any Restricted Subsidiary (other than Liens on assets of the Company or any Guarantor in favor of a Restricted Subsidiary that is not a Guarantor);
(l)(A) deposits made in the ordinary course of business to secure obligations to insurance carriers providing casualty, liability or other insurance to the Company and the Subsidiaries and (B) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(m)receipt of progress payments and advances from customers in the ordinary course of business to the extent the same creates a Lien;
(n)Liens on fixed or capital assets subject to any Sale/Leaseback Transaction; provided that (i) such Liens secure only Indebtedness permitted by Section 4.09(b)(xvi) and obligations relating thereto not constituting Indebtedness and (ii) such Liens shall not apply to any other asset of the Company or any Restricted Subsidiary, other than to proceeds and products of, and after-acquired property that is affixed or incorporated into, the assets covered by such Liens;
(o)Liens on cash and Cash Equivalents securing obligations in respect of any Hedging Obligations permitted hereunder and entered into in the ordinary course of business; provided that at the time of the incurrence of such Liens, the aggregate amount of cash and Cash Equivalents secured by Liens permitted by this clause does not exceed the greater of (i) $7,500,000 and (ii) 12.5% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period;
(p)Liens securing Permitted Ratio Indebtedness and obligations relating thereto not constituting Indebtedness;
(q)Liens securing Permitted Incurred Acquisition Indebtedness and obligations relating thereto not constituting Indebtedness;
(r)Liens on the Capital Stock of joint ventures or Unrestricted Subsidiaries securing capital contributions to, or obligations of, such Persons;

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(s)Liens on receivables and related assets incurred in connection with Permitted Factoring Transactions (including Liens on such receivables resulting from precautionary UCC filings or from recharacterization or any such with Permitted Factoring Transactions as a financing or a loan); and
(t)other Liens securing Indebtedness or other obligations, provided that at the time of the incurrence of such Liens and the related Indebtedness and other obligations and after giving pro forma effect thereto and the use of proceeds thereof, the aggregate outstanding amount of Indebtedness and other obligations secured by Liens permitted by this clause does not exceed the greater of (i) $15,000,000 and (ii) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period.

Transactions with Affiliates

The Company will not, and privilegeswill not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Company (each, an “Affiliate Transaction”) involving aggregate payments or consideration in excess of $2,000,000, unless:

(1)the Affiliate Transaction is on terms that are substantially as favorable to the Company or the relevant Restricted Subsidiary, taken as a whole, as those that would have been obtained at the time in a comparable arms-length transaction by the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the Company or any of its Restricted Subsidiaries;
(2)the Company delivers to the Trustee, with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $10,000,000, a resolution of the Board accompanied by an Officer’s Certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board; and
(3)with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $25,000,000, the Company obtains a written opinion from an Independent Financial Advisor to the effect that the consideration to be paid or received in connection with such Affiliate Transaction or Affiliate Transactions is fair, from a financial point of view, to the Company and its Subsidiaries, taken as a whole.

The following will not be deemed Affiliate Transactions under the Indenture, and are therefore not subject to the above limitations:

(1)any collective bargaining, consulting or employment agreement or compensation plan, stock option, stock ownership plan, management equity plan, phantom equity plan or any other management, employee benefit or other compensatory plan or agreement (and any successor plans or arrangements thereto), termination or severance agreement, or officer or director indemnification arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business for the benefit of any future, current or former employee, director, officer, member of management, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries and payments and transactions pursuant thereto, including (A) any issuance, transfer or sale of Capital Stock, options, other equity-related interests or other securities, or other payments, awards or grants in cash, securities or otherwise to any future, current or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members,) of the Company or any of its Restricted Subsidiaries; (B) the payment of compensation, fees, costs and expenses to, and indemnities (including under insurance policies) and reimbursements, employment and severance arrangements, and employee benefit and pension expenses provided on behalf of, or for the benefit of, future, current or former employees, directors, officers, members of management, managers, contractors, consultants, distributors or advisors (or their respective Immediate Family Members) of the Company or any Restricted Subsidiary (whether directly or indirectly and including by their Immediate Family Members); (C) any subscription agreement or similar agreement pertaining to the repurchase of Capital Stock pursuant to put/call rights or similar rights with current or former officers, directors, members of management, managers, employees, consultants or independent contractors; and (D) transactions pursuant to any employee compensation, benefit plan, stock option plan or arrangement, any health, disability or similar insurance plan which covers current or former officers, directors, members of management, managers, employees, consultants or independent contractors or any employment contract or arrangement;

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(2)transactions between or among the Company and/or its Restricted Subsidiaries (or a Person that becomes a Restricted Subsidiary as a result of such transaction);
(3)payment of fees and reimbursement of expenses and indemnities provided to any future, current or former employee, director, officer, member of management, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries;
(4)any transaction in which the only consideration paid by the Company or any Restricted Subsidiary consists of Capital Stock (other than Disqualified Stock) of the Company or any contribution of capital to the Company;
(5)any payments made pursuant to the Tax Receivable Agreement;
(6)Restricted Payments that do not violate the provisions of Section 4.08 of the Indenture;
(7)transactions pursuant to agreements or arrangements as in effect on the Issue Date, or any amendment, modification, or supplement thereto or replacement thereof (so long as such agreement or arrangement, as so amended, modified or supplemented or replaced, is not materially more disadvantageous, taken as a whole, than such agreement or arrangement as in effect on the Issue Date, as determined in good faith by the Company);
(8)purchases or sales of goods and/or services with customers, clients, suppliers, joint ventures, purchasers, sales agents or sellers of goods and services or providers of employees or other labor entered into in the ordinary course of business on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained at the time in a comparable transaction by the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the Company;
(9)(A) if such Affiliate Transaction is with an Affiliate in its capacity as a holder of Indebtedness of the Company or any Restricted Subsidiary, a transaction in which such Affiliate is treated no more favorably than the other holders of Indebtedness of the Company or such Restricted Subsidiary; (B) any purchases by the Company’s Affiliates of Indebtedness or Disqualified Stock of the Company or any of the Restricted Subsidiaries, the majority of which Indebtedness or Disqualified Stock is purchased by Persons who are not the Company’s Affiliates; provided that such purchases by the Company’s Affiliates are on the same terms as such purchases by such Persons who are not the Company’s Affiliates; and (C) (i) investments by Affiliates in securities or loans of the Company or any of the Restricted Subsidiaries so long as the investment is being offered by the Company or such Restricted Subsidiary generally to other non-affiliated third party investors on the same or more favorable terms and (ii) payments to Affiliates in respect of securities or loans of the Company or any of the Restricted Subsidiaries contemplated in the foregoing subclause (i) or that were acquired from Persons other than the Company and its Restricted Subsidiaries, in each case, in accordance with the terms of such securities or loans;
(10)the formation and maintenance of any consolidated group or subgroup for tax, accounting or cash pooling or management purposes in the ordinary course of business or transactions undertaken in good faith for the purpose of improving the consolidated tax efficiency of the Company or any Restricted Subsidiary and not for the purpose of circumventing any provision of this Indenture;
(11)to the extent permitted under this Indenture, including in compliance with Article 11 of the Indenture, any merger, consolidation or reorganization of the Company with an Affiliate of the Company solely for the purpose of (i) forming or collapsing a holding company structure or (ii) reincorporating the Company in a new jurisdiction;
(12)entering into and the payment of costs and expenses and indemnities pursuant to one or more agreements that provide registration rights to the security holders of the Company or any direct or indirect parent of the Company or amending such agreement with security holders of the Company or any direct or any indirect parent of the Company and the performance of such agreements on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained at the time in a comparable transaction by the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the Company and that have been approved by the Board;
(13)fees, indemnities and reimbursements may be paid to directors, officers, employees, members of management, managers, consultants independent contractors of the Company and its Restricted Subsidiaries;

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(14)Restricted Subsidiaries of the Company may pay management fees, licensing fees and similar fees to the Company or to any Guarantor;
(15)advances to employees of the Company or any Restricted Subsidiary made in the ordinary course of business, in a manner that is consistent with past practice;
(16)the existence of, or the performance by the Company or any Restricted Subsidiary of its obligations under the terms of, any equityholders, limited liability company agreement, limited partnership agreement, investor rights or similar agreement (including any registration rights agreement or purchase agreements related thereto) to which it is party as of the Issue Date and any similar agreement that it may enter into thereafter; provided that the existence of, or the performance by the Company or any Restricted Subsidiary of its obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date will only be permitted under this clause to the extent that the terms of any such amendment or new agreement are not otherwise, when taken as a whole, more disadvantageous to the Holders in any material respect in the reasonable determination of the Company than those in effect on the Issue Date;
(17)transactions in which the Company or any Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Subsidiary from a financial point of view or meets the requirements of the Transactions with Affiliates covenant in the Indenture.
(18)transactions in which the Company or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Restricted Subsidiary from a financial point of view or meets the requirements of Section 4.11(a)(i) of the Indenture; and
(19)transactions entered into by an Unrestricted Subsidiary with an Affiliate prior to the designation of any such Unrestricted Subsidiary as a Restricted Subsidiary pursuant to the definition of “Unrestricted Subsidiary”, provided that such transactions were not entered into in contemplation of or in connection with such designation.

In addition, if the Company or any of its Restricted Subsidiaries (i) purchases or otherwise acquires assets or properties from a Person which is not an Affiliate, the purchase or acquisition by an Affiliate of the Company of an interest in all or a portion of the assets or properties acquired shall not be deemed an Affiliate Transaction (or cause such purchase or acquisition by the Company or a Restricted Subsidiary to be deemed an Affiliate Transaction) or (ii) sells or otherwise disposes of assets or other properties to a Person who is not an Affiliate, the sale or other disposition by an Affiliate of the Company of an interest in all or a portion of the assets or properties sold shall not be deemed an Affiliate Transaction (or cause such sale or other disposition by the Company or a Restricted Subsidiary to be deemed an Affiliate Transaction).

Material Intellectual Property

Interests in the Material Intellectual Property shall be held at all times by the Company or a Guarantor and the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, a) sell or transfer its interest, in one or a series of transactions, in any of the Material Intellectual Property to a Person that is not the Company or a Guarantor, (b) exclusively or co-exclusively licenses any Material Intellectual Property to a Person that is not the Company or a Guarantor (other than (i) non-perpetual licenses that are exclusive solely with respect to a customized software or software enhancement entered into in the ordinary course of business and in connection with the provision of services by the Company or any of its Restricted Subsidiaries or the provision, directly or together with the Company, of services by any third party with whom the Company or any of its Restricted Subsidiaries has a commercial arrangement to provide services or technology to enable the provision of such services to its customers; provided that, (i) at the time such license is entered into, in the judgment of the Company, the granting of such license does not materially and adversely affect the business or condition (financial or otherwise) of the Company and its Restricted Subsidiaries, taken as a whole), or (c) sell or transfer any interest in any Guarantor holding interests in Material Intellectual Property to a Person that is not the Company or a Guarantor, provided that, in each case, any Lien permitted by this Indenture shall not be prohibited by this covenant.

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Merger, Consolidation or Sale of Assets

Subject to certain provisions of the Indenture, the Company shall not consolidate with, merge with or into, or sell, convey, transfer or lease, all or substantially all of the consolidated assets of the Company and the Company’s Subsidiaries, taken as a whole, to another Person, unless:

(i)the resulting, surviving or transferee Person, if not the Company, shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and the Successor Company (if not the Company) shall expressly assume, by supplemental indenture all of the obligations of the Company under 2027 Convertible Notes and the Indenture;
(ii)immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing under the Indenture; and
(iii)if the Company is not the Successor Company, the Successor Company shall have delivered to the Trustee an Officer’s Certificate and Opinion of Counsel, each stating that such consolidation, merger, sale, conveyance, transfer or lease complies with the Indenture and that such supplemental indenture is authorized or permitted by the Indenture and an Opinion of Counsel stating that the supplemental indenture is the valid and binding obligation of the Successor Company, subject to customary exceptions and qualifications.

Subject to certain provisions of the Indenture, no Guarantor shall consolidate with, merge with or into, or sell, convey, transfer or lease, all or substantially all of its assets to, another Person, unless:

(i)the other Person is the Company or a Guarantor or becomes a Guarantor concurrently with the transaction;
(ii)either (x) the Company or a Guarantor is the continuing Person or (y) the resulting, surviving or transferee Person expressly assumes all of the obligations of the Guarantor under the Indenture by the execution of a supplemental indenture; or
(iii)the transaction constitutes a sale or other disposition or transfer (including by way of consolidation, merger or amalgamation) of the Guarantor or the sale, conveyance, transfer or lease of all or substantially all the assets of the Guarantor (in each case other than to the Company or a Guarantor) otherwise not prohibited by the Indenture.

Notes Guarantees

Certain subsidiaries of the Company (each a “Guarantor” and collectively, the “Guarantors”) have jointly and severally, fully and unconditionally guaranteed the obligations under the 2027 Convertible Notes as to payment of principal of and premium, if any, and interest when and as the same shall become due and payable (the “Guarantees”).

A Guarantee will be automatically and unconditionally terminated, and the relevant Guarantor will be automatically and unconditionally released and relieved of any obligations under its Guarantee and the Indenture in the event of:

upon a sale, transfer, exchange or other disposition (including by way of consolidation or merger) of Capital Stock of such Guarantor following which the applicable Guarantor ceases to be a Subsidiary or the sale, transfer, exchange or other disposition of all or substantially all the properties and assets of the applicable Guarantor (other than to the other Guarantors) otherwise not prohibited by the Indenture;
upon the release or discharge of such Guarantor’s obligations under the Credit Agreements or other Indebtedness that resulted in the creation of such Guarantee other than, in each case, a release or discharge through payment thereon;
upon the merger, amalgamation or consolidation of any Guarantor with and into the Company or another Guarantor or upon the liquidation of such Guarantor, in each case, in compliance with the Indenture;
upon the satisfaction and discharge of the 2027 Convertible Notes; or
as permitted by Article 10 of the Indenture.

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Company’s Mandatory Conversion Option

On or after February 14, 2024 and prior to the close of business on December 12, 2026, the Company may, at its option, elect to convert the outstanding Notes, in whole or in part, if (x) the Last Reported Sale Price of the Class A Common Stock (i) for at least twenty (20) Trading Days (whether or not consecutive) during the period of thirty (30) consecutive Trading Days ending on, and including, the Trading Day immediately preceding the date the Company sends a Mandatory Conversion Notice (the “Mandatory Conversion Notice Date”) and (ii) on the Trading Day immediately preceding the Mandatory Conversion Notice Date is greater than or equal to $14.00 per share; (y) the 60-Day ADTV ending on, and including, the Trading Day immediately preceding the Mandatory Conversion Notice Date is greater than or equal to $15,000,000; and (z) the shares of Class A Common Stock to be delivered upon such conversion, together with all shares of Class A Common Stock previously delivered in connection with the conversion of any Notes, equal no more than 20% of the free-float of the Class A Common Stock on a pro forma basis taking into account such conversion (together, the “Company Mandatory Conversion Condition”); provided that the Company may not elect to convert Notes under Section 14.03 of the Indenture in part unless it converts the same proportion of the principal amount of all outstanding Notes across all Holders.

To exercise the Company Mandatory Conversion Right, the Company will send notice of the Company’s election (a “Mandatory Conversion Notice”) to Holders, the Trustee and the Conversion Agent.

Such Mandatory Conversion Notice must state:

(i)that the 2027 Convertible Notes have been called for Mandatory Conversion, briefly describing the Company Mandatory Conversion Right under the Indenture;
(ii)the Mandatory Conversion Date;
(iii)the current Conversion Rate;
(iv)the name and address of the Paying Agent and the Conversion Agent; and
(v)the CUSIP and ISIN numbers, if any, of the 2027 Convertible Notes.

If the Company exercises the Company Mandatory Conversion Right in accordance with the Indenture, then a Conversion Date will automatically, and without the need for any action on the part of any Holder, the Trustee or the Conversion Agent, be deemed to occur, with respect to each Note then outstanding, on the Mandatory Conversion Date. The Mandatory Conversion Date will be a Business Day of the Company’s choosing that is no more than thirty (30), nor less than ten (10), Business Days after the Company sends the Mandatory Conversion Notice; provided that the Mandatory Conversion Date shall be no later than the second Scheduled Trading Day prior to the Maturity Date. The Company shall pay or deliver, as the case may be, the consideration due in respect of the Conversion Obligation on the second (2nd) Business Day immediately following the Mandatory Conversion Date.

Each share of Class A Common Stock delivered upon a Mandatory Conversion of any Note will be a newly issued or treasury share and will be duly and validly issued, fully paid, non-assessable, free from preemptive rights and free of any lien or adverse claim. If the Class A Common Stock is then listed on any securities exchange and has been registered on an effective registration statement with the Commission, then the Company will cause each share of Class A Common Stock, when delivered upon a Mandatory Conversion of any Note, to be admitted for listing on such exchange. Notwithstanding anything herein to the contrary, the Company (1) shall not be permitted to effect any Company Mandatory Conversion hereunder unless as of such Mandatory Conversion Date no Equity Conditions Failure then exists.

Adjustment of Conversion Rate

The Conversion Rate shall be adjusted from time to time by the Company if any of the following events occurs, except that the Company shall not make any adjustments to the Conversion Rate if Holders of the Notes participate (other than in the case of (x) a share split or share combination or (y) a tender or exchange offer), at the same time and upon the same terms as holders of the Class A Common Stock and solely as a result of holding the Notes, in any of the transactions described in the Indenture, without having to convert their Notes, as if they held a number of shares of Class A Common Stock equal to the Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.

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(a)

If the Company exclusively issues shares of Class A Common Stock as a dividend or distribution on shares of the Class A Common Stock, or if the Company effects a share split or share combination, the Conversion Rate shall be adjusted based on the following formula:

OS1

CR1 = CR0 ×

OS0

where,

CR0=the Conversion Rate in effect immediately prior to the open of business on the Record Date of such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as applicable;

CR1=the Conversion Rate in effect immediately after the open of business on such Record Date or Effective Date, as applicable;

OS0=the number of shares of Class A Common Stock outstanding immediately prior to the open of business on such Record Date or Effective Date, as applicable, before giving effect to such dividend, distribution, share split or share combination; and

OS1=the number of shares of Class A Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination, as applicable.

Any adjustment made under this section shall become effective immediately after the open of business on the Record Date for such dividend or distribution, or immediately after the open of business on the Effective Date for such share split or share combination, as applicable. If any dividend or distribution of the type described in this section is declared but not so paid or made, or any share split or combination of the type described in this section is announced but the outstanding shares of Class A Common Stock are not split or combined, as the case may be, the Conversion Rate shall be immediately readjusted, effective as of the date the Board determines in good faith not to pay such dividend or distribution, or not to split or combine the outstanding shares of Class A Common Stock, as the case may be, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared or such share split or combination had not been announced.

If the Company issues to all or substantially all holders of the Class A Common Stock any rights, options or warrants (other than pursuant to a stockholders rights plan) entitling them, for a period of not more than forty-five (45) calendar days after the announcement date of such issuance, to subscribe for or purchase shares of the Class A Common Stock at a price per share that is less than the average of the Last Reported Sale Prices of the Class A Common Stock for the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

OS0 + X

OS0 + Y

where,

CR0=the Conversion Rate in effect immediately prior to the open of business on the Record Date for such issuance;

CR1=the Conversion Rate in effect immediately after the open of business on such Record Date;

OS0=the number of shares of Class A Common Stock outstanding immediately prior to the open of business on such Record Date;

X=the total number of shares of Class A Common Stock issuable pursuant to such rights, options or warrants; and

Y=the number of shares of Class A Common Stock equal to (i) the aggregate price payable to exercise such rights, options or warrants, divided by (ii) the average of the Last Reported Sale Prices of the Class A Common Stock over the ten

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(10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants.

Any increase made under this section shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the open of business on the Record Date for such issuance. To the extent that shares of the Class A Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Class A Common Stock actually delivered. If such rights, options or warrants are not so issued, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such Record Date for such issuance had not occurred.

For purposes of this section, in determining whether any rights, options or warrants entitle the holders of Class A Common Stock to subscribe for or purchase shares of the Class A Common Stock at a price per share that is less than such average of the Last Reported Sale Prices of the Class A Common Stock for the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, and in determining the aggregate offering price of such shares of Class A Common Stock, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board in good faith.

If the Company distributes shares of its Capital Stock, evidences of its indebtedness, other assets or property of the Company or rights, options or warrants to acquire its Capital Stock or other securities, to all or substantially all holders of the Class A Common Stock, excluding (i) dividends, distributions or issuances (including share splits) as to which an adjustment was effected pursuant to the Indenture, (ii) except as otherwise described in the Indenture, rights issued pursuant to any stockholders rights plan of the Company then in effect, (iii) dividends or distributions paid exclusively in cash as to which the provisions set forth in Section 14.04(d) of the Indenture shall apply, (iv) dividends or distributions of Reference Property in exchange for or upon conversion of the Class A Common Stock in a Share Exchange Event, and (v) Spin-Offs as to which the provisions set forth below in this Section 14.04(c) of the Indenture shall apply (any of such shares of Capital Stock, evidences of indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities, the “Distributed Property”), then the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

SP0

SP0 - FMV

where,

CR0=the Conversion Rate in effect immediately prior to the open of business on the Record Date for such distribution;

CR1=the Conversion Rate in effect immediately after the open of business on such Record Date;

SP0=the average of the Last Reported Sale Prices of the Class A Common Stock over the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Record Date for such distribution; and

FMV=the fair market value (as determined by the Board in good faith) of the Distributed Property with respect to each outstanding share of the Class A Common Stock on the Record Date for such distribution.

Any increase made under the portion of this section above shall become effective immediately after the open of business on the Record Date for such distribution. If such distribution is not so paid or made, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such distribution had not been declared. If the Company issues rights, options or warrants to acquire Capital Stock or other securities that are exercisable only upon the occurrence of certain triggering events, the Company shall not adjust the conversion rate pursuant to the clauses above until the earliest of these triggering events occurs. Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), then, in lieu of the foregoing increase, each Holder of a Note shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of the Class A Common Stock receive the Distributed Property, the amount and kind of Distributed Property such Holder would have received if such Holder owned a number of shares of Class A Common Stock equal to the Conversion Rate in effect immediately prior to the open of business on the Record Date for the distribution. If the Board determines in good faith the “FMV” (as defined above) of any distribution for purposes of this section by reference to the actual or when-issued trading market for

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any securities, it shall in doing so consider the prices in such market over the same period used in computing the Last Reported Sale Prices of the Class A Common Stock over the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Record Date for such distribution.

With respect to an adjustment pursuant to this section where there has been a payment of a dividend or other distribution on the Class A Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit of the Company, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

FMV0 + MP0

MP0

where,

CR0=the Conversion Rate in effect immediately prior to the end of the Valuation Period;

CR1=the Conversion Rate in effect immediately after the end of the Valuation Period;

FMV0=the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Class A Common Stock applicable to one share of the Class A Common Stock (determined by reference to the definition of Last Reported Sale Price as set forth in the Definitions section of the Indenture as if references therein to Class A Common Stock were to such Capital Stock or similar equity interest) over the first ten (10) consecutive Trading Day period after, and including, the Record Date of the Spin-Off (the “Valuation Period”); and

MP0=the average of the Last Reported Sale Prices of the Class A Common Stock over the Valuation Period.

The increase to the Conversion Rate under the preceding paragraph shall occur at the close of business on the last Trading Day of the Valuation Period; provided that if the relevant Conversion Date occurs during the Valuation Period, references to “10” in the preceding paragraph shall be deemed to be replaced with such lesser number of Trading Days as have elapsed between the Record Date of such Spin-Off and the Conversion Date in determining the Conversion Rate. If any dividend or distribution that constitutes a Spin-Off is declared but not so paid or made, the Conversion Rate shall be immediately decreased, effective as of the date the Board determines in good faith not to pay or make such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared or announced.

For purposes of this section (and subject in all respect to Section 14.11 of the Indenture), rights, options or warrants distributed by the Company to all holders of the Class A Common Stock entitling them to subscribe for or purchase shares of the Company’s Capital Stock, including Class A Common Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (“Trigger Event”):

(i)are deemed to be transferred with such shares of the Class A Common Stock;
(ii)are not exercisable; and
(iii)are also issued in respect of future issuances of the Class A Common Stock,

shall be deemed not to have been distributed for purposes of this section (and no adjustment to the Conversion Rate under this section will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this section. If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Record Date with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other event (of

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the type described in the immediately preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this section was made:

(1)in the case of any such rights, options or warrants that shall all have been redeemed or purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by a holder or holders of Class A Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Class A Common Stock as of the date of such redemption or purchase, and
(2)in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights, options and warrants had not been issued.

For purposes of Section 14.04(a), Section 14.04(b) and this section of the Indenture, if any dividend or distribution to which this section is applicable also includes one or both of:

(A)a dividend or distribution of shares of Class A Common Stock to which Section 14.04(a) of the Indenture is applicable (the “Clause A Distribution”); or
(B)a dividend or distribution of rights, options or warrants to which Section 14.04(b) of the Indenture is applicable (the “Clause B Distribution”),

then, in either case,

(1)

such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a dividend or distribution to which this section is applicable (the “Clause C Distribution”) and any Conversion Rate adjustment required by this section with respect to such Clause C Distribution shall then be made, and

(2)

the Clause A Distribution and Clause B Distribution shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 14.04(a) and Section 14.04(b) of the Indenture with respect thereto shall then be made, except that, if determined by the Company (I) the “Record Date” of the Clause A Distribution and the Clause B Distribution shall be deemed to be the Record Date of the Clause C Distribution and (II) any shares of Class A Common Stock included in the Clause A Distribution or Clause B Distribution shall be deemed not to be “outstanding immediately prior to the open of business on such Record Date or Effective Date” within the meaning of Section 14.04(a) of the Indenture or “outstanding immediately prior to the open of business on such Record Date” within the meaning of Section 14.04(b) of the Indenture.

If the Company pays or makes any cash dividend or distribution to all or substantially all holders of the Class A Common Stock, the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

SP0

SP0 – C

where,

CR0=the Conversion Rate in effect immediately prior to the open of business on the Record Date for such dividend or distribution;

CR1=the Conversion Rate in effect immediately after the open of business on the Record Date for such dividend or distribution;

SP0=the Last Reported Sale Price of the Class A Common Stock on the Trading Day immediately preceding the Record Date for such dividend or distribution; and

C=the amount in cash per share the Company distributes to all or substantially all holders of the Class A Common Stock.

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Any increase pursuant to this section shall become effective immediately after the open of business on the Record Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Rate shall be decreased, effective as of the date the Board determines in good faith not to make or pay such dividend or distribution, to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall receive, for each $1,000 principal amount of Notes, at the same time and upon the same terms as holders of shares of the Class A Common Stock, the amount of cash that such Holder would have received if such Holder owned a number of shares of Class A Common Stock equal to the Conversion Rate in effect on the Record Date for such cash dividend or distribution.

(ii)

If the Company or any of its Subsidiaries make a payment in respect of a tender or exchange offer for the Class A Common Stock that is subject to the then-applicable tender offer rules under the Exchange Act (other than an odd lot tender offer), to the extent that the cash and value of any other consideration included in the payment per share of the Class A Common Stock exceeds the average of the Last Reported Sale Prices of the Class A Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

AC + (SP1 x OS1)

OS0 x SP1

where,

CR0=the Conversion Rate in effect immediately prior to the close of business on the tenth (10th) Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires (the date such tender offer or exchange offer expires, the “Expiration Date”);

CR1=the Conversion Rate in effect immediately after the close of business on the tenth (10th) Trading Day immediately following, and including, the Trading Day next succeeding the Expiration Date;

AC=the aggregate value of all cash and any other consideration (as determined by the Board in good faith) paid or payable for shares of Class A Common Stock purchased in such tender or exchange offer;

OS0=the number of shares of Class A Common Stock outstanding immediately prior to the Expiration Date (prior to giving effect to the purchase of all shares of Class A Common Stock accepted for purchase or exchange in such tender or exchange offer);

OS1=the number of shares of Class A Common Stock outstanding immediately after the Expiration Date (after giving effect to the purchase of all shares of Class A Common Stock accepted for purchase or exchange in such tender or exchange offer); and

SP1=the average of the Last Reported Sale Prices of the Class A Common Stock over the ten (10) consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the Expiration Date.

The increase to the Conversion Rate under this section shall occur at the close of business on the tenth (10th) Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that if the relevant Conversion Date occurs during the ten (10) Trading Days immediately following, and including, the Trading Day next succeeding the Expiration Date of any tender or exchange offer, references to “ten (10)” or “tenth (10th)” in the preceding paragraph shall be deemed replaced with such lesser number of Trading Days as have elapsed between the Expiration Date of such tender or exchange offer and the Conversion Date in determining the Conversion Rate. In addition, if the Trading Day next succeeding the date such tender or exchange offer expires is after the tenth (10th) Trading Day immediately preceding, and including, the date immediately preceding the relevant Conversion Date in respect of a conversion of Notes, references to “ten (10)” or “tenth (10th)” in the preceding paragraph and this paragraph shall be deemed to be replaced, solely in respect of that conversion of Notes, with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the date such tender or exchange offer expires to, and including, the last Trading Day immediately preceding the relevant Conversion Date.

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Upon the occurrence of Reset Date, the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

$1,000 / CR0

ACP

where,

CR0=the Conversion Rate in effect immediately prior to the close of business on the Trading Day immediately preceding the Reset Date;

CR1=the Conversion Rate in effect immediately after the open of business on Reset Date;

ACP=the Applicable Conversion Price.

For the avoidance of doubt, the Conversion Rate may not be decreased pursuant to this section.

Notwithstanding this section or any other provision of this Indenture or the Notes, if a Conversion Rate adjustment becomes effective on any Record Date, and a Holder that has converted its Notes on or after such Record Date and on or prior to the related Record Date would be treated as the record holder of the shares of Class A Common Stock as of the related Conversion Date as described under Section 14.02(i) of the Indenture based on an adjusted Conversion Rate for such Record Date, then, notwithstanding the Conversion Rate adjustment provisions in this Section 14.04 of the Indenture, the Conversion Rate adjustment relating to such Record Date shall not be made for such converting Holder. Instead, such Holder shall be treated as if such Holder were the record owner of the shares of Class A Common Stock on an unadjusted basis and participate in the related dividend, distribution or other event giving rise to such adjustment.

Except as stated herein, the Company shall not adjust the Conversion Rate for the issuance of shares of the Class A Common Stock or any securities convertible into or exchangeable for shares of the Class A Common Stock or the right to purchase shares of the Class A Common Stock or such convertible or exchangeable securities.

In addition to those adjustments required by clauses (a), (b), (c), (d), (e) and (f) of this Section 14.04 of the Indenture, the Company from time to time may increase the Conversion Rate by any amount for a period of at least twenty (20) Business Days if the Board determines in good faith that such increase would be in the Company’s best interest. In addition, the Company may (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Class A Common Stock or rights to purchase Class A Common Stock in connection with a dividend or distribution of shares of Class A Common Stock (or rights to acquire shares of Class A Common Stock) or similar event. Whenever the Conversion Rate is increased pursuant to either of the preceding two sentences, the Company shall deliver to the Holder of each Note a notice of the increase at least fifteen (15) days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

Except as stated in the Indenture, the Company shall not adjust the Conversion Rate for the issuance of shares of Class A Common Stock or any securities convertible into or exchangeable for shares of Class A Common Stock or the right to purchase shares of Class A Common Stock or such convertible or exchangeable securities. For illustrative purposes only and without limiting the generality of the preceding sentence, the Conversion Rate shall not be adjusted:

(i)upon the issuance of any shares of Class A Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in shares of Class A Common Stock under any plan;
(ii)upon the issuance of any shares of Class A Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of the Company’s Subsidiaries;
(iii)upon the issuance of any shares of the Class A Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in clause (ii) of this subsection and outstanding as of the date the 2027 Convertible Notes were first issued;

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(iv)upon the repurchase of any shares of Class A Common Stock pursuant to an open market share repurchase program or other buy-back transaction, including structured or derivative transactions, that is not a tender or exchange offer of the nature described in Section 14.04(e) of the Indenture;
(v)solely for a change in the par value (or lack of par value) of the Class A Common Stock; or
(vi)for accrued and unpaid interest, if any.

In addition, for the avoidance of doubt, none of the foregoing shall constitute a Conversion Reset Offering.

All calculations and other determinations under the Conversion of Notes article in the Indenture shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000th) of a share.

Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly deliver to the Trustee (and the Conversion Agent if not the Trustee) an Officer’s Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a written notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall deliver such notice of such adjustment of the Conversion Rate to each Holder (with a copy to the Trustee). Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

For purposes of this section, the number of shares of Class A Common Stock at any time outstanding shall not include shares of Class A Common Stock held in the treasury of the Company so long as the Company does not pay any dividend or make any distribution on shares of Class A Common Stock held in the treasury of the Company, but shall include shares of Class A Common Stock issuable in respect of scrip certificates issued in lieu of fractions of shares of Class A Common Stock.

For the avoidance of doubt, the closing of the transactions contemplated by the BCA to occur on the date of the Indenture shall not result in any adjustment of the Conversion Rate, Conversion Price or any other terms of the 2027 Convertible Notes.

Adjustment of Prices

Whenever any provision of the Indenture requires the Company to calculate the Last Reported Sale Prices or the Daily VWAPs over a span of multiple days, the Board shall make appropriate adjustments (without duplication in respect of any adjustment made pursuant to Section 14.04 of the Indenture) to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date, Record Date, Effective Date or Expiration Date, as the case may be, of the event occurs, at any time during the period when the Last Reported Sale Prices or the Daily VWAPs are to be calculated.

Effect of Recapitalizations, Reclassifications and Changes of the Class A Common Stock

(a)

In the case of:

(i)any recapitalization, reclassification or similar change of the Class A Common Stock (other than changes in par value or resulting from a subdivision or combination),
(ii)any consolidation, merger, combination or similar transaction involving the Company,
(iii)any sale, lease or other transfer to a third party of all or substantially all of the consolidated assets of the Company and the Company’s Subsidiaries, taken as a whole, or
(iv)any statutory share exchange,

in each case, as a result of which the Class A Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any such event, a “Share Exchange Event”), then at and after the effective time of such Share Exchange Event, the right to convert each $1,000 principal amount of Notes shall be changed into a

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right to convert such principal amount of Notes into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a holder of a number of shares of Class A Common Stock equal to the Conversion Rate immediately prior to such Share Exchange Event would have owned or been entitled to receive (the “Reference Property,” with each “unit of Reference Property” meaning the kind and amount of Reference Property that a holder of one share of Class A Common Stock is entitled to receive) upon such Share Exchange Event and, prior to or at the effective time of such Share Exchange Event, the Company or the successor or acquiring Person, as the case may be, shall execute with the Trustee a supplemental indenture permitted under Section 10.01(g) of the Indenture providing for such change in the right to convert each $1,000 principal amount of Notes; providedhowever, that at and after the effective time of the Share Exchange Event (I) any amount payable in cash upon conversion of the Notes in accordance with Section 14.02 of the Indenture shall continue to be payable in cash, (II) any shares of Class A Common Stock that the Company would have been required to deliver upon conversion of the Notes in accordance with Section 14.02 of the Indenture shall instead be deliverable in the amount and type of Reference Property that a holder of that number of shares of Class A Common Stock would have been entitled to receive in such Share Exchange Event and (III) the Daily VWAP shall be calculated based on the value of a unit of Reference Property.

If the Share Exchange Event causes the Class A Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), then (i) the Reference Property into which the Notes will be convertible shall be deemed to be the weighted average of the types and amounts of consideration actually received by the holders of Class A Common Stock, and (ii) the unit of Reference Property for purposes of the immediately preceding paragraph shall refer to the consideration referred to in clause (i) attributable to one share of Class A Common Stock. If the holders of the Class A Common Stock receive only cash in such Share Exchange Event, then for all conversions for which the relevant Conversion Date occurs after the effective date of such Share Exchange Event (A) the consideration due upon conversion of each $1,000 principal amount of Notes shall be solely cash in an amount equal to the Conversion Rate in effect on the Conversion Date (as may be increased by any Additional Shares pursuant to Section 14.14 of the Indenture), multiplied by the price paid per share of Class A Common Stock in such Share Exchange Event and (B) the Company shall satisfy the Conversion Obligation by paying such cash amount to converting Holders on the second (2nd) Business Day immediately following the relevant Conversion Date. The Company shall notify in writing Holders, the Trustee and the Conversion Agent (if other than the Trustee) of such weighted average as soon as reasonably practicable after such determination is made.

If the Reference Property in respect of any Share Exchange Event includes, in whole or in part, shares of common equity, such supplemental indenture described in the second immediately preceding paragraph shall provide for anti-dilution and other adjustments that shall be as nearly equivalent as is possible to the adjustments provided for in this Article 14 of the Indenture with respect to the portion of the Reference Property consisting of such common equity. If, in the case of any Share Exchange Event, the Reference Property includes shares of stock, securities or other property or assets (including any combination thereof), other than cash and/or Cash Equivalents, of a Person other than the Company or the successor or purchasing corporation, as the case may be, in such Share Exchange Event, then such supplemental indenture shall also be executed by such other Person, if such other Person is an affiliate of the Company or the successor or acquiring company, and shall contain such additional provisions to protect the interests of the Holders of the Notes as the Board shall reasonably consider necessary by reason of the foregoing, including the provisions providing for the purchase rights set forth in Section 15.02 of the Indenture.

When the Company executes a supplemental indenture pursuant to this section, the Company shall promptly deliver to the Trustee an Officer’s Certificate briefly stating the reasons therefor, the kind or amount of cash, securities or property or asset that will comprise a unit of Reference Property after any such Share Exchange Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with, and shall promptly deliver notice thereof to all Holders. The Company shall cause notice of the execution of such supplemental indenture to be delivered to each Holder promptly and in any event within twenty (20) days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

The Company shall not become a party to any Share Exchange Event unless its terms are consistent with this Section 14.07 of the Indenture. None of the foregoing provisions shall affect the right of a holder of Notes to convert its Notes into shares of Class A Common Stock, as set forth in Section 14.01 of the Indenture and Section 14.02 of the Indenture prior to the effective date of such Share Exchange Event.

The above provisions of this section shall similarly apply to successive Share Exchange Events.

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Fundamental Change

If a Fundamental Change (as defined in the Indenture) occurs prior to the maturity date, holders of the 2027 Convertible Notes will have the right to require the Company to repurchase all or any portion of their 2027 Convertible Notes in principal amounts of $1,000 or an integral multiple thereof, at a repurchase price equal to the principal amount of the 2027 Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

Following certain corporate events that occur prior to the maturity date or if the Company exercises its mandatory conversion right in connection with such corporate events, the Company will in certain circumstances increase the conversion rate for a holder who elects to convert its 2027 Convertible Notes in connection with such corporate events or has been forced to convert its 2027 Convertible Notes in connection with such corporate events, as the case may be.

Governing Law

The Indenture, the 2027 Convertible Notes and the Security Agreement are governed by, and construed in accordance with, the laws of the State of New York.

Certain Anti-Takeover Provisions of Delaware Law, the Company’s Certificate of Incorporation and Amended and Restated Bylaws

Our Certificate of Incorporation provides that the Board is classified into three classes of directors of approximately equal size. As a result, in most circumstances, a person can gain control of the board only by successfully engaging in a proxy contest at three or more annual meetings. Furthermore, because the Board will be classified, directors may be removed only with cause by a majority of our outstanding shares.

In addition, the Certificate of Incorporation does not provide for cumulative voting in the election of directors. Our authorized but unissued Class A Common Stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved Class A Common Stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

Special Meeting of Stockholders

The Certificate of Incorporation provides that special meetings of our stockholders may be called only by the Chairman of the Board or the QualTek Board pursuant to a resolution adopted by a majority of the Board. Stockholders of QualTek will not be eligible and has no right to call a special meeting.

Advance Notice Requirements for Stockholder Proposals and Director Nominations

Our Amended and Restated Bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders, must provide timely notice of their intent in writing. To be timely, a stockholder’s notice will need to be received by the Company’s Secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the open of business on the 120th day prior to the anniversary date of the immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained in the annual proxy statement. The Certificate of Incorporation specifies certain requirements as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders. Our Amended and Restated Bylaws also specify certain requirements as to the form and content of a stockholder’s notice for an annual meeting. Specifically, a stockholder’s notice must include: (i) a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event such business includes a proposal to amend the Amended and Restated Bylaws, the language of the proposed amendment) and the reasons for conducting such business at the annual meeting, (ii) the name and record address of such stockholder and the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (iii) the class or series and number of shares of our capital stock that are owned beneficially and of record by such stockholder and by the beneficial owner, if any, on whose behalf the proposal is made, (iv) a description of all arrangements or understandings between such stockholder and the beneficial owner, if any, on whose behalf the proposal is made and any other person or persons (including their

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names) in connection with the proposal of such business by such stockholder, (v) any material interest of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made in such business and (vi) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. These notice requirements will be deemed satisfied by a stockholder as to any proposal (other than nominations) if the stockholder has notified the Company of such stockholder’s intention to present such proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) of the Exchange Act, and such stockholder has complied with the requirements of such rule for inclusion of such proposal in a proxy statement prepared by us to solicit proxies for such annual meeting. The foregoing provisions may limit our stockholders’ ability to bring matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.

Securities Eligible for Future Sale

The Company has 24,446,284 shares of Class A Common Stock outstanding as of September 15, 2022. Of these shares, 6,136,283 public shares are freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act (“Rule 144”). All of the remaining 18,310,001 outstanding shares are, and any shares of Class A Common Stock issued upon conversion of the 2027 Convertible Notes will be, restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.

Rule 144

Pursuant to Rule 144 under the Securities Act, a person who has beneficially owned restricted shares of our Class A Common Stock or warrants for at least six months would be entitled to sell his, her or its securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.

Persons who have beneficially owned restricted shares of our Class A Common Stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:

1% of the total number of shares of Class A Common Stock then outstanding; or
the average weekly reported trading volume of the Class A Common Stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.

Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies

Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:

the issuer of the securities that was formerly a shell company has ceased to be a shell company;
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
at least one year has elapsed from the time that the issuer filed current Form 10-type information with the SEC reflecting its status as an entity that is not a shell company.

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As a result, our Initial Stockholders are able to sell their Founder Shares and Private Warrants, as applicable, pursuant to Rule 144 without registration one year after the closing of the Business Combination.

Investor Rights Agreement

In connection with the closing of our Business Combination, QualTek, certain Sellers as set forth therein, BCP QualTek, the Sponsors, Sponsor Representative, and certain Other Holders (all as defined therein) entered into an Investor Rights Agreement, pursuant to which the Registration Rights Agreement, dated as of March 2, 2021, between the Other Holders (as defined therein) and ROCR was terminated and whereby we agreed to grant to the Holders (as defined therein), which includes certain equityholders of QualTek as well as the Sponsors, certain registration rights, including customary piggyback registration rights and demand registration rights immediately after the closing of our Business Combination, which are subject to customary terms and conditions, including with respect to cooperation and reduction of underwritten shelf takedown provisions (subject to lock-up restrictions for six months after the closing of the Business Combination). Additionally, the Investor Rights Agreement sets forth certain corporate governance standards relating to QualTek.

2027 Convertible Note Subscription Agreements

The Company is obligated to register the resale of the 2027 Convertible Notes and the shares issuable upon the conversion of the 2027 Convertible Notes. The Company agreed that, the Company will file with a registration statement registering the resale of the shares of Class A Common Stock issuable upon conversion of the 2027 Convertible Notes. The Company will use its commercially reasonable efforts to maintain the continuous effectiveness of such registration statement, and to be supplemented and amended to the extent necessary to ensure that such prospectus is available or, if not available, that another registration statement is available for the resale of the 2027 Convertible Notes, until the earliest of (i) the date on which the 2027 Convertible Notes may be resold without volume or manner of sale limitations pursuant to Rule 144 promulgated under the Securities Act, (ii) the date on which such 2027 Convertible Notes have actually been sold and (iii) the date which is three years after the closing of the Business Combination.

Notwithstanding anything to the contrary in the Convertible Note Subscription Agreements, the Company shall be entitled to delay or postpone the effectiveness of the registration statement, and from time to time to require any Selling Securityholder not to sell under the registration statement or to suspend the effectiveness thereof, if (i) it determines that in order for the registration statement not to contain a material misstatement or omission, an amendment or supplement thereto would be needed or (ii) the negotiation or consummation of a transaction by the Company or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event, the Board reasonably believes, upon the advice of legal counsel, would require additional disclosure by the Company in the Registration Statement of material information that the Company has a bona fide business purpose for keeping confidential and the non-disclosure of which in the registration statement would be expected, in the reasonable determination of the Board, upon the advice of legal counsel, to cause the Registration Statement to fail to comply with applicable disclosure requirements.

Section 203 of the DGCL

QualTek is subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:

a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
an affiliate of an interested stockholder; or
an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.

A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:

the Board approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of Class A Common Stock; or

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on or subsequent to the date of the transaction, the business combination is approved by the Board and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.

Listing of Securities

The Company’s Class A Common Stock and warrants are listed on Nasdaq under the symbol “QTEK” and “QTEKW,” respectively. The 2027 Convertible Notes will not be listed on any securities exchange.

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PLAN OF DISTRIBUTION

The Selling Securityholders, which, as used herein, includes their permitted transferees, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of Class A Common Stock and/or warrants on Nasdaq or any other stock exchange, market or trading facility on which such securities are traded or in private transactions. In addition, the Selling Securityholders, which, as used herein, includes their permitted transferees, may, from time to time, sell, transfer or otherwise dispose of any or all of their 2027 Convertible Notes on any market or trading facility on which such securities are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale or at negotiated prices.

The Selling Securityholders may use any one or more of the following methods when disposing of their shares of our Class A Common Stock, our warrants and/or our 2027 Convertible Notes:

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
an exchange distribution in accordance with the rules of the applicable exchange;
privately negotiated transactions;
in underwritten transactions;
short sales;
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
broker-dealers may agree with the Selling Securityholders to sell a specified number of such shares at a stipulated price;
distribution to members, limited partners or stockholders of Selling Securityholders;
“at the market” or through market makers or into an existing market for the shares;
a combination of any such methods of sale; and
any other method permitted pursuant to applicable law.

The Selling Securityholders may, from time to time, pledge or grant a security interest in some or all of the shares of our Class A Common Stock, our warrants or our 2027 Convertible Notes owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell their shares, warrants or 2027 Convertible Notes, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b) or other applicable provision of the Securities Act amending the list of Selling Securityholders to include the pledgee, transferee or other successors in interest as Selling Securityholders under this prospectus. The Selling Securityholders also may transfer their securities in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of our Class A Common Stock, our warrants, 2027 Convertible Notes or interests therein, the Selling Securityholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of our securities in the course of hedging the positions they assume. The Selling Securityholders may also sell their securities short and deliver these securities to close out their short positions, or loan or pledge such securities to broker-dealers that in turn may sell these securities. The Selling Securityholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other

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financial institution of the shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The aggregate proceeds to the Selling Securityholders from the sale of our Class A Common Stock, warrants or 2027 Convertible Notes offered by them will be the purchase price less discounts or commissions, if any. The Selling Securityholders reserve the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of our Class A Common Stock, warrants or 2027 Convertible Notes to be made directly or through agents. We will not receive any of the proceeds from any offering by the Selling Securityholders.

The Selling Securityholders also may in the future resell a portion of our Class A Common Stock, warrants or 2027 Convertible Notes in open market transactions in reliance upon Rule 144 under the Securities Act, provided that they meet the criteria and conform to the requirements of that rule, or pursuant to other available exemptions from the registration requirements of the Securities Act.

The Selling Securityholders and any underwriters, broker-dealers or agents that participate in the sale of our Class A Common Stock, warrants or 2027 Convertible Notes or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of our Class A Common Stock, warrants or 2027 Convertible Notes may be underwriting discounts and commissions under the Securities Act. If any selling security holder is an “underwriter” within the meaning of Section 2(11) of the Securities Act, then the selling security holder will be subject to the prospectus delivery requirements of the Securities Act. Underwriters and their controlling persons, dealers and agents may be entitled, under agreements entered into with us and the Selling Securityholders, to indemnification against and contribution toward specific civil liabilities, including liabilities under the Securities Act.

To the extent required, our Class A Common Stock, warrants or 2027 Convertible Notes to be sold, the respective purchase prices and public offering prices, the names of any agent, dealer or underwriter, and any applicable discounts, commissions, concessions or other compensation with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the prospectus that includes this prospectus.

To facilitate an offering of the securities, certain persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involves the sale by persons participating in the offering of more securities than we sold to them. In these circumstances, these persons would cover the over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.

We have agreed to maintain the effectiveness of this prospectus until all such securities have been sold under this prospectus or Rule 144 under the Securities Act or are no longer outstanding. We are required to pay all fees and expenses incident to the registration of the shares of our Class A Common Stock, warrants or 2027 Convertible Notes to be offered and sold pursuant to this prospectus. The Selling Securityholders will bear all commissions and discounts, if any, attributable to their sale of shares of our Class A Common Stock or warrants.

The Selling Securityholders may use this prospectus in connection with resales of our Class A Common Stock, warrants or 2027 Convertible Notes. This prospectus and any accompanying prospectus supplement will identify the Selling Securityholders, the terms of our Class A Common Stock, warrants or 2027 Convertible Notes and any material relationships between us and the Selling Securityholders. The Selling Securityholders may be deemed to be underwriters under the Securities Act in connection with our Class A Common Stock, warrants or 2027 Convertible Notes they resell and any profits on the sales may be deemed to be underwriting discounts and commissions under the Securities Act. Unless otherwise set forth in a prospectus supplement, the Selling Securityholders will receive all the net proceeds from the resale of our Class A Common Stock, warrants or 2027 Convertible Notes.

A Selling Securityholder that is an entity may elect to make an in-kind distribution of Class A Common Stock, warrants or 2027 Convertible Notes to its members, partners or stockholders pursuant to the registration statement of which this prospectus is a part by delivering a prospectus. To the extent that such members, partners or stockholders are not affiliates of ours, such members, partners or stockholders would thereby receive freely tradable Class A Common Stock, warrants or 2027 Convertible Notes pursuant to the distribution through a registration statement.

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BENEFICIAL OWNERSHIP OF SECURITIES

The following table sets forth information regarding the beneficial ownership of the Company’s Class A Common Stock and Class B Common Stock as of September 15, 2022:

each person or “group” (as such term is used in Section 13(d)(3) of the Exchange Act) known by the Company to be the beneficial owner of more than 5% of shares of our Common Stock;
each of the executive officers and directors of the Company; and
all executive officers and directors of the Company as a group.

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Company stock issuable upon exercise of options and warrants currently exercisable within 60 days are deemed outstanding solely for purposes of calculating the percentage of total voting power of the beneficial owner thereof.

In connection with the closing of the Business Combination, (i) 2,274,934 shares of Class A Common Stock issued to certain BCP Sellers (ii) 3,836,177 QualTek Common Units issued to the QualTek Equityholders (the “Earnout Common Units”) and (iii) an equal number of shares of Class B Common Stock issued to the QualTek Equityholders by the Company ((i) and (iii) collectively, the “Earnout Shares”), will be subject to certain restriction on transfer and voting and potential forfeiture pending the achievement (if any) of the following earnout targets pursuant to the terms of the Business Combination Agreement: (A) if, on or any time prior to the fifth anniversary of the date of the closing of the Business Combination, the closing sale price per share of Class A Common Stock equals or exceeds $15.00 per share for 20 trading days of any 30 consecutive trading day period following the closing of the Business Combination, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting; and (B) if, on or any time prior to the fifth anniversary of the date of the closing of the Business Combination, the closing sale price per share of Class A Common Stock equals or exceeds $18.00 per share for 20 trading days of any 30 consecutive trading day period following the closing of the Business Combination, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting.

The beneficial ownership of our Common Stock, which includes the Earnout Shares, is based on 24,446,284 shares of our Class A Common Stock, which number excludes shares issuable upon exercise of outstanding warrants, 26,663,575 shares of our Class B Common Stock issued and outstanding as of September 15, 2022.

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The beneficial ownership information below excludes the Earnout Shares, other than in the calculation of the percentage of Common Stock beneficially owned.

    

Number of Shares

    

Number of Shares

    

Percentage

 

of Class A

of Class B

Of Common Stock

Name and Address of Beneficial Owners(1)

Common Stock

Common Stock(2)

Beneficially Owned

5% Holders

  

  

  

 

BCP GP Investors, LLC(3)(4)

 

12,673,939

 

13,939,005

 

52.07

%

QualTek Management HoldCo, LLC(5)

 

 

4,825,893

 

9.44

%

Victoria Partners L.P.

 

 

2,656,250

 

5.20

%

Named Executive Officers and Directors

 

  

 

  

 

  

Christopher S. Hisey(5)(6)

 

96,250

 

4,825,893

 

9.63

%

Elizabeth Downey(7)

 

40,500

 

 

*

Michael B. Williams(8)

 

31,250

 

 

*

Adam Spittler(9)

 

56,500

 

 

*

Andrew Weinberg(3)(4)

 

12,673,939

 

13,939,005

 

52.07

%

Matthew Allard(3)

 

 

 

Sam Chawla

 

91,194

 

 

*

Robert Bulloch(3)

 

 

 

Maha Eltobgy(3)

 

 

 

Jigisha Desai

 

 

 

Daniel Lafond

 

10,000

 

 

*

Sam Totusek

All Named Executive Officers and Directors of the Company as a group (7 individuals)

 

12,999,633

 

18,764,898

 

62.12

%

*

Less than 1%.

(1)Unless otherwise noted, the business address of each of the following entities or individuals is c/o QualTek, 475 Sentry Parkway E, Suite 200 Blue Bell, PA 19422.
(2)In the Business Combination, existing equityholders of QualTek HoldCo were issued new HoldCo common units and an equal number of shares of Class B Common Stock. A holder of a HoldCo common unit may convert one HoldCo common unit and one share of Class B Common Stock into one share of Class A Common Stock.
(3)The business address for this person is c/o Brightstar, 650 Fifth Avenue, 29th Floor, New York, NY 10019.
(4)Represents (1) 3,642,750 shares of Class A Common Stock held of record by BCP AIV Investor Holdings-3, L.P. (“BCP AIV-3”), (2) 4,184,290 shares of Class A Common Stock held of record by BCP Strategic AIV Investor Holdings-2, L.P. (“BCP AIV-2”), (3) 4,096,901 shares of Class A Common Stock held of record by BCP QualTek Investor Holdings, L.P. (“BCP L.P.”), (4) 11,780,782 shares of Class B Common Stock held of record by BCP QualTek, LLC and (5) 2,158,223 shares of Class B Common Stock held of record by BCP QualTek II, LLC. Brightstar Associates is the general partner of each of BCP AIV-3, BCP AIV-2 and BCP L.P., and each of BCP QualTek, LLC and BCP QualTek II, LLC is controlled by Brightstar Associates, its managing member. Brightstar GP is the general partner of Brightstar Associates. Brightstar GP is controlled by its sole managing member, Andrew Weinberg. Each of the foregoing disclaims beneficial ownership of the securities held directly or indirectly by such entities.
(5)Represents 4,825,893 shares of Class B Common Stock held of record by QualTek Management HoldCo, LLC (“QualTek Management”). Christopher S. Hisey is the managing member of QualTek Management and as such could be deemed to have voting and dispositive power with respect to the shares held by QualTek Management. Mr. Hisey disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The table does not reflect 1,157,803 shares of Class B Common Stock held of record by QualTek Management that constitute Earnout Shares.
(6)Includes options to purchase 81,250 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Hisey has an indirect beneficial interest in 798,771 HoldCo common units and 798,771 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Hisey are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(7)Includes options to purchase 37,500 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Ms. Downey has an indirect beneficial interest in 166,693 HoldCo common units and 166,693 shares of Class B Common Stock. Pursuant to the

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Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Ms. Downey are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(8)Includes options to purchase 31,250 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Williams has an indirect beneficial interest in 82,013 HoldCo common units and 82,013 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Williams are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(9)Includes options to purchase 43,750 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Spittler has an indirect beneficial interest in 107,947 HoldCo common units and 107,947 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Spittler are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Relationships and Related Person Transactions — Founder Shares

In February 2019, the CR Financial Holdings, Inc. (the “Sponsor”), an entity affiliated with Roth, purchased an aggregate of 100 shares from us for an aggregate purchase price of $25,000. On May 26, 2020, we effected a dividend of 28,750 shares for each share outstanding resulting in there being an aggregate of 2,875,000 shares outstanding. On May 29, 2020, Craig-Hallum Capital Group LLC and certain of our directors, officers and affiliates of our management team purchased from the Sponsor an aggregate of 2,059,019 shares for an aggregate purchase price of $17,904.51. On January 19, 2021 and February 3, 2021, certain affiliates of our management team purchased from the Sponsor and Craig-Hallum an aggregate of 239,583 shares for an aggregate purchase price of $2,083.33. On February 9, 2021, certain of initial stockholders of ROCR sold an aggregate of 417,080 shares back to us, which shares were cancelled, and Craig-Hallum and certain of our directors and affiliates of our management team purchased from us an aggregate of 417,080 shares, in each case, for an aggregate purchase price of $2,417.86. That same date, Craig-Hallum purchased from the Sponsor 39,931 shares for a purchase price of $231.48. Also on February 9, 2021, we effected a dividend of 0.50 share for each share outstanding, which dividend was rescinded and cancelled on February 24, 2021. As of the date hereof, there are an aggregate of 2,875,000 outstanding shares of our Common Stock held by the Sponsor and its affiliates (the “Founder Shares”).

Private Placement

Simultaneously with the closing of the ROCR IPO, we consummated the sale of 408,000 units (the “Private Units”) at a price of $10.00 per Private Unit in a private placement to its stockholders, generating gross proceeds of $4,080,000. These purchases took place on a private placement basis simultaneously with the consummation of the IPO. The Private Units are identical to the units sold to the public except that the (i) warrants included in the Private Units are non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees, and (ii) the Private Units may be transferred following the closing of the Business Combination. Our stockholders approved the issuance of the Private Units and underlying securities upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation of our Business Combination.

Promissory Note — Related Party

On December 15, 2020, we issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $200,000. The Promissory Note was non-interest bearing and was paid in-full in connection with the IPO.

On November 3, 2021, we issued an unsecured promissory note in the aggregate principal amount of $500,000 to certain payees including certain of our directors and officers, the Sponsor, Craig-Hallum, and affiliates of our management team. The note does not bear interest and matured upon closing of the Business Combination. The note is not convertible into ROCR securities.

Registration Rights

The holders of our Founder Shares, as well as the holders of the Private Units (and all underlying securities), are entitled to registration rights entered into on March 5, 2021. The holders of a majority of these securities are entitled to make up to two demands that we register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units can elect to exercise these registration rights at any time. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements. Notwithstanding the foregoing, they may not exercise demand or piggyback rights after five (5) and seven (7) years, respectively, from the effective date of this offering and may not exercise demand rights on more than one occasion in respect of all registrable securities.

Related Party Loans

In order to meet our working capital needs our initial stockholders, officers and directors and their respective affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes were paid upon consummation of the Business Combination, without interest.

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On November 3, 2021, we issued an unsecured promissory note in the aggregate principal amount of $500,000 to certain payees including certain of our directors and officers, the Sponsor, Craig-Hallum, and affiliates of our management team. The note does not bear interest and matured upon closing of the Business Combination. The note was repaid upon the closing of the Business Combination.

We have reimbursed our Initial Stockholders, officers and directors for reasonable out-of-pocket business expenses incurred by them in connection with certain activities on our behalf, including identifying and investigating the Business Combination. There is no limit on the amount of out-of-pocket expenses reimbursable by us. The audit committee reviews and approves all reimbursements and payments made to any initial stockholder or member of our management team, or our or their respective affiliates, and any reimbursements and payments made to members of our audit committee will be reviewed and approved by our Board of Directors, with any interested director abstaining from such review and approval.

No compensation or fees of any kind, including finder’s fees, consulting fees or other similar compensation, will be paid to any of our Initial Stockholders, officers or directors who owned our shares of common stock prior to the IPO, or to any of their respective affiliates, prior to or with respect to the Business Combination except as described in this prospectus.

We entered into indemnity agreements with each of our officers and directors. These agreements require us to indemnify these individuals to the fullest extent permitted under Delaware law and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions, including the payment of any compensation, will require prior approval by a majority of our disinterested independent directors (to the extent we have any) or the members of our Board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our disinterested independent directors (or, if there are no independent directors, our disinterested directors) determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties.

Related Party Policy

Our Code of Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except under guidelines approved by the Board of Directors (or the audit committee). Related-party transactions are defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) we or any of our subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner of our common stock, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives personal benefits as a result of his or her position.

Our audit committee, pursuant to its written charter, is responsible for reviewing and approving related-party transactions to the extent we enter into such transactions. All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions will require prior approval by our audit committee and a majority of our disinterested independent directors, or the members of our Board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our audit committee and a majority of our disinterested independent directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties. Additionally, we require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions. These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.

Advisory Services Agreement

On July 18, 2018, QualTek HoldCo entered into an advisory services agreement (the “Advisory Services Agreement”) with Brightstar Advisors, L.P., an affiliate of Brightstar Capital Partners, its majority member. The Advisory Services Agreement requires

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quarterly advisory fees of $125,000 paid at the beginning of each quarter. QualTek HoldCo incurred $126,000 and $622,000 in advisory fees for the six months ended July 2, 2022 and July 3, 2021, respectively. Effective as of the date of the Business Combination, the advisory fees were suspended.

Investor Rights Agreement

The Company, certain Sellers as set forth therein, the BCP QualTek, the Sponsors, Sponsor Representative, and certain Other Holders have entered into an Investor Rights Agreement, pursuant to which the Registration Rights Agreement, dated as of March 2, 2021, between the Other Holders and the Company was terminated and whereby the Company agreed to grant to the Holders (as defined therein), which includes certain equityholders of QualTek HoldCo as well as the Sponsors, certain registration rights, including customary piggyback registration rights and demand registration rights immediately after the closing of the Business Combination, which are subject to customary terms and conditions, including with respect to cooperation and reduction of underwritten shelf takedown provisions (subject to lock-up restrictions for six months after the closing of the Business Combination). Additionally, the Investor Rights Agreement sets forth certain corporate governance standards relating to the Company.

Founder Shares Forfeiture and Lock-Up Agreement

Contemporaneously with the execution of the Business Combination Agreement, the Company entered into a Founder Shares Forfeiture and Lock-Up Agreement with QualTek HoldCo and each of the holders of any shares of Preferred StockROCR common stock issued prior to the IPO (the “Founder Shares Agreement”), pursuant to which such holders agreed to (i) forfeit up to an aggregate amount of 575,000 shares of their ROCR common stock for no consideration, on a pro rata basis, based on the level of the amount of funds remaining in the Trust Account following all redemptions by public stockholders prior to the closing of the Business Combination, and (ii) lock up an aggregate amount of up to 575,000 shares of ROCR that ROCR may issuecommon stock for no consideration, on a pro rata basis, similarly based on the level of the amount of funds remaining in the future.Trust Account following all redemptions by public stockholders prior to the closing of the Business Combination (the “lock-up shares”). The lock-up shares will be released on the date on which the closing price of the Class A Common Stock on Nasdaq equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any consecutive 30-trading day period commencing after the closing of the Business Combination (the “lock-up release”). If the requirements for the lock-up release are not satisfied within five (5) years following the closing of the Business Combination, the holders have agreed to forfeit the lock-up shares for no consideration.

On January 14, 2022, in connection with the Convertible Note Investment, the Company, QualTek HoldCo, and the holders mutually agreed to terminate the Founder Shares Agreement, such that there will be no forfeiture or lock up of any of the shares of ROCR common stock pursuant to the terms of the Founder Shares Agreement, and all rights, benefits and obligations thereunder terminated effective as of the that date. Accordingly, the Initial Stockholders will continue to hold all 2,875,000 Founder Shares. Pursuant to the Investor Rights Agreement, the Founder Shares will be locked up for a period of six months following the closing of the Business Combination compared to the up to five year lockup period under the Founder Shares Agreement. The lock-up under the Investor Rights Agreement does not contemplate a potential forfeiture of the shares at the expiration of the lock-up period, as was set forth in the Founder Shares Agreement for up to 575,000 shares prior to its termination. Following the termination of the Founder Shares Agreement, the Initial Stockholders are no longer at risk of forfeiting up to an aggregate of 1,150,000 Founder Shares, and the benefit to the Initial Stockholders equates to up to $11,408,000 based on the closing price of ROCR common stock on February 1, 2022 of $9.97 per share. Following the lock-up, it is anticipated that the Initial Stockholders will be permitted to sell such shares pursuant to a resale registration statement. The sale of the Founder Shares will cause immediate dilution to existing holders of Class A Common Stock upon such sale.

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PIPE Subscription Agreements and PIPE Registration Rights Agreement

In connection with the Business Combination, ROCR obtained commitments from certain accredited investors (each a “Subscriber”), including QualTek HoldCo, Roth, Craig-Hallum, and certain officers and directors of ROCR, to purchase shares of Class A Common Stock issued in connection with the closing of the Business Combination (the “PIPE Shares”), for an aggregate cash amount of $66.1 million initially at a purchase price of $10.00 per share, in a private placement (the “PIPE Investment”) pursuant to certain subscription agreements, by and between each Subscriber and ROCR (collectively, the “Subscription Agreements”). On January 14, 2022, the terms of the PIPE Investment were amended to reduce the purchase price per share from $10.00 to $8.00 per share, and to allow Subscribers to invest in the Convertible Note Investment in lieu of all or a portion of their PIPE Investment. A total of approximately $24.7 million of the PIPE Investment elected to invest in the Convertible Note Investment in lieu of the PIPE Investment. On that same date, QualTek HoldCo, the Sponsor, Craig-Hallum, Roth, directors and officers of the Company and affiliates of the Company’s management waived their rights to the reduced per share price and eligibility to participate in the Convertible Note Investment. Accordingly these Subscribers paid $10.00 per share pursuant to the terms of the Subscription Agreements, which amount in the aggregate represents $20,015,000 or 2,001,500 shares. Following that certain amendment to the PIPE Investment, dated as of January 14, 2022, the aggregate number of shares issued pursuant to the Subscription Agreements was 4,676,500 shares of Class A Common Stock for gross proceeds of $41.4 million (or 7,145,000 shares of Class A Common Stock for gross proceeds of $66.1 million including the impact from Subscribers who elected to participate in the Convertible Note Investment in lieu of the PIPE Investment). Certain offering-related expenses were payable by the Company, including customary fees payable to the placement agents, Roth and Craig-Hallum, aggregating $5,150,000. The purpose of the sale of the PIPE Shares was to raise additional capital for use in connection with the Business Combination and to meet the minimum cash requirements provided in the Business Combination Agreement.

The Company has also entered into a registration rights agreement (the “PIPE Registration Rights Agreement”) with each Subscriber. Pursuant to the PIPE Registration Rights Agreement, the Company filed (at the Company’s sole cost and expense) the PIPE Resale Registration Statement registering the resale of the shares of Class A Common Stock purchased in the private placement PIPE Investment with the SEC that went effective on February 14, 2022.

Indemnification Agreements

The Certificate of Incorporation contains provisions limiting the liability of the members of the Board, and the Amended and Restated Bylaws provide that we will indemnify each of the members of our Board and officers and certain other persons who provide services to us to the fullest extent permitted under Delaware law.

We entered into indemnification agreements with each of our directors and executive officers and certain other key employees. The indemnification agreements each provide that we will indemnify each of our directors and executive officers and such other key employees against any and all expenses incurred by such director, executive officer or other key employee because of his or her status as one of our directors, executive officers or other key employees, to the fullest extent permitted by Delaware law, the Certificate of Incorporation and the Amended and Restated Bylaws. In addition, the indemnification agreements each provide that, to the fullest extent permitted by Delaware law, we will advance all expenses incurred by our directors, executive officers and other key employees in connection with a legal proceeding involving his or her status as a director, executive officer or key employee.

Tax Receivable Agreement

In connection with the closing of the Business Combination, we, the TRA Holders and the TRA Holder Representative entered into the Tax Receivable Agreement.

Pursuant to the Tax Receivable Agreement, we are required to pay the TRA Holders 85% of the amount of savings, if any, in U.S. federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that we (and applicable consolidated, unitary, or combined Subsidiaries thereof, if any) realize, or is deemed to realize, as a result of certain tax attributes, including:

existing tax basis in certain assets of QualTek and certain of its direct or indirect Subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service, attributable to QualTek Common Units acquired by us at the closing of the Business Combination or from a TRA Holder (including QualTek Common Units held by the Blocker, which is acquired by us in a Reorganization Transaction (as defined in the Tax Receivable Agreement));

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tax basis adjustments resulting from the acquisition of QualTek Common Units by us at the closing of the Business Combination and taxable exchanges of QualTek Common Units (including any such adjustments resulting from certain payments made by us under the Tax Receivable Agreement) acquired by us from a TRA Holder pursuant to the terms of the Third Amended and Restated LLCA;
tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement; and
certain tax attributes of the Blocker, which holds QualTek Common Units that are acquired directly or indirectly by us pursuant to a Reorganization Transaction (each of the foregoing, collectively, the “Tax Attributes”).

Under the Tax Receivable Agreement, the Tax Group generally is treated as realizing a tax benefit from the use of a Tax Attribute on a “with and without” basis, thereby generally treating the Tax Attributes as the last item used, subject to several exceptions. Payments under the Tax Receivable Agreement generally are based on the tax reporting positions that we determine (with the amount of subject payments determined in consultation with an advisory firm and subject to the TRA Holder Representative’s review and consent), and the IRS or another taxing authority may challenge all or any part of position taken with respect to Tax Attributes or the utilization thereof, and a court may sustain such a challenge. In the event that any tax benefits initially claimed by the Tax Group are disallowed, the TRA Holders will not be required to reimburse us for any excess payments that may previously have been made pursuant to the Tax Receivable Agreement, for example, due to adjustments resulting from examinations by taxing authorities. Rather, any excess payments made to such TRA Holders will be applied against and reduce any future cash payments otherwise required to be made by us under the Tax Receivable Agreement, if any, after the determination of such excess. As a result, in certain circumstances we could be required to make payments under the Tax Receivable Agreement in excess of the Tax Group’s actual savings in respect of the Tax Attributes.

The Tax Receivable Agreement provides that, in the event that (i) we exercise our early termination rights under the Tax Receivable Agreement, (ii) certain changes of control of QualTek occur (as described in the Third Amended and Restated LLCA), (iii) QualTek in certain circumstances, fails to make a payment required to be made pursuant to the Tax Receivable Agreement by its final payment date, which non-payment continues for 60 days following such final payment date or (iv) QualTek materially breaches (or is deemed to materially breach) any of its material obligations under the Tax Receivable Agreement other than as described in the foregoing clause (iii) and, in the case of clauses (iii) and (iv), unless certain liquidity related or restrictive covenant related exceptions apply, QualTek’s obligations under the Tax Receivable Agreement will accelerate (if the TRA Holder Representative so elects in the case of clauses (ii)-(iv)) and QualTek will be required to make a lump-sum cash payment to all the TRA Holders equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement, which lump-sum payment would be based on certain assumptions, including those relating to there being sufficient future taxable income of the Tax Group to fully utilize the Tax Attributes over certain specified time periods and that all QualTek Common Units (including QualTek Common Units held by Blocker) that had not yet been exchanged for Common Stock or cash are deemed exchanged for cash. The lump-sum payment could be material and could materially exceed any actual tax benefits that the TRA Holder realizes subsequent to such payment.

As a result of the foregoing, in some circumstances (i) QualTek could be required to make payments under the Tax Receivable Agreement that are greater than or less than the actual tax savings that the Tax Group realizes in respect of the Tax Attributes and (ii) it is possible that QualTek may be required to make payments years in advance of the actual realization of tax benefits (if any, and may never actually realize the benefits paid for) in respect of the Tax Attributes (including if any Early Termination Events occur).

QualTek is required to notify and keep the TRA Holder Representative reasonably informed regarding tax audits or other proceedings the outcome of which is reasonably expected to reduce or defer payments to any TRA Holder under the Tax Receivable Agreement and the TRA Holder Representative and any affected TRA Holder has the right to (i) discuss with QualTek, and provide input and comment to QualTek regarding any portion of any such tax audit or proceeding and (ii) participate in, at the affected TRA Holders’ and TRA Holder Representative’s expense, any such portion of any such tax audit or other tax proceeding to the extent it relates to issues the resolution of which would reasonably be expected to reduce or defer payments to any TRA Holder under the Tax Receivable Agreement. QualTek is not permitted to settle or fail to contest any issue pertaining to income taxes that is reasonably expected to materially and adversely affect the TRA Holders’ rights and obligations under the Tax Receivable Agreement without the consent of the TRA Holder Representative (which is not to be unreasonably withheld or delayed).

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Under the Tax Receivable Agreement, QualTek is required to provide the TRA Holder Representative with a schedule showing the calculation of payments that are due under the Tax Receivable Agreement with respect to each taxable year. This calculation will be based upon the advice of our tax advisors and an advisory firm. Payments under the Tax Receivable Agreement generally will be required to be made to the TRA Holders a short period of time after this schedule becomes final pursuant to the procedures set forth in the Tax Receivable Agreement, although interest on such payments will begin to accrue at from the due date (without extensions) of the U.S. federal income tax return of QualTek. Any late payments that may be made under the Tax Receivable Agreement will continue to accrue interest (generally at a default rate) until such payments are made.

Class B Common Stock

Upon completion of the Business Combination, we expect that there will be 29,538,575 shares of Class B Common Stock outstanding, assuming that (1) the Earnout Shares are excluded unless and until such shares become earned in accordance with the Business Combination Agreement, and (2) there are no other issuances of equity interests of ROCR prior to or in connection with the Closing. All shares of Class B Common Stock are fully paid and non-assessable.

Voting Rights

Each holder of Class B Common Stock is entitled to one vote for each share of Class B Common Stock held by such holder on all matters on which stockholders generally are entitled to vote. Holders of Class B Common Stock will vote together with holders of Class A Common Stock as a single class on all matters presented to ROCR’sthe Company’s stockholders for their vote or approval. Except as described below, all matters to be voted on by stockholders must be approved by a majority of the votes entitled to be cast by all stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy, voting together as a single class. Notwithstanding the foregoing, to the fullest extent permitted by law, holders of Class B Common Stock, as such, will have no voting power with respect to, and will not be entitled to vote on, any amendment to the CharterCertificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such securities, to vote thereon pursuant to the Proposed Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.

Pursuant to the CharterCertificate of Incorporation (i) the vote of holders of Class B Common Stock will not be required to amend, alter, change, add to or repeal the bylawsAmended and Restated Bylaws so long as any such amendment, alteration, change, addition or repeal is consistent with Delaware law or the CharterCertificate of Incorporation and, in each case, subject to the rights of the parties to the Investor Rights Agreement and (ii) a vote of at least 80% of the total voting power of ROCR’sthe Company’s stock entitled to vote generally in the election of directors, voting together as a single class, is required to alter, amend, add to or repeal any of the provisions in Article X (Competition and Corporate Opportunities) of the Charter.Certificate of Incorporation.

Dividend Rights. Dividends

The holders of the Class B Common Stock will not participate in any dividends declared by the Board.

Rights upon Liquidation.

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the ROCR’sCompany’s affairs, the holders of Class B Common Stock are not entitled to receive any assets of ROCR.the Company.

Other Rights. and Preferences

The holders of shares of Class B Common Stock do not have preemptive, subscription, redemption or conversion rights. There will be no redemption or sinking fund provisions applicable to the Class B Common Stock.

Issuance and Retirement of Class B Common Stock. Stock

In the event that any outstanding share of Class B Common Stock ceases to be held directly or indirectly by a holder of the QualTek Common Units, such share will automatically be transferred to ROCRthe Company for no consideration and thereupon will be retired. ROCR willThe Company does not plan to issue additional shares of Class B Common Stock after the adoption of the Charter other than in connection with the valid issuance or transfer of a QualTek Common Unit in accordance with the governing documents of ROCR.

Preferred Stock

No shares of Preferred Stock will be issued or outstanding immediately after the completion of the Business Combination. The Charter will authorize the Board to establish one or more series of Preferred Stock. Unless required by law or any stock exchange, the authorized shares of Preferred Stock will be available for issuance without further action by the holders of the common stock of ROCR. The Board has the discretion to determine the powers, preferences and relative, participating, optional and other special rights,Company.

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including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferencesWarrants

Each whole Warrant entitles the registered holder to purchase one share of each series of Preferred Stock.

The issuance of Preferred Stock may have the effect of delaying, deferring or preventing a change in control of ROCR without further action by the stockholders. Additionally, the issuance of Preferred Stock may adversely affect the holders of the common stock of ROCR by restricting dividends on the Class Aour Common Stock diluting the voting power of the Class B Common Stock or subordinating the liquidation rights of the Class A Common Stock. Asat a result of these or other factors, the issuance of Preferred Stock could have an adverse impact on the market price of the Class A Common Stock. Currently, we have no plans$11.50 per share, subject to issueadjustment as discussed below, at any Preferred Stock.

Dividends

The payment of future dividends on the shares of Class A Common Stock will depend on the financial condition of ROCRtime commencing 30 days after the completion of our initial business combination. Pursuant to the Business Combination andwarrant agreement, a Warrant holder may exercise its Warrants only for a whole number of shares of Common Stock. This means that only a whole Warrant may be exercised at any given time by a Warrant holder. However, no Warrants issued pursuant to the ROCR IPO (the “Public Warrants”) will be subjectexercisable for cash unless we have an effective and current registration statement covering the shares of Common Stock issuable upon exercise of the Warrants and a current prospectus relating to such shares of Common Stock. Notwithstanding the foregoing, if the registration statement is not available and a new registration statement covering the shares of Common Stock issuable upon exercise of the Public Warrants is not effective within 120 days from the closing of our initial business combination, Warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. The Warrants will expire on February 14, 2027 at 5:00 p.m., New York City time.

The Company may call the outstanding Warrants (excluding the Warrants underlying the Private Units (the “Private Warrants”)) for redemption, in whole and not in part, at a price of $0.01 per Warrant: (i) at any time after the Warrants become exercisable, (ii) upon not less than 30 days’ prior written notice of redemption to each Warrant holder, (iii) if, and only if, the reported last sale price of the shares of Common Stock equals or exceeds $18.00 per share, for any 20 trading days within a 30-day trading period commencing after the Warrants become exercisable and ending on the third business day prior to the discretionnotice of redemption to Warrant holders, and (iv) if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying such Warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

The right to exercise will be forfeited unless the Warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of a Warrant will have no further rights except to receive the redemption price for such holder’s Warrant upon surrender of such Warrant.

The redemption criteria for our Warrants have been established at a price which is intended to provide Warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the Warrant exercise price so that if the share price declines as a result of our redemption call, the redemption will not cause the share price to drop below the exercise price of the Board. There canwarrants.

If we call the Warrants for redemption as described above, our management will have the option to require all holders that wish to exercise Warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the difference between the exercise price of the Warrants and the “fair market value” by (y) the fair market value. The “fair market value” for this purpose shall mean the average reported last sale price of our Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of Warrants. Whether we will exercise our option to require all holders to exercise their Warrants on a “cashless basis” will depend on a variety of factors including the price of shares of our Common Stock at the time the Warrants are called for redemption, our cash needs at such time and concerns regarding dilutive share issuances.

The Warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as Warrant agent, and us. The warrant agreement provides that the terms of the Warrants may be no guaranteeamended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval, by written consent or vote, of the holders of a majority of the then outstanding Warrants in order to make any change that cash dividendsadversely affects the interests of the registered holders.

The exercise price and number of shares of Common Stock issuable on exercise of the Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, the Warrants will not be adjusted for issuances of shares of Common Stock at a price below their respective exercise prices.

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The Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to us, for the number of Warrants being exercised. The Warrant holders do not have the rights or privileges of holders of shares of Common Stock and any voting rights until they exercise their Warrants and receive shares of Common Stock. After the issuance of shares of Common Stock upon exercise of the Warrants, each holder will be declared. The abilityentitled to one vote for each share held of ROCRrecord on all matters to declare dividends may be limitedvoted on by stockholders.

Except as described above, no Public Warrants will be exercisable for cash and we will not be obligated to issue shares of Common Stock unless at the terms and conditionstime a holder seeks to exercise such Warrant, a prospectus relating to the shares of other financing and other agreements entered into by ROCR or any of its subsidiaries from time to time.

Upon completionCommon Stock issuable upon exercise of the Business Combination, ROCR willwarrants is current and the shares of Common Stock have been registered or qualified or deemed to be a holding company with no material assets other than ownershipexempt under the securities laws of QualTek Common Units.

the state of residence of the holder of the Warrants. Under the terms of the Third Amendedwarrant agreement, we have agreed to use our best efforts to meet these conditions and Restated Company LLCA, QualTek is obligated to make pro rata tax distributions to holders of QualTek Common Units calculated at certain assumed rates.. In addition, pursuantmaintain a current prospectus relating to the Tax Receivable Agreement, ROCRshares of Common Stock issuable upon exercise of the Warrants until the expiration of the Warrants. However, we cannot assure you that we will generallybe able to do so and, if we do not maintain a current prospectus relating to the shares of Common Stock issuable upon exercise of the Warrants, holders will be unable to exercise their Warrants, and we will not be required to pay the TRA Holders 85% of the amount of savings, if any, in U.S. federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that ROCR (and applicable consolidated, unitary, or combined Subsidiaries thereof, if any) realizes, or is deemed to realize, as a result of certain tax attributes. ROCR anticipates that the distributions received from QualTek may, in certain periods, exceed its actual tax liabilities and obligations to make payments under the Tax Receivable Agreement. The board, in its sole discretion, will make any determination from time to time with respect to the use ofsettle any such excess cash so accumulated, which may include, among other uses, to pay dividends on Class A Common Stock. ROCR will have no obligation to distribute such cash (or other available cash other than any declared dividend) to its stockholders. SeeWarrant exercise. If the risk factor entitled “Risk Factors — Risks Related to Tax — Our only principal asset following the Business Combination will be our interest in QualTek, and accordingly we will depend on distributions from QualTek to pay dividends, taxes, other expenses, and make any payments required to be made under the Tax Receivable Agreement.”

Investor Rights Agreement

At the Closing, ROCR (and subsequent to the Business Combination, the Combined Company), certain Sellers as set forth therein, the Equity Representative, the Sponsors, Sponsor Representative, and certain Other Holders (all as defined therein) will enter into an Investor Rights Agreement, pursuant to which the Registration Rights Agreement, dated as of March 2, 2021, between the Other Holders (as defined therein) and ROCR will be terminated and whereby the Buyer will agree to grant to the Holders (as defined therein), which includes certain equityholders of QualTek as well as the Sponsors, certain registration rights, including customary piggyback registration rights and demand registration rights immediately after the Closing, which are subject to customary terms and conditions, including with respect to cooperation and reduction of underwritten shelf takedown provisions (subject to lock-up restrictions for six months after the Closing Date). Additionally, the Investor Rights Agreement will set forth certain corporate governance standardsprospectus relating to the Combined Company.shares of Common Stock issuable upon the exercise of the Warrants is not current or if the Common Stock is not qualified or exempt from qualification in the jurisdictions in which the holders of the Warrants reside, we will not be required to net cash settle or cash settle the Warrant exercise, the Warrants may have no value, the market for the Warrants may be limited and the warrants may expire worthless.

Certain Anti-Takeover ProvisionsWarrant holders may elect to be subject to a restriction on the exercise of Delaware Law,their Warrants such that an electing Warrant holder would not be able to exercise their Warrants to the Charter and Amended and Restated Bylawsextent that, after giving effect to such exercise, such holder would beneficially own in excess of 9.9% of the shares of Common Stock outstanding.

No fractional shares will be issued upon exercise of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of Common Stock to be issued to the Warrant holder.

The Charter,Company has agreed that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. This provision applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district courts of the United States of America are the sole and exclusive forum.

Preferred Stock

We have no Preferred Stock outstanding.

Anti-Takeover Provisions

The Company’s Certificate of Incorporation and Amended and Restated Bylaws, the Investor Rights Agreement and the DGCL contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our Board. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the members of our Board or taking other corporate actions, including effecting changes in our management. For instance, our Board will be empowered to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death, or removal of a director in certain circumstances; and the Company’s advance notice provisions in the Amended and Restated Bylaws require that stockholders must comply with certain procedures in order to nominate candidates to our Board or to propose matters to be acted upon at a stockholders’ meeting.

The Company’s authorized but unissued Common Stock and Preferred Stock is available for future issuances without stockholder approval and may be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved Common Stock and Preferred Stock could render more difficult or discourage an attempt to obtain control of the Company by means of a proxy contest, tender offer, merger or otherwise.

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AuthorizedRegistration Rights

We are subject to an Investor Rights Agreement, dated February 14, 2022 with certain Sellers, BCP QualTek, the Sponsors, Sponsor Representative, and certain Other Holders (all as defined therein), which obligates us to grant to the Holders (as defined therein) certain registration rights, including customary piggyback registration rights and demand registration rights immediately after the closing of the Business Combination, which are subject to customary terms and conditions, including with respect to cooperation and reduction of underwritten shelf takedown provisions (subject to lock-up restrictions for six months after the closing date of the Business Combination). Additionally, the Investor Rights agreement sets forth certain corporate governance rights relating to the Company.

Listing

Our Class A Common Stock and Warrants are listed on the Nasdaq Capital Market under the symbols “QTEK” And “QTEKW,” respectively.

Transfer Agent and Warrant Agent

The transfer agent for our shares of common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company, 1 State Street, 30th Floor, New York, New York 10004.

2027 Convertible Notes

The 2027 Convertible Notes are governed by the Indenture. The 2027 Convertible Notes bear interest as described immediately below, are payable quarterly, are convertible into shares of Class A Common Stock at an initial conversion price (subject to adjustment as described in the Indenture) of the lowest of (i) $10.00; (ii) 115% of the arithmetic average of the Daily VWAPs for the 10-Trading Day period commencing on the first Trading Day after the public release of the Company’s first quarterly earnings announcement following the Issue Date; (iii) 115% of the arithmetic average of the Daily VWAPs for the 10-Trading Day period commencing on the first Trading Day after the public release of the Company’s second quarterly earnings announcement following the Issue Date; (iv) 115% of the arithmetic average of the Daily VWAPs for the 10-Trading Day period commencing on the first Trading Day immediately following the first anniversary of the date of the Indenture and (v) 115% of the arithmetic average of the Daily VWAPs for the 10-Trading Day period commencing on the first Trading Day after the closing date of the applicable Conversion Reset Offering by the Company, and shall mature on February 15, 2027. The 2027 Convertible Notes may not be redeemed or repaid by the Company prior to maturity. Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Indenture.

Maturity and Interest

The 2027 Convertible Notes will mature on February 15, 2027, unless earlier converted or repurchased.

The 2027 Convertible Notes provide for an interest rate that is set quarterly based on gross leverage, with a minimum interest rate of 9.50% per annum and up to a maximum of 11.75% per annum as follows:

Applicable Interest Rate

Total Leverage Ratio (as defined in the Indenture)

(as defined in the Indenture)

Less than 4.5x

9.50

%

4.5x or greater but less than 5.0x

10.00

%

5.0x or greater but less than 5.25x

10.75

%

5.25x or greater

11.75

%

Interest accrues from the issue date or from the most recent date on which interest has been paid. Interest is payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, commencing on June 15, 2022. Accrued interest on the 2027 Notes shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.

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Ranking

The 2027 Convertible Notes are general senior obligations of the Company and:

rank pari passu in right of payment with all existing and future senior indebtedness of the Company;
are effectively senior to all of the Company’s subordinated indebtedness; and
are guaranteed on a senior basis by the Guarantors (as defined below).

The Guarantees (as defined below) are general senior obligations of each Guarantor and:

rank pari passu in right of payment with all existing and future senior indebtedness of such Guarantor; and
are effectively senior to all of such Guarantor’s subordinated indebtedness.

Certain Covenants

The 2027 Convertible Notes are subject to various covenants that restrict the Company’s and its Subsidiaries’ ability to, among other things:

make restricted payments;
incur or guarantee indebtedness or issue disqualified stock;
create, incur or assume any Lien;
make any payment to, or sell, lease, transfer or otherwise dispose of properties or assets or enter into transactions with any Affiliate of the Company;
sell or transfer interest in its Material Intellectual Property; or
merge or consolidate with other companies or transfer all or substantially all of the Company’s assets.

Limitation on Certain Restricted Payments

The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly:

(i)declare or pay any dividend or make any payment or distribution (x) on account of the Company’s or any of its Restricted Subsidiaries’ Capital Stock (including any payment made in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or (y) to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Capital Stock in their capacity as holders, other than (A) dividends, payments or distributions by the Company payable solely in Capital Stock (other than Disqualified Stock) of the Company or (B) dividends, payments or distributions by a Restricted Subsidiary to the Company or another Restricted Subsidiary (and in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Capital Stock in such class or series of securities);
(ii)purchase, redeem, defease or otherwise acquire or retire for value (including any payment made in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) any Capital Stock of the Company held by Persons other than the Company or any Restricted Subsidiary;
(iii)purchase, repay, prepay, repurchase, redeem, defease, acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Indebtedness, other than (A) Indebtedness permitted under clause (ii) of Section 4.09(b) of the Indenture or (B) the purchase, repurchase or other acquisition of Subordinated

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Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or
(iv)make any Restricted Investment;

(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”).

Notwithstanding anything to the contrary contain herein, so long as no Default shall have occurred and be continuing or would occur as a consequence thereof, the provisions of this covenant will not prohibit any of the following:

(i)the payment of any dividend or distribution or consummation of any redemption within sixty (60) days after the date of declaration thereof or the giving of a redemption notice related thereto, if at the date of declaration or notice such payment would have complied with any provision of this covenant; provided that the making of such payment will reduce capacity for Restricted Payments pursuant such provisions when so made;
(ii)a Restricted Payment to pay for the prepayment, purchase, repurchase, redemption, defeasance, discharge, retirement or other acquisition of Capital Stock of the Company held by any future, present or former employee, director, officer, member of management, operating partner, manager, contractor, service provider, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries pursuant to any management equity plan, stock option plan, phantom equity plan or any other management, employee benefit or other compensatory plan or agreement (and any successor plans or arrangements thereto), employment, termination or severance agreement, or any stock subscription or equityholder agreement (including, for the avoidance of doubt, any principal and interest payable on any Indebtedness issued by the Company in connection with such prepayment, purchase, repurchase, redemption, defeasance, discharge, retirement or other acquisition), including any Capital Stock rolled over, accelerated or paid out by or to any employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries in connection with any transaction; providedhowever, that the aggregate Restricted Payments made under this clause do not exceed $5,500,000 in any fiscal year (with unused amounts in any fiscal year being carried over to succeeding fiscal years); providedfurther, that such amount in any calendar year may be increased by an amount not to exceed:
(A)the cash proceeds from the sale of Capital Stock (other than Disqualified Stock) of the Company to any future, present or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries or any of its direct or indirect parent companies that occurs after the Issue Date to the extent the cash proceeds from the sale of such Capital Stock have not otherwise been applied to the making of Restricted Payments pursuant to this covenant; plus the cash proceeds of key man life insurance policies received by the Company or any Restricted Subsidiary of the Company after the Issue Date; and in addition, cancellation of Indebtedness owing to the Company or any Restricted Subsidiary from any future, present or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries (or any permitted transferees thereof) of the Company or any Restricted Subsidiary of the Company in connection with a repurchase of Capital Stock of the Company or any Restricted Subsidiary of the Company from such Persons will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provisions of the Indenture;
(iii)cashless repurchases of Capital Stock deemed to occur upon the exercise of stock options, warrants or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represent a portion of the exercise, conversion or exchange price thereof;
(iv)each Restricted Subsidiary of the Company may make Restricted Payments to the Company or any Guarantor or to another Restricted Subsidiary of the Company which is the immediate parent of the Restricted Subsidiary making such Restricted Payment;
(v)payments made or expected to be made by the Company or any Subsidiary in respect of withholding or similar taxes payable in connection with the exercise or vesting of Capital Stock or any other equity award by any future, present or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any Subsidiary and purchases, repurchases, redemptions, defeasances or other acquisitions or retirements of

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Capital Stock deemed to occur upon the exercise, conversion or exchange of stock options, warrants, equity-based awards or other rights in respect thereof if such Capital Stock represents payments in respect of withholding or similar taxes payable upon exercise or vesting thereof;
(vi)the making of cash payments in connection with any conversion or redemption of the Notes, in each case, pursuant to the terms of the Indenture;
(vii)any non-Wholly Owned Subsidiary of the Company may make Restricted Payments (which may be in cash) to its shareholders, members or partners generally, so long as the Company or the Restricted Subsidiary which owns the Capital Stock in the Restricted Subsidiary making such Restricted Payment receives at least its proportionate share thereof (based upon its relative holding of the Capital Stock in the Restricted Subsidiary making such Restricted Payment and taking into account the relative preferences, if any, of the various classes of Capital Stock of such Restricted Subsidiary);

(viii)

any payments made pursuant to the Tax Receivable Agreement;

(ix)

(a) any prepayment, purchase, repurchase, redemption, defeasance, discharge, retirement or other acquisition of Capital Stock, including any accrued and unpaid dividends thereon (“Treasury Capital Stock”) or Subordinated Indebtedness made by exchange (including any such exchange pursuant to the exercise of a conversion right or privilege in connection with which cash is paid in lieu of the issuance of fractional shares) for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (in each case, other than Disqualified Stock or Designated Preferred Stock) (“Refunding Capital Stock”), and (b) the declaration and payment of dividends on Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to a Restricted Subsidiary of the Company or to an employee stock ownership plan or any trust established by the Company or any of its Restricted Subsidiaries) of Refunding Capital Stock;

(x)any prepayment, purchase, repurchase, exchange, redemption, defeasance, discharge, retirement or other acquisition of Subordinated Indebtedness made by exchange for, or out of the proceeds of the substantially concurrent sale of, Refinancing Indebtedness permitted to be incurred pursuant to Section 4.09 of the Indenture;
(xi)payments or distributions to dissenting stockholders pursuant to applicable law (including in connection with, or as a result of, exercise of dissenters’ or appraisal rights and the settlement of any claims or action (whether actual, contingent or potential)), pursuant to or in connection with a merger, amalgamation, consolidation or transfer of assets not prohibited by the Indenture;
(xii)the payment by QualTek Holdco, LLC or any of its Subsidiaries of any dividend or distribution described in Section 6.2 of the Amended and Restated Limited Liability Company Agreement of QualTek Holdco, LLC (and any successor thereto) (in each case as determined without reference to any restrictions applicable to tax distributions contained in any then applicable bank financing agreements), as in effect on the Issue Date; and

(xiii)

any Restricted Payment provided that (i) no Event of Default shall have occurred and be continuing or would result therefrom and (ii) immediately after giving effect to the making thereof on a Pro Forma Basis (including any related incurrence of Indebtedness), the Total Net Leverage Ratio, determined as of the last day of the then most recently ended Four Quarter Period (or in the case of any Restricted Payment of the type described in clause (a) of the definition thereof, the Four Quarter Period most recently ended prior to the time of the declaration thereof), shall not exceed 2.50:1.00.

For purposes of determining compliance with this covenant, if any Restricted Payment (or portion thereof) would be permitted pursuant to one or more provisions described above, the Company may divide such Restricted Payment in any manner that complies with this covenant.

Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock or Disqualified Stock

The Company will not, and will not permit any of its Restricted Subsidiaries, in each case, to, directly or indirectly, create, incur, issue, assume, enter into a guarantee of or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Indebtedness), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock.

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Notwithstanding anything to the contrary therein, this covenant will not prohibit the incurrence of any of the following items of Indebtedness or the issuance of any of the following Disqualified Stock or Preferred Stock (collectively, “Permitted Indebtedness”):

(i)(A) the incurrence of Indebtedness pursuant to Credit Facilities by the Company or any Restricted Subsidiary; provided that, immediately after giving effect to any such incurrence and the use of proceeds thereof, on a Pro Forma Basis, the aggregate principal amount of all Indebtedness incurred under this provision (including any Permitted Refinancing Indebtedness in respect thereof) does not exceed the sum of $483,500,000 plus (A) if such Indebtedness is secured by Liens, an amount equal to the maximum principal amount of Indebtedness that could be incurred such that after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, the Secured Net Leverage Ratio of the Company for the most recently ended Four Quarter Period as of such date would not exceed 4.75:1.00 or (B) if such Indebtedness is unsecured, an amount equal to the maximum principal amount of Indebtedness that could be incurred such that after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, the Total Net Leverage Ratio for the most recently ended Four Quarter Period as of such date would not exceed 5.25:1.00; provided that the aggregate principal amount of Indebtedness then outstanding under this clause (i) incurred by Restricted Subsidiaries that are not Guarantors, together with the aggregate principal amount of Refinancing Indebtedness then outstanding under clause (xv) below, shall not exceed the greater of (x) $15,000,000 and (y) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period, and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(ii)Indebtedness of the Company or any Restricted Subsidiary owing to the Company or any Restricted Subsidiary; provided that (i) such Indebtedness shall not have been transferred to any Person other than the Company or any Restricted Subsidiary, (ii) such Indebtedness owing by the Company or any Guarantor to a Restricted Subsidiary that is not a Guarantor shall be unsecured and subordinated in right of payment to the payment in full of the Notes and (iii) such Indebtedness owing by any Restricted Subsidiary that is not a Guarantor to any Guarantor or the Company is permitted as an Investment under Section 4.08 of the Indenture;
(iii)Guarantees incurred in compliance with clause (n) of the definition of “Permitted Investments” (as defined in the Indenture);
(iv)(A) Indebtedness existing on the Issue Date, or incurred pursuant to Credit Facilities existing on the Issue Date (in an aggregate amount not greater than the aggregate amount outstanding or available for borrowing under such Credit Facilities on the Issue Date), (B) the Notes and the Guarantees, and (C) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clauses (A) or (B) above or under this clause (C);
(v)(A) Indebtedness of the Company or any Restricted Subsidiary (a) incurred to finance the acquisition, construction, repair, replacement or improvement of any fixed or capital assets of the Company or any Restricted Subsidiary, including Capitalized Lease Obligations, provided that such Indebtedness is incurred prior to or within 270 days after such acquisition or the completion of such construction or improvement and the principal amount of such Indebtedness does not exceed the cost of acquiring, constructing or improving such fixed or capital assets, or (b) assumed in connection with the acquisition of any fixed or capital assets of the Company or any Restricted Subsidiary, provided, in the case of this clause (A), that at the time of incurrence or assumption of such Indebtedness and after giving pro forma effect thereto and the use of the proceeds thereof, the aggregate principal amount of Indebtedness then outstanding under this clause (A), together with the aggregate principal amount of Permitted Refinancing Indebtedness then outstanding under clause (B) below, shall not exceed the greater of (x) $20,000,000 and (y) 33.4% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period; and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(vi)(A) Indebtedness, Disqualified Stock or Preferred Stock of any Person that becomes (other than as a result of a redesignation of an Unrestricted Subsidiary) a Restricted Subsidiary (or of any Person not previously a Subsidiary that is merged or consolidated with or into a Restricted Subsidiary in a transaction permitted hereunder) after the Issue Date, or Indebtedness of any Person that is assumed after the Issue Date by any Restricted Subsidiary in connection with an acquisition of assets by such Restricted Subsidiary in an Acquisition or other Investment permitted hereunder, provided that (a) such Indebtedness, Disqualified Stock or Preferred exists at the time such Person becomes a Restricted Subsidiary (or is so merged or consolidated) or such assets are acquired and is not created in contemplation of or in connection with such Person becoming a Restricted Subsidiary (or such merger or consolidation) or such assets being acquired, and (b) immediately after giving effect to the Company or any Restricted Subsidiary becoming liable with respect to such Indebtedness, Disqualified Stock or Preferred Stock (whether as a result of such Person becoming a Restricted Subsidiary (or such merger or consolidation) or

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such assumption), and after giving pro forma effect thereto, (x) if such Indebtedness is secured by Liens, the Secured Net Leverage Ratio of the Company for the most recently ended Four Quarter Period as of such date would not exceed the greater of 4.75:1.00 and the Secured Net Leverage Ratio of the Company in effect immediately prior to the assumption or incurrence of such Indebtedness or (y) if such Indebtedness is unsecured, the Total Net Leverage Ratio for the most recently ended Four Quarter Period as of such date would not exceed the greater of 5.25:1.00 and the Total Net Leverage Ratio of the Company in effect immediately prior to the assumption or incurrence of such Indebtedness, and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(vii)Indebtedness of the Company or any Restricted Subsidiary arising from any agreement in the form of purchase price adjustments, earn-outs, non-competition agreements, indemnification obligations or other arrangements representing Acquisition Consideration or deferred payments of a similar nature incurred in connection with any Acquisition or other Investment permitted by Section 4.08 or any Disposition permitted by Section 11.01, and Indebtedness arising from guarantees, letters of credit, bank guarantees, surety bonds, performance bonds or similar instruments securing the performance of the Company or any such Restricted Subsidiary pursuant to any such agreement; provided that, with respect to any Indebtedness existing or incurred pursuant to this clause (vii) with respect to unpaid earn-outs, the amount of any unpaid earn-out shall not exceed 35% of the Acquisition Consideration of the Acquisition or Investment to which such unpaid earn-out relates;
(viii)(A) Indebtedness of Restricted Subsidiaries that are not Guarantors, provided that at the time of incurrence of such Indebtedness and after giving pro forma effect thereto and the use of the proceeds thereof, the aggregate principal amount of Indebtedness then outstanding under this clause (A), together with the aggregate principal amount of Permitted Refinancing Indebtedness then outstanding under clause (B) below, shall not exceed the greater of (x) $15,000,000 and (y) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period; and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(ix)(A) Indebtedness of the Company and the Restricted Subsidiaries, provided that at the time of incurrence of such Indebtedness and after giving pro forma effect thereto and the use of the proceeds thereof, the aggregate principal amount of Indebtedness then outstanding under this clause (A), together with the aggregate principal amount of Permitted Refinancing Indebtedness then outstanding under clause (B) below, shall not exceed the greater of (x) $15,000,000 and (y) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period; and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(x)Indebtedness in respect of netting services, overdraft protections and otherwise arising from treasury, depository, credit card, debit cards and cash management services or in connection with any automated clearing-house transfers of funds, overdraft or any similar services, in each case in the ordinary course of business;
(xi)Indebtedness incurred in respect of letters of credit, bank guarantees, bankers’ acceptances, surety bonds, performance bonds or similar instruments issued or created by the Company or any Restricted Subsidiary in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations, including in respect of workers’ compensation claims, unemployment insurance (including premiums related thereto), vacation pay, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims;
(xii)Indebtedness in respect of, or in respect of letters of credit, bank guarantees, surety bonds, performance bonds or similar instruments relating to, tenders, statutory obligations, performance, bid, appeal, stay, customs, surety and return-of-money bonds, performance and completion guarantees and similar obligations of the Company or any Restricted Subsidiary incurred in the ordinary course of business (including relating to any litigation being contested in good faith and not constituting an Event of Default hereunder) and not in connection with the borrowing of money or any Hedging Obligations;
(xiii)Indebtedness owed to current or former officers, directors or employees of the Company or any Restricted Subsidiary (or their respective estates, heirs, family members, spouses and former spouses, domestic partners and former domestic partners or beneficiaries under their respective estates) to finance the purchase or redemption of Capital Stock in the Company permitted by Section 4.08 of the Indenture;
(xiv)Indebtedness consisting of the financing of insurance premiums or take or pay obligations contained in supply arrangements that do not constitute Guarantees, in each case, incurred in the ordinary course of business;

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(xv)(A) Indebtedness of the Company and/or any Restricted Subsidiary incurred in connection with an Acquisition or other Investment permitted hereunder, provided that, immediately after giving effect to the Company or any Restricted Subsidiary becoming liable with respect to such Indebtedness, Disqualified Stock or Preferred Stock (whether as a result of such Person becoming a Restricted Subsidiary (or such merger or consolidation) or such assumption), and after giving pro forma effect thereto, (x) if such Indebtedness is secured by Liens, the Secured Net Leverage Ratio of the Company for the most recently ended Four Quarter Period as of such date would not exceed the greater of 4.75:1.00 and the Secured Net Leverage Ratio of the Company in effect immediately prior to the assumption or incurrence of such Indebtedness or (y) if such Indebtedness is unsecured, the Total Net Leverage Ratio for the most recently ended Four Quarter Period as of such date would not exceed the greater of 5.25:1.00 and the Total Net Leverage Ratio of the Company in effect immediately prior to the assumption or incurrence of such Indebtedness; provided that the aggregate principal amount of Indebtedness then outstanding under this clause (xv) incurred by Restricted Subsidiaries that are not Guarantors, together with the aggregate principal amount of Refinancing Indebtedness then outstanding under clause ((i) above, shall not exceed the greater of (x) $15,000,000 and (y) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period, and (B) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(xvi)(A) Capitalized Lease Obligations arising under any Sale/Leaseback Transaction permitted under Section 4.10(n) of the Indenture; provided that at the time of consummation of such Sale/Leaseback Transaction and after giving pro forma effect thereto, the aggregate principal amount of Indebtedness then outstanding under this clause (A), together with the aggregate principal amount of Permitted Refinancing Indebtedness then outstanding under clause (B) below, shall not exceed the greater of (x) $5,000,000 and (y) 8.4% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period; and (ii) any Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under clause (A) above or under this clause (B);
(xvii)Indebtedness consisting of obligations of the Company or any Restricted Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with the Transactions, Permitted Acquisitions or any other Investment expressly permitted hereunder;
(xviii)to the extent constituting Indebtedness, all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in this covenant;
(xix)(A) Guarantees by the Company or any Restricted Subsidiary of the obligations of suppliers, customers and licensees in the ordinary course of business, (B) Indebtedness incurred in the ordinary course of business in respect of obligations of the Company or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (C) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guarantees or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(xx)Indebtedness of the Company or any Restricted Subsidiary consisting of obligations owing under incentive, supply, license or similar agreements entered into in the ordinary course of business;
(xxi)Indebtedness of the Company or any Restricted Subsidiary representing deferred compensation to current or former directors, officers, employees, members of management, managers and consultants of the Company (or any direct or indirect parent thereof) or any Restricted Subsidiary in the ordinary course of business;
(xxii)unfunded pension fund and other employee benefit plan obligations and liabilities incurred by the Company or any Restricted Subsidiary in the ordinary course of business to the extent that the unfunded amounts would not otherwise cause an Event of Default hereunder;
(xxiii)to the extent constituting Indebtedness, obligations arising under agreements governing any Permitted Factoring Transactions; and
(xxiv)the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of Preferred Stock; providedhowever, that: (x) any subsequent issuance or transfer of Capital Stock that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary; and (y) any sale or other transfer of any such Preferred Stock to a Person that is not the Company or a Restricted Subsidiary, will be deemed, in each

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case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (xxiv).

Limitation on Liens

Neither the Company nor any Restricted Subsidiary will, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any asset of the Company or any Restricted Subsidiary, whether now owned or hereafter acquired or licensed, or assign or sell any income, profits or revenues (including accounts receivable and royalties) or rights in respect of any thereof, except:

(i)in the case of Liens securing Subordinated Indebtedness, the Notes and related Guarantees are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens; and
(ii)in all other cases, the 2027 Convertible Notes or the Guarantees are equally and ratably secured.

The foregoing provisions of this covenant shall not apply to:

(a)(i) Liens securing the Notes and the related Guarantees and (ii) Liens securing Indebtedness and other Obligations permitted to be incurred under (or secured pursuant to) Credit Facilities, including any letter of credit facility relating thereto, that was incurred pursuant to Section 4.09(b)(i) of the Indenture;
(b)Permitted Encumbrances;
(c)any Lien on any asset of the Company or any Restricted Subsidiary existing on the Issue Date, and any extensions, renewals and replacements thereof; provided that (i) such Lien shall not apply to any other asset of the Company or any Restricted Subsidiary, other than to proceeds and products of, and after-acquired property that is affixed or incorporated into, the assets covered by such Lien (it being understood that individual financings of the type permitted under Section 4.09(b)(v) of the Indenture provided by any Person (or its Affiliates) may be cross-collateralized to other such financings provided by such Person (or its Affiliates)), and (ii) such Lien shall secure only those obligations that it secures on the Issue Date and any extensions, renewals and refinancings thereof that do not increase the outstanding principal amount thereof (except by an amount not greater than accrued and unpaid interest on such obligations, any original issue discount and any reasonable fees, premiums and expenses relating to such extension, renewal or refinancing) and, in the case of any such obligations constituting Indebtedness, that are permitted under Section 4.09(b)(iv) of the Indenture as Permitted Refinancing Indebtedness in respect thereof;
(d)Liens on fixed or capital assets acquired, constructed, repaired, replaced or improved by the Company or any Restricted Subsidiary; provided that (i) such Liens secure only Indebtedness permitted by Section 4.09(b)(v) of the Indenture and obligations relating thereto not constituting Indebtedness and (ii) such Liens shall not apply to any other asset of the Company or any Restricted Subsidiary, other than to proceeds and products of, and after-acquired property that is affixed or incorporated into, the assets covered by such Liens; provided further that individual financings of equipment or other fixed or capital assets otherwise permitted to be secured hereunder provided by any Person (or its Affiliates) may be cross-collateralized to other such financings provided by such Person (or its Affiliates);
(e)any Lien existing on any asset prior to the acquisition thereof by the Company or any Subsidiary or existing on any asset of any Person that becomes (other than as a result of a redesignation of an Unrestricted Subsidiary) a Restricted Subsidiary (or of any Person not previously a Subsidiary that is merged or consolidated with or into a Restricted Subsidiary in a transaction permitted hereunder) after the Issue Date prior to the time such Person becomes a Restricted Subsidiary (or is so merged or consolidated), and any extensions, renewals and replacements thereof; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Restricted Subsidiary (or such merger or consolidation), (ii) such Lien shall not apply to any other asset of the Company or any Restricted Subsidiary (other than, in the case of any such merger or consolidation, the assets of any special purpose merger Restricted Subsidiary that is a party thereto), other than to proceeds and products of, and after-acquired property that is affixed or incorporated into, the assets covered by such Lien or becomes subject to such Lien pursuant to an after-acquired property clause as in effect on the date of such acquisition or the date such Person becomes a Restricted Subsidiary (or is so merged or consolidated) (it being understood that individual financings of the type permitted under Section 4.09(b)(v) of the Indenture provided by any Person (or its Affiliates) may be cross-collateralized to other such financings provided by such Person (or its Affiliates)), and

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(iii) such Lien shall secure only those obligations that it secures on the date of such acquisition or the date such Person becomes a Restricted Subsidiary (or is so merged or consolidated), and any extensions, renewals and refinancing thereof that do not increase the outstanding principal amount thereof (except by an amount not greater than accrued and unpaid interest on such obligations, any original issue discount or upfront fees and any fees, premiums and expenses relating to such extension, renewal or refinancing);
(f)in connection with any Disposition permitted under Section 11.01 of the Indenture, customary rights and restrictions contained in agreements relating to such Disposition pending the completion thereof;
(g)in the case of (A) any Restricted Subsidiary that is not a Wholly Owned Subsidiary or (B) the Capital Stock in any Person that is not a Restricted Subsidiary (including any Unrestricted Subsidiary), any encumbrance, restriction or other Lien, including any put and call arrangements, related to the Capital Stock in such Restricted Subsidiary or such other Person set forth in (a) its Organizational Documents or any related joint venture, shareholders’ or similar agreement, in each case so long as such encumbrance or restriction is applicable to all holders of the same class of Capital Stock or is otherwise of the type that is customary for agreements of such type, or (b) in the case of any Person that is not a Restricted Subsidiary, in any agreement or document governing Indebtedness of such Person;
(h)any Lien on assets and Capital Stock of Restricted Subsidiaries that are not Guarantors (including Capital Stock owned by such Persons); provided that such Lien shall secure only Indebtedness or other obligations of Restricted Subsidiaries that are not Guarantors;
(i)Liens solely on any cash earnest money deposits, escrow arrangements or similar arrangements made by the Company or any Restricted Subsidiary in connection with any letter of intent or purchase agreement for any Acquisition or Investment permitted hereunder;
(j)nonexclusive outbound licenses of Intellectual Property granted by the Company or any Restricted Subsidiary in the ordinary course of business that do not materially detract from the value of the affected asset or interfere with the ordinary conduct of business of the Company or any Restricted Subsidiary;
(k)any Lien in favor of the Company or any Restricted Subsidiary (other than Liens on assets of the Company or any Guarantor in favor of a Restricted Subsidiary that is not a Guarantor);
(l)(A) deposits made in the ordinary course of business to secure obligations to insurance carriers providing casualty, liability or other insurance to the Company and the Subsidiaries and (B) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(m)receipt of progress payments and advances from customers in the ordinary course of business to the extent the same creates a Lien;
(n)Liens on fixed or capital assets subject to any Sale/Leaseback Transaction; provided that (i) such Liens secure only Indebtedness permitted by Section 4.09(b)(xvi) and obligations relating thereto not constituting Indebtedness and (ii) such Liens shall not apply to any other asset of the Company or any Restricted Subsidiary, other than to proceeds and products of, and after-acquired property that is affixed or incorporated into, the assets covered by such Liens;
(o)Liens on cash and Cash Equivalents securing obligations in respect of any Hedging Obligations permitted hereunder and entered into in the ordinary course of business; provided that at the time of the incurrence of such Liens, the aggregate amount of cash and Cash Equivalents secured by Liens permitted by this clause does not exceed the greater of (i) $7,500,000 and (ii) 12.5% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period;
(p)Liens securing Permitted Ratio Indebtedness and obligations relating thereto not constituting Indebtedness;
(q)Liens securing Permitted Incurred Acquisition Indebtedness and obligations relating thereto not constituting Indebtedness;
(r)Liens on the Capital Stock of joint ventures or Unrestricted Subsidiaries securing capital contributions to, or obligations of, such Persons;

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(s)Liens on receivables and related assets incurred in connection with Permitted Factoring Transactions (including Liens on such receivables resulting from precautionary UCC filings or from recharacterization or any such with Permitted Factoring Transactions as a financing or a loan); and
(t)other Liens securing Indebtedness or other obligations, provided that at the time of the incurrence of such Liens and the related Indebtedness and other obligations and after giving pro forma effect thereto and the use of proceeds thereof, the aggregate outstanding amount of Indebtedness and other obligations secured by Liens permitted by this clause does not exceed the greater of (i) $15,000,000 and (ii) 25.0% of Consolidated Adjusted EBITDA for the most recently ended Four Quarter Period.

Transactions with Affiliates

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Company (each, an “Affiliate Transaction”) involving aggregate payments or consideration in excess of $2,000,000, unless:

(1)the Affiliate Transaction is on terms that are substantially as favorable to the Company or the relevant Restricted Subsidiary, taken as a whole, as those that would have been obtained at the time in a comparable arms-length transaction by the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the Company or any of its Restricted Subsidiaries;
(2)the Company delivers to the Trustee, with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $10,000,000, a resolution of the Board accompanied by an Officer’s Certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board; and
(3)with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $25,000,000, the Company obtains a written opinion from an Independent Financial Advisor to the effect that the consideration to be paid or received in connection with such Affiliate Transaction or Affiliate Transactions is fair, from a financial point of view, to the Company and its Subsidiaries, taken as a whole.

The following will not be deemed Affiliate Transactions under the Indenture, and are therefore not subject to the above limitations:

(1)any collective bargaining, consulting or employment agreement or compensation plan, stock option, stock ownership plan, management equity plan, phantom equity plan or any other management, employee benefit or other compensatory plan or agreement (and any successor plans or arrangements thereto), termination or severance agreement, or officer or director indemnification arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business for the benefit of any future, current or former employee, director, officer, member of management, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries and payments and transactions pursuant thereto, including (A) any issuance, transfer or sale of Capital Stock, options, other equity-related interests or other securities, or other payments, awards or grants in cash, securities or otherwise to any future, current or former employee, director, officer, manager, contractor, consultant or advisor (or their respective Immediate Family Members,) of the Company or any of its Restricted Subsidiaries; (B) the payment of compensation, fees, costs and expenses to, and indemnities (including under insurance policies) and reimbursements, employment and severance arrangements, and employee benefit and pension expenses provided on behalf of, or for the benefit of, future, current or former employees, directors, officers, members of management, managers, contractors, consultants, distributors or advisors (or their respective Immediate Family Members) of the Company or any Restricted Subsidiary (whether directly or indirectly and including by their Immediate Family Members); (C) any subscription agreement or similar agreement pertaining to the repurchase of Capital Stock pursuant to put/call rights or similar rights with current or former officers, directors, members of management, managers, employees, consultants or independent contractors; and (D) transactions pursuant to any employee compensation, benefit plan, stock option plan or arrangement, any health, disability or similar insurance plan which covers current or former officers, directors, members of management, managers, employees, consultants or independent contractors or any employment contract or arrangement;

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(2)transactions between or among the Company and/or its Restricted Subsidiaries (or a Person that becomes a Restricted Subsidiary as a result of such transaction);
(3)payment of fees and reimbursement of expenses and indemnities provided to any future, current or former employee, director, officer, member of management, manager, contractor, consultant or advisor (or their respective Immediate Family Members) of the Company or any of its Restricted Subsidiaries;
(4)any transaction in which the only consideration paid by the Company or any Restricted Subsidiary consists of Capital Stock (other than Disqualified Stock) of the Company or any contribution of capital to the Company;
(5)any payments made pursuant to the Tax Receivable Agreement;
(6)Restricted Payments that do not violate the provisions of Section 4.08 of the Indenture;
(7)transactions pursuant to agreements or arrangements as in effect on the Issue Date, or any amendment, modification, or supplement thereto or replacement thereof (so long as such agreement or arrangement, as so amended, modified or supplemented or replaced, is not materially more disadvantageous, taken as a whole, than such agreement or arrangement as in effect on the Issue Date, as determined in good faith by the Company);
(8)purchases or sales of goods and/or services with customers, clients, suppliers, joint ventures, purchasers, sales agents or sellers of goods and services or providers of employees or other labor entered into in the ordinary course of business on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained at the time in a comparable transaction by the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the Company;
(9)(A) if such Affiliate Transaction is with an Affiliate in its capacity as a holder of Indebtedness of the Company or any Restricted Subsidiary, a transaction in which such Affiliate is treated no more favorably than the other holders of Indebtedness of the Company or such Restricted Subsidiary; (B) any purchases by the Company’s Affiliates of Indebtedness or Disqualified Stock of the Company or any of the Restricted Subsidiaries, the majority of which Indebtedness or Disqualified Stock is purchased by Persons who are not the Company’s Affiliates; provided that such purchases by the Company’s Affiliates are on the same terms as such purchases by such Persons who are not the Company’s Affiliates; and (C) (i) investments by Affiliates in securities or loans of the Company or any of the Restricted Subsidiaries so long as the investment is being offered by the Company or such Restricted Subsidiary generally to other non-affiliated third party investors on the same or more favorable terms and (ii) payments to Affiliates in respect of securities or loans of the Company or any of the Restricted Subsidiaries contemplated in the foregoing subclause (i) or that were acquired from Persons other than the Company and its Restricted Subsidiaries, in each case, in accordance with the terms of such securities or loans;
(10)the formation and maintenance of any consolidated group or subgroup for tax, accounting or cash pooling or management purposes in the ordinary course of business or transactions undertaken in good faith for the purpose of improving the consolidated tax efficiency of the Company or any Restricted Subsidiary and not for the purpose of circumventing any provision of this Indenture;
(11)to the extent permitted under this Indenture, including in compliance with Article 11 of the Indenture, any merger, consolidation or reorganization of the Company with an Affiliate of the Company solely for the purpose of (i) forming or collapsing a holding company structure or (ii) reincorporating the Company in a new jurisdiction;
(12)entering into and the payment of costs and expenses and indemnities pursuant to one or more agreements that provide registration rights to the security holders of the Company or any direct or indirect parent of the Company or amending such agreement with security holders of the Company or any direct or any indirect parent of the Company and the performance of such agreements on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained at the time in a comparable transaction by the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the Company and that have been approved by the Board;
(13)fees, indemnities and reimbursements may be paid to directors, officers, employees, members of management, managers, consultants independent contractors of the Company and its Restricted Subsidiaries;

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(14)Restricted Subsidiaries of the Company may pay management fees, licensing fees and similar fees to the Company or to any Guarantor;
(15)advances to employees of the Company or any Restricted Subsidiary made in the ordinary course of business, in a manner that is consistent with past practice;
(16)the existence of, or the performance by the Company or any Restricted Subsidiary of its obligations under the terms of, any equityholders, limited liability company agreement, limited partnership agreement, investor rights or similar agreement (including any registration rights agreement or purchase agreements related thereto) to which it is party as of the Issue Date and any similar agreement that it may enter into thereafter; provided that the existence of, or the performance by the Company or any Restricted Subsidiary of its obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date will only be permitted under this clause to the extent that the terms of any such amendment or new agreement are not otherwise, when taken as a whole, more disadvantageous to the Holders in any material respect in the reasonable determination of the Company than those in effect on the Issue Date;
(17)transactions in which the Company or any Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Subsidiary from a financial point of view or meets the requirements of the Transactions with Affiliates covenant in the Indenture.
(18)transactions in which the Company or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Restricted Subsidiary from a financial point of view or meets the requirements of Section 4.11(a)(i) of the Indenture; and
(19)transactions entered into by an Unrestricted Subsidiary with an Affiliate prior to the designation of any such Unrestricted Subsidiary as a Restricted Subsidiary pursuant to the definition of “Unrestricted Subsidiary”, provided that such transactions were not entered into in contemplation of or in connection with such designation.

In addition, if the Company or any of its Restricted Subsidiaries (i) purchases or otherwise acquires assets or properties from a Person which is not an Affiliate, the purchase or acquisition by an Affiliate of the Company of an interest in all or a portion of the assets or properties acquired shall not be deemed an Affiliate Transaction (or cause such purchase or acquisition by the Company or a Restricted Subsidiary to be deemed an Affiliate Transaction) or (ii) sells or otherwise disposes of assets or other properties to a Person who is not an Affiliate, the sale or other disposition by an Affiliate of the Company of an interest in all or a portion of the assets or properties sold shall not be deemed an Affiliate Transaction (or cause such sale or other disposition by the Company or a Restricted Subsidiary to be deemed an Affiliate Transaction).

Material Intellectual Property

Interests in the Material Intellectual Property shall be held at all times by the Company or a Guarantor and the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, a) sell or transfer its interest, in one or a series of transactions, in any of the Material Intellectual Property to a Person that is not the Company or a Guarantor, (b) exclusively or co-exclusively licenses any Material Intellectual Property to a Person that is not the Company or a Guarantor (other than (i) non-perpetual licenses that are exclusive solely with respect to a customized software or software enhancement entered into in the ordinary course of business and in connection with the provision of services by the Company or any of its Restricted Subsidiaries or the provision, directly or together with the Company, of services by any third party with whom the Company or any of its Restricted Subsidiaries has a commercial arrangement to provide services or technology to enable the provision of such services to its customers; provided that, (i) at the time such license is entered into, in the judgment of the Company, the granting of such license does not materially and adversely affect the business or condition (financial or otherwise) of the Company and its Restricted Subsidiaries, taken as a whole), or (c) sell or transfer any interest in any Guarantor holding interests in Material Intellectual Property to a Person that is not the Company or a Guarantor, provided that, in each case, any Lien permitted by this Indenture shall not be prohibited by this covenant.

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Merger, Consolidation or Sale of Assets

Subject to certain provisions of the Indenture, the Company shall not consolidate with, merge with or into, or sell, convey, transfer or lease, all or substantially all of the consolidated assets of the Company and the Company’s Subsidiaries, taken as a whole, to another Person, unless:

(i)the resulting, surviving or transferee Person, if not the Company, shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and the Successor Company (if not the Company) shall expressly assume, by supplemental indenture all of the obligations of the Company under 2027 Convertible Notes and the Indenture;
(ii)immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing under the Indenture; and
(iii)if the Company is not the Successor Company, the Successor Company shall have delivered to the Trustee an Officer’s Certificate and Opinion of Counsel, each stating that such consolidation, merger, sale, conveyance, transfer or lease complies with the Indenture and that such supplemental indenture is authorized or permitted by the Indenture and an Opinion of Counsel stating that the supplemental indenture is the valid and binding obligation of the Successor Company, subject to customary exceptions and qualifications.

Subject to certain provisions of the Indenture, no Guarantor shall consolidate with, merge with or into, or sell, convey, transfer or lease, all or substantially all of its assets to, another Person, unless:

(i)the other Person is the Company or a Guarantor or becomes a Guarantor concurrently with the transaction;
(ii)either (x) the Company or a Guarantor is the continuing Person or (y) the resulting, surviving or transferee Person expressly assumes all of the obligations of the Guarantor under the Indenture by the execution of a supplemental indenture; or
(iii)the transaction constitutes a sale or other disposition or transfer (including by way of consolidation, merger or amalgamation) of the Guarantor or the sale, conveyance, transfer or lease of all or substantially all the assets of the Guarantor (in each case other than to the Company or a Guarantor) otherwise not prohibited by the Indenture.

Notes Guarantees

Certain subsidiaries of the Company (each a “Guarantor” and collectively, the “Guarantors”) have jointly and severally, fully and unconditionally guaranteed the obligations under the 2027 Convertible Notes as to payment of principal of and premium, if any, and interest when and as the same shall become due and payable (the “Guarantees”).

A Guarantee will be automatically and unconditionally terminated, and the relevant Guarantor will be automatically and unconditionally released and relieved of any obligations under its Guarantee and the Indenture in the event of:

upon a sale, transfer, exchange or other disposition (including by way of consolidation or merger) of Capital Stock of such Guarantor following which the applicable Guarantor ceases to be a Subsidiary or the sale, transfer, exchange or other disposition of all or substantially all the properties and assets of the applicable Guarantor (other than to the other Guarantors) otherwise not prohibited by the Indenture;
upon the release or discharge of such Guarantor’s obligations under the Credit Agreements or other Indebtedness that resulted in the creation of such Guarantee other than, in each case, a release or discharge through payment thereon;
upon the merger, amalgamation or consolidation of any Guarantor with and into the Company or another Guarantor or upon the liquidation of such Guarantor, in each case, in compliance with the Indenture;
upon the satisfaction and discharge of the 2027 Convertible Notes; or
as permitted by Article 10 of the Indenture.

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Company’s Mandatory Conversion Option

On or after February 14, 2024 and prior to the close of business on December 12, 2026, the Company may, at its option, elect to convert the outstanding Notes, in whole or in part, if (x) the Last Reported Sale Price of the Class A Common Stock (i) for at least twenty (20) Trading Days (whether or not consecutive) during the period of thirty (30) consecutive Trading Days ending on, and including, the Trading Day immediately preceding the date the Company sends a Mandatory Conversion Notice (the “Mandatory Conversion Notice Date”) and (ii) on the Trading Day immediately preceding the Mandatory Conversion Notice Date is greater than or equal to $14.00 per share; (y) the 60-Day ADTV ending on, and including, the Trading Day immediately preceding the Mandatory Conversion Notice Date is greater than or equal to $15,000,000; and (z) the shares of Class A Common Stock to be delivered upon such conversion, together with all shares of Class A Common Stock previously delivered in connection with the conversion of any Notes, equal no more than 20% of the free-float of the Class A Common Stock on a pro forma basis taking into account such conversion (together, the “Company Mandatory Conversion Condition”); provided that the Company may not elect to convert Notes under Section 14.03 of the Indenture in part unless it converts the same proportion of the principal amount of all outstanding Notes across all Holders.

To exercise the Company Mandatory Conversion Right, the Company will send notice of the Company’s election (a “Mandatory Conversion Notice”) to Holders, the Trustee and the Conversion Agent.

Such Mandatory Conversion Notice must state:

(i)that the 2027 Convertible Notes have been called for Mandatory Conversion, briefly describing the Company Mandatory Conversion Right under the Indenture;
(ii)the Mandatory Conversion Date;
(iii)the current Conversion Rate;
(iv)the name and address of the Paying Agent and the Conversion Agent; and
(v)the CUSIP and ISIN numbers, if any, of the 2027 Convertible Notes.

If the Company exercises the Company Mandatory Conversion Right in accordance with the Indenture, then a Conversion Date will automatically, and without the need for any action on the part of any Holder, the Trustee or the Conversion Agent, be deemed to occur, with respect to each Note then outstanding, on the Mandatory Conversion Date. The Mandatory Conversion Date will be a Business Day of the Company’s choosing that is no more than thirty (30), nor less than ten (10), Business Days after the Company sends the Mandatory Conversion Notice; provided that the Mandatory Conversion Date shall be no later than the second Scheduled Trading Day prior to the Maturity Date. The Company shall pay or deliver, as the case may be, the consideration due in respect of the Conversion Obligation on the second (2nd) Business Day immediately following the Mandatory Conversion Date.

Each share of Class A Common Stock delivered upon a Mandatory Conversion of any Note will be a newly issued or treasury share and will be duly and validly issued, fully paid, non-assessable, free from preemptive rights and free of any lien or adverse claim. If the Class A Common Stock is then listed on any securities exchange and has been registered on an effective registration statement with the Commission, then the Company will cause each share of Class A Common Stock, when delivered upon a Mandatory Conversion of any Note, to be admitted for listing on such exchange. Notwithstanding anything herein to the contrary, the Company (1) shall not be permitted to effect any Company Mandatory Conversion hereunder unless as of such Mandatory Conversion Date no Equity Conditions Failure then exists.

Adjustment of Conversion Rate

The Conversion Rate shall be adjusted from time to time by the Company if any of the following events occurs, except that the Company shall not make any adjustments to the Conversion Rate if Holders of the Notes participate (other than in the case of (x) a share split or share combination or (y) a tender or exchange offer), at the same time and upon the same terms as holders of the Class A Common Stock and solely as a result of holding the Notes, in any of the transactions described in the Indenture, without having to convert their Notes, as if they held a number of shares of Class A Common Stock equal to the Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.

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(a)

If the Company exclusively issues shares of Class A Common Stock as a dividend or distribution on shares of the Class A Common Stock, or if the Company effects a share split or share combination, the Conversion Rate shall be adjusted based on the following formula:

OS1

CR1 = CR0 ×

OS0

where,

CR0=the Conversion Rate in effect immediately prior to the open of business on the Record Date of such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as applicable;

CR1=the Conversion Rate in effect immediately after the open of business on such Record Date or Effective Date, as applicable;

OS0=the number of shares of Class A Common Stock outstanding immediately prior to the open of business on such Record Date or Effective Date, as applicable, before giving effect to such dividend, distribution, share split or share combination; and

OS1=the number of shares of Class A Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination, as applicable.

Any adjustment made under this section shall become effective immediately after the open of business on the Record Date for such dividend or distribution, or immediately after the open of business on the Effective Date for such share split or share combination, as applicable. If any dividend or distribution of the type described in this section is declared but not so paid or made, or any share split or combination of the type described in this section is announced but the outstanding shares of Class A Common Stock are not split or combined, as the case may be, the Conversion Rate shall be immediately readjusted, effective as of the date the Board determines in good faith not to pay such dividend or distribution, or not to split or combine the outstanding shares of Class A Common Stock, as the case may be, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared or such share split or combination had not been announced.

If the Company issues to all or substantially all holders of the Class A Common Stock any rights, options or warrants (other than pursuant to a stockholders rights plan) entitling them, for a period of not more than forty-five (45) calendar days after the announcement date of such issuance, to subscribe for or purchase shares of the Class A Common Stock at a price per share that is less than the average of the Last Reported Sale Prices of the Class A Common Stock for the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

OS0 + X

OS0 + Y

where,

CR0=the Conversion Rate in effect immediately prior to the open of business on the Record Date for such issuance;

CR1=the Conversion Rate in effect immediately after the open of business on such Record Date;

OS0=the number of shares of Class A Common Stock outstanding immediately prior to the open of business on such Record Date;

X=the total number of shares of Class A Common Stock issuable pursuant to such rights, options or warrants; and

Y=the number of shares of Class A Common Stock equal to (i) the aggregate price payable to exercise such rights, options or warrants, divided by (ii) the average of the Last Reported Sale Prices of the Class A Common Stock over the ten

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(10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants.

Any increase made under this section shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the open of business on the Record Date for such issuance. To the extent that shares of the Class A Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Class A Common Stock actually delivered. If such rights, options or warrants are not so issued, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such Record Date for such issuance had not occurred.

For purposes of this section, in determining whether any rights, options or warrants entitle the holders of Class A Common Stock to subscribe for or purchase shares of the Class A Common Stock at a price per share that is less than such average of the Last Reported Sale Prices of the Class A Common Stock for the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, and in determining the aggregate offering price of such shares of Class A Common Stock, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board in good faith.

If the Company distributes shares of its Capital Stock, evidences of its indebtedness, other assets or property of the Company or rights, options or warrants to acquire its Capital Stock or other securities, to all or substantially all holders of the Class A Common Stock, excluding (i) dividends, distributions or issuances (including share splits) as to which an adjustment was effected pursuant to the Indenture, (ii) except as otherwise described in the Indenture, rights issued pursuant to any stockholders rights plan of the Company then in effect, (iii) dividends or distributions paid exclusively in cash as to which the provisions set forth in Section 14.04(d) of the Indenture shall apply, (iv) dividends or distributions of Reference Property in exchange for or upon conversion of the Class A Common Stock in a Share Exchange Event, and (v) Spin-Offs as to which the provisions set forth below in this Section 14.04(c) of the Indenture shall apply (any of such shares of Capital Stock, evidences of indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities, the “Distributed Property”), then the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

SP0

SP0 - FMV

where,

CR0=the Conversion Rate in effect immediately prior to the open of business on the Record Date for such distribution;

CR1=the Conversion Rate in effect immediately after the open of business on such Record Date;

SP0=the average of the Last Reported Sale Prices of the Class A Common Stock over the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Record Date for such distribution; and

FMV=the fair market value (as determined by the Board in good faith) of the Distributed Property with respect to each outstanding share of the Class A Common Stock on the Record Date for such distribution.

Any increase made under the portion of this section above shall become effective immediately after the open of business on the Record Date for such distribution. If such distribution is not so paid or made, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such distribution had not been declared. If the Company issues rights, options or warrants to acquire Capital Stock or other securities that are exercisable only upon the occurrence of certain triggering events, the Company shall not adjust the conversion rate pursuant to the clauses above until the earliest of these triggering events occurs. Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), then, in lieu of the foregoing increase, each Holder of a Note shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of the Class A Common Stock receive the Distributed Property, the amount and kind of Distributed Property such Holder would have received if such Holder owned a number of shares of Class A Common Stock equal to the Conversion Rate in effect immediately prior to the open of business on the Record Date for the distribution. If the Board determines in good faith the “FMV” (as defined above) of any distribution for purposes of this section by reference to the actual or when-issued trading market for

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any securities, it shall in doing so consider the prices in such market over the same period used in computing the Last Reported Sale Prices of the Class A Common Stock over the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Record Date for such distribution.

With respect to an adjustment pursuant to this section where there has been a payment of a dividend or other distribution on the Class A Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit of the Company, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

FMV0 + MP0

MP0

where,

CR0=the Conversion Rate in effect immediately prior to the end of the Valuation Period;

CR1=the Conversion Rate in effect immediately after the end of the Valuation Period;

FMV0=the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Class A Common Stock applicable to one share of the Class A Common Stock (determined by reference to the definition of Last Reported Sale Price as set forth in the Definitions section of the Indenture as if references therein to Class A Common Stock were to such Capital Stock or similar equity interest) over the first ten (10) consecutive Trading Day period after, and including, the Record Date of the Spin-Off (the “Valuation Period”); and

MP0=the average of the Last Reported Sale Prices of the Class A Common Stock over the Valuation Period.

The increase to the Conversion Rate under the preceding paragraph shall occur at the close of business on the last Trading Day of the Valuation Period; provided that if the relevant Conversion Date occurs during the Valuation Period, references to “10” in the preceding paragraph shall be deemed to be replaced with such lesser number of Trading Days as have elapsed between the Record Date of such Spin-Off and the Conversion Date in determining the Conversion Rate. If any dividend or distribution that constitutes a Spin-Off is declared but not so paid or made, the Conversion Rate shall be immediately decreased, effective as of the date the Board determines in good faith not to pay or make such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared or announced.

For purposes of this section (and subject in all respect to Section 14.11 of the Indenture), rights, options or warrants distributed by the Company to all holders of the Class A Common Stock entitling them to subscribe for or purchase shares of the Company’s Capital Stock, including Class A Common Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (“Trigger Event”):

(i)are deemed to be transferred with such shares of the Class A Common Stock;
(ii)are not exercisable; and
(iii)are also issued in respect of future issuances of the Class A Common Stock,

shall be deemed not to have been distributed for purposes of this section (and no adjustment to the Conversion Rate under this section will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this section. If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Record Date with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other event (of

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the type described in the immediately preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this section was made:

(1)in the case of any such rights, options or warrants that shall all have been redeemed or purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by a holder or holders of Class A Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Class A Common Stock as of the date of such redemption or purchase, and
(2)in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights, options and warrants had not been issued.

For purposes of Section 14.04(a), Section 14.04(b) and this section of the Indenture, if any dividend or distribution to which this section is applicable also includes one or both of:

(A)a dividend or distribution of shares of Class A Common Stock to which Section 14.04(a) of the Indenture is applicable (the “Clause A Distribution”); or
(B)a dividend or distribution of rights, options or warrants to which Section 14.04(b) of the Indenture is applicable (the “Clause B Distribution”),

then, in either case,

(1)

such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a dividend or distribution to which this section is applicable (the “Clause C Distribution”) and any Conversion Rate adjustment required by this section with respect to such Clause C Distribution shall then be made, and

(2)

the Clause A Distribution and Clause B Distribution shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 14.04(a) and Section 14.04(b) of the Indenture with respect thereto shall then be made, except that, if determined by the Company (I) the “Record Date” of the Clause A Distribution and the Clause B Distribution shall be deemed to be the Record Date of the Clause C Distribution and (II) any shares of Class A Common Stock included in the Clause A Distribution or Clause B Distribution shall be deemed not to be “outstanding immediately prior to the open of business on such Record Date or Effective Date” within the meaning of Section 14.04(a) of the Indenture or “outstanding immediately prior to the open of business on such Record Date” within the meaning of Section 14.04(b) of the Indenture.

If the Company pays or makes any cash dividend or distribution to all or substantially all holders of the Class A Common Stock, the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

SP0

SP0 – C

where,

CR0=the Conversion Rate in effect immediately prior to the open of business on the Record Date for such dividend or distribution;

CR1=the Conversion Rate in effect immediately after the open of business on the Record Date for such dividend or distribution;

SP0=the Last Reported Sale Price of the Class A Common Stock on the Trading Day immediately preceding the Record Date for such dividend or distribution; and

C=the amount in cash per share the Company distributes to all or substantially all holders of the Class A Common Stock.

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Any increase pursuant to this section shall become effective immediately after the open of business on the Record Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Rate shall be decreased, effective as of the date the Board determines in good faith not to make or pay such dividend or distribution, to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall receive, for each $1,000 principal amount of Notes, at the same time and upon the same terms as holders of shares of the Class A Common Stock, the amount of cash that such Holder would have received if such Holder owned a number of shares of Class A Common Stock equal to the Conversion Rate in effect on the Record Date for such cash dividend or distribution.

(ii)

If the Company or any of its Subsidiaries make a payment in respect of a tender or exchange offer for the Class A Common Stock that is subject to the then-applicable tender offer rules under the Exchange Act (other than an odd lot tender offer), to the extent that the cash and value of any other consideration included in the payment per share of the Class A Common Stock exceeds the average of the Last Reported Sale Prices of the Class A Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

AC + (SP1 x OS1)

OS0 x SP1

where,

CR0=the Conversion Rate in effect immediately prior to the close of business on the tenth (10th) Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires (the date such tender offer or exchange offer expires, the “Expiration Date”);

CR1=the Conversion Rate in effect immediately after the close of business on the tenth (10th) Trading Day immediately following, and including, the Trading Day next succeeding the Expiration Date;

AC=the aggregate value of all cash and any other consideration (as determined by the Board in good faith) paid or payable for shares of Class A Common Stock purchased in such tender or exchange offer;

OS0=the number of shares of Class A Common Stock outstanding immediately prior to the Expiration Date (prior to giving effect to the purchase of all shares of Class A Common Stock accepted for purchase or exchange in such tender or exchange offer);

OS1=the number of shares of Class A Common Stock outstanding immediately after the Expiration Date (after giving effect to the purchase of all shares of Class A Common Stock accepted for purchase or exchange in such tender or exchange offer); and

SP1=the average of the Last Reported Sale Prices of the Class A Common Stock over the ten (10) consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the Expiration Date.

The increase to the Conversion Rate under this section shall occur at the close of business on the tenth (10th) Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that if the relevant Conversion Date occurs during the ten (10) Trading Days immediately following, and including, the Trading Day next succeeding the Expiration Date of any tender or exchange offer, references to “ten (10)” or “tenth (10th)” in the preceding paragraph shall be deemed replaced with such lesser number of Trading Days as have elapsed between the Expiration Date of such tender or exchange offer and the Conversion Date in determining the Conversion Rate. In addition, if the Trading Day next succeeding the date such tender or exchange offer expires is after the tenth (10th) Trading Day immediately preceding, and including, the date immediately preceding the relevant Conversion Date in respect of a conversion of Notes, references to “ten (10)” or “tenth (10th)” in the preceding paragraph and this paragraph shall be deemed to be replaced, solely in respect of that conversion of Notes, with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the date such tender or exchange offer expires to, and including, the last Trading Day immediately preceding the relevant Conversion Date.

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Upon the occurrence of Reset Date, the Conversion Rate shall be increased based on the following formula:

CR1 = CR0 ×

$1,000 / CR0

ACP

where,

CR0=the Conversion Rate in effect immediately prior to the close of business on the Trading Day immediately preceding the Reset Date;

CR1=the Conversion Rate in effect immediately after the open of business on Reset Date;

ACP=the Applicable Conversion Price.

For the avoidance of doubt, the Conversion Rate may not be decreased pursuant to this section.

Notwithstanding this section or any other provision of this Indenture or the Notes, if a Conversion Rate adjustment becomes effective on any Record Date, and a Holder that has converted its Notes on or after such Record Date and on or prior to the related Record Date would be treated as the record holder of the shares of Class A Common Stock as of the related Conversion Date as described under Section 14.02(i) of the Indenture based on an adjusted Conversion Rate for such Record Date, then, notwithstanding the Conversion Rate adjustment provisions in this Section 14.04 of the Indenture, the Conversion Rate adjustment relating to such Record Date shall not be made for such converting Holder. Instead, such Holder shall be treated as if such Holder were the record owner of the shares of Class A Common Stock on an unadjusted basis and participate in the related dividend, distribution or other event giving rise to such adjustment.

Except as stated herein, the Company shall not adjust the Conversion Rate for the issuance of shares of the Class A Common Stock or any securities convertible into or exchangeable for shares of the Class A Common Stock or the right to purchase shares of the Class A Common Stock or such convertible or exchangeable securities.

In addition to those adjustments required by clauses (a), (b), (c), (d), (e) and (f) of this Section 14.04 of the Indenture, the Company from time to time may increase the Conversion Rate by any amount for a period of at least twenty (20) Business Days if the Board determines in good faith that such increase would be in the Company’s best interest. In addition, the Company may (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Class A Common Stock or rights to purchase Class A Common Stock in connection with a dividend or distribution of shares of Class A Common Stock (or rights to acquire shares of Class A Common Stock) or similar event. Whenever the Conversion Rate is increased pursuant to either of the preceding two sentences, the Company shall deliver to the Holder of each Note a notice of the increase at least fifteen (15) days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

Except as stated in the Indenture, the Company shall not adjust the Conversion Rate for the issuance of shares of Class A Common Stock or any securities convertible into or exchangeable for shares of Class A Common Stock or the right to purchase shares of Class A Common Stock or such convertible or exchangeable securities. For illustrative purposes only and without limiting the generality of the preceding sentence, the Conversion Rate shall not be adjusted:

(i)upon the issuance of any shares of Class A Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in shares of Class A Common Stock under any plan;
(ii)upon the issuance of any shares of Class A Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of the Company’s Subsidiaries;
(iii)upon the issuance of any shares of the Class A Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in clause (ii) of this subsection and outstanding as of the date the 2027 Convertible Notes were first issued;

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(iv)upon the repurchase of any shares of Class A Common Stock pursuant to an open market share repurchase program or other buy-back transaction, including structured or derivative transactions, that is not a tender or exchange offer of the nature described in Section 14.04(e) of the Indenture;
(v)solely for a change in the par value (or lack of par value) of the Class A Common Stock; or
(vi)for accrued and unpaid interest, if any.

In addition, for the avoidance of doubt, none of the foregoing shall constitute a Conversion Reset Offering.

All calculations and other determinations under the Conversion of Notes article in the Indenture shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000th) of a share.

Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly deliver to the Trustee (and the Conversion Agent if not the Trustee) an Officer’s Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a written notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall deliver such notice of such adjustment of the Conversion Rate to each Holder (with a copy to the Trustee). Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

For purposes of this section, the number of shares of Class A Common Stock at any time outstanding shall not include shares of Class A Common Stock held in the treasury of the Company so long as the Company does not pay any dividend or make any distribution on shares of Class A Common Stock held in the treasury of the Company, but shall include shares of Class A Common Stock issuable in respect of scrip certificates issued in lieu of fractions of shares of Class A Common Stock.

For the avoidance of doubt, the closing of the transactions contemplated by the BCA to occur on the date of the Indenture shall not result in any adjustment of the Conversion Rate, Conversion Price or any other terms of the 2027 Convertible Notes.

Adjustment of Prices

Whenever any provision of the Indenture requires the Company to calculate the Last Reported Sale Prices or the Daily VWAPs over a span of multiple days, the Board shall make appropriate adjustments (without duplication in respect of any adjustment made pursuant to Section 14.04 of the Indenture) to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date, Record Date, Effective Date or Expiration Date, as the case may be, of the event occurs, at any time during the period when the Last Reported Sale Prices or the Daily VWAPs are to be calculated.

Effect of Recapitalizations, Reclassifications and Changes of the Class A Common Stock

(a)

In the case of:

(i)any recapitalization, reclassification or similar change of the Class A Common Stock (other than changes in par value or resulting from a subdivision or combination),
(ii)any consolidation, merger, combination or similar transaction involving the Company,
(iii)any sale, lease or other transfer to a third party of all or substantially all of the consolidated assets of the Company and the Company’s Subsidiaries, taken as a whole, or
(iv)any statutory share exchange,

in each case, as a result of which the Class A Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any such event, a “Share Exchange Event”), then at and after the effective time of such Share Exchange Event, the right to convert each $1,000 principal amount of Notes shall be changed into a

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right to convert such principal amount of Notes into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a holder of a number of shares of Class A Common Stock equal to the Conversion Rate immediately prior to such Share Exchange Event would have owned or been entitled to receive (the “Reference Property,” with each “unit of Reference Property” meaning the kind and amount of Reference Property that a holder of one share of Class A Common Stock is entitled to receive) upon such Share Exchange Event and, prior to or at the effective time of such Share Exchange Event, the Company or the successor or acquiring Person, as the case may be, shall execute with the Trustee a supplemental indenture permitted under Section 10.01(g) of the Indenture providing for such change in the right to convert each $1,000 principal amount of Notes; providedhowever, that at and after the effective time of the Share Exchange Event (I) any amount payable in cash upon conversion of the Notes in accordance with Section 14.02 of the Indenture shall continue to be payable in cash, (II) any shares of Class A Common Stock that the Company would have been required to deliver upon conversion of the Notes in accordance with Section 14.02 of the Indenture shall instead be deliverable in the amount and type of Reference Property that a holder of that number of shares of Class A Common Stock would have been entitled to receive in such Share Exchange Event and (III) the Daily VWAP shall be calculated based on the value of a unit of Reference Property.

If the Share Exchange Event causes the Class A Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), then (i) the Reference Property into which the Notes will be convertible shall be deemed to be the weighted average of the types and amounts of consideration actually received by the holders of Class A Common Stock, and (ii) the unit of Reference Property for purposes of the immediately preceding paragraph shall refer to the consideration referred to in clause (i) attributable to one share of Class A Common Stock. If the holders of the Class A Common Stock receive only cash in such Share Exchange Event, then for all conversions for which the relevant Conversion Date occurs after the effective date of such Share Exchange Event (A) the consideration due upon conversion of each $1,000 principal amount of Notes shall be solely cash in an amount equal to the Conversion Rate in effect on the Conversion Date (as may be increased by any Additional Shares pursuant to Section 14.14 of the Indenture), multiplied by the price paid per share of Class A Common Stock in such Share Exchange Event and (B) the Company shall satisfy the Conversion Obligation by paying such cash amount to converting Holders on the second (2nd) Business Day immediately following the relevant Conversion Date. The Company shall notify in writing Holders, the Trustee and the Conversion Agent (if other than the Trustee) of such weighted average as soon as reasonably practicable after such determination is made.

If the Reference Property in respect of any Share Exchange Event includes, in whole or in part, shares of common equity, such supplemental indenture described in the second immediately preceding paragraph shall provide for anti-dilution and other adjustments that shall be as nearly equivalent as is possible to the adjustments provided for in this Article 14 of the Indenture with respect to the portion of the Reference Property consisting of such common equity. If, in the case of any Share Exchange Event, the Reference Property includes shares of stock, securities or other property or assets (including any combination thereof), other than cash and/or Cash Equivalents, of a Person other than the Company or the successor or purchasing corporation, as the case may be, in such Share Exchange Event, then such supplemental indenture shall also be executed by such other Person, if such other Person is an affiliate of the Company or the successor or acquiring company, and shall contain such additional provisions to protect the interests of the Holders of the Notes as the Board shall reasonably consider necessary by reason of the foregoing, including the provisions providing for the purchase rights set forth in Section 15.02 of the Indenture.

When the Company executes a supplemental indenture pursuant to this section, the Company shall promptly deliver to the Trustee an Officer’s Certificate briefly stating the reasons therefor, the kind or amount of cash, securities or property or asset that will comprise a unit of Reference Property after any such Share Exchange Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with, and shall promptly deliver notice thereof to all Holders. The Company shall cause notice of the execution of such supplemental indenture to be delivered to each Holder promptly and in any event within twenty (20) days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

The Company shall not become a party to any Share Exchange Event unless its terms are consistent with this Section 14.07 of the Indenture. None of the foregoing provisions shall affect the right of a holder of Notes to convert its Notes into shares of Class A Common Stock, as set forth in Section 14.01 of the Indenture and Section 14.02 of the Indenture prior to the effective date of such Share Exchange Event.

The above provisions of this section shall similarly apply to successive Share Exchange Events.

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Fundamental Change

If a Fundamental Change (as defined in the Indenture) occurs prior to the maturity date, holders of the 2027 Convertible Notes will have the right to require the Company to repurchase all or any portion of their 2027 Convertible Notes in principal amounts of $1,000 or an integral multiple thereof, at a repurchase price equal to the principal amount of the 2027 Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

Following certain corporate events that occur prior to the maturity date or if the Company exercises its mandatory conversion right in connection with such corporate events, the Company will in certain circumstances increase the conversion rate for a holder who elects to convert its 2027 Convertible Notes in connection with such corporate events or has been forced to convert its 2027 Convertible Notes in connection with such corporate events, as the case may be.

Governing Law

The Indenture, the 2027 Convertible Notes and the Security Agreement are governed by, and construed in accordance with, the laws of the State of New York.

Certain Anti-Takeover Provisions of Delaware Law, the Company’s Certificate of Incorporation and Amended and Restated Bylaws

Our Certificate of Incorporation provides that the Board is classified into three classes of directors of approximately equal size. As a result, in most circumstances, a person can gain control of the board only by successfully engaging in a proxy contest at three or more annual meetings. Furthermore, because the Board will be classified, directors may be removed only with cause by a majority of our outstanding shares.

In addition, the Certificate of Incorporation does not provide for cumulative voting in the election of directors. Our authorized but unissued Class A Common Stock and preferred stock will beare available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved Class A Common Stock and preferred stock could render more difficult or discourage an attempt to obtain control of the Companyus by means of a proxy contest, tender offer, merger or otherwise.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES FOR NON-U.S. HOLDERS OF CLASS A COMMON STOCKStockholders

The following summary sets forth below certain material U.S. federal income tax consequences for Non-U.S. Holders (as defined below)Certificate of Class A Common Stock asIncorporation provides that special meetings of our stockholders may be called only by the Chairman of the date hereof. This summary is based uponBoard or the Internal Revenue CodeQualTek Board pursuant to a resolution adopted by a majority of 1986,the Board. Stockholders of QualTek will not be eligible and has no right to call a special meeting.

Advance Notice Requirements for Stockholder Proposals and Director Nominations

Our Amended and Restated Bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as amended (the “Code”), the regulations promulgateddirectors at our annual meeting of stockholders, must provide timely notice of their intent in writing. To be timely, a stockholder’s notice will need to be received by the U.S. Treasury Department, current administrative interpretations and practicesCompany’s Secretary at our principal executive offices not later than the close of business on the U.S. Internal Revenue Service (the “IRS”) and judicial decisions, all as currently in effect as90th day nor earlier than the open of business on the date hereof and all of which are subject to differing interpretations or change, possibly with retroactive effect. No assurance can be given that the IRS will not assert, or that a court will not sustain a position contrary to any of the tax considerations described below. This summary does not discuss all aspects of U.S. federal income taxation that may be relevant to particular holders in light of their particular circumstances, and does not address the U.S. federal income tax consequences to holders that are subject to special tax rules, including, without limitation: financial institutions, insurance companies, mutual funds, pension plans, S corporations, controlled foreign corporations, broker-dealers, traders in securities that elect mark-to-market treatment, regulated investment companies, real estate investment trusts, partnerships and their partners, tax-exempt organizations (including private foundations), investors that hold Class A Common Stock as part of a “straddle,” “hedge,” “conversion,” “synthetic security,” “constructive ownership transaction,” “constructive sale” or other integrated transaction for U.S. federal income tax purposes, holders subject to the alternative minimum tax provisions of the Code, holders who acquired Class A Common Stock directly or indirectly in connection with performance of services, pursuant to an exercise of employee options, in connection with employee incentive plans or otherwise as compensation, the Sponsor and its affiliates, persons who actually or constructively own 5% or more (by vote or value) of the Class A Common Stock, persons required to accelerate the recognition of any item of gross income with respect to Class A Common Stock as a result of such income being recognized on an applicable financial statement, and U.S. expatriates, all of whom may be subject to tax rules that differ materially from those summarized below. In addition, this summary does not discuss any state, local, or non-United States tax considerations, any non-income tax (such as gift or estate tax) considerations, the alternative minimum tax, the Medicare tax on certain net investment income, or any tax reporting obligations in respect of the ownership of Class A Common Stock. This summary does not address any tax consequences to holders that directly or indirectly held equity interests in QualTek120th day prior to the Business Combination, includinganniversary date of the Pre-PIPE Investors,immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained in the annual proxy statement. The Certificate of Incorporation specifies certain requirements as to the form and holders of Class A Common Stock that also hold, directly or indirectly, equity interests in QualTek. In addition, this summary is limited to holders that hold Class A Common Stock as “capital assets” (generally, property held for investment) under the Code.

If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds Class A Common Stock, the tax treatmentcontent of a partner in such partnership will generally depend uponstockholders’ meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders. Our Amended and Restated Bylaws also specify certain requirements as to the statusform and content of a stockholder’s notice for an annual meeting. Specifically, a stockholder’s notice must include: (i) a brief description of the partner,business desired to be brought before the activitiesannual meeting, the text of the partnershipproposal or business (including the text of any resolutions proposed for consideration and in the event such business includes a proposal to amend the Amended and Restated Bylaws, the language of the proposed amendment) and the partner and certain determinations madereasons for conducting such business at the partner level. If you are a partnerannual meeting, (ii) the name and record address of a partnership holding Class A Common Stock, you are urged to consult your tax advisor.

For purposessuch stockholder and the name and address of this discussion, a “Non-U.S. Holder” is athe beneficial owner, for U.S. federal income tax purposesif any, on whose behalf the proposal is made, (iii) the class or series and number of Class A Common Stockshares of our capital stock that are owned beneficially and of record by such stockholder and by the beneficial owner, if any, on whose behalf the proposal is notmade, (iv) a description of all arrangements or understandings between such stockholder and the beneficial owner, if any, ofon whose behalf the following:proposal is made and any other person or persons (including their

an individual who is a United States citizen or resident of the United States;
a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
a trust (i) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons (within the meaning of the Code) who have the authority to control all substantial decisions of the trust or (ii) that has in effect a valid election under applicable Treasury regulations to be treated as a United States person.

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Gainnames) in connection with the proposal of such business by such stockholder, (v) any material interest of such stockholder and the beneficial owner, if any, on Sale, Taxablewhose behalf the proposal is made in such business and (vi) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. These notice requirements will be deemed satisfied by a stockholder as to any proposal (other than nominations) if the stockholder has notified the Company of such stockholder’s intention to present such proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) of the Exchange Act, and such stockholder has complied with the requirements of such rule for inclusion of such proposal in a proxy statement prepared by us to solicit proxies for such annual meeting. The foregoing provisions may limit our stockholders’ ability to bring matters before our annual meeting of stockholders or Other Taxable Dispositionfrom making nominations for directors at our annual meeting of stockholders.

Securities Eligible for Future Sale

The Company has 24,446,284 shares of Class A Common Stock

Subject to outstanding as of September 15, 2022. Of these shares, 6,136,283 public shares are freely tradable without restriction or further registration under the discussions belowSecurities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under “— Information Reportingthe Securities Act (“Rule 144”). All of the remaining 18,310,001 outstanding shares are, and Backup Withholding” and “—FATCA,” a Non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax in respectany shares of gain recognized on a taxable disposition of its Class A Common Stock unless:issued upon conversion of the 2027 Convertible Notes will be, restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.

Rule 144

Pursuant to Rule 144 under the Securities Act, a person who has beneficially owned restricted shares of our Class A Common Stock or warrants for at least six months would be entitled to sell his, her or its securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.

Persons who have beneficially owned restricted shares of our Class A Common Stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:

1% of the gain is effectively connected with the conducttotal number of a tradeshares of Class A Common Stock then outstanding; or business by the Non-U.S. Holder within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. Holder), in which case, a non-corporate Non-U.S. Holder will be subject to tax on the net gain derived from the sale under regular graduated U.S. federal income tax rates, and a corporate Non-U.S. Holder may be subject to an additional branch profits tax at a 30% rate (or lower rate as may be specified by an applicable income tax treaty);
the Non-U.S. Holder is an individual who is present inaverage weekly reported trading volume of the United States for 183 days or more inClass A Common Stock during the taxable year in whichfour calendar weeks preceding the disposition takes place and certain other conditions are met, in which casefiling of a notice on Form 144 with respect to the Non-U.S. Holder will generallysale.

Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.

Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies

Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:

the issuer of the securities that was formerly a shell company has ceased to be subject to a 30% tax on the individual’s net capital gain for the year; orshell company;
QSIthe issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
the issuer of the securities has been a “United States real property holding corporation” for U.S. federal income tax purposes at any timefiled all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. Holder held Class A Common Stock,issuer was required to file such reports and inmaterials), other than Form 8-K reports; and
at least one year has elapsed from the case where shares of Class A Common Stock are regularly traded ontime that the issuer filed current Form 10-type information with the SEC reflecting its status as an established securities market, the Non-U.S. Holder has owned, directly or constructively, more than 5% of the Class A Common Stock at any time within the shorter of the five-year period preceding the disposition or such Non-U.S. Holder’s holding period for the shares of Class A Common Stock.entity that is not a shell company.

With respect to the third bullet point above (if applicable to a particular Non-U.S. Holder), gain recognized by such Non-U.S. Holder on the sale, exchange or other disposition of Class A Common Stock will be subject to tax at generally applicable U.S. federal income tax rates. There can be no assurance that the Class A Common Stock will be treated as regularly traded on an established securities market for this purpose. QSI does not believe that it is or has been a United States real property holding corporation for U.S. federal income tax purposes but there can be no assurance in this regard. QSI would be classified as a United States real property holding corporation if the fair market value of its “United States real property interests” equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes.

Taxation of Distributions

Subject to the discussions below under “— Information Reporting and Backup Withholding” and “—FATCA,” in general, any distributions QSI makes to a Non-U.S. Holder on shares of Class A Common Stock, to the extent paid out of QSI’s current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, under certain income tax treaties, attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. Holder), the applicable withholding agent will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. Holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S. Holder’s adjusted tax basis in its shares of Class A Common Stock (and, subject to the discussion below under “— Information Reporting and Backup Withholding” and “— FATCA,” and the third bullet point above under “— Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock,” to the extent such distribution does not exceed the adjusted tax basis such amount will generally not be subject to withholding) and, to the extent such distribution exceeds the Non-U.S. Holder’s adjusted tax basis, as gain realized from the sale or other disposition of Class A Common Stock, which will be treated as described above under “— Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock.” In addition, if QSI determines that it is classified as a United States real property holding corporation, it will withhold 15% of any distribution that exceeds QSI’s current and accumulated earnings and profits.

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Dividends QSI paysAs a result, our Initial Stockholders are able to a Non-U.S. Holder thatsell their Founder Shares and Private Warrants, as applicable, pursuant to Rule 144 without registration one year after the closing of the Business Combination.

Investor Rights Agreement

In connection with the closing of our Business Combination, QualTek, certain Sellers as set forth therein, BCP QualTek, the Sponsors, Sponsor Representative, and certain Other Holders (all as defined therein) entered into an Investor Rights Agreement, pursuant to which the Registration Rights Agreement, dated as of March 2, 2021, between the Other Holders (as defined therein) and ROCR was terminated and whereby we agreed to grant to the Holders (as defined therein), which includes certain equityholders of QualTek as well as the Sponsors, certain registration rights, including customary piggyback registration rights and demand registration rights immediately after the closing of our Business Combination, which are effectively connected with such Non-U.S. Holder’s conduct of a trade or business within the United States (and, under certain income tax treaties, attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. Holder), generally will not be subject to U.S. federal withholding tax, provided such Non-U.S. Holder complies with certain certificationcustomary terms and disclosure requirements. Instead, such dividends generally will be subject to U.S. federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to United States persons as defined under the Code (subject to an exemption or reduction in such tax as may be provided by an applicable income tax treaty). If the Non-U.S. Holder is a corporation, dividends that are effectively connected income may also be subject to an additional “branch profits tax” at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty).

Information Reporting and Backup Withholding

QSI generally must report annually to the IRS and to each Non-U.S. Holder the amount of dividends paid to such holder and the tax withheldconditions, including with respect to such dividends, regardlesscooperation and reduction of whether withholding was required. A Non-U.S. Holder may haveunderwritten shelf takedown provisions (subject to comply with certification procedures to establish that it is not a United States person in order to avoid information reporting and backup withholding requirements. The certification procedures required to claim a reduced rate of withholding under an applicable income tax treaty generally will satisfy a Non-U.S. Holder’s certification requirements necessary to avoid backup withholding as well. Backup withholding is not an additional tax. Any amounts withheld underlock-up restrictions for six months after the backup withholding rules will generally be allowed as a refund or a credit against a Non-U.S. Holders U.S. federal income tax liability provided the required information is timely furnished to the IRS. Holders should consult their tax advisors regarding the application of information reporting and backup withholding to them.

FATCA

Under sections 1471 to 1474closing of the Code (commonly referredBusiness Combination). Additionally, the Investor Rights Agreement sets forth certain corporate governance standards relating to as “FATCA”)QualTek.

2027 Convertible Note Subscription Agreements

The Company is obligated to register the resale of the 2027 Convertible Notes and the shares issuable upon the conversion of the 2027 Convertible Notes. The Company agreed that, the Company will file with a 30% withholding tax generally applies with respect to certain payments on and, subject toregistration statement registering the regulatory relief described below, gross proceeds from a sale or dispositionresale of the shares of Class A Common Stock issuable upon conversion of the 2027 Convertible Notes. The Company will use its commercially reasonable efforts to maintain the continuous effectiveness of such registration statement, and to be supplemented and amended to the extent necessary to ensure that such prospectus is available or, if paid to (i) a foreign financial institution (as the beneficial owner or as an intermediarynot available, that another registration statement is available for the beneficial owner), unlessresale of the 2027 Convertible Notes, until the earliest of (i) the date on which the 2027 Convertible Notes may be resold without volume or manner of sale limitations pursuant to Rule 144 promulgated under the Securities Act, (ii) the date on which such institution (a) enters into,2027 Convertible Notes have actually been sold and (iii) the date which is in compliance with, a withholding and information reporting agreement withthree years after the U.S. government to collect and provideclosing of the Business Combination.

Notwithstanding anything to the U.S. tax authorities substantialcontrary in the Convertible Note Subscription Agreements, the Company shall be entitled to delay or postpone the effectiveness of the registration statement, and from time to time to require any Selling Securityholder not to sell under the registration statement or to suspend the effectiveness thereof, if (i) it determines that in order for the registration statement not to contain a material misstatement or omission, an amendment or supplement thereto would be needed or (ii) the negotiation or consummation of a transaction by the Company or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event, the Board reasonably believes, upon the advice of legal counsel, would require additional disclosure by the Company in the Registration Statement of material information regarding U.S. account holdersthat the Company has a bona fide business purpose for keeping confidential and the non-disclosure of such institution (whichwhich in the registration statement would includebe expected, in the reasonable determination of the Board, upon the advice of legal counsel, to cause the Registration Statement to fail to comply with applicable disclosure requirements.

Section 203 of the DGCL

QualTek is subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. This statute prevents certain equity and debt holders of such institution, as well asDelaware corporations, under certain account holders that are foreign entities with U.S. owners) or (b) is a residentcircumstances, from engaging in a country that has entered into an intergovernmental agreement with the United States in relation to such withholding and information reporting and the financial institution complies with the related information reporting requirements“business combination” with:

a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
an affiliate of an interested stockholder; or
an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.

A “business combination” includes a merger or sale of such country or (ii) a foreign entity that is not a financial institution (as the beneficial owner or as an intermediary for the beneficial owner), unless such entity provides the withholding agent with a certification identifying the substantial United States owners of the entity, which generally includes any United States person who directly or indirectly owns more than 10% of our assets. However, the entity, or such entity otherwise qualifies for an exemption from these rules. An intergovernmental agreement betweenabove provisions of Section 203 do not apply if:

the Board approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of Class A Common Stock; or

144

on or subsequent to the date of the transaction, the business combination is approved by the Board and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.

Listing of Securities

The Company’s Class A Common Stock and warrants are listed on Nasdaq under the United Statessymbol “QTEK” and the applicable foreign country, or future U.S. Treasury regulations or other guidance, may modify these requirements. Under proposed U.S. Treasury regulations that may“QTEKW,” respectively. The 2027 Convertible Notes will not be relied upon pending finalization, the withholding taxlisted on gross proceeds would be eliminated and, consequently, FATCA withholding on gross proceeds is not expected to apply unless such proposed U.S. Treasury regulations are modified, withdrawn or replaced in a manner that would subject gross proceeds to FATCA withholding. Non-U.S. Holders should consult their tax advisors regarding the possible implications of such withholding tax.

NON-U.S. HOLDERS OF CLASS A COMMON STOCK ARE URGED TO CONSULT THEIR TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES THEREOF.

any securities exchange.

114145

SELLING STOCKHOLDERS

The shares of Class A Common Stock being offered by the Selling Stockholders are those previously issued to the Selling Stockholders in connection with the Business Combination, or issuable upon the exchange of Common Units and shares of Class B Common Stock underlying the Pre-PIPE Notes. We are registering the shares of Class A Common Stock in order to permit the Selling Stockholders to offer the shares of Class A Common Stock for resale from time to time. Except for (x) the ownership of the shares of Class A Common Stock, securities of QualTek or securities of QSI, as applicable, (y) service as executive officers and/or directors of ROCR, QualTek or the Combined Company, as applicable, and (z) as described under “Certain Relationships and Related Party Transactions,” the Selling Stockholders have not had any material relationship with us within the past three years.

The table below lists the Selling Stockholders and other information regarding the beneficial ownership of the shares of Class A Common Stock, including any shares of Class A Common Stock underlying Private Units and issuable upon the exchange of Common Units and shares of Class B Common Stock underlying the Pre-PIPE Notes, by each of the Selling Stockholders. The second column lists the number of shares of Class A Common Stock beneficially owned by each Selling Stockholder or issuable upon the exchange of Common Units and shares of Class B Common Stock underlying the Pre-PIPE Notes, as of February 1, 2022.

The third column lists the number of shares of Class A Common Stock being offered by this prospectus by each of the Selling Stockholders.

The fourth column lists the number of shares of Class A Common Stock owned by each of the Selling Stockholders following the sale of the maximum number of shares of Class A Common Stock listed in the third column by such Selling Stockholder.

The Selling Stockholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”

    

Maximum Number

of Shares of

Number of

Class A

Number of

Percent

Shares of

Common Stock

Shares

of Shares of

Class A

To Be

of Class A

Class A

Common Stock

Sold Pursuant

Common Stock

Common Stock

Owned Prior to

to this

Owned After

Owned After

NAME OF SELLING SHAREHOLDER

the Offering

    

Prospectus

    

the Offering

    

the Offering(1)

Victoria Partner LP(2)

 

2,656,250

 

2,656,250

 

 

—  

ZCA Private Investments Fund II, LP(3)

 

468,750

 

468,750

 

 

—  

CVI Investments, Inc.(4)

 

781,250

 

781,250

 

 

—  

DS Liquid Div RVA MON LLC(5)

 

439,453

 

439,453

 

 

—  

Monashee Solitario Fund LP(6)

 

263,672

 

263,672

 

 

—  

Pacera Larson Ventures LLC(7)

 

546,875

 

546,875

 

 

—  

ACT Capital Partners, LP(8)

 

156,250

 

156,250

 

 

—  

The Ecker Family Partnership(9)

 

31,250

 

31,250

 

 

—  

Gingko Fund, LLC(10)

 

228,125

 

228,125

 

 

—  

Whitethorne Fund, LLC(11)

 

131,250

 

131,250

 

 

—  

Granite Point Capital Master Fund, LP(12)

 

156,250

 

156,250

 

 

—  

Granite Point Capital Scorpion Focused Ideas Fund(13)

 

78,125

 

78,125

 

 

—  

Emerson 1993 Family Trust(14)

 

343,750

 

343,750

 

 

—  

Emerson Partners(15)

 

93,750

 

93,750

 

 

—  

SNP Family Partnership(16)

 

187,500

 

187,500

 

 

—  

David S. Zelman(17)

 

78,125

 

78,125

 

 

—  

Millrace Capital, LP(18)

 

45,704

 

45,704

 

 

—  

Millrace Fund, LP(19)

 

488,672

 

488,672

 

 

—  

BCP QualTek, LLC(20)

 

750,000

 

750,000

 

 

—  

115

    

Maximum Number

of Shares of

Number of

Class A

Number of

Percent

Shares of

Common Stock

Shares

of Shares of

Class A

To Be

of Class A

Class A

Common Stock

Sold Pursuant

Common Stock

Common Stock

Owned Prior to

to this

Owned After

Owned After

NAME OF SELLING SHAREHOLDER

the Offering

    

Prospectus

    

the Offering

    

the Offering(1)

Casing & Co. F/B/O Wasatch Micro Cap Fund(21)

 

2,125,000

 

2,125,000

 

 

—  

Roth Capital Partners, LLC(22)

 

607,231

 

594,588

 

12,643

 

*  

Aaron M. Gurewitz, as Trustee of the AMG Trust established January 23, 2007(23)

 

136,202

 

16,662

 

119,540

 

*  

Gordon J. Roth(24)

 

99,852

 

7,500

 

92,352

 

*  

Matthew Day(25)

 

16,093

 

2,000

 

14,093

 

*  

Theodore D. Roth(26)

 

57,298

 

5,000

 

52,298

 

*  

Mike Anderson(27)

 

51,031

 

6,243

 

44,788

 

*  

Brad Baker(28)

 

102,062

 

12,485

 

89,577

 

*  

Craig-Hallum Capital Group LLC(29)

 

589,761

 

450,235

 

139,526

 

*  

Steve Dyer(30)

 

51,031

 

6,243

 

44,788

 

*  

Kevin Harris(31)

 

102,062

 

12,485

 

89,577

 

*  

William F. Hartfiel III(32)

 

102,062

 

12,485

 

89,577

 

*  

Donald Ryan Hultstrand(33)

 

76,547

 

9,364

 

67,183

 

*  

Dan Kapke(34)

 

25,515

 

3,121

 

22,394

 

*  

John Lipman(35)

 

796,862

 

97,481

 

699,381

 

2.23

%

Christian Schwab(36)

 

25,515

 

3,121

 

22,394

 

*  

George Sutton(37)

 

51,031

 

6,243

 

44,788

 

*  

James Zavoral(38)

 

51,031

 

6,243

 

44,788

 

*  

Patriot Strategy Partners LLC(39)

 

250,000

 

250,000

 

 

—  

Harbour Holdings Ltd.(40)

 

6,250

 

6,250

 

 

—  

Skylands Special Investment LLC(41)

 

46,875

 

46,875

 

 

—  

Skylands Special Investment II LLC(42)

 

9,375

 

9,375

 

 

—  

*Represents beneficial ownership of less than 1%.

(1)The percentage of beneficial ownership after this offering is calculated based on 31,383,439 shares of Class A Common Stock outstanding as of the date of this prospectus. Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares beneficially owned by them.
(2)The address of Victoria Partner LP is 10801 W. Charleston Boulevard, Suite 600 Las Vegas, NV 89135.
(3)The address of ZCA Private Investments Fund II, LP is 1205 Westlakes Drive, Berwyn, PA 19312.
(4)Heights Capital Management, Inc., the authorized agent of CVI Investments, Inc. (“CVI”), has discretionary authority to vote and dispose of the shares held by CVI and may be deemed to be the beneficial owner of these shares. Martin Kobinger, in his capacity as Investment Manager of Heights Capital Management, Inc., may also be deemed to have investment discretion and voting power over the shares held by CVI. Mr. Kobinger disclaims any such beneficial ownership of the shares. The principal business address of CVI is c/o Heights Capital Management, Inc., 101 California Street, Suite 3250, San Francisco, California 94111.
(5)The address of DS Liquid Div RVA MON LLC is c/o Monashee Investment Management LLC, 75 Park Plaza, 2nd Floor, Boston MA 02116.
(6)The address of Monashee Solitario Fund LP is c/o Monashee Investment Management LLC, 75 Park Plaza, 2nd Floor, Boston MA 02116.
(7)The address of Pacera Larson Ventures LLC is 555 Croton Rd Suite 307, King of Prussia, PA 19406.

116

(8)Amir L. Ecker has voting and dispositive power over the shares held by ACT Capital Partners LP. The address of ACT Capital Partners, LP is c/o ACT Capital Management, LLC 100 W. Lancaster Avenue, Suite 110, Wayne, PA 19087.
(9)Amir L. Ecker has voting and dispositive power over the shares held by The Ecker Family Partnership. The address of The Ecker Family Partnership is c/o ACT Capital Management, LLC 100 W. Lancaster Avenue, Suite 110, Wayne, PA 19087.
(10)Amir L. Ecker has voting and dispositive power over the shares held by Gingko Fund, LLC. The address of Gingko Fund, LLC is c/o ACT Capital Management, LLC 100 W. Lancaster Avenue, Suite 110, Wayne, PA 19087.
(11)Amir L. Ecker has voting and dispositive power over the shares held by Whitethorne Fund, LLC. The address of Whitethorne Fund, LLC is c/o ACT Capital Management, LLC 100 W. Lancaster Avenue, Suite 110, Wayne, PA 19087.
(12)Warren B. Lammert, III has voting and dispositive power over the shares held by Granite Point Capital Master Fund, LP. The address of Granite Point Capital Master Fund, LP is 109 State Street, 5th Floor, Boston, MA 02109.
(13)Warren B. Lammert, III has voting and dispositive power over the shares held by Granite Point Capital Scorpion Focused Ideas Fund. The address of Granite Point Capital Scorpion Focused Ideas Fund is 109 State Street, 5th Floor, Boston, MA 02109.
(14)V. Steven Emerson has voting and dispositive power over the shares held by Emerson 1993 Family Trust. The address of Emerson 1993 Family Trust is 1522 Ensley Avenue, Los Angeles, CA 90024.
(15)V. Steven Emerson has voting and dispositive power over the shares held by Emerson Partners. The address of Emerson Partners is 1522 Ensley Avenue, Los Angeles, CA 90024.
(16)The address of SNP Family Partnership is 21200 NE 38th Avenue, Unit 2101, Aventura, FL 33180-3785.
(17)The address of David S. Zelman is 2701 E. Oviatt Road, Suite 14, Bay Village, OH 44140.
(18)William L. Kitchel III has voting and dispositive power over the shares held by Millrace Capital, LP. The address of Millrace Capital, LP is c/o Millrace Asset Group, Inc., 1205 Westlakes Dr., Suite 375, Berwyn, PA 19312.
(19)William L. Kitchel III has voting and dispositive power over the shares held by Millrace Fund, LP. The address of Millrace Fund, LP is c/o Millrace Asset Group, Inc., 1205 Westlakes Dr., Suite 375, Berwyn, PA 19312.
(20)The address of BCP Qualtek, LLC is 650 5th Avenue, New York, NY 10019.
(21)Ken Korngiebel has voting and dispositive power over the shares held by Casing & Co. F/B/O Wasatch Micro Cap Fund. The address of Casing & Co. F/B/O Wasatch Micro Cap Fund is c/o Wasatch Global Investors, 505 Wakara Drive, Suite 300, Salt Lake City, UT 84108.
(22)Byron Roth and Gordon Roth, both members of Roth Capital Partners, LLC, have voting and dispositive power over the shares held by Roth Capital Partners, LLC. The address of Roth Capital Partners, LLC is 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(23)The address of Aaron M. Gurewitz, as Trustee of the AMG Trust established 1/23/2007 is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(24)The address of Gordon J. Roth is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(25)The address of Matthew Day is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.
(26)The address of Theodore D. Roth is c/o Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660.

117

(27)The address of Mike Anderson is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(28)The address of Brad Baker is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(29)The address of Craig-Hallum Capital Group LLC is 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(30)The address of Steve Dyer is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(31)The address of Kevin Harris is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(32)The address of William F. Hartfiel III is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402. Mr. Hartfiel and at least three other individuals each have voting and dispositive power over the shares owned by Craig-Hallum Capital Group LLC. Under the so-called “rule of three,” if voting and dispositive decisions regarding an entity’s securities are made by three or more individuals, and a voting or dispositive decision requires the approval of a majority of those individuals, then none of the individuals is deemed a beneficial owner of the entity’s securities. Based upon the foregoing analysis, the aforementioned individuals do not exercise voting or dispositive control over any of the securities held by Craig-Hallum Capital Group LLC, even those in which he directly holds a pecuniary interest. Accordingly, none of them will be deemed to have or share beneficial ownership of such shares. The address is c/o Craig-Hallum, 222 S 9th Street, Suite 350, Minneapolis, MN 55402.
(33)The address of Donald Ryan Hulstrand is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(34)The address of Dan Kapke is c/o Craig Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(35)The address of John Lipman is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(36)The address of Christian Schwab is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(37)The address of George Sutton is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(38)The address of James Zavoral is c/o Craig-Hallum Capital Group LLC, 222 South 9th Street, Suite 350, Minneapolis, MN 55402.
(39)Lara Brody has voting and dispositive power over the shares held by Patriot Strategy Partners LLC. The address of Patriot Strategy Partners LLC is 2 Greenwich Office Park, Suite 300, Greenwich, CT 06831.
(40)Charles A Paquelet has voting and dispositive power over the shares held by Harbour Holdings Ltd. The address of Harbour Holdings Ltd is c/o Skylands Capital, LLC, 1200 N. Mayfair Rd, Suite 250, Milwaukee WI 53226.
(41)Charles A Paquelet has voting and dispositive power over the shares held by Skyland Special Investment LLC. The address of Skylands Special Investment LLC is c/o Skylands Capital, LLC, 1200 N. Mayfair Rd, Suite 250, Milwaukee WI 53226.
(42)Charles A Paquelet has voting and dispositive power over the shares held by Skylands Special Investment II LLC. The address of Skylands Special Investment II LLC is c/o Skylands Capital, LLC, 1200 N. Mayfair Rd, Suite 250, Milwaukee WI 53226.

118

PLAN OF DISTRIBUTION

EachThe Selling Stockholder of the securities and any ofSecurityholders, which, as used herein, includes their pledgees, assignees and successors-in- interestpermitted transferees, may, from time to time, sell, transfer or otherwise dispose of any or all of their securities covered herebyshares of Class A Common Stock and/or warrants on the principal trading market for such securitiesNasdaq or any other stock exchange, market or trading facility on which such securities are traded or in private transactions. In addition, the Selling Securityholders, which, as used herein, includes their permitted transferees, may, from time to time, sell, transfer or otherwise dispose of any or all of their 2027 Convertible Notes on any market or trading facility on which such securities are traded or in private transactions. These salesdispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale or at negotiated prices. A

The Selling StockholderSecurityholders may use any one or more of the following methods when selling securities:disposing of their shares of our Class A Common Stock, our warrants and/or our 2027 Convertible Notes:

ordinary brokerage transactions and transactions in which the broker-dealer solicits Subscribers;purchasers;
block trades in which the broker-dealer will attempt to sell the securitiesshares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
an exchange distribution in accordance with the rules of the applicable exchange;
privately negotiated transactions;
settlement of short sales;in underwritten transactions;
in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;short sales;
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
broker-dealers may agree with the Selling Securityholders to sell a specified number of such shares at a stipulated price;
distribution to members, limited partners or stockholders of Selling Securityholders;
“at the market” or through market makers or into an existing market for the shares;
a combination of any such methods of sale; orand
any other method permitted pursuant to applicable law.

The Selling StockholdersSecurityholders may, alsofrom time to time, pledge or grant a security interest in some or all of the shares of our Class A Common Stock, our warrants or our 2027 Convertible Notes owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell securitiestheir shares, warrants or 2027 Convertible Notes, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 144424(b) or any other exemption from registration underapplicable provision of the Securities Act if available, rather thanamending the list of Selling Securityholders to include the pledgee, transferee or other successors in interest as Selling Securityholders under this prospectus.

Broker-dealers engaged by The Selling Securityholders also may transfer their securities in other circumstances, in which case the Selling Stockholders may arrangetransferees, pledgees or other successors in interest will be the selling beneficial owners for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the Subscriberpurposes of securities, from the Subscriber) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.prospectus.

In connection with the sale of the securitiesour Class A Common Stock, our warrants, 2027 Convertible Notes or interests therein, the Selling StockholdersSecurityholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of theour securities in the course of hedging the positions they assume. The Selling StockholdersSecurityholders may also sell their securities short and deliver these securities to close out their short positions, or loan or pledge thesuch securities to broker-dealers that in turn may sell these securities. The Selling StockholdersSecurityholders may also enter into option or other transactions with broker-dealers or other financial institutions or createthe creation of one or more derivative securities which require the delivery to such broker-dealer or other

146

financial institution of securitiesthe shares offered by this prospectus, which securitiesshares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The aggregate proceeds to the Selling StockholdersSecurityholders from the sale of our Class A Common Stock, warrants or 2027 Convertible Notes offered by them will be the purchase price less discounts or commissions, if any. The Selling Securityholders reserve the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of our Class A Common Stock, warrants or 2027 Convertible Notes to be made directly or through agents. We will not receive any of the proceeds from any offering by the Selling Securityholders.

The Selling Securityholders also may in the future resell a portion of our Class A Common Stock, warrants or 2027 Convertible Notes in open market transactions in reliance upon Rule 144 under the Securities Act, provided that they meet the criteria and conform to the requirements of that rule, or pursuant to other available exemptions from the registration requirements of the Securities Act.

The Selling Securityholders and any underwriters, broker-dealers or agents that are involvedparticipate in selling the securitiessale of our Class A Common Stock, warrants or 2027 Convertible Notes or interests therein may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act in connection with such sales.

In such event,Act. Any discounts, commissions, concessions or profit they earn on any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by themour Class A Common Stock, warrants or 2027 Convertible Notes may be deemed to be underwriting discounts and commissions or discounts under the Securities Act. Each Selling Stockholder has informedIf any selling security holder is an “underwriter” within the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distributemeaning of Section 2(11) of the securities.

119

The Company is required to pay certain fees and expenses incurred incidentSecurities Act, then the selling security holder will be subject to the registrationprospectus delivery requirements of the securities. The Company has agreed to indemnifySecurities Act. Underwriters and their controlling persons, dealers and agents may be entitled, under agreements entered into with us and the Selling StockholdersSecurityholders, to indemnification against certain losses, claims, damages and contribution toward specific civil liabilities, including liabilities under the Securities Act.

To the extent required, our Class A Common Stock, warrants or 2027 Convertible Notes to be sold, the respective purchase prices and public offering prices, the names of any agent, dealer or underwriter, and any applicable discounts, commissions, concessions or other compensation with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the prospectus that includes this prospectus.

To facilitate an offering of the securities, certain persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involves the sale by persons participating in the offering of more securities than we sold to them. In these circumstances, these persons would cover the over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.

We have agreed to keepmaintain the effectiveness of this prospectus effective until the earlier of (i) all of thesuch securities have been sold pursuant tounder this prospectus or Rule 144 under the Securities Act or any other ruleare no longer outstanding. We are required to pay all fees and expenses incident to the registration of similar effect, (ii) they maythe shares of our Class A Common Stock, warrants or 2027 Convertible Notes to be offered and sold pursuant to Rule 144 without volumethis prospectus. The Selling Securityholders will bear all commissions and discounts, if any, attributable to their sale of shares of our Class A Common Stock or manner-of-sale restrictions, as determined by RMI;warrants.

The Selling Securityholders may use this prospectus in connection with resales of our Class A Common Stock, warrants or (iii) it has been two years from the Closing Date. The resale securities2027 Convertible Notes. This prospectus and any accompanying prospectus supplement will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition,identify the Selling Stockholders will be subject to applicable provisionsSecurityholders, the terms of the Exchange Actour Class A Common Stock, warrants or 2027 Convertible Notes and any material relationships between us and the rules and regulations thereunder, including Regulation M, whichSelling Securityholders. The Selling Securityholders may limit the timing of purchases and sales of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus availablebe deemed to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each Subscriber at or prior to the time of the sale (including by compliance with Rule 172be underwriters under the Securities Act).Act in connection with our Class A Common Stock, warrants or 2027 Convertible Notes they resell and any profits on the sales may be deemed to be underwriting discounts and commissions under the Securities Act. Unless otherwise set forth in a prospectus supplement, the Selling Securityholders will receive all the net proceeds from the resale of our Class A Common Stock, warrants or 2027 Convertible Notes.

A Selling Securityholder that is an entity may elect to make an in-kind distribution of Class A Common Stock, warrants or 2027 Convertible Notes to its members, partners or stockholders pursuant to the registration statement of which this prospectus is a part by delivering a prospectus. To the extent that such members, partners or stockholders are not affiliates of ours, such members, partners or stockholders would thereby receive freely tradable Class A Common Stock, warrants or 2027 Convertible Notes pursuant to the distribution through a registration statement.

120147

EXPERTSBENEFICIAL OWNERSHIP OF SECURITIES

The financial statementsfollowing table sets forth information regarding the beneficial ownership of Roth CH Acquisition III Co.the Company’s Class A Common Stock and Class B Common Stock as of December 31, 2020 and 2019, and for the year ended December 31, 2020 and the period from February 13, 2019 (inception) through December 31, 2019, appearing in this prospectus have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph relating to substantial doubt about the ability of Roth CH Acquisition III Co. to continue as a going concern as described in Note 1September 15, 2022:

each person or “group” (as such term is used in Section 13(d)(3) of the Exchange Act) known by the Company to be the beneficial owner of more than 5% of shares of our Common Stock;
each of the executive officers and directors of the Company; and
all executive officers and directors of the Company as a group.

Beneficial ownership is determined according to the financial statements), appearing elsewhere in this prospectus, and are included in reliance on the report of such firm given upon their authority as experts in accounting and auditing.

The consolidated financial statements of BCP QualTek Holdco, LLC as of December 31, 2020 and 2019 and for eachrules of the years inSEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Company stock issuable upon exercise of options and warrants currently exercisable within 60 days are deemed outstanding solely for purposes of calculating the two-year period ended December 31, 2020 have been audited by RSM US LLP, an independent registered public accounting firm, as stated in their report thereon and included in this prospectus in reliance upon such report and upon the authoritypercentage of such firm as experts in accounting and auditing.

LEGAL MATTERS

Loeb & Loeb LLP, New York, New York, will pass upon the validitytotal voting power of the securities offered hereby.

WHERE YOU CAN FIND MORE INFORMATIONbeneficial owner thereof.

We have filedIn connection with the SEC a registration statement on Form S-1 underclosing of the Securities Act with respect to theBusiness Combination, (i) 2,274,934 shares of Class A Common Stock offeredissued to certain BCP Sellers (ii) 3,836,177 QualTek Common Units issued to the QualTek Equityholders (the “Earnout Common Units”) and (iii) an equal number of shares of Class B Common Stock issued to the QualTek Equityholders by this prospectus. This prospectus, which constitutes a partthe Company ((i) and (iii) collectively, the “Earnout Shares”), will be subject to certain restriction on transfer and voting and potential forfeiture pending the achievement (if any) of the registration statement, does not contain allfollowing earnout targets pursuant to the terms of the information set forth in the registration statement, some of which is contained in exhibitsBusiness Combination Agreement: (A) if, on or any time prior to the registration statement as permitted by the rules and regulationsfifth anniversary of the SEC. For further information with respect to ROCR, QualTek, QSI anddate of the closing of the Business Combination, the closing sale price per share of Class A Common Stock we refer youequals or exceeds $15.00 per share for 20 trading days of any 30 consecutive trading day period following the closing of the Business Combination, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the registration statement, includingapplicable restrictions on transfer and voting; and (B) if, on or any time prior to the exhibits filed as a partfifth anniversary of the registration statement.

Statements contained in this prospectus concerningdate of the contentsclosing of the Business Combination, the closing sale price per share of Class A Common Stock equals or exceeds $18.00 per share for 20 trading days of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit30 consecutive trading day period following the closing of the Business Combination, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the registration statement, please seeapplicable restrictions on transfer and voting.

The beneficial ownership of our Common Stock, which includes the copyEarnout Shares, is based on 24,446,284 shares of our Class A Common Stock, which number excludes shares issuable upon exercise of outstanding warrants, 26,663,575 shares of our Class B Common Stock issued and outstanding as of September 15, 2022.

148

The beneficial ownership information below excludes the Earnout Shares, other than in the calculation of the contract or document that has been filed. Each statement is this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The SEC maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The addresspercentage of that website is www.sec.gov.Common Stock beneficially owned.

    

Number of Shares

    

Number of Shares

    

Percentage

 

of Class A

of Class B

Of Common Stock

Name and Address of Beneficial Owners(1)

Common Stock

Common Stock(2)

Beneficially Owned

5% Holders

  

  

  

 

BCP GP Investors, LLC(3)(4)

 

12,673,939

 

13,939,005

 

52.07

%

QualTek Management HoldCo, LLC(5)

 

 

4,825,893

 

9.44

%

Victoria Partners L.P.

 

 

2,656,250

 

5.20

%

Named Executive Officers and Directors

 

  

 

  

 

  

Christopher S. Hisey(5)(6)

 

96,250

 

4,825,893

 

9.63

%

Elizabeth Downey(7)

 

40,500

 

 

*

Michael B. Williams(8)

 

31,250

 

 

*

Adam Spittler(9)

 

56,500

 

 

*

Andrew Weinberg(3)(4)

 

12,673,939

 

13,939,005

 

52.07

%

Matthew Allard(3)

 

 

 

Sam Chawla

 

91,194

 

 

*

Robert Bulloch(3)

 

 

 

Maha Eltobgy(3)

 

 

 

Jigisha Desai

 

 

 

Daniel Lafond

 

10,000

 

 

*

Sam Totusek

All Named Executive Officers and Directors of the Company as a group (7 individuals)

 

12,999,633

 

18,764,898

 

62.12

%

*

Less than 1%.

(1)Unless otherwise noted, the business address of each of the following entities or individuals is c/o QualTek, 475 Sentry Parkway E, Suite 200 Blue Bell, PA 19422.
(2)In the Business Combination, existing equityholders of QualTek HoldCo were issued new HoldCo common units and an equal number of shares of Class B Common Stock. A holder of a HoldCo common unit may convert one HoldCo common unit and one share of Class B Common Stock into one share of Class A Common Stock.
(3)The business address for this person is c/o Brightstar, 650 Fifth Avenue, 29th Floor, New York, NY 10019.
(4)Represents (1) 3,642,750 shares of Class A Common Stock held of record by BCP AIV Investor Holdings-3, L.P. (“BCP AIV-3”), (2) 4,184,290 shares of Class A Common Stock held of record by BCP Strategic AIV Investor Holdings-2, L.P. (“BCP AIV-2”), (3) 4,096,901 shares of Class A Common Stock held of record by BCP QualTek Investor Holdings, L.P. (“BCP L.P.”), (4) 11,780,782 shares of Class B Common Stock held of record by BCP QualTek, LLC and (5) 2,158,223 shares of Class B Common Stock held of record by BCP QualTek II, LLC. Brightstar Associates is the general partner of each of BCP AIV-3, BCP AIV-2 and BCP L.P., and each of BCP QualTek, LLC and BCP QualTek II, LLC is controlled by Brightstar Associates, its managing member. Brightstar GP is the general partner of Brightstar Associates. Brightstar GP is controlled by its sole managing member, Andrew Weinberg. Each of the foregoing disclaims beneficial ownership of the securities held directly or indirectly by such entities.
(5)Represents 4,825,893 shares of Class B Common Stock held of record by QualTek Management HoldCo, LLC (“QualTek Management”). Christopher S. Hisey is the managing member of QualTek Management and as such could be deemed to have voting and dispositive power with respect to the shares held by QualTek Management. Mr. Hisey disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The table does not reflect 1,157,803 shares of Class B Common Stock held of record by QualTek Management that constitute Earnout Shares.
(6)Includes options to purchase 81,250 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Hisey has an indirect beneficial interest in 798,771 HoldCo common units and 798,771 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Hisey are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(7)Includes options to purchase 37,500 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Ms. Downey has an indirect beneficial interest in 166,693 HoldCo common units and 166,693 shares of Class B Common Stock. Pursuant to the

149

Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Ms. Downey are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(8)Includes options to purchase 31,250 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Williams has an indirect beneficial interest in 82,013 HoldCo common units and 82,013 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Williams are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.
(9)Includes options to purchase 43,750 shares that are exercisable within 60 days of September 15, 2022. As a member of QualTek Management, Mr. Spittler has an indirect beneficial interest in 107,947 HoldCo common units and 107,947 shares of Class B Common Stock. Pursuant to the Third Amended and Restated LLCA, QualTek HoldCo’s common units held by Mr. Spittler are not exchangeable for the Company’s Class A Common Stock until the expiration or waiver of certain lock-up periods.

121150

INDEX TO FINANCIAL STATEMENTSCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

PAGE

Roth CH Acquisition III Co. Audited Financial Statements

Report of Independent Registered Public Accounting Firm

F-2

Balance Sheets

F-3

Statements of Operations

F-4

Statements of Changes in Stockholders’ Equity

F-5

Statements of Cash Flows

F-6

Notes to Financial Statements

F-7

Roth CH Acquisition III Co. Unaudited Financial Statements

Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020

F-16

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020

F-17

Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three and Nine Months Ended September 30, 2021 and 2020

F-18

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30 , 2021 and 2020

F-19

Notes to Condensed Financial Statements

F-20 to F-38

BCP QualTek Holdco, LLC and Subsidiary Audited Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

F-39

Consolidated Balance Sheets as of December 31, 2020 and 2019

F-40

Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2020 and 2019

F-41

Consolidated Statements of Changes in Equity for the years ended December 31, 2020 and 2019

F-42

Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019

F-43

Notes to Consolidated Financial Statements

F-44

BCP QualTek Holdco, LLC and Subsidiary Unaudited Consolidated Financial Statements

Condensed Consolidated Balance Sheets as of October 2, 2021 and December 31, 2020

F-65

Condensed Consolidated Statements of Operations and Comprehensive Loss for the nine months ended October 2, 2021 and October 3, 2020

F-66

Condensed Consolidated Statements of Changes in Equity for the nine months ended October 2, 2021 and October 3, 2020

F-67

Condensed Consolidated Statements of Cash Flows for the nine months ended October 2, 2021 and October 3, 2020.

F-68

Notes to Condensed Consolidated Financial Statements

F-69

Certain Relationships and Related Person Transactions — Founder Shares

In February 2019, the CR Financial Holdings, Inc. (the “Sponsor

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To100 shares from us for an aggregate purchase price of $25,000. On May 26, 2020, we effected a dividend of 28,750 shares for each share outstanding resulting in there being an aggregate of 2,875,000 shares outstanding. On May 29, 2020, Craig-Hallum Capital Group LLC and certain of our directors, officers and affiliates of our management team purchased from the ShareholdersSponsor an aggregate of 2,059,019 shares for an aggregate purchase price of $17,904.51. On January 19, 2021 and February 3, 2021, certain affiliates of our management team purchased from the BoardSponsor and Craig-Hallum an aggregate of Directors239,583 shares for an aggregate purchase price of

Roth CH Acquisition III Co.

Opinion $2,083.33. On February 9, 2021, certain of initial stockholders of ROCR sold an aggregate of 417,080 shares back to us, which shares were cancelled, and Craig-Hallum and certain of our directors and affiliates of our management team purchased from us an aggregate of 417,080 shares, in each case, for an aggregate purchase price of $2,417.86. That same date, Craig-Hallum purchased from the Sponsor 39,931 shares for a purchase price of $231.48. Also on the Financial Statements

We have audited the accompanying balance sheetsFebruary 9, 2021, we effected a dividend of Roth CH Acquisition III Co. (the “Company”) as of December 31, 20200.50 share for each share outstanding, which dividend was rescinded and 2019 and the related statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2020 and for the period fromcancelled on February 13, 2019 (inception) through December 31, 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position24, 2021. As of the Company asdate hereof, there are an aggregate of December 31, 2020 and 2019 and2,875,000 outstanding shares of our Common Stock held by the results of its operationsSponsor and its cash flows foraffiliates (the “Founder Shares”).

Private Placement

Simultaneously with the year ended December 31, 2020 and for the period from February 13, 2019 (inception) through December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph — Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s ability to execute its business plan is dependent upon its completionclosing of the proposed initial public offering described in Note 3 to the financial statements. The Company has a working capital deficiency as of December 31, 2020 and lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters are also described in Notes 1 and 3. The financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require thatROCR IPO, we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Marcum LLP

Marcum LLP

We have served as the Company’s auditor since 2021.

Houston, TX

January 8, 2021, except for the second paragraph of Note 8 as to which the date is February 25, 2021

F-2

ROTH CH ACQUISITION III CO.

BALANCE SHEETS

December 31,

December 31,

2020

2019

ASSETS

Cash

    

$

195,758

    

$

25,000

Other current asset

1,500

0

Total Current Assets

197,258

25,000

Deferred offering costs

31,542

0

TOTAL ASSETS

$

228,800

$

25,000

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

  

 

  

Current liabilities

Accrued expenses

$

1,000

$

1,225

Accrued offering costs

 

5,000

 

0

Promissory note – related party

200,000

0

Total Current Liabilities

206,000

1,225

Commitments

Stockholders' Equity

Common stock, $0.0001 par value; 50,000,000 shares authorized; 2,875,000 shares issued and outstanding as of December 31, 2020 and December 31, 2019(1)

288

288

Additional paid-in capital

24,712

24,712

Accumulated deficit

(2,200)

(1,225)

Total Stockholders’ Equity

22,800

23,775

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

228,800

$

25,000

(1)Includes up to 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8).

The accompanying notes are an integral part of these financial statements.

F-3

ROTH CH ACQUISITION III CO.

STATEMENTS OF OPERATIONS

For the Period

from

    

  

    

February 13,

  

2019

For the Year

(Inception)

Ended

Through

 

December 31,

 

December 31,

 

2020

 

2019

Formation and operating costs

$

975

$

1,225

Net Loss

$

(975)

$

(1,225)

Weighted average shares outstanding, basic and diluted(1)

 

2,500,000

 

2,500,000

Basic and diluted net loss per common share

$

(0.00)

$

(0.00)

(1)Excludes an aggregate of up to 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8).

The accompanying notes are an integral part of these financial statements.

F-4

ROTH CH ACQUISITION III CO.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Additional

Total

Paid-in

Accumulated

Stockholders'

Common Stock

Capital

Deficit

Equity

Shares

Amount

Balance - February 13, 2019 (inception)

0

$

0

$

0

$

0

$

0

Issuance of common stock to Initial Stockholders(1)

    

2,875,000

    

288

    

24,712

    

0

    

25,000

Net loss

0

0

0

(1,225)

(1,225)

Balance – December 31, 2019

2,875,000

288

24,712

(1,225)

23,775

Net loss

0

0

0

(975)

(975)

Balance – December 31, 2020

 

2,875,000

$

288

$

24,712

$

(2,200)

$

22,800

(1)Includes 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8).

The accompanying notes are an integral part of these financial statements.

F-5

ROTH CH ACQUISITION III CO.

STATEMENTS OF CASH FLOWS

For the Period

from

February 13,

For the

2019

Year

(Inception)

    

ended

    

Through

December 31,

December 31,

2020

2019

Cash Flows from Operating Activities:

  

  

Net loss

$

(975)

$

(1,225)

Adjustments to reconcile net loss to net cash used in operating activities:

Changes in operating assets and liabilities:

Other current asset

 

(1,500)

 

0

Accrued expenses

 

(225)

 

1,225

Net cash used in operating activities

 

(2,700)

 

0

Cash Flows from Financing Activities:

Proceeds from sale of common stock to Initial Stockholders

 

0

 

25,000

Proceeds from promissory note – related party

 

200,000

 

0

Payments of offering costs

 

(26,542)

 

0

Net cash provided by operating activities

 

173,458

 

25,000

Net Change in Cash

 

170,758

 

25,000

Cash – Beginning

 

25,000

 

0

Cash – Ending

$

195,758

$

25,000

Non-cash investing and financing activities:

 

  

 

  

Deferred offering costs included in accrued offering costs

$

5,000

$

0

The accompanying notes are an integral part of these financial statements.

F-6

ROTH CH ACQUISITION III CO.

NOTES TO FINANCIAL STATEMENTS

Note 1 — Description of Organization and Business Operations

Roth CH Acquisition III Co. (the “Company”) was incorporated in Delaware on February 13, 2019. The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with 1 or more businesses or entities (the “Business Combination”).

The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of December 31, 2020, the Company had not commenced any operations. All activity for the period from February 13, 2019 (inception) through December 31, 2020 relates to the Company’s formation and the proposed initial public offering (“Proposed Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Proposed Public Offering. The Company has selected December 31 as its fiscal year end.

The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a Proposed Public Offering of 10,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units being offered, the “Public Shares”) at $10.00 per Unit (or 11,500,000 units if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3, andconsummated the sale of 378,000 units (or 408,000 units if the underwriters’ over-allotment option is exercised in full) (the “Private Units”Private Units) at a price of $10.00 per Private Unit in a private placement to certainits stockholders, generating gross proceeds of the Company’s stockholders prior to the offering that will close$4,080,000. These purchases took place on a private placement basis simultaneously with the Proposed Public Offering.

consummation of the IPO. The Company’s management has broad discretion with respectPrivate Units are identical to the specific applicationunits sold to the public except that the (i) warrants included in the Private Units are non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees, and (ii) the Private Units may be transferred following the closing of the net proceeds ofBusiness Combination. Our stockholders approved the Proposed Public Offering and the saleissuance of the Private Units although substantially alland underlying securities upon conversion of such notes, to the net proceeds are intendedextent the holder wishes to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (excluding taxes payable on income earned on the Trust Account)so convert them at the time of the agreement to enter into an initialconsummation of our Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Upon the closing of the Proposed Public Offering, management has agreed that an amount equal to at least $10.00 per Unit sold in the Proposed Public Offering, including the proceeds from the sale of the Private Units, will be held in a trust account (“Trust Account”), located in the United States and will be held in cash items or invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below.

The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption will be recorded at redemption value

F-7

ROTH CH ACQUISITION III CO.

NOTES TO FINANCIAL STATEMENTS

and classified as temporary equity upon the completion of the Proposed Public Offering in accordance with the Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”

The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC containing substantially the same information as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the holders of the Company’s shares prior to the Proposed Public Offering (the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in Note 5), Private Shares (as defined in Note 4) and any Public Shares purchased during or after the Proposed Public Offering (a) in favor of approving a Business Combination and (b) not to redeem any shares in connection with a stockholder vote to approve a Business Combination or sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of how or whether they vote on the proposed transaction or don’t vote at all.

The Initial Stockholders have agreed (a) to waive their redemption rights with respect to their Founder Shares, Private Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

The Company will have until 24 months from the closing of the Proposed Public Offering to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than five business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes and liquidation expenses up to $50,000, divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

The Initial Stockholders have agreed to waive their liquidation rights with respect to the Founder Shares and Private Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders acquire Public Shares in or after the Proposed Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Proposed Public Offering price per Unit ($10.00).

In order to protect the amounts held in the Trust Account, the Initial Stockholders have agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a

F-8

ROTH CH ACQUISITION III CO.

NOTES TO FINANCIAL STATEMENTS

prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below $10.00 per Public Share, except as to any claims by a third party who executed a valid and enforceable agreement with the Company waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of Proposed Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Initial Stockholders will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that Initial Stockholders will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Going Concern Consideration

At December 31, 2020, the Company had cash of $195,758 and working capital deficit of $8,742. The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management plans to address this uncertainty through a Proposed Public Offering as discussed in Note 3. There is no assurance that the Company’s plans to raise capital or to consummate a Business Combination will be successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes- Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which

F-9

ROTH CH ACQUISITION III CO.

NOTES TO FINANCIAL STATEMENTS

has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Cash and cash equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020 and 2019.

Deferred Offering Costs

Deferred offering costs consist of legal, accounting and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholders’ equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations.

Income Taxes

The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were 0 unrecognized tax benefits and 0 amounts accrued for interest and penalties as of December 31, 2020 and 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

The provision for income taxes was deemed to be de minimis for the year ended December 31, 2020, and for the period from February 13, 2019 (inception) through December 31, 2019.

Net Loss Per Common Share

Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture by the Initial Stockholders. Weighted average shares were reduced for the effect of an aggregate of 375,000 shares of common stock that are subject

F-10

ROTH CH ACQUISITION III CO.

NOTES TO FINANCIAL STATEMENTS

to forfeiture if the over-allotment option is not exercised by the underwriters (see Notes 5 and 8). At December 31, 2020 and 2019, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the periods presented.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. At December 31, 2020 and 2019, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature.

Recent Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

Risks and Uncertainties

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and the World. As of the date the financial statements were issued, there was considerable uncertainty around the expected duration of this pandemic. The Company has concluded that while it is reasonably possible that COVID-19 could have a negative effect on identifying a target company for a Business Combination, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 3 — Public Offering

Pursuant to the Proposed Public Offering, the Company intends to offer for sale 10,000,000 Units (or 11,500,000 Units if the over-allotment option is exercised in full) at a price of $10.00 per Unit. Each Unit will consist of 1 share of common stock and one-quarter of one redeemable warrant (“Public Warrant”). Each whole Public Warrant will entitle the holder to purchase 1 share of common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 7).

Note 4 — Private Placement

The Initial Stockholders will enter into an agreement to purchase an aggregate of 378,000 Private Units (or 408,000 Private Units if the over-allotment option is exercised in full) at a price of $10.00 per Private Unit, for an aggregate purchase price of $3,780,000, or $4,080,000 if the over-allotment option is exercised in full, in a private placement that will occur simultaneously with the closing of the Proposed Public Offering. Each Private Unit will consist of 1 share of common stock (“Private Share”) and one- quarter of one redeemable warrant (“Private Warrant”). Each whole Private Warrant will entitle the holder to purchase 1 share of common stock at a price of $11.50 per full share, subject to adjustment (see Note 7). The proceeds from the Private Units will be added to the proceeds from the Proposed Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the

F-11

ROTH CH ACQUISITION III CO.

NOTES TO FINANCIAL STATEMENTS

Combination Period, the proceeds from the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law).

Note 5 — Related Party Transactions

Founder Shares

In February 2019, the Initial Stockholders purchased an aggregate of 100 shares of the Company’s common stock for an aggregate price of $25,000. On May 26, 2020, the Company effected a stock dividend of 28,750 shares of common stock for each share of common stock outstanding, resulting in an aggregate of 2,875,000 shares of common stock being held by the Initial Stockholders (the “Founder Shares”). On February 9, 2021, the Company effected a dividend of 0.50 share for each share outstanding resulting in there being an aggregate of 4,312,500 shares outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding (see Note 8). All share and per-share amounts have been retroactively restated to reflect the stock transactions. The Founder Shares include an aggregate of up to 375,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the Initial Stockholders will collectively own 20% of the Company’s issued and outstanding shares after the Proposed Public Offering (assuming the Initial Stockholders do not purchase any Public Shares in the Proposed Public Offering and excluding the Private Shares).

The Initial Stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect to 50% of the Founder Shares, the earlier of six months after the completion of a Business Combination and the date on which the closing price of the common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing after a Business Combination and (2) with respect to the remaining 50% of the Founder Shares, six months after the completion of a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Promissory Note — Related Party

On December 15, 2020, the Companywe issued an unsecured promissory note to the sponsorSponsor (the Promissory Note”Note), pursuant to which the Company maycould borrow up to an aggregate principal amount of $200,000. The Promissory Note iswas non-interest bearing and payable onwas paid in-full in connection with the earlierIPO.

On November 3, 2021, we issued an unsecured promissory note in the aggregate principal amount of (i)$500,000 to certain payees including certain of our directors and officers, the consummationSponsor, Craig-Hallum, and affiliates of our management team. The note does not bear interest and matured upon closing of the Proposed Public Offering or (ii)Business Combination. The note is not convertible into ROCR securities.

Registration Rights

The holders of our Founder Shares, as well as the holders of the Private Units (and all underlying securities), are entitled to registration rights entered into on March 5, 2021. The holders of a majority of these securities are entitled to make up to two demands that we register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Company determines notPrivate Units can elect to proceedexercise these registration rights at any time. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Business Combination. We will bear the expenses incurred in connection with the Proposed Public Offering. Asfiling of December 31, 2020, there was $200,000 outstanding underany such registration statements. Notwithstanding the Promissory Note.foregoing, they may not exercise demand or piggyback rights after five (5) and seven (7) years, respectively, from the effective date of this offering and may not exercise demand rights on more than one occasion in respect of all registrable securities.

Related Party Loans

In addition, in order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’smeet our working capital needs our initial stockholders, officers and directors orand their respective affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would be repaid upon consummation of a Business Combination, without interest.

F-12

ROTH CH ACQUISITION III CO.

NOTES TO FINANCIAL STATEMENTS

Note 6 — Commitments

Registration Rights

The holders of the Founder Shares, as well as the holders of the Private Units (and underlying securities), will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of the Proposed Public Offering. The holders of a majority of these securities are entitled to make up to 2 demands that the Company register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units (and underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Notwithstanding the foregoing, they may not exercise demand or piggyback rights after five (5) and seven (7) years, respectively, from the effective date of the Proposed Public Offering and may not exercise demand rights on more than one occasion in respect of all registrable securities.

Underwriting Agreement

The Company will grant the underwriters a 45-day option from the date of Proposed Public Offering to purchase up to 1,500,000 additional Units to cover over-allotments, if any, at the Proposed Public Offering price less the underwriting discounts and commissions.

The underwriters will be entitled to a cash underwriting discount of 2.0% of the gross proceeds of the Proposed Public Offering, or $2,000,000 (or up to $2,300,000 if the underwriters’ over-allotment is exercised in full).

Business Combination Marketing Agreement

The Company will engage Roth Capital Partners, LLC (“Roth”) and Craig-Hallum Capital Group LLC (“Craig-Hallum”), the underwriters in the Proposed Public Offering, as advisors in connection with its Business Combination Business combination to assist in the transaction structuring and negotiation of a definitive purchase agreement with respect to the Business Combination, holding meetings with the stockholders to discuss the Business Combination and the target’s attributes, introducing the Company to potential investors to purchase its securities in connection with the Business Combination, assisting in obtaining stockholder approval for the Business Combination, and assisting with financial analysis, presentations, press releases and filings related to the Business Combination. The Company will pay Roth and Craig-Hallum a marketing fee for such services upon the consummation of a Business Combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Proposed Public Offering, including any proceeds from the full or partial exercise of the underwriters’ over-allotment option. As a result, Roth and Craig-Hallum will not be entitled to such fee unless the Company consummates a Business Combination.

Note 7 — Stockholders’ Equity

Common Stock — The Company is authorized to issue 50,000,000 shares of common stock with a par value of $0.0001 per share. At December 31, 2020 and 2019, after giving effect to the stock dividend and share cancellation described in Note 8, there were 2,875,000 shares of common stock issued and outstanding, of which an aggregate of up to 375,000 shares are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the Initial Stockholders will collectively own 20% of the Company’s issued and outstanding common stock after the Proposed Public Offering (assuming the Initial Stockholders do not purchase any Public Shares in the Proposed Public Offering and excluding the Private Shares).

F-13

ROTH CH ACQUISITION III CO.

NOTES TO FINANCIAL STATEMENTS

Warrants — The Company will not issue fractional warrants. The Public Warrants will become exercisable on 30 days after the completion of a Business Combination. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if the registration statement of which this prospectus forms a part is not available and a new registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within 120 days following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. The warrants will expire five years from the closing of a Business Combination.

Once the warrants become exercisable, the Company may redeem the Public Warrants:

in whole and not in part;
at a price of $0.01 per warrant;
at any time after the warrants become exercisable;
upon not less than 30 days’ prior written notice of redemption to each warrant holder;
if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share, for any 20 trading days within a 30-day trading period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and
if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

In addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the Initial Stockholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to

F-14

ROTH CH ACQUISITION III CO.

NOTES TO FINANCIAL STATEMENTS

115% of the Market Value and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the Market Price.

The Private Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

Note 8 — Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to January 8, 2021, the date that the financial statements were available to be issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock transactions.

F-15

ROTH CH ACQUISITION III CO.

CONDENSED CONSOLIDATED BALANCE SHEETS

    

September 30, 

    

December 31, 

2021

2020

(Unaudited)

ASSETS

Current assets

Cash

$

93,594

$

195,758

Prepaid expenses

 

286,946

 

1,500

Total Current Assets

380,540

197,258

Deferred offering costs

 

 

31,542

Marketable securities held in Trust Account

115,007,452

TOTAL ASSETS

$

115,387,992

$

228,800

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

 

 

Current liabilities

Accounts payable and accrued expenses

$

393,287

$

1,000

Accrued offering costs

1,105

5,000

Promissory note - related party

200,000

Total Current Liabilities

 

394,392

 

206,000

Warrant liability

 

217,260

 

Total Liabilities

 

611,652

 

206,000

 

 

Commitments

 

 

Common stock subject to possible redemption 11,500,000 and 0 shares at redemption value at September 30, 2021 and December 31, 2020, respectively

115,000,000

 

 

Stockholders' (Deficit) Equity

 

 

Common stock, $0.0001 par value; 50,000,000 shares authorized; 3,283,000 and 2,875,000 shares issued and outstanding (excluding 11,500,000 and 0 shares subject to possible redemption) as of September 30, 2021 and December 31, 2020, respectively

 

328

 

288

Additional paid-in capital

 

1,200,660

 

24,712

Accumulated deficit

 

(1,424,648)

 

(2,200)

Total Stockholders’ (Deficit) Equity

 

(223,660)

 

22,800

TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

$

115,387,992

$

228,800

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

F-16

ROTH CH ACQUISITION III CO.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2021

    

2020

    

2021

    

2020

General and administrative expenses

$

909,139

$

800

$

1,304,440

$

885

Loss from operations

(909,139)

(800)

(1,304,440)

(885)

Other income (expense):

Change in fair value of warrant liability

97,920

0

(125,460)

0

Interest earned on marketable securities held in Trust Account

1,479

0

7,452

0

Other income (expense), net

99,399

0

(118,008)

0

Net loss

$

(809,740)

$

(800)

$

(1,422,448)

$

(885)

 

 

 

 

Basic and diluted weighted average shares outstanding, redeemable common stock

 

11,500,000

 

0

 

8,804,029

0

Basic and diluted net loss per share, redeemable common stock

$

(0.05)

$

(0.00)

$

(0.12)

$

(0.00)

 

Basic and diluted weighted average shares outstanding, non-redeemable common stock

 

3,283,000

 

2,500,000

 

3,099,440

 

2,500,000

Basic and diluted net loss per share, non-redeemable common stock

$

(0.05)

$

(0.00)

$

(0.12)

$

(0.00)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

F-17

ROTH CH ACQUISITION III CO.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(DEFICIT)

(UNAUDITED)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021

Additional

Total

Common Stock

Paid in

Accumulated

Stockholders’

    

Shares

    

Amount

    

Capital

    

Deficit

    

Equity

Balance — January 1, 2021

2,875,000

$

288

$

24,712

$

(2,200)

$

22,800

 

 

 

 

 

Accretion for common stock to redemption amount

(2,812,212)

0

(2,812,212)

Sale of 408,000 Private Units

408,000

40

3,988,160

0

3,988,200

Net loss

 

 

 

0

 

(28,740)

 

(28,740)

Balance — March 31, 2021 (Restated)

 

3,283,000

328

1,200,660

(30,940)

1,170,048

Net loss

 

 

 

0

 

(583,968)

 

(583,968)

Balance – June 30, 2021 (Restated)

3,283,000

328

1,200,660

(614,908)

586,080

Net loss

0

(809,740)

(809,740)

Balance – September 30, 2021

3,283,000

$

328

$

1,200,660

$

(1,424,648)

$

(223,660)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020

Additional

Total

Common Stock

Paid in

Accumulated

Stockholders’

    

Shares

    

Amount

    

Capital

    

Deficit

    

Equity

Balance — January 1, 2020

2,875,000

$

288

$

24,712

$

(1,225)

$

23,775

 

 

 

 

 

Net loss

 

 

 

 

(85)

 

(85)

Balance — March 31, 2020

 

2,875,000

288

24,712

(1,310)

23,690

Net loss

 

0

 

0

 

0

 

0

 

0

Balance – June 30, 2020

2,875,000

288

24,712

(1,310)

23,690

Net loss

(800)

(800)

Balance – September 30, 2020

2,875,000

$

288

$

24,712

$

(2,110)

$

22,890

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

F-18

ROTH CH ACQUISITION III CO.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended

September 30, 

September 30, 

    

2021

    

2020

Cash Flows from Operating Activities:

  

 

Net loss

$

(1,422,448)

$

(885)

Adjustments to reconcile net loss to net cash used in operating activities:

 

Change in fair value of warrants

125,460

0

Interest earned on marketable securities held in Trust Account

(7,452)

0

Changes in operating assets and liabilities:

 

  

Prepaid expenses

(285,446)

0

Accounts payable and accrued expenses

 

392,287

(225)

Net cash used in operating activities

 

(1,197,599)

(1,110)

Cash Flows from Investing Activities:

Investment of cash in Trust Account

$

(115,000,000)

$

0

Net cash used in investing activities

(115,000,000)

0

 

  

Cash Flows from Financing Activities:

 

  

Proceeds from sale of Units, net of underwriting discounts paid

$

112,700,000

$

0

Proceeds from sale of Private Placement Units

4,080,000

0

Repayment of promissory note — related party

 

(200,000)

0

Payment of offering costs

 

(484,565)

(723)

Net cash provided by (used in) financing activities

 

116,095,435

(723)

 

Net Change in Cash

 

(102,164)

(1,833)

Cash — Beginning of period

 

195,758

25,000

Cash — End of period

$

93,594

$

23,167

 

Non-Cash investing and financing activities:

 

Offering costs included in accrued offering costs

$

1,105

$

0

Initial classification of common stock subject to possible redemption

$

115,000,000

$

0

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

F-19

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Roth CH Acquisition III Co. (the “Company”) was incorporated in Delaware on February 13, 2019. The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with 1 or more businesses or entities (the “Business Combination”).

The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of September 30, 2021, the Company had not commenced any operations. All activity from February 13, 2019 (inception) through September 30, 2021 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on marketable securities held in the Trust Account.

The registration statement for the Company’s Initial Public Offering was declared effective on March 2, 2021. On March 5, 2021, the Company consummated the Initial Public Offering of 11,500,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold, the “Public Shares”), which includes the full exercise by the underwriters of their over-allotment option in the amount of 1,500,000 Units, at $10.00 per Unit, generating gross proceeds of $115,000,000, which is described in Note 4.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 408,000 units (the "Private Units”) at a price of $10.00 per Private Unit in a private placement to certain of the Company’s stockholders, generating gross proceeds of $4,080,000, which is described in Note 5.

Transaction costs amounted to $2,812,212 consisting of $2,300,000 of underwriting fees, and $512,212 of other offering costs.

Following the closing of the Initial Public Offering on March 5, 2021, an amount of $115,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Units was placed in a trust account (the “Trust Account”), located in the United States and will be held in cash items or invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.

F-20

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC containing substantially the same information as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the holders of the Company’s shares prior to the Initial Public Offering (the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in Note 5), Private Shares (as defined in Note 4) and any Public Shares purchased during or after the Initial Public Offering (a) in favor of approving a Business Combination and (b) not to redeem any shares in connection with a stockholder vote to approve a Business Combination or sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of how or whether they vote on the proposed transaction or do not vote at all.

The Initial Stockholders have agreed (a) to waive their redemption rights with respect to their Founder Shares, Private Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

The Company will have until March 5, 2023 to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company for its working capital requirements or necessary to pay its taxes, divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

F-21

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

The Initial Stockholders have agreed to waive their liquidation rights with respect to the Founder Shares and Private Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders acquire Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).

In order to protect the amounts held in the Trust Account, the Initial Stockholders have agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below $10.00 per Public Share, except as to any claims by a third party who executed a valid and enforceable agreement with the Company waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Initial Stockholders will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that Initial Stockholders will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

On June 16, 2021, (i) the Company, (ii) Roth CH III Blocker Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Blocker Merger Sub”), (iii) BCP QualTek Investors, LLC, a Delaware limited liability company (the “Blocker”), (iv) Roth CH III Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Company Merger Sub”, and together with the Company and the Blocker Merger Sub, the “Buyer Parties”), (v) BCP QualTek HoldCo, LLC, a Delaware limited liability company ( “QualTek”), and (vi) BCP QualTek, LLC, a Delaware limited liability company, solely in its capacity as representative of the Blocker’s equityholders and QualTek’s equityholders (the “Equityholder Representative”), entered into a Business Combination Agreement (the “Business Combination Agreement”).

Pursuant to the terms of the Business Combination Agreement, (i) Blocker Merger Sub will be merged with and into the Blocker, with the Blocker surviving as a wholly owned subsidiary of the Company, (ii) immediately thereafter, the Blocker will be merged with and into the Company, with the Company as the surviving company, and (iii) immediately thereafter, Company Merger Sub will be merged with and into QualTek, with QualTek as the surviving company (such mergers and the other transactions contemplated by the Business Combination Agreement, the “Merger”).

The Business Combination Agreement contains customary representations and warranties, covenants, and closing conditions.

Liquidity and Going Concern

As of September 30, 2021, the Company had $93,594 in its operating bank accounts and $115,007,452 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith. As of September 30, 2021, approximately $7,452 of the amount on deposit in the Trust Account represented interest income, which is available to pay the Company’s tax obligations.

Until the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective

F-22

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination.

The Company will need to raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Companyus funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion,discretion. Each loan would be evidenced by a promissory note. The notes were paid upon consummation of the Business Combination, without interest.

151

On November 3, 2021, we issued an unsecured promissory note in the aggregate principal amount of $500,000 to meetcertain payees including certain of our directors and officers, the Company’s working capital needs. Accordingly,Sponsor, Craig-Hallum, and affiliates of our management team. The note does not bear interest and matured upon closing of the Company mayBusiness Combination. The note was repaid upon the closing of the Business Combination.

We have reimbursed our Initial Stockholders, officers and directors for reasonable out-of-pocket business expenses incurred by them in connection with certain activities on our behalf, including identifying and investigating the Business Combination. There is no limit on the amount of out-of-pocket expenses reimbursable by us. The audit committee reviews and approves all reimbursements and payments made to any initial stockholder or member of our management team, or our or their respective affiliates, and any reimbursements and payments made to members of our audit committee will be reviewed and approved by our Board of Directors, with any interested director abstaining from such review and approval.

No compensation or fees of any kind, including finder’s fees, consulting fees or other similar compensation, will be paid to any of our Initial Stockholders, officers or directors who owned our shares of common stock prior to the IPO, or to any of their respective affiliates, prior to or with respect to the Business Combination except as described in this prospectus.

We entered into indemnity agreements with each of our officers and directors. These agreements require us to indemnify these individuals to the fullest extent permitted under Delaware law and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions, including the payment of any compensation, will require prior approval by a majority of our disinterested independent directors (to the extent we have any) or the members of our Board who do not be ablehave an interest in the transaction, in either case who had access, at our expense, to obtain additional financing. Ifour attorneys or independent legal counsel. We will not enter into any such transaction unless our disinterested independent directors (or, if there are no independent directors, our disinterested directors) determine that the Company is unableterms of such transaction are no less favorable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assuranceus than those that new financing willwould be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt aboutus with respect to such a transaction from unaffiliated third parties.

Related Party Policy

Our Code of Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except under guidelines approved by the Company’s abilityBoard of Directors (or the audit committee). Related-party transactions are defined as transactions in which (1) the aggregate amount involved will or may be expected to continueexceed $120,000 in any calendar year, (2) we or any of our subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a going concerndirector, (b) greater than 5% beneficial owner of our common stock, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives personal benefits as a result of his or her position.

Our audit committee, pursuant to its written charter, is responsible for a reasonable periodreviewing and approving related-party transactions to the extent we enter into such transactions. All ongoing and future transactions between us and any of time, which is consideredour officers and directors or their respective affiliates will be on terms believed by us to be one yearno less favorable to us than are available from unaffiliated third parties. Such transactions will require prior approval by our audit committee and a majority of our disinterested independent directors, or the issuance datemembers of the financial statements. These financial statementsour Board who do not includehave an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any adjustments relating to the recoverysuch transaction unless our audit committee and a majority of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Risks and Uncertainties

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possibleour disinterested independent directors determine that the virus could haveterms of such transaction are no less favorable to us than those that would be available to us with respect to such a negative effecttransaction from unaffiliated third parties. Additionally, we require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions. These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the Company’s financial position and/part of a director, employee or searchofficer.

Advisory Services Agreement

On July 18, 2018, QualTek HoldCo entered into an advisory services agreement (the “Advisory Services Agreement”) with Brightstar Advisors, L.P., an affiliate of Brightstar Capital Partners, its majority member. The Advisory Services Agreement requires

152

quarterly advisory fees of $125,000 paid at the beginning of each quarter. QualTek HoldCo incurred $126,000 and $622,000 in advisory fees for a target company, the specific impact is not readily determinablesix months ended July 2, 2022 and July 3, 2021, respectively. Effective as of the date of the financial statements. Business Combination, the advisory fees were suspended.

Investor Rights Agreement

The financial statements do not include any adjustments that might result fromCompany, certain Sellers as set forth therein, the outcome of this uncertainty.

NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

In connection withBCP QualTek, the preparation ofSponsors, Sponsor Representative, and certain Other Holders have entered into an Investor Rights Agreement, pursuant to which the Company’s financial statementsRegistration Rights Agreement, dated as of September 30,March 2, 2021, management identified errors made in its historical financial statements where, atbetween the Other Holders and the Company was terminated and whereby the Company agreed to grant to the Holders (as defined therein), which includes certain equityholders of QualTek HoldCo as well as the Sponsors, certain registration rights, including customary piggyback registration rights and demand registration rights immediately after the closing of the Company’s Initial Public Offering,Business Combination, which are subject to customary terms and conditions, including with respect to cooperation and reduction of underwritten shelf takedown provisions (subject to lock-up restrictions for six months after the closing of the Business Combination). Additionally, the Investor Rights Agreement sets forth certain corporate governance standards relating to the Company.

Founder Shares Forfeiture and Lock-Up Agreement

Contemporaneously with the execution of the Business Combination Agreement, the Company improperly valued its common stock subject to possible redemption. The Company previously determinedentered into a Founder Shares Forfeiture and Lock-Up Agreement with QualTek HoldCo and each of the common stock subject to possible redemption to be equal to the redemption valueholders of $10.00 per shareshares of common stock, while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that theROCR common stock issued during the Initial Public Offering can be redeemed or become redeemable subjectprior to the occurrenceIPO (the “Founder Shares Agreement”), pursuant to which such holders agreed to (i) forfeit up to an aggregate amount of future events considered outside the Company’s control. Therefore, management concluded that the redemption value should include all575,000 shares of their ROCR common stock subject to possible redemption, resulting infor no consideration, on a pro rata basis, based on the common stock subject to possible redemption being equal to their redemption value. As a result, management has noted a classification error related to temporary equity and permanent equity. This resulted in a restatementlevel of the initial carrying valueamount of the common stock subject to possible redemption with the offset recorded to additional paid-in capital and common stock.

F-23

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

The impact of the restatement on the Company’s financial statements is reflected in the following tables.

    

As Previously 

    

    

Balance Sheet as of March 05, 2021 (unaudited)

    

Reported

    

Adjustment

    

As Restated

Common stock subject to possible redemption

$

111,197,990

$

3,802,010

$

115,000,000

Common stock

$

366

$

(38)

$

328

Additional paid-in capital

$

5,002,631

$

(3,801,972)

$

1,200,659

Total Stockholders’ Equity

$

5,000,008

$

(3,802,010)

$

1,197,998

Number of shares subject to redemption

11,119,799

380,201

11,500,000

Number of shares, non-redeemable common stock

3,663,201

(380,201)

3,283,000

Balance Sheet as of March 31, 2021 (unaudited)

Common stock subject to possible redemption

$

111,170,039

$

3,829,961

$

115,000,000

Common stock

$

366

$

(38)

$

328

Additional paid-in capital

$

5,030,583

$

(3,829,923)

$

1,200,660

Total Stockholders’ Equity

$

5,000,009

$

(3,829,961)

$

1,170,048

Number of shares subject to redemption

11,117,004

382,996

11,500,000

Number of shares, non-redeemable common stock

3,665,996

(382,996)

3,283,000

Balance Sheet as of June 30, 2021 (unaudited)

Common stock subject to possible redemption

$

110,586,069

$

4,413,931

$

115,000,000

Common stock

$

372

$

(44)

$

328

Additional paid-in capital

$

5,614,547

$

(4,413,887)

$

1,200,660

Total Stockholders’ Equity

$

5,000,011

$

(4,413,931)

$

586,080

Number of shares subject to redemption

11,058,607

441,393

11,500,000

Number of shares, non-redeemable common stock

3,724,393

(441,393)

3,283,000

Statement of Operations for the Three Months Ended March 31, 2021 (unaudited)

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

3,212,386

109,836

3,322,222

Basic and diluted net loss per share, Common stock subject to possible redemption

$

(0.00)

$

$

(0.00)

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

2,836,036

(109,836)

$

2,726,200

Basic and diluted net loss per share, Non-redeemable common stock

$

(0.01)

$

0.01

$

(0.00)

Statement of Operations for the Three Months Ended June 30, 2021 (unaudited)

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

11,117,004

382,996

11,500,000

Basic and diluted net loss per share, Common stock subject to possible redemption

$

0.00

$

(0.04)

$

(0.04)

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

3,665,996

(382,996)

3,283,000

Basic and diluted net loss per share, Non-redeemable common stock

$

(0.16)

$

0.12

$

(0.04)

Statement of Operations for the Six Months Ended June 30, 2021 (unaudited)

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

11,117,625

(3,683,923)

7,433,702

Basic and diluted net loss per share, Common stock subject to possible redemption

$

0.00

$

(0.06)

$

(0.06)

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

3,253,309

(247,171)

3,006,138

Basic and diluted net loss per share, Non-redeemable common stock

$

(0.19)

$

0.13

$

(0.06)

Statement of Cash Flows for the Three Months Ended March 31, 2021 (unaudited)

Initial classification of common stock subject to possible redemption

$

111,197,990

$

3,802,010

$

115,000,000

Change in value of common stock subject to possible redemption

$

(27,591)

$

27,591

$

Statement of Cash Flows for the Six Months Ended June 30, 2021 (unaudited)

Initial classification of common stock subject to possible redemption

$

111,197,990

$

3,802,010

$

115,000,000

Change in value of common stock subject to possible redemption

$

(611,921)

$

611,921

$

Statement of Changes in Stockholders’ (Deficit) Equity for the Three Months Ended March 31, 2021 (unaudited)

Sale of 11,500,000 Units, net of underwriting discounts and offering expenses

$

112,187,788

$

(112,187,788)

$

Common stock subject to redemption

$

(111,170,139)

$

111,170,039

$

Accretion for common stock subject to redemption

$

$

(2,812,212)

$

(2,812,212)

Total shareholders’ equity

$

5,000,009

$

(3,829,961)

$

1,170,048

Shares of common stock

3,665,996

382,996

3,283,000

Common stock

$

366

$

(38)

$

328

Statement of Changes in Stockholders’ (Deficit) Equity for the Three Months Ended June 30, 2021 (unaudited)

Change in value of common stock subject to redemption

$

583,970

$

(583,970)

$

Total shareholders’ equity

$

5,000,011

$

(4,413,931)

$

586,080

Shares of common stock

3,724,393

441,393

3,283,000

Common stock

$

372

$

(44)

$

328

F-24

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on March 2, 2021. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary where the Company has the ability to exercise control. All significant intercompany balances and transactions have been eliminated in consolidation.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

F-25

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statement with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these condensed financial statements is the determination of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly, the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2021 and December 31, 2020.

Marketable Securities Held in Trust Account

At September 30, 2021, substantially all of the assets heldfunds remaining in the Trust Account were held in money marketfollowing all redemptions by public stockholders prior to the closing of the Business Combination, and (ii) lock up an aggregate amount of up to 575,000 shares of ROCR common stock for no consideration, on a pro rata basis, similarly based on the level of the amount of funds which are invested primarily in U.S. Treasury securities. The Company’s investments heldremaining in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these investments are included in interest earned on marketable securities held in Trust Account in the accompanying condensed consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the Company’s condensed consolidated balance sheets, primarily duefollowing all redemptions by public stockholders prior to their short-term nature, with the exception of the warrant liabilities (see Note 9).

F-26

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

Common Stock Subject to Possible Redemption

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2021, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stocks to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable common stocks resulted in charges against additional paid-in capital.

At September 30, 2021, common stock subject to possible redemption reflected in the condensed balance sheets are reconciled in the following table:

Gross proceeds

    

$

115,000,000

Less:

 

  

Common stock issuance costs

 

(2,812,212)

Plus:

 

  

Accretion of carrying value to redemption value

 

2,812,212

Common stock subject to possible redemption

$

115,000,000

Business Combination (the “lock-up shares

Warrant Liability

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinarylock-up shares among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the Private Placement Warrants (as defined in Note 5) was estimated using a binomial lattice simulation approach (see Note 9).

F-27

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

Income Taxes

The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were 0 unrecognized tax benefits and 0 amounts accrued for interest and penalties as of September 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The effective tax rate differs from the statutory tax rate of 21% for the three months and nine months ended September 30, 2021 and 2020, respectively, primarily due to the valuation allowance recorded on the Company’s net operating losses.

Net Income (Loss) per Common Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of common stock is excluded from income (loss) per common share as the redemption value approximates fair value.

The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 2,977,000 shares in the calculation of diluted loss per share, since the inclusion of such warrants would be anti-dilutive. As of September 30, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented.

F-28

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts):

    

    

    

    

    

For the Period from

2/13/19 (Inception)

Three Months Ended

Nine Months Ended 

Through

September 30, 2021

September 30, 2021

September 30, 2020

Redeemable

Non-redeemable

Redeemable

Non-redeemable

Non-redeemable

common stock

common stock

common stock

common stock

common stock

Basic and diluted net loss per common share

Numerator:

Allocation of net loss, as adjusted

$

(629,913)

$

(179,827)

$

(1,052,069)

$

(370,379)

$

(800)

Denominator:

Basic and diluted weighted average shares outstanding

11,500,000

3,283,000

 

8,804,029

3,099,440

2,500,000

Basic and diluted net loss per common share

$

(0.05)

$

(0.05)

$

(0.12)

$

(0.12)

$

(0.00)

Three Months Ended

Nine Months Ended

September 30, 2020

September 30, 2020

Non-redeemable

Non-redeemable

    

common stock

    

common stock

Basic and diluted net loss per common share

 

  

 

  

Numerator:

 

  

 

  

Allocation of net loss, as adjusted

$

(800)

$

(885)

Denominator:

 

  

 

  

Basic and diluted weighted average shares outstanding

 

2,500,000

 

2,500,000

Basic and diluted net loss per common share

$

(0.00)

$

(0.00)

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts.

Recent Accounting Standards

In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements.

NOTE 4. PUBLIC OFFERING

Pursuant to the Initial Public Offering, the Company sold 11,500,000 Units, which includes a full exercise by the underwriters on March 5, 2021 of their over-allotment option in the amount of 1,500,000 Units, at a price of $10.00 per Unit. Each Unit consists of 1 share of common stock and one-quarter of one redeemable warrant (“Public Warrant”).

F-29

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

Each whole Public Warrant entitles the holder to purchase 1 share of common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 9).

NOTE 5. PRIVATE PLACEMENT

Simultaneously with the closing of the Initial Public Offering, the Initial Stockholders purchased an aggregate of 408,000 Private Units at a price of $10.00 per Private Unit, for an aggregate purchase price of $4,080,000, in a private placement. Each Private Unit consists of 1 share of common stock (“Private Share”) and one-quarter of one redeemable warrant (“Private Placement Warrant”). Each whole Private Placement Warrant entitles the holder to purchase 1 share of common stock at a price of $11.50 per full share, subject to adjustment (see Note 9). The proceeds from the Private Units were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law).

NOTE 6. RELATED PARTY TRANSACTIONS

Founder Shares

In February 2019, the Initial Stockholders purchased an aggregate of 100 shares of the Company’s common stock for an aggregate price of $25,000. On May 26, 2020, the Company effected a stock dividend of 28,750 shares of common stock for each share of common stock outstanding, resulting in an aggregate of 2,875,000 shares of common stock being held by the Initial Stockholders (the “Founder Shares”). In February 2021, the Company sold 35,233 Founder Shares to three of the Company’s director nominees (for a total of 105,699 Founder Shares) and 89,093 Founder Shares to affiliates of its sponsor group as part of a larger purchase and resale of securities. The total consideration paid for these shares was $1,247. On February 9, 2021, the Company effected a dividend of 0.50 share for each share outstanding resulting in there being an aggregate of 4,312,500 shares outstanding, andreleased on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock dividend. The Founder Shares included an aggregate of up to 375,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Initial Stockholders would collectively own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Initial Stockholders did not purchase any Public Shares in the Initial Public Offering and excluding the Private Shares). As a result of the underwriters’ election to fully exercise their over-allotment option, no Founder Shares are subject to forfeiture.

F-30

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

The sale of the Founders Shares to the Company's director nominees and affiliates of its sponsor group, as described above, is within the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”).  Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the 194,792 shares sold to the Company’s director nominees and affiliates of its sponsor group was $1,229,138, or $6.31 per share. The Founders Shares were effectively sold subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founders Shares is recognized only when the performance condition is probable of occurrence. Stock-based compensation will be recognized at the date a Business Combination is considered probable in an amount equal to the number of Founders Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founders Shares. As of September 30, 2021, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense has been recognized.

The Initial Stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect to 50% of the Founder Shares, the earlier of six months after the completion of a Business Combination and the date on which the closing price of the common stockClass A Common Stock on Nasdaq equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations recapitalizations and the like)recapitalizations) for any 20 trading days within any consecutive 30-trading day period commencing after a Business Combination and (2) with respect to the remaining 50% of the Founder Shares, six months after the completion of a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. 

Promissory Note — Related Party

On December 15, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $200,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) the consummation of the Initial Public Offering or (ii) the date on which the Company determined not to proceed with the Initial Public Offering. The outstanding balance under the Promissory Note of $200,000 was repaid on March 9, 2021. Borrowings under the Promissory Note are no longer available.

Related Party Loans

In order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would be repaid upon consummation of a Business Combination, without interest. Up to $1,500,000 of such loans may be convertible into units at a price of $10.00 per unit, at the option of the lender. The units would be identical to the Private Units. As of September 30, 2021 and December 31, 2020, there were 0 amounts outstanding under the Working Capital Loans. On November 3, 2021 the Company entered into a new promissory note with related parties of the Company in the aggregate principal amount of $500,000 in order to finance the Company’s working capital needs (see Note 11).

F-31

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

NOTE 7. COMMITMENTS

Registration Rights

Pursuant to a registration rights agreement entered into on March 2, 2021, the holders of the Founder Shares and the holders of the Private Units (and underlying securities) are entitled to registration rights. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units (and underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Notwithstanding the foregoing, the holders of the Founder Shares and the holders of the Private Units may not exercise demand or piggyback rights after seven (7) years from the effective date of the Initial Public Offering and may not exercise demand rights on more than one occasion in respect of all registrable securities.

Business Combination Marketing Agreement

The Company entered into a business combination marketing agreement with Roth Capital Partners, LLC (“Roth”) and Craig-Hallum Capital Group LLC (“Craig-Hallum”), the underwriters in the Initial Public Offering, to act as advisors in connection with a Business Combination, including assisting in the transaction structuring and negotiation of a definitive purchase agreement with respect to the Business Combination, holding meetings with the stockholders to discuss the Business Combination and the target’s attributes, introducing the Company to potential investors to purchase its securities in connection with the Business Combination, assisting in obtaining stockholder approval for the Business Combination, and assisting with relevant financial analysis, presentations, press releases and filings related to the Business Combination. The Company will pay Roth and Craig-Hallum a marketing fee for such services upon the consummation of a Business Combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Initial Public Offering, or $4,025,000. Roth and Craig-Hallum will not be entitled to such fee unless the Company consummates a Business Combination.

Business Combination Agreement

On June 16, 2021, (i) the Company, (ii) Blocker Merger Sub, (iii) the Blocker, (iv) Company Merger Sub, (v) QualTek, and (vi) the Equityholder Representative, entered into the Business Combination Agreement. Pursuant to the termsclosing of the Business Combination Agreement, (i) Blocker Merger Sub will be merged with and into(the “lock-up release”). If the Blocker, withrequirements for the Blocker surviving as a wholly owned subsidiary oflock-up release are not satisfied within five (5) years following the Company, (ii) immediately thereafter, the Blocker will be merged with and into the Company, with the Company as the surviving company, and (iii) immediately thereafter, Company Merger Sub will be merged with and into QualTek, with QualTek as the surviving company.

The Business Combination Agreement contains customary representations and warranties, covenants, and closing conditions.

Consideration

Subject to the terms and conditions of the Business Combination Agreement, as a result of the Business Combination, the consideration payable or issuableholders have agreed to forfeit the owners of such equity interests in the Blocker (“Blocker Owners”) and the equityholders of QualTek other than the Blocker (the “Flow-Through Sellers”) is set forth below.

F-32

ROTH CH ACQUISITION III CO.lock-up shares for no consideration.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

Blocker Owner Consideration

The consideration to be received by the Blocker Owners at the Closing will consist of (i) 11,923,940 shares of Class A Common Stock with 3,642,750 shares of Class A Common Stock to be received by BCP AIV Investor Holdings-3, L.P., 4,184,290 shares of Class A Common Stock to be received by BCP Strategic AIV Investor Holdings-2, L.P., and 4,096,901 shares of Class A Common Stock to be received by BCP QualTek Investor Holdings L.P. and (ii) 2,274,934 Blocker Owner Earnout Shares (as defined herein) with 626,123 Blocker Owner Earnout Shares to be received by BCP AIV Investor Holdings-3, L.P., 719,230 Blocker Owner Earnout Shares to be received by BCP Strategic AIV Investor Holdings-2, L.P., and 929,582 Blocker Owner Earnout Shares to be received by BCP QualTek Investor Holdings L.P.

Flow-Through Seller Consideration

The consideration to be received by each Flow-Through Seller at the Closing will consist of:

18,764,898 Common Units, with 4,825,893 Common Units to be received by BCP QualTek Management LLC, 11,780,782 Common Units to be received by BCP QualTek, LLC and 2,158,223 Common Units to be received by BCP QualTek II, LLC;
18,764,898 shares of Class B Common Stock, with 4,825,893 shares of Class B Common Stock to be received by BCP QualTek Management LLC, 11,780,782 shares of Class B Common Stock to be received by BCP QualTek, LLC and 2,158,223 shares of Class B Common Stock to be received by BCP QualTek II, LLC;
3,836,177 Earnout Common Units, with 1,157,803 Earnout Common Units to be received by BCP QualTek Management LLC, 2,678,374 Earnout Common Units to be received by BCP QualTek, LLC and 0 Earnout Common Units to be received by BCP QualTek II, LLC; and
3,836,177 Earnout Voting Shares, with 1,157,803 Earnout Voting Shares to be received by BCP QualTek Management LLC, 2,678,374 Earnout Voting Shares to be received by BCP QualTek, LLC and 0 Earnout Common Units to be received by BCP QualTek II, LLC.

No fractional shares will be issued pursuant to the Business Combination Agreement. In lieu of any fractional shares that would otherwise be issuable to any Blocker Owner or Flow-Through Seller, the Company will pay to such Blocker Owner or Flow-Through Seller, as applicable, cash (rounded up to the nearest cent) in an amount equal to such fraction multiplied by $10.00.

The Earnout Shares and Earnout Common Units

In connection with the Closing, (i) 2,274,934 shares of Class A Common Stock issued to the Blocker Owners (the “Blocker Owner Earnout Shares”), (ii) 3,836,177 Common Units issued to the Flow-Through Sellers (the “Earnout Common Units”) and (iii) an equal number of shares of Class B Common Stock issued to the Flow-Through Sellers by the CompanyOn January 14, 2022, in connection with the Business Combination (the “Earnout VotingConvertible Note Investment, the Company, QualTek HoldCo, and the holders mutually agreed to terminate the Founder Shares” and together with the Blocker Owner Earnout Shares, the “Earnout Shares”), Agreement, such that there will be subject to certain restriction on transfer and voting and potentialno forfeiture pending the achievement (if any)or lock up of any of the following earnout targetsshares of ROCR common stock pursuant to the terms of the Founder Shares Agreement, and all rights, benefits and obligations thereunder terminated effective as of the that date. Accordingly, the Initial Stockholders will continue to hold all 2,875,000 Founder Shares. Pursuant to the Investor Rights Agreement, the Founder Shares will be locked up for a period of six months following the closing of the Business Combination Agreement:compared to the up to five year lockup period under the Founder Shares Agreement. The lock-up under the Investor Rights Agreement does not contemplate a potential forfeiture of the shares at the expiration of the lock-up period, as was set forth in the Founder Shares Agreement for up to 575,000 shares prior to its termination. Following the termination of the Founder Shares Agreement, the Initial Stockholders are no longer at risk of forfeiting up to an aggregate of 1,150,000 Founder Shares, and the benefit to the Initial Stockholders equates to up to $11,408,000 based on the closing price of ROCR common stock on February 1, 2022 of $9.97 per share. Following the lock-up, it is anticipated that the Initial Stockholders will be permitted to sell such shares pursuant to a resale registration statement. The sale of the Founder Shares will cause immediate dilution to existing holders of Class A Common Stock upon such sale.

F-33153

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)Table of Contents

if, on or any time prior to the fifth anniversary of the date of the Closing, the closing sale price per share of Class A Common Stock equals or exceeds $15.00 per share for 20 trading days of any 30 consecutive trading day period following the Closing, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting; and
if, on or any time prior to the fifth anniversary of the date of the Closing, the closing sale price per share of Class A Common Stock equals or exceeds $18.00 per share for 20 trading days of any 30 consecutive trading day period following the Closing, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting.

Pre-PIPE Convertible Notes OfferingPIPE Subscription Agreements and PIPE Registration Rights Agreement

In connection with the Business Combination, accredited investors (each a “Pre-PIPE Investor”) have purchased convertible notes of QualTek, as issuer (the “Notes Issuer”), in an aggregate principal amount of $44.4 million (the “Pre-PIPE Notes”) in a private placement, issuable pursuant to Note Purchase Agreements (the “Note Purchase Agreements”), among the Notes Issuer, ROCR and the Pre-PIPE Investors (the “Pre-PIPE Investment”). The Pre-PIPE Notes are senior unsecured unsubordinated obligations of the Notes Issuer and are not transferable without the consent of the Notes Issuer (other than customary exceptions for transfers to affiliates). The Notes Issuer intends to use the proceeds from the sale of the Pre-PIPE Notes for general working capital or to fund acquisitions of accretive business targets.

Unless earlier converted or redeemed in accordance with the terms of the Pre-PIPE Notes, the Pre-PIPE Notes have a perpetual maturity. The Pre-PIPE Notes will not bear interest and are subject to certain customary information rights.

Pursuant to the current terms of the Pre-PIPE Notes, upon consummation of the Merger, the Pre-PIPE Notes will automatically convert into Class A Common Stock of the Company at $8.00 per share, subject to certain adjustments. However, the Note Purchase Agreements provide that the parties will use commercially reasonable efforts to amend the Pre-PIPE Notes and any other agreements deemed necessary such that upon the consummation of the Business Combination, the Pre-PIPE Notes automatically convert into Common Units of the Company (along with a corresponding number of shares of Class B Common Stock of the Company) in lieu of converting into Class A Common Stock. The number of Common Units and Class B Common Stock will be equal to the quotient that results from dividing the aggregate principal amount of the Note by $8.00, subject to certain adjustments.

PIPE Subscription Agreements

In connection with the Merger, the Company has obtained commitments from certain accredited investors (each a “Subscriber”Subscriber), including QualTek HoldCo, Roth, Craig-Hallum, and certain officers and directors of ROCR, to purchase shares of Class A Common Stock which will be issued in connection with the closing of the MergerBusiness Combination (the “PIPE Shares”PIPE Shares), for an aggregate cash amount of $66.1 million initially at a purchase price of $10.00 per share, in a private placement (the “PIPE Investment”PIPE Investment) pursuant to certain subscription agreements, by and between each Subscriber and ROCR (collectively, the “Subscription Agreements”). On January 14, 2022, the terms of the PIPE Investment were amended to reduce the purchase price per share from $10.00 to $8.00 per share, and to allow Subscribers to invest in the Convertible Note Investment in lieu of all or a portion of their PIPE Investment. A total of approximately $24.7 million of the PIPE Investment elected to invest in the Convertible Note Investment in lieu of the PIPE Investment. On that same date, QualTek HoldCo, the Sponsor, Craig-Hallum, Roth, directors and officers of the Company and affiliates of the Company’s management waived their rights to the reduced per share price and eligibility to participate in the Convertible Note Investment. Accordingly these Subscribers paid $10.00 per share pursuant to the terms of the Subscription Agreements, which amount in the aggregate represents $20,015,000 or 2,001,500 shares. Following that certain amendment to the PIPE Investment, dated as of January 14, 2022, the aggregate number of shares issued pursuant to the Subscription Agreements was 4,676,500 shares of Class A Common Stock for gross proceeds of $41.4 million (or 7,145,000 shares of Class A Common Stock for gross proceeds of $66.1 million including the impact from Subscribers who elected to participate in the Convertible Note Investment in lieu of the PIPE Investment). Certain offering-related expenses arewere payable by the Company, including customary fees payable to the placement agents, Roth Capital Partners, LLC and Craig-Hallum, aggregating $5,150,000. Such commitments are being made by way of the subscription agreements, by and between each Subscriber and the Company (collectively, the “Subscription Agreements”). The purpose of the sale of the PIPE Shares iswas to raise additional capital for use in connection with the Business Combination and to meet the minimum cash requirements provided in the Business Combination Agreement.

The Company has also entered into a registration rights agreement (the “PIPE Shares are identicalRegistration Rights Agreement”) with each Subscriber. Pursuant to the PIPE Registration Rights Agreement, the Company filed (at the Company’s sole cost and expense) the PIPE Resale Registration Statement registering the resale of the shares of Class A Common Stock purchased in the private placement PIPE Investment with the SEC that went effective on February 14, 2022.

Indemnification Agreements

The Certificate of Incorporation contains provisions limiting the liability of the members of the Board, and the Amended and Restated Bylaws provide that we will be heldindemnify each of the members of our Board and officers and certain other persons who provide services to us to the fullest extent permitted under Delaware law.

We entered into indemnification agreements with each of our directors and executive officers and certain other key employees. The indemnification agreements each provide that we will indemnify each of our directors and executive officers and such other key employees against any and all expenses incurred by such director, executive officer or other key employee because of his or her status as one of our directors, executive officers or other key employees, to the Company’s public stockholders atfullest extent permitted by Delaware law, the timeCertificate of Incorporation and the Amended and Restated Bylaws. In addition, the indemnification agreements each provide that, to the fullest extent permitted by Delaware law, we will advance all expenses incurred by our directors, executive officers and other key employees in connection with a legal proceeding involving his or her status as a director, executive officer or key employee.

Tax Receivable Agreement

In connection with the closing of the Business Combination, except thatwe, the PIPE Shares will not be entitledTRA Holders and the TRA Holder Representative entered into the Tax Receivable Agreement.

Pursuant to any redemption rights and will not be registered with the SEC at closingTax Receivable Agreement, we are required to pay the TRA Holders 85% of the Business Combination.

F-34

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

NOTE 8. STOCKHOLDERS’ EQUITY

Common Stock — The Companyamount of savings, if any, in U.S. federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that we (and applicable consolidated, unitary, or combined Subsidiaries thereof, if any) realize, or is authorizeddeemed to issue 50,000,000 sharesrealize, as a result of common stock with a par value of $0.0001 per share. At September 30, 2021 and December 31, 2020, there were 3,283,000 and 2,875,000 shares of common stock issued and outstanding, excluding 11,500,000 and 0 shares of common stock subject to possible redemption, which are presented as temporary equity, respectively.

NOTE 9. WARRANTS

The Company will not issue fractional warrants. The Public Warrants will become exercisable on 30 days after the completion of a Business Combination. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if there is no effective registration statement covering the shares of common stock issuable upon exercise of the Public Warrants within 120 days following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. The warrants will expire five years from the closing of a Business Combination.

Once the warrants become exercisable, the Company may redeem the Public Warrants:certain tax attributes, including:

existing tax basis in wholecertain assets of QualTek and notcertain of its direct or indirect Subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in part;service, attributable to QualTek Common Units acquired by us at the closing of the Business Combination or from a TRA Holder (including QualTek Common Units held by the Blocker, which is acquired by us in a Reorganization Transaction (as defined in the Tax Receivable Agreement));

154

tax basis adjustments resulting from the acquisition of QualTek Common Units by us at the closing of the Business Combination and taxable exchanges of QualTek Common Units (including any such adjustments resulting from certain payments made by us under the Tax Receivable Agreement) acquired by us from a TRA Holder pursuant to the terms of the Third Amended and Restated LLCA;
at a pricetax deductions in respect of $0.01 per warrant;
at any time afterportions of certain payments made under the warrants become exercisable;
upon not less than 30 days’ prior written notice of redemption to each warrant holder;
if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share, for any 20 trading days within a 30-day trading period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders;Tax Receivable Agreement; and
if, and only if, there iscertain tax attributes of the Blocker, which holds QualTek Common Units that are acquired directly or indirectly by us pursuant to a current registration statement in effect with respect toReorganization Transaction (each of the shares of common stock underlying such warrants atforegoing, collectively, the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.Tax Attributes”).

IfUnder the Company callsTax Receivable Agreement, the Public Warrants for redemption, management will haveTax Group generally is treated as realizing a tax benefit from the option to require all holders that wish to exercise the Public Warrants to do souse of a Tax Attribute on a “cashless“with and without” basis, thereby generally treating the Tax Attributes as the last item used, subject to several exceptions. Payments under the Tax Receivable Agreement generally are based on the tax reporting positions that we determine (with the amount of subject payments determined in consultation with an advisory firm and subject to the TRA Holder Representative’s review and consent), and the IRS or another taxing authority may challenge all or any part of position taken with respect to Tax Attributes or the utilization thereof, and a court may sustain such a challenge. In the event that any tax benefits initially claimed by the Tax Group are disallowed, the TRA Holders will not be required to reimburse us for any excess payments that may previously have been made pursuant to the Tax Receivable Agreement, for example, due to adjustments resulting from examinations by taxing authorities. Rather, any excess payments made to such TRA Holders will be applied against and reduce any future cash payments otherwise required to be made by us under the Tax Receivable Agreement, if any, after the determination of such excess. As a result, in certain circumstances we could be required to make payments under the Tax Receivable Agreement in excess of the Tax Group’s actual savings in respect of the Tax Attributes.

The Tax Receivable Agreement provides that, in the event that (i) we exercise our early termination rights under the Tax Receivable Agreement, (ii) certain changes of control of QualTek occur (as described in the Third Amended and Restated LLCA), (iii) QualTek in certain circumstances, fails to make a payment required to be made pursuant to the Tax Receivable Agreement by its final payment date, which non-payment continues for 60 days following such final payment date or (iv) QualTek materially breaches (or is deemed to materially breach) any of its material obligations under the Tax Receivable Agreement other than as described in the warrant agreement. The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

F-35

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

In addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors,foregoing clause (iii) and, in the case of clauses (iii) and (iv), unless certain liquidity related or restrictive covenant related exceptions apply, QualTek’s obligations under the Tax Receivable Agreement will accelerate (if the TRA Holder Representative so elects in the case of clauses (ii)-(iv)) and QualTek will be required to make a lump-sum cash payment to all the TRA Holders equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement, which lump-sum payment would be based on certain assumptions, including those relating to there being sufficient future taxable income of the Tax Group to fully utilize the Tax Attributes over certain specified time periods and that all QualTek Common Units (including QualTek Common Units held by Blocker) that had not yet been exchanged for Common Stock or cash are deemed exchanged for cash. The lump-sum payment could be material and could materially exceed any actual tax benefits that the TRA Holder realizes subsequent to such payment.

As a result of the foregoing, in some circumstances (i) QualTek could be required to make payments under the Tax Receivable Agreement that are greater than or less than the actual tax savings that the Tax Group realizes in respect of the Tax Attributes and (ii) it is possible that QualTek may be required to make payments years in advance of the actual realization of tax benefits (if any, and may never actually realize the benefits paid for) in respect of the Tax Attributes (including if any Early Termination Events occur).

QualTek is required to notify and keep the TRA Holder Representative reasonably informed regarding tax audits or other proceedings the outcome of which is reasonably expected to reduce or defer payments to any TRA Holder under the Tax Receivable Agreement and the TRA Holder Representative and any affected TRA Holder has the right to (i) discuss with QualTek, and provide input and comment to QualTek regarding any portion of any such issuancetax audit or proceeding and (ii) participate in, at the affected TRA Holders’ and TRA Holder Representative’s expense, any such portion of any such tax audit or other tax proceeding to the Initial Stockholdersextent it relates to issues the resolution of which would reasonably be expected to reduce or their affiliates,defer payments to any TRA Holder under the Tax Receivable Agreement. QualTek is not permitted to settle or fail to contest any issue pertaining to income taxes that is reasonably expected to materially and adversely affect the TRA Holders’ rights and obligations under the Tax Receivable Agreement without takingthe consent of the TRA Holder Representative (which is not to be unreasonably withheld or delayed).

155

Under the Tax Receivable Agreement, QualTek is required to provide the TRA Holder Representative with a schedule showing the calculation of payments that are due under the Tax Receivable Agreement with respect to each taxable year. This calculation will be based upon the advice of our tax advisors and an advisory firm. Payments under the Tax Receivable Agreement generally will be required to be made to the TRA Holders a short period of time after this schedule becomes final pursuant to the procedures set forth in the Tax Receivable Agreement, although interest on such payments will begin to accrue at from the due date (without extensions) of the U.S. federal income tax return of QualTek. Any late payments that may be made under the Tax Receivable Agreement will continue to accrue interest (generally at a default rate) until such payments are made.

Related Party Transactions Policy

Our Board has adopted a written policy on transactions with related parties that is in conformity with the requirements for issuers having publicly held Class A Common Stock that is listed on Nasdaq. Related party transactions are defined as transactions in which (i) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (ii) we or any of our subsidiaries is a participant, and (iii) any (x) executive officer, director or nominee for election as a director, (y) greater than 5% beneficial owner of our Common Stock, or (z) immediate family member of the persons referred to in clauses (x) and (y) has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity). Under the policy, our general counsel will be primarily responsible for developing and implementing processes and procedures to obtain information regarding related parties with respect to potential related party transactions and then determining, based on the facts and circumstances, whether such potential related party transactions do, in fact, constitute related party transactions requiring compliance with the policy. If our general counsel determines that a transaction or relationship is a related party transaction requiring compliance with the policy, our general counsel will be required to present to our audit committee all relevant facts and circumstances relating to the related party transaction. Our audit committee will be required to review the relevant facts and circumstances of each related party transaction, including if the transaction is on terms comparable to those that could be obtained in arm’s-length dealings with an unrelated third party and the extent of the related party’s interest in the transaction, take into account any Founder Shares held by themthe conflicts of interest and corporate opportunity provisions of our code of ethics, and either approve or disapprove the related party transaction. If our audit committee’s approval of a related party transaction requiring our audit committee’s approval is not feasible in advance of such related party transaction, then the transaction may be preliminarily entered into upon prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60%approval of the total equity proceeds,transaction by the chair of our audit committee, subject to ratification of the transaction by our audit committee at our audit committee’s next regularly scheduled meeting; provided, however, that, if the ratification is not forthcoming, management will make all reasonable efforts to cancel or annul the related party transaction. If a transaction was not initially recognized as a related party transaction, then, upon such recognition, the related party transaction will be presented to our audit committee for ratification at our audit committee’s next regularly scheduled meeting; provided, however, that, if the ratification is not forthcoming, management will make all reasonable efforts to cancel or annul the related party transaction. Management will update our audit committee as to any material changes to any approved or ratified related party transaction and interest thereon, available for the fundingwill provide a status report at least annually of all then current related party transactions. No member of our Board will be permitted to participate in approval of a Business Combination on the daterelated party transaction for which he or she is a related party.

156

LEGAL MATTERS

The validity of the consummation of a Business Combination (net of redemptions),securities offered by this prospectus have been passed upon for us by Kirkland & Ellis LLP, New York, New York and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period ending on the trading day prior to the day on which the Company consummates Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the Market Value and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the Market Price.Boughton Law Corporation, Vancouver, British Columbia.

EXPERTS

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the sharesconsolidated financial statements of common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

At September 30, 2021, there were 2,875,000 Public Warrants and 102,000 Private Placement Warrants outstanding. There were 0 Public Warrants or Private Placement Warrants outstandingBCP QualTek Holdco, LLC as of December 31, 2020.

NOTE 10. FAIR VALUE MEASUREMENTS

The Company follows the guidance in ASC 8202021 and 2020 and for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assetsyears in the two-year period ended December 31, 2021 have been audited by RSM US LLP, an independent registered public accounting firm, as stated in their report thereon and liabilities reflects management’s estimateincluded in this Prospectus and Registration Statement in reliance upon such report and upon the authority of amounts that the Company would have receivedsuch firm as experts in connectionaccounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We file reports, proxy statements and other information with the sale ofSEC as required by the assets or paid in connection withExchange Act. You can read the transfer ofCompany’s SEC filings, including this prospectus, over the liabilities in an orderly transaction between market participantsInternet at the measurement date. In connection with measuringSEC’s website at http://www.sec.gov.

If you would like additional copies of this prospectus, you should contact us at the fair value of its assetsfollowing address and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1:Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3:Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

F-36

ROTH CH ACQUISITION III CO.telephone number:

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSQualTek Services Inc.

SEPTEMBER 30, 2021475 Sentry Parkway E, Suite 200

(Unaudited)

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.Blue Bell, PA 19422

Quoted Prices in

Significant Other

Significant Other

September 30, 

Active Markets

Observable Inputs

Unobservable Inputs

    

Description

    

2021

    

(Level 1)

    

(Level 2)

    

(Level 3)

Assets:

  

  

  

  

  

Cash and marketable securities held in Trust Account

 

  

$

115,007,452

$

115,007,452

$

$

Liabilities:

 

  

 

  

 

  

 

  

 

  

Warrant Liability – Private Placement Warrants

 

  

$

217,260

$

$

$

217,260

The Private Placement Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liability on the accompanying condensed consolidated balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liability in the condensed consolidated statements of operations.

The Private Placement Warrants were valued using a binomial lattice model incorporating the Cox-Ross-Rubenstein methodology, which is considered to be a Level 3 fair value measurement. The binomial lattice model’s primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the expected volatility of the common stock. The expected volatility as of the Initial Public Offering date was derived from observable public

F-37

ROTH CH ACQUISITION III CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

warrant pricing on comparable ‘blank-check’ companies without an identified target. The expected volatility as of subsequent valuation dates was implied from the Company’s own Public Warrant pricing.

There were 0 transfers between Levels 1, 2 or 3 during the three and nine months ended September 30, 2021.

The following table provides quantitative information regarding Level 3 fair value measurements:

At

March 5, 2021

 

(Initial

At

 

Measurement)

September 30, 2021

Stock price

    

$

9.78

$

9.94

Strike price

$

11.50

$

11.50

Volatility

14.9

%

19.8

%

Risk-free rate

0.87

%

0.95

%

Probability of Business Combination occurring

75

%

90.0

%

Dividend yield

0.0

%

0.0

%

Fair value of Private Placement Warrants

$

0.90

$

2.13

The following table presents the changes in the fair value of Level 3 warrant liabilities:

    

Warrant Liabilities

Fair value as of March 5, 2021 (Initial Measurement)

$

91,800

Change in fair value

 

(9,180)

Fair value as of March 31, 2021

82,620

Change in fair value

232,560

Fair value as of June 30, 2021

$

315,180

Change in fair value

(97,920)

Fair value as of September 30, 2021

$

217,260

NOTE 11.  SUBSEQUENT EVENTS

On November 3, 2021 the Company entered into a new promissory note with related parties of the Company in the aggregate principal amount of $500,000 in order to finance the Company’s working capital needs. The promissory note is non-interest bearing and is not convertible into any securities of the Company and shall be payable upon the consummation of a Business Combination.(484) 804-4585

F-38157

Report of Independent Registered Public Accounting Firm

To the Members and the Board of Directors

BCP QualTek Holdco, LLC

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of BCP QualTek Holdco, LLC and Subsidiary (the Company) as of December 31, 20202021 and 2019,2020, the related consolidated statements of operations and comprehensive loss, changes in equity (deficit) and cash flows for the years ended December 31, 20202021 and 2019,2020, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20202021 and 2019,2020, and the results of their operations and their cash flows for the years then ended in, conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits.audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America.PCAOB. Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, auditsan audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provideaudit provides a reasonable basis for our opinion.

/s/ RSM US LLP

We have served as the Company’s auditor since 2012.

Blue Bell, Pennsylvania
May 11, 2021,

April 1, 2022, except for the effects of discontinued operationsthe reverse recapitalization described in the Nature of business section of Note 14,1, as to which the date is December 8, 2021

September 16, 2022

F-39F-2

BCP QUALTEK HOLDCO, LLC AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(in thousands, except unitshare and per share information)

December 31, 

    

December 31,

    

2020

    

2019

    

2021

    

2020

Assets

 

  

 

  

  

 

  

Current assets:

 

  

 

  

  

 

  

Cash

$

76

$

91

$

606

$

76

Accounts receivable, net of allowance

 

174,797

 

228,659

 

201,845

 

174,797

Inventories, net

 

5,765

 

7,790

 

5,409

 

5,765

Prepaid expenses

 

3,459

 

4,130

 

12,140

 

3,459

Other current assets

 

1,592

 

1,608

 

2,021

 

1,592

Current assets of discontinued operations

6,534

6,736

 

4,502

 

6,534

Total current assets

 

192,223

 

249,014

 

226,523

 

192,223

Property and equipment, net

 

33,794

 

18,173

 

50,682

 

33,794

Intangible assets, net

 

345,816

 

381,573

 

364,174

 

345,816

Goodwill

 

58,522

 

86,503

 

28,723

 

58,522

Other long-term assets

 

1,241

 

842

 

1,657

 

1,241

Non-current assets of discontinued operations

9,272

11,125

 

 

9,272

Total assets

$

640,868

$

747,230

$

671,759

$

640,868

Liabilities and Equity

 

  

 

  

Liabilities and (Deficit) / Equity

 

  

 

  

Current liabilities:

 

  

 

  

 

  

 

  

Current portion of long-term debt and capital lease obligations

$

27,249

$

13,466

$

127,375

$

27,249

Current portion of contingent consideration

 

9,968

 

10,808

 

9,299

 

9,968

Accounts payable

 

55,749

 

70,964

 

60,726

 

55,749

Accrued expenses

 

65,172

 

61,144

 

52,986

 

65,172

Contract liabilities

 

14,945

 

18,470

 

14,773

 

14,945

Current liabilities of discontinued operations

3,365

2,846

 

2,048

 

3,365

Total current liabilities

 

176,448

 

177,698

 

267,207

 

176,448

Capital lease obligations, net of current portion

 

15,959

 

6,730

 

19,851

 

15,959

Long-term debt, net of current portion and deferred financing fees

 

397,464

 

390,769

 

418,813

 

397,464

Contingent consideration, net of current portion

 

8,161

 

29,311

 

21,457

 

8,161

Distributions payable

 

11,409

 

5,930

 

11,409

 

11,409

Non-current liabilities of discontinued operations

1,793

2,634

 

 

1,793

Total liabilities

 

611,234

 

613,072

 

738,737

 

611,234

Commitments and contingencies (Notes 7 and 11)

 

  

 

  

Equity:

 

  

 

  

Preferred units, 25,000 units authorized, issued and outstanding (liquidation preference $29,029 as of December 31, 2020)

 

25,000

 

25,000

Class A units, 2,005,824 units authorized, issued and outstanding

 

208,324

 

208,324

Members’ deficit

 

(204,086)

 

(99,323)

Commitments and contingencies (Notes 8 and 12)

 

  

 

  

(Deficit) / Equity:

 

  

 

  

Preferred shares, 25,000 shares authorized, issued and outstanding as of December 31, 2020

 

 

25,000

Class A common stock, $0.0001 par value; 500,000,000 shares authorized, 11,923,941 and 10,989,751 shares issued and outstanding as of December 31, 2021 and 2020, respectively

 

1

 

1

Class B common stock, $0.0001 par value; 500,000,000 shares authorized, 13,085,488 and 11,173,776 shares issued and outstanding as of December 31, 2021 and 2020, respectively

1

1

Additional paid in capital

 

252,593

 

208,322

Accumulated deficit

(320,080)

(204,086)

Accumulated other comprehensive income

 

396

 

157

 

507

 

396

Total equity

 

29,634

 

134,158

Total (deficit) / equity

 

(66,978)

 

29,634

Total liabilities and equity

$

640,868

$

747,230

$

671,759

$

640,868

See notes to the consolidated financial statements.

F-40F-3

BCP QUALTEK HOLDCO, LLC AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per unitshare information)

For the Years Ended 

For the Years Ended December 31, 

December 31,

    

2020

    

2019

    

2021

    

2020

Revenue

$

656,524

$

599,268

$

612,241

$

656,524

Costs and expenses:

 

  

 

  

 

  

 

  

Cost of revenues

 

597,583

 

525,403

 

502,688

 

597,583

General and administrative

 

47,049

 

42,665

 

50,994

 

47,049

Transaction expenses

 

988

 

4,257

 

3,826

 

988

Loss on legal settlement

 

2,600

 

Change in fair value of contingent consideration

 

(7,081)

 

6,149

 

(4,780)

 

(7,081)

Impairment of long-lived assets

 

 

840

Impairment of goodwill

 

28,802

 

8,132

 

52,487

 

28,802

Depreciation and amortization

 

46,475

 

40,103

 

53,675

 

46,475

Total costs and expenses

 

713,816

 

627,549

 

661,490

 

713,816

Loss from operations

 

(57,292)

 

(28,281)

 

(49,249)

 

(57,292)

Other income (expense):

 

  

 

  

 

  

 

  

Gain on sale/ disposal of property and equipment

 

729

 

129

 

587

 

729

Interest expense

 

(37,659)

 

(33,380)

 

(50,477)

 

(37,659)

Loss on extinguishment of convertible notes

 

(2,436)

 

Total other expense

 

(36,930)

 

(33,251)

 

(52,326)

 

(36,930)

Loss from continuing operations

(94,222)

(61,532)

 

(101,575)

 

(94,222)

Loss from discontinued operations

(3,865)

(6,262)

 

(8,851)

 

(3,865)

Net loss

 

(98,087)

 

(67,794)

 

(110,426)

 

(98,087)

Other comprehensive income:

 

  

 

  

Other comprehensive income (loss):

 

  

 

  

Foreign currency translation adjustments

 

239

 

685

 

111

 

239

Comprehensive loss

$

(97,848)

$

(67,109)

$

(110,315)

$

(97,848)

Earnings per unit:

 

  

 

  

Basic and diluted net loss per unit from continuing operations

$

(48.61)

$

(31.74)

Basic and diluted net loss per unit from discontinued operations

(1.93)

(3.19)

Basic and diluted net loss per unit

$

(50.54)

$

(34.93)

Basic and diluted weighted average common units outstanding

 

2,005,824

 

1,962,115

Denominator

 

  

 

  

Weighted average Class A common shares outstanding – basic and diluted

11,859,955

10,989,751

Loss per share from continuing operations – basic and diluted

$

(8.70)

$

(8.87)

Loss per share from discontinued operations – basic and diluted

$

(0.75)

$

(0.35)

Net loss per share – basic and diluted

$

(9.45)

$

(9.22)

See notes to the consolidated financial statements.

F-41F-4

BCP QUALTEK HOLDCO, LLC AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

(in thousands, except unitshare information)

    

    

    

    

    

    

    

    

    

    

Accumulated

    

    

Other

Preferred Units

Class A Units

Members’

Comprehensive

Total

    

Units

    

Amount

    

Units

    

Amount

    

Deficit

    

Income (Loss)

    

Equity

Balance, January 1, 2019

 

$

1,948,237

$

194,824

$

(14,925)

$

(528)

$

179,371

Adoption of Accounting Standards Codification Topic 606

 

 

 

 

 

(9,831)

 

 

(9,831)

Acquisitions (Note 3)

 

 

 

57,587

 

13,500

 

 

 

13,500

Issuance of preferred equity

 

25,000

 

25,000

 

 

 

 

 

25,000

Tax distributions

 

 

 

 

 

(6,773)

 

 

(6,773)

Other comprehensive income

 

 

 

 

 

 

685

 

685

Net loss

 

 

 

 

 

(67,794)

 

 

(67,794)

Balance, December 31, 2019

 

25,000

 

25,000

 

2,005,824

 

208,324

 

(99,323)

 

157

 

134,158

Tax distributions

 

 

 

 

 

(6,676)

 

 

(6,676)

Other comprehensive income

 

 

 

 

 

 

239

 

239

Net loss

 

 

 

 

 

(98,087)

 

 

(98,087)

Balance, December 31, 2020

 

25,000

$

25,000

 

2,005,824

$

208,324

$

(204,086)

$

396

$

29,634

Accumulated

Additional

Other

Total

Preferred Shares

Class A Shares

Class B Shares

Paid-

Accumulated

Comprehensive

Equity

Shares

Amount

Shares

Amount

Shares

Amount

in-Capital

Deficit

Income

(Deficit)

Balance, January 1, 2020

 

25,000

$

25,000

 

10,989,751

$

1

11,173,776

$

1

$

208,322

 

$

(99,323)

$

157

$

134,158

Tax distributions

 

 

 

 

 

(6,676)

 

 

(6,676)

Other comprehensive loss

 

 

 

 

 

 

239

 

239

Net loss

 

 

 

 

(98,087)

 

 

(98,087)

 

Balance, December 31, 2020

 

25,000

$

25,000

 

10,989,751

$

1

11,173,776

1

$

208,322

$

(204,086)

$

396

$

29,634

Issuance of common stock

 

 

 

934,190

 

683,344

15,000

 

 

 

15,000

Issuance of common stock – non-return

 

 

 

 

367

 

 

 

367

Beneficial conversion feature on convertible notes

 

 

 

 

16,904

 

 

 

16,904

Acquisitions (see Note 4)

 

 

 

 

1,228,368

12,000

 

 

 

12,000

Paid in kind preferred share distribution

 

 

5,568

 

 

 

(5,568)

 

 

Preferred shares exchanged for convertible notes

 

(25,000)

 

(30,568)

 

 

 

 

 

(30,568)

Other comprehensive income

 

 

 

 

 

 

111

 

111

Net loss

 

 

 

 

 

(110,426)

 

 

(110,426)

Balance, December 31, 2021

 

$

11,923,941

$

1

13,085,488

$

1

$

252,593

$

(320,080)

$

507

$

(66,978)

See notes to the consolidated financial statements.

F-42F-5

BCP QUALTEK HOLDCO, LLC AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

For the Years Ended December 31, 

    

2020

    

2019

Cash flows from operating activities:

 

  

 

  

Net loss

$

(98,087)

$

(67,794)

Loss from discontinued operations

3,865

6,262

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

  

 

  

Depreciation, amortization and accretion of debt discount

 

46,474

 

40,103

Impairment of intangible assets, including goodwill

 

28,802

 

8,972

Amortization of debt issuance costs

 

3,090

 

2,269

Change in fair value of contingent consideration

 

(7,081)

 

6,148

Payments of acquisition related contingent consideration

 

 

(5,238)

Provision for bad debt expense

 

3,619

 

(1,139)

Gain on disposal of property and equipment

 

(729)

 

(130)

Changes in assets and liabilities:

 

  

 

  

Accounts receivable

 

52,524

 

(17,897)

Inventories

 

2,111

 

(296)

Prepaid expenses and other assets

 

(262)

 

(1,043)

Accounts payable and accrued liabilities

 

(16,244)

 

15,546

Contract liabilities

 

(3,525)

 

11,696

Net cash provided by (used in) operating activities from continuing operations

14,557

(2,541)

Net cash used in operating activities from discontinued operations

(1,100)

(461)

Net cash provided by (used in) operating activities

 

13,457

 

(3,002)

Cash flows from investing activities:

 

  

 

  

Purchases of property and equipment

 

(4,808)

 

(3,153)

Proceeds from sale of property and equipment

 

881

 

378

Acquisitions of businesses, see Note 3

 

 

(76,342)

Net cash used in investing activities from continuing operations

(3,927)

(79,117)

Net cash used in investing activities from discontinued operations

(36)

(492)

Net cash used in investing activities

 

(3,963)

 

(79,609)

Cash flows from financing activities:

 

  

 

  

Proceeds from line of credit, net of repayments

 

13,283

 

(14,844)

Proceeds from long-term debt

 

 

100,000

Payments for financing fees

 

(113)

 

(6,215)

Repayment of long-term debt

 

(9,564)

 

(8,691)

Proceeds from subordinated related party note

 

 

25,100

Repayment of subordinated related party note

 

 

(25,100)

Payments of acquisition related contingent consideration

 

(6,000)

 

(7,870)

Repayment of capital leases

 

(5,160)

 

(3,425)

Proceeds from issuance of preferred equity

 

 

25,000

Tax distributions to members

 

(1,197)

 

(843)

Net cash (used in) provided by financing activities from continuing operations

 

(8,751)

83,112

Net cash used in financing activities from discontinued operations

(961)

(1,157)

Net cash (used in) provided by financing activities

(9,712)

 

81,955

Effect of foreign currency exchange rate (translation) on cash

 

59

 

23

Net decrease in cash

 

(159)

 

(633)

Cash:

 

  

 

  

Beginning of year

 

328

 

961

End of year

$

169

$

328

Balances included in the Condensed Consolidated Balance Sheets:

Cash

76

91

Cash included in current assets of discontinued operations

93

237

Cash at end of period

$

169

$

328

Supplemental disclosure of cash flow information:

 

  

 

  

Interest paid – continuing operations

$

34,908

$

30,185

Interest paid – discontinued operations

$

189

$

213

Supplemental disclosure of non-cash investing and financing activities:

 

  

 

  

Assets acquired under capital leases from continuing operations

$

18,289

$

9,587

For the Years Ended December 31,

    

2021

    

2020

Cash flows from operating activities:

 

  

 

  

Net loss

$

(110,426)

$

(98,087)

Loss from discontinued operations

 

8,851

 

3,865

Adjustments:

 

  

 

  

Depreciation, amortization and accretion of debt discount

 

64,734

 

46,474

Impairment of goodwill

 

52,487

 

28,802

Loss on extinguishment of convertible notes

 

2,436

 

Amortization of debt issuance costs

 

4,795

 

3,090

Change in fair value of contingent consideration

 

(4,780)

 

(7,081)

Provision for bad debt expense

 

1,867

 

3,619

Gain on disposal of property and equipment

 

(587)

 

(729)

Changes in assets and liabilities:

 

  

 

  

Accounts receivable

 

(11,638)

 

52,524

Inventories

 

514

 

2,111

Prepaid expenses and other assets

 

(8,627)

 

(262)

Accounts payable and accrued liabilities

 

(14,042)

 

(16,244)

Contract liabilities

 

(2,595)

 

(3,525)

Net cash (used in) provided by operating activities from continuing operations

 

(17,011)

 

14,557

Net cash used in operating activities from discontinued operations

 

(931)

 

(1,100)

Net cash (used in) provided by operating activities

 

(17,942)

 

13,457

Cash flows from investing activities:

 

  

 

  

Purchases of property and equipment

 

(3,014)

 

(4,808)

Proceeds from sale of property and equipment

 

833

 

881

Acquisition of businesses, net of cash acquired (see Note 4)

 

(45,849)

 

Net cash used in investing activities from continuing operations

 

(48,030)

 

(3,927)

Net cash provided by (used in) investing activities from discontinued operations

 

4,498

 

(36)

Net cash used in investing activities

 

(43,532)

 

(3,963)

Cash flows from financing activities:

 

  

 

  

Proceeds from line of credit, net of repayments

 

27,796

 

13,283

Proceeds from convertible notes – related party

 

5,000

 

Repayment of convertible notes – related party

 

(5,000)

 

Proceeds from convertible notes

 

44,400

 

Repayment of long-term debt

 

(9,564)

 

(9,564)

Payments for financing fees

 

(2,295)

 

(113)

Payments of acquisition related contingent consideration

 

 

(6,000)

Payments of capital leases

 

(9,585)

 

(5,160)

Proceeds from issuance of equity

 

15,367

 

Tax distributions to members

 

 

(1,197)

Net cash provided by (used in) financing activities from continuing operations

 

66,119

 

(8,751)

Net cash used in financing activities from discontinued operations

 

(2,746)

 

(961)

Net cash provided by (used in) financing activities

 

63,373

 

(9,712)

Effect of foreign currency exchange rate (translation) on cash

 

83

 

59

Net increase (decrease) in cash

 

1,982

 

(159)

Cash:

 

  

 

  

Beginning of year

 

169

 

328

End of year

$

2,151

$

169

Balances included in the consolidated balance sheets:

 

  

 

  

Cash

$

606

$

76

Cash included in current assets of discontinued operations

 

1,545

 

93

Cash at end of year

$

2,151

$

169

Supplemental disclosure of cash flow information:

 

  

 

  

Cash paid for:

 

  

 

  

Interest from continuing operations

$

31,801

$

34,908

Interest from discontinued operations

$

195

$

189

Non-cash investing and financing activities:

 

  

 

  

Assets acquired under capital leases from continuing operations

$

9,804

$

18,289

See notes to the consolidated financial statements.

F-43F-6

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial StatementsTable of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1.Nature of Business and Summary of Significant Accounting Policies

This summary of significant accounting policies of BCP QualTek Holdco, LLC and Subsidiary (collectively with its subsidiaries, “QualTek”, “BCP QualTek”, the “Company”, “we”, “our”, or “us”) is presented to assist in understanding the Company’s consolidated financial statements (financial statements)(“financial statements”). The financial statements and notes are the responsibility of the Company’s management, who is responsible for their integrity and objectivity.

Nature of business:The Company is a leading provider of communication infrastructure services and renewable solutions and disaster recovery services, delivering a full suite of critical services to major telecommunications and utility customers throughout North America.

We operate in 2two reportable segments, which reflects the way performance is assessed and resources are allocated by our Chief Executive Officer, who is our chief operating decision maker. Our Telecom segment provides engineering, construction, installation, network design, project management, site acquisition and maintenance services to major telecommunication, utility, and cable carriers in various locations in the United States. Our Renewables and Recovery Logistics segment provides businesses with continuity and disaster recovery operations with a wide range of logistics,as well as new fiber optic construction services and maintenance and repair capabilitiesservices for telecommunicationsrenewable energy, commercial and utilities customers across the United States.

On February 14, 2022, BCP QualTek Holdco, LLC and Roth CH Acquisition III Co. (“ROCR”) consummated the business combination (“Business Combination”), pursuant to the terms of the Business Combination Agreement dated June 16, 2021 resulting in the Company becoming a publicly listed company. The combined company changed its name from Roth CH Acquisition III Co. to QualTek Services Inc. and BCP QualTek Holdco, LLC changed its name to QualTek Holdco, LLC. As a result of the Business Combination, the shares and corresponding equity amounts and loss per share related to the Company’s Class A Units prior to the Business Combination have been retroactively restated to reflect the post-Business Combination Common Stock capital structure of QualTek Services, Inc. See Note 15 for additional information.

Principles of presentation: The accompanying financial statements, including the accounts of QualTek and its wholly owned subsidiaries, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of QualTek and its wholly owned subsidiary.. All intercompany transactions and balances have been eliminated in consolidation.

Discontinued Operations:operations: The Company presents discontinued operations when there is a disposal of a component group or a group of components that in our judgment represents a strategic shift that will have a major effect on our operations and financial results. We aggregate the results of operations for discontinued operations into a single line item in the Consolidated Statementsconsolidated statements of Operationsoperations and Comprehensive Losscomprehensive loss for all periods presented. Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheetsconsolidated balance sheets as of December 31, 20202021 and 2019.2020. Throughout these financial statements, unless otherwise indicated, amounts and activity are presented on a continuing operations basis. See Note 143 for additional information.

Use of estimates:The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant of these estimates and assumptions relate to the recognition of contract revenues under the cost-to-cost method of progress, fair value estimates, the allowance for doubtful accounts, long-lived assets and intangible assets, asset impairment (including goodwill and other long-lived assets), valuation of assets acquired and liabilities assumed in business combinations, and acquisition-related contingent consideration. These estimates are based on historical experience and various other assumptions that management believes to be reasonable under the current facts and circumstances. Actual results could differ from those estimates.

Accounts receivable: The Company’s accounts receivable are due primarily from largemajor telecommunication and cable carriersutility companies operating within the United States and are carried at original contract amount less an estimate for uncollectible amounts based on historical experience. Management determines the allowance for doubtful receivables by regularly evaluating individual customer receivables and considering a customer’s financial condition and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The

F-7

Company generally does not require collateral. Accounts receivable are considered past due if any portion of the receivables balance is outstanding for more than one day beyond the contractual due date. The Company does not charge interest on past due accounts.

The Company is party to non-recourse financing arrangements in the ordinary course of business, under which certain receivables are settled with the customer’s bank in return for a nominal fee. Discount charges related to these arrangements, which are included within interest expense, totaled $1,003 thousand and $1,713 thousand for the years ended December 31, 2021 and 2020, respectively.

Contract assets: Contract assets include unbilled amounts typically resulting from arrangements whereby complete satisfaction of a performance obligation and the right to payment are conditioned on completing additional tasks or services under the terms of the contract.

Contract liabilities: Contract liabilities consist of amounts invoiced to customers in excess of revenue recognized. The Company’s contract assets and liabilities are reported in a net position on a contract by contract basis at the end of each reporting period. As of December 31, 20202021 and 2019,2020, the contract liabilities balance is classified as a current liability as uncompleted contracts are typically resolved within one year and not considered significant financing components.

F-44

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 1.    Nature of Business and Summary of Significant Accounting Policies (continued)

Cash:Cash includes cash on hand and deposits with banks.

Sale of accounts receivable:     The Company has an arrangement to sell certain receivables to a financial institution. The Company accounts for the transfer of these receivables when it has surrendered control over the assets. Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of the Company’s continuing involvement with the assets transferred. In the event of uncollectability, the Company’s arrangement does not permit recourse, and the Company does not retain any interest in the underlying accounts receivable once transferred. The sold accounts receivable balances are removed from the consolidated balance sheets and cash received is reflected as cash provided by operating activities in the consolidated statements of cash flow. The fair value of the Company’s accounts receivable sold less the proceeds received is recorded as interest expense in the Company’s accompanying consolidated statements of operations and comprehensive loss. For the years ended December 31, 2020 and 2019, the Company recognized factoring related interest expense of $1.8 million and $1.7 million, respectively.

Concentration of credit risk: Financial instruments that potentially subject the Company to concentration of credit risks consist principally of cash and accounts receivable.

The Company maintains certain cash balances with U.S. and Canadian financial institutions and, from time to time, the Company may have balances in excess of the federally insured deposit limit.

Inventories: Inventories are valued at the lower of cost or net realizable value. The cost of inventory is maintained using the weighted average-cost method. Consideration is given to excess, obsolescence and other factors in determining estimated net realizable value.

Property and equipment: Property and equipment acquired through business combinations are stated at the estimated fair value at the date of acquisition. Purchases are recorded at cost. Maintenance and repairs are expensed as incurred. Renewals and betterments that materially extend the life of assets are capitalized. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets, which generally range from 3 to 7 years. Leasehold improvements are amortized over the shorter of the estimated useful life of the improvement or the remaining lease term.

Goodwill and intangible assets: Goodwill is assessed annually for impairment as of the first day of the fourth fiscal quarter of each year, or more frequently if events occur that would indicate a potential reduction in the fair value of a reporting unit below its carrying value. The Company performs an annual impairment review of goodwill at the reporting unit level, which is one level below the operating segment. The Company determines the fair value of the reporting units using a weighting of fair values derived in equal proportions from the income approach and market approach valuation methodologies. The income approach uses the discounted cash flow method and the market approach uses the guideline public company method. If the Company determines the fair value of the reporting unit’s goodwill is less than its carrying value, an impairment loss is recognized and reflected in the operating income or loss in the consolidated statements of operations and comprehensive loss.

Intangible assets consist of customer relationships, trademarks and trade names. Intangible assets that have finite useful lives are amortized on a straight-line basis over their estimated useful lives ranging from 2 years1 year to 15 years.

Impairment of long-lived and intangible assets: The Company reviews its long-lived assets, including property and equipment, and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company measures recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate. If the carrying value of the assets or asset group are not recoverable, the impairment recognized is measured as the amount by which the carrying value exceeds its fair value.

F-45

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 1.    Nature of Business and Summary of Significant Accounting Policies (continued)

Business combinations: The Company accounts for business combinations under the acquisition method of accounting. The purchase price of each business acquired is allocated to the tangible and intangible assets acquired and the liabilities assumed based on

F-8

information regarding their respective fair values on the date of acquisition. Any excess of the purchase price over the fair value of the separately identifiable assets acquired and the liabilities assumed is allocated to goodwill. Management determines the fair values used in purchase price allocations for intangible assets based on historical data, estimated discounted future cash flows, expected royalty rates for trademarks and trade names, as well as certain other information. The valuation of assets acquired, and liabilities assumed requires a number of judgments and is subject to revision as additional information about the fair value of assets and liabilities becomes available. Additional information, which existed as of the acquisition date but unknown to us at that time, may become known during the remainder of the measurement period. This measurement period may not exceed 12 months from the acquisition date. The Company recognizes any adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustments are determined. Additionally, in the same period in which adjustments are recognized, the Company records the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of any change to the provisional amounts, calculated as if the accounting adjustment had been completed at the acquisition date. Acquisition costs are expensed as incurred. The results of operations of businesses acquired are included in the consolidated statements of operations and comprehensive loss from their dates of acquisition.

Deferred financing costs: Deferred financing costs are presented in the consolidated balance sheets as a direct reduction from the carrying amount of long-term debt and are amortized over the term of the related debt. For the years ended December 31, 20202021 and 2019,2020, the Company amortized $3.1 million$4,795 thousand and $2.3 million,$3,090 thousand, respectively, which is included in interest expense on the accompanying consolidated statements of operations and comprehensive loss.

Foreign currency: The discontinued operations of the Company’s foreign subsidiary is translated from the local (functional) currency into U.S. dollars using period-end rates of exchange for assets and liabilities and average monthly rates of exchange for revenues and expenses. Translation gains and losses resulting from these translation adjustments are recorded in the consolidated balance sheets as a component of accumulated other comprehensive income.

Income taxes: No provision for income taxes has been made in the accompanying financial statements since all items of income and loss are allocated to the members for inclusion in their respective tax returns. Accounting Standards Codification (ASC) Topic 740, Income Taxes, provides guidance for how uncertain tax positions should be recognized, measured, disclosed and presented in the financial statements. This requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are more likely than not of being sustained when challenged or when examined by the applicable tax authority.

Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense or benefit and liability in the current year. Based on the Company’s assessment of many factors, including past experience and complex judgments about future events, the Company does not currently anticipate significant changes in its uncertain tax positions over the next 12 months. The Company is not subject to income tax examinations by the U.S. federal, state, or local tax authorities prior to 2017.2018.

Revenue recognition: The Company adopted the requirements of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which is also referred to as ASC Topic 606 (“Topic 606”), under the modified retrospective transition approach effective January 1, 2019, with application to all existing contracts that were not substantially completed as of January 1, 2019.

Under Topic 606, revenue is recognized when, or as, control of promised goods and services is transferred to customers, and the amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for the goods and services transferred. A contractual agreement exists when each party involved approves and commits to, the rights of the parties and payment terms are identified, the agreement has commercial substance, and collectability of consideration is probable. The Company’s services are performed for the sole benefit of its customers, whereby the assets being created or maintained are controlled by the customer and the services the Company performs do not have alternative benefits for the Company.

F-46

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 1.    Nature of Business and Summary of Significant Accounting Policies (continued)

The Company acquires revenue primarily from construction related projects under certain master service and other service agreements contracts. Portions of the contracts include one or multiple performance obligations, which is a contractual promise to deliver a distinct good or transfer of a specific service to a customer. We use different methods of revenue recognition for different types of contracts.

For the Company’s projects recognized under the input method, the Company typically identifies two promised goods and services in the contract: (a) delivery of materials, which is recognized as point in time revenue, and (b) installation and construction services, which are recognized over time as related costs are incurred. The Company determined that the materials and the construction services are both considered distinct performance obligations. The Company’s customers are able to benefit from the materials and construction services both on their own and in connection with readily available resources, indicating that both promises are capable of being distinct. The Company further determined that its promises to transfer the materials and to provide the

F-9

construction services are each separately identifiable from the other promises in the contract. Further, these promises do not represent inputs to a combined output which may represent a single performance obligation as no significant integration services are provided, there is not a high degree of customization, and the promises are not highly interrelated. As a result, the Company concludes that its input method contracts typically include two performance obligations: the sale of materials and construction services.

Revenue for engineering, construction, project management and site acquisition services are primarily recognized by the Company over time utilizing the cost-to-cost measure of progress, which is an input method, on contracts for specific projects, and for certain master service and other service agreements.

The majority of our performance obligations are completed within one year. Under Topic 606, theThe cost-to-cost measure of progress best depicts the continuous transfer of control of goods or services to the customer, and correspondingly, when performance obligations are satisfied, for these contracts.

Revenue for engineering, aerial and underground construction for projects with customer-specified service requirements are primarily performed under master service agreements and other contracts that contain customer-specified service requirements. The Company has identified multiple performance obligations in these contracts represented by theThese agreements include pricing for individual tasks, included in the contract, each based on a specific unit of measure. These performance obligations include,including, for example, the placement of underground or aerial fiber, directional boring, and fiber splicing.splicing, each based on a specific unit of measure. Revenue is recognized over time as services are performed and customers simultaneously receive and consume the benefits provided by the Company. Output measures such as units delivered are utilized to assess progress against specific contractual performance obligations.

The Company allocates total contract consideration to each performance obligation using the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation. The Company’s customers simultaneously receive and consume the benefit provided by the Company, and revenue is recognized over time as services are performed for all performance obligations identified in the contract. Output measures such as units delivered are utilized to assess progress against specific contractual performance obligations.

Revenue from fulfillment, maintenance, compliance, and recovery services provided to the telecommunication, cable and utility industries is recognized as the services are rendered. These services are generally performed under master or other service agreements and billed on a contractually agreed price per unit on a work order basis. Each service is a separate performance obligation that is recognized upon completion at a point in time as the service is delivered.

Transaction prices for the Company’s contracts may include variable consideration such as contracted materials. Management estimates variable consideration for a performance obligation utilizing estimation methods that it believes best predict the amount of consideration to which the Company will be entitled. Variable consideration is included in the estimated transaction price if it is probable that when the uncertainty associated with the variable consideration is resolved, there will not be a significant reversal of the cumulative amount of revenue that has been recognized.

F-47

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 1.    Nature of Business and Summary of Significant Accounting Policies (continued)

Management’s estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are based largely on engineering studies, past practices with the customer, specific discussions, correspondence or preliminary negotiations with the customer and all other relevant information that is reasonably available at the time of the estimate. The effect of variable consideration on the transaction price of a performance obligation is typically recognized as an adjustment to revenue on a cumulative catch-up basis, as such variable consideration is generally for services encompassed under the existing contract.

To the extent variable consideration reflected in transaction prices are not resolved in accordance with management’s estimates, there could be reductions in, or reversals of, previously recognized revenue. Sales, use and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Most of the Company’s contracts include assurance warranties which do not include any additional distinct services other than the assurance that the services and materials comply with agreed-upon specifications. Therefore, there is not a separate performance obligation for these warranties.

For contracts containing more than one performance obligation, the Company allocates the transaction price on a relative standalone selling price (“SSP”) basis. The Company determines SSP based on the price at which the performance obligation is sold separately. If the SSP is not observable through past transactions, the Company estimates the SSP taking into account available information, such as market conditions and internally approved pricing guidelines related to the performance obligation.

F-10

Revenue generated from fulfillment, maintenance, compliance and recovery services as well as certain performance obligations related to material sales is recognized at a point in time. Point in time revenue accounted for approximately 35%37% and 32%35% of consolidated revenue for the years ended December 31, 20202021 and 2019,2020, respectively. Substantially all the Company’s other revenue is recognized over time. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided.

Equity award compensation: The Company recognizes all equity award compensation to employees, including grants of employee awards to be recognized in the consolidated statements of operations and comprehensive loss, based on their fair values over their vesting period.

Recent accounting pronouncements:In February 2016, the FASB issued ASUAccounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), requiring an entity to recognize assets and liabilities arising from operating leases with terms longer than 12 months. The updated standard will replace most existing lease recognition guidance in GAAP when it becomes effective. The updated standard will be effective for annual reporting periods beginning after December 15, 2021. TheWe have adopted this standard effective January 1, 2022, for non-interim periods, with the impact resulting in the Company is currently evaluating the effect that the updated standard will haverecognizing right-of-use assets and operating lease liabilities on the financial statements.our balance sheets upon adoption, which increases our total assets and liabilities.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“(“ASU No. 2016-13”), which requires the measurement and recognition of expected credit losses for certain financial assets, including trade accounts receivable. ASU No. 2016-13 replaces the existing incurred loss impairment model with an expected loss model that requires the use of relevant information, including an entity’s historical experience, current conditions and other reasonable and supportable forecasts that affect collectability over the life of a financial asset. The amendments in ASU No. 2016-13 are effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company isWe are currently evaluating the impact that the adoption of this new standard will have on its financial statements.

F-48

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 1.    Nature of Business and Summary of Significant Accounting Policies (continued)

In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment testing. An entity will no longer determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with the carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The Company retroactively adopted this standard on January 1, 2019 and has applied its guidance in its impairment assessments.

Risks and uncertainties:     On January 30, 2020, the World Health Organization declared the coronavirus outbreak a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to amongst other provisions, provide emergency assistance for individuals, families and businesses affected by the coronavirus pandemic.

It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the Company.

Note 2.     Earnings Per Unit

Basic net loss per unit is calculated by dividing net loss attributable to Class A members by the weighted average units outstanding during the period, without consideration for Class A equivalents. Diluted net loss per unit is calculated by adjusting weighted average units outstanding for the dilutive effect of common unit equivalents outstanding for the period, determined using the treasury-stock method. If the Company reports a loss, rather than income, the computation of diluted loss per unit excludes the effect of dilutive common unit equivalents, as their effect would be anti-dilutive. For purposes of the diluted net loss per unit calculation, as there are no existing equity units considered to be Class A equivalents, basic and diluted net loss per unit were the same for all periods presented. The performance-based Class P units (See Note 9) are omitted from the calculation of diluted Earnings Per Unit until it is determined that the performance criteria has been met at the end of the reporting period.

The basic and diluted earnings per unit calculations for the years ended December 31, 2020 and 2019 are presented below (in thousands, except for units and per unit amounts):

    

2020

    

2019

Numerator:

 

  

 

  

Net loss

$

(98,087)

$

(67,794)

Less: accrued preferred return

 

(3,287)

 

(742)

Net loss attributable to Class A Units

 

(101,374)

 

(68,536)

Denominator:

 

  

 

  

Weighted-average number of units outstanding, basic and diluted

 

2,005,824

 

1,962,115

Net loss per unit, basic and diluted

$

(50.54)

$

(34.93)

F-49

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 3.     Acquisitions

Vertical Limit Acquisition

On March 29, 2019, pursuant to the Asset Purchase Agreement between QualTek and Vertical Limit Construction, LLC (the “Vertical Limit Seller”), QualTek acquired certain assets and liabilities from the Vertical Limit Seller. The transaction was accounted for as a business combination within the Telecom segment, and the overall consideration transferred was $16.3 million of cash. The purchase price was subject to adjustment based upon Vertical Limit exceeding pre-determined crew counts through May 15, 2019, EBITDA thresholds for 2019 and 2020, and trained employee counts through December 31, 2021, as defined in the agreement, subject to a maximum payment of $15.7 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $7.7 million. As of December 31, 2020 and 2019, results of operations subsequent to the acquisition date and changes to management’s forecasts resulted in a change in fair value of the contingent consideration of ($1.2) million and $4.2 million, respectively, which is reflected in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019.

During the year ended December 31, 2019, the Company paid $3.0 million for the 2019 first quarter EBITDA earnout, as defined in the agreement, which was recorded as a reduction of contingent consideration on the consolidated balance sheets. As of December 31, 2020, $3.5 million of earned but unpaid consideration is included in current portion of long-term debt and capital lease obligations on the consolidated balance sheets as acquisition debt (See Note 7). Goodwill resulted from expected synergies and revenue growth from combining operations with the Company.

The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands):

Purchase consideration:

    

  

Cash paid

$

16,250

Contingent consideration

 

7,677

$

23,927

Purchase price allocations:

 

  

Accounts receivable

$

14,815

Inventories

 

65

Property and equipment

 

1,195

Prepaid expenses

 

72

Trademarks and trade names

 

1,900

Customer relationships

 

6,100

Goodwill

 

7,093

Other long-term assets

 

46

 

31,286

Accounts payable

 

(5,621)

Accrued expenses

 

(1,688)

Capital lease obligations

 

(50)

$

23,927

F-50

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 3.     Acquisitions (continued)

Vinculums Acquisition

On October 4, 2019, pursuant to the Asset Purchase Agreement between QualTek and Vinculums Services, LLC (the “Vinculums Seller”), QualTek acquired certain assets and liabilities from the Vinculums Seller. The transaction was accounted for as a business combination within the Telecom segment, and the overall consideration transferred was $43.6 million of cash and rollover equity valued at $12.5 million. The purchase price was subject to adjustment based upon Vinculums exceeding pre-determined EBITDA thresholds for 2019, 2020, and 2021, as defined in the agreement, subject to a maximum payment of $35 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $22.6 million. As of December 31, 2020, results of operations subsequent to the acquisition date and changes to management’s forecasts resulted in a change in fair value of the contingent consideration of ($5.8) million, which is reflected in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2020. As of December 31, 2020, $5.0 million of earned but unpaid consideration is included in current portion of long-term debt and capital lease obligations on the consolidated balance sheets as acquisition debt (See Note 7). Goodwill resulted from expected synergies and revenue growth from combining operations with the Company.

The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands):

Purchase consideration:

    

  

Cash paid

$

43,595

Rollover equity

 

12,500

Contingent consideration

 

22,615

$

78,710

Purchase price allocations:

 

  

Accounts receivable

$

37,574

Inventories

 

1,668

Prepaid expenses

 

318

Property and equipment

 

990

Trademarks and trade names

 

4,500

Customer relationships

 

35,100

Goodwill

 

32,581

Other long-term assets

 

79

 

112,810

Accounts payable

 

(14,830)

Accrued expenses

 

(12,706)

Contract liabilities

 

(6,190)

Capital lease obligations

 

(374)

$

78,710

The Company finalized the purchase price allocation for Vinculums, which resulted in an increase in goodwill of $973 thousand during the year ended December 31, 2020. The Company made this measurement period adjustment to reflect facts and circumstances that related to accounts receivable, accounts payable, and accrued expenses that existed at the acquisition date and did not result from intervening events subsequent to such date.

F-51

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 3.     Acquisitions (continued)

Aerial Acquisition

On October 18, 2019, pursuant to the Asset Purchase Agreement between QualTek and Aerial Wireless Services, LLC (the “Aerial Seller”), QualTek acquired certain assets and liabilities from the Aerial Seller. The transaction was accounted for as a business combination within the Telecom segment, and the overall consideration transferred was $16.5 million of cash and rollover equity valued at $1.0 million. The purchase price was subject to adjustment based upon Aerial exceeding pre-determined billing thresholds under purchased contracts for 2019 and 2020, as defined in the agreement, subject to a maximum payment of $6.0 million. The agreement also included two timing payments of $1.5 million payable through October 18, 2020. As of December 31, 2019, $1.5 million was unpaid and was included in accrued expenses on the consolidated balance sheets. The balance was subsequently paid in 2020. As of the acquisition date, the fair value of the contingent consideration was determined to be $5.8 million. The full $6.0 million was paid in 2020. Goodwill resulted from expected synergies and revenue growth from combining operations with the Company.

The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands):

Purchase consideration:

    

  

Cash paid

$

16,497

Rollover equity

 

1,000

Contingent consideration

 

5,825

Timing payments

 

1,447

$

24,769

Purchase price allocations:

 

  

Accounts receivable

$

8,847

Inventories

 

150

Prepaid expenses

 

167

Property and equipment

 

1,446

Trademarks and trade names

 

340

Customer relationships

 

3,800

Goodwill

 

14,698

Other long-term assets

 

28

 

29,476

Accounts payable

 

(2,254)

Accrued expenses

 

(789)

Contract liabilities

 

(648)

Capital lease obligations

 

(1,016)

$

24,769

The Company finalized the purchase price allocation for Aerial, which resulted in a decrease in goodwill of $153 thousand during the year ended December 31, 2020. The Company made this measurement period adjustment to reflect facts and circumstances that related to accounts receivable, inventory, prepaid assets, accounts payable, accrued expenses, and contract liabilities that existed at the acquisition date and did not result from intervening events subsequent to such date.

Costs incurred to affect the acquisitions, as well as costs associated with failed transactions, are recognized separately rather than included in the cost allocated to the assets acquired and liabilities assumed. Total transaction related costs of $1.0 million and $4.3 million were reflected in the consolidated statements of operations and comprehensive loss during the years ended December 31, 2020 and 2019, respectively.

F-52

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 3.     Acquisitions (continued)

Site Resources, LLC Acquisition — 2018 Acquisition

As of December 31, 2019, results of operations subsequent to the acquisition date of Site Resources, LLC resulted in a change in fair value of the contingent consideration of ($1.0) million, which is reflected in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2019. NaN contingent consideration payments were made.

Recovery Logistics LLC Acquisition — 2018 Acquisition

As of December 31, 2019, results of operations subsequent to the acquisition date of Recovery Logistics, LLC (“RLI”) resulted in a change in fair value of the contingent consideration of $2.9 million, which is reflected in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2019. During the year ended December 31, 2019, the Company paid $10.1 million to settle the RLI earnout for the specific event in 2018 which was recorded as a reduction of contingent consideration on the consolidated balance sheets. As of December 31, 2020, $2.1 million of earned but unpaid consideration is included in current portion of long-term debt and capital lease obligations on the consolidated balance sheets as acquisition debt (See Note 7).

NX Canada, ULC Acquisition — 2018 Acquisition

As of December 31, 2019, results of operations subsequent to the acquisition date of NX Canada, ULC resulted in a change in fair value of the contingent consideration of ($266) thousand, which is reflected in loss from discontinued operations in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2019. NaN contingent consideration payments were made.

Note 4.     Property and Equipment

Property and equipment consisted of the following as of December 31, 2020 and 2019 (in thousands):

    

2020

    

2019

Office furniture

$

1,249

$

898

Computers

 

1,217

 

1,051

Machinery, equipment and vehicles

 

10,275

 

6,532

Leasehold improvements

 

3,354

 

792

Software

 

2,199

 

1,903

Assets under capital lease

 

32,153

 

15,226

Construction in process

 

605

 

246

 

51,052

 

26,648

Less: accumulated depreciation

 

(17,258)

 

(8,475)

Property and equipment, net

$

33,794

$

18,173

Property and equipment includes assets acquired under capital leases of $32.2 million and $15.2 million and accumulated depreciation of $8.1 million and $3.9 million as of December 31, 2020 and 2019, respectively. Depreciation and amortization expense for the years ended December 31, 2020 and 2019 was $9.0 million and $6.3 million, respectively.

F-53

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 5.     Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration

The following provides further details on the consolidated balance sheet accounts of accounts receivable, net and contract liabilities. See Note 1 for further information on our policies related to these consolidated balance sheet accounts, as well as our revenue recognition policies.

Accounts Receivable, Net of Allowance

Accounts receivable, net, classified as current, consisted of the following as of December 31, 2020 and 2019 (in thousands):

    

2020

    

2019

Trade accounts receivable

$

44,419

$

61,365

Contract assets

 

134,311

 

173,734

 

178,730

 

235,099

Less: allowance for doubtful accounts

 

(3,933)

 

(6,440)

Accounts receivable, net

$

174,797

$

228,659

Contract Assets and Liabilities

Net contract assets consisted of the following as of December 31, 2020 and 2019 (in thousands):

    

2020

    

2019

Contract assets

$

134,311

$

173,734

Contract liabilities

 

(14,945)

 

(18,470)

Contract assets, net

$

119,366

$

155,264

The amount of revenue recognized in the year ended December 31, 2020 and 2019 that was previously included in contract liabilities at the beginning of the period was $9.4 million and $5.7 million, respectively.

Customer Credit Concentration

Customers whose combined amounts of accounts receivable and contract assets exceeded 10% of total combined accounts receivable and contract assets as of December 31, 2020 and 2019 were as follows (in thousands):

    

2020

    

2019

 

Amount

    

% of Total

Amounts

    

% of Total

 

AT&T

$

81,796

 

45.8

%

$

120,145

 

51.1

%

Verizon

 

65,346

 

36.6

%

 

69,552

 

29.6

%

Total

$

147,142

 

82.3

%

$

189,697

 

80.8

%

F-54

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 6.     Goodwill and Intangible Assets

Goodwill by reportable segment consisted of the following as of December 31, 2020 and 2019 (in thousands):

    

Renewables

    

    

    

    

and Recovery

Logistics

Telecom

Total

Goodwill as of January 1, 2019

$

13,598

$

27,485

$

41,083

Additions from acquistions

 

 

53,552

 

53,552

Impairment loss

 

 

(8,132)

 

(8,132)

Goodwill as of December 31, 2019

$

13,598

$

72,905

$

86,503

Measurement period adjustments, net

 

 

821

 

821

Impairment loss

 

 

(28,802)

 

(28,802)

Goodwill as of December 31, 2020

$

13,598

$

44,924

$

58,522

For the years ended December 31, 2020 and 2019, the Company recognized goodwill impairment within the Telecom segment of $28.8 million and $8.1 million, respectively. Impairment resulted from a change in projected future discounted cash flows of the reporting units within the segment which resulted in an carrying value in excess of the estimated fair value.

Intangible assets consisted of the following as of December 31, 2020 and 2019 (in thousands):

    

2020

Weighted Average

Remaining Useful

Gross carrying

Accumulated

Life

    

amount

    

amortization

    

Net carrying amount

Customer relationships

 

10.8

$

368,200

$

(65,868)

$

302,332

Trade names

 

9.9

 

58,519

 

(15,035)

 

43,484

$

426,719

$

(80,903)

$

345,816

    

2019

Weighted Average

Remaining Useful

Gross carrying

Accumulated

    

Life

    

amount

    

amortization

    

Net carrying amount

Customer relationships

 

11.8

$

368,200

$

(36,782)

$

331,418

Trade names

 

10.5

 

58,519

 

(8,364)

 

50,155

$

426,719

$

(45,146)

$

381,573

Amortization expense of intangible assets was $35.8 million and $32.9 million for the years ended December 31, 2020 and 2019, respectively.

For the year ended December 31, 2019, the Company recorded $0.8 million of impairment of long-lived assets within the Telecom segment as a result of a change in projected future undiscounted cash flows of an asset group within the segment. No impairments have occurred during the year ended December 31, 2020.

F-55

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 6.     Goodwill and Intangible Assets (continued)

The following table provides estimated future amortization expense related to the intangible assets (in thousands):

Years ending December 31:

 

  

2021

    

$

35,585

2022

 

35,585

2023

 

34,294

2024

 

32,245

2025

 

31,289

Thereafter

 

176,818

$

345,816

Note 7.     Long-Term Debt and Capital Lease Obligations

Line of credit: The Company has an Asset Based Lending Credit Agreement (“Credit Agreement”) with PNC Bank, N.A. (PNC). Under the Credit Agreement, the Company has available a revolving credit facility for working capital needs and general corporate purposes. On September 8, 2020, the revolving credit facility was increased from $90.0 million to $103.5 million. The amount the Company may borrow is limited to the lesser of the maximum available amount and the borrowing base. The borrowing base is calculated primarily as a percentage of the Company’s eligible accounts receivable, contract assets, net, and eligible inventory, as defined in the Credit Agreement. Interest on the outstanding principal amount, payable in arrears monthly, is based on either an elected Base Rate plus an applicable margin (4.75% at December 31, 2020), or an adjusted Eurodollar rate, plus an applicable margin (ranging from 2.77% to 2.87% at December 31, 2020), as defined in the agreement. There was $37.9 million available under this facility as of December 31, 2020. The entire unpaid principal amount of the line of credit together with accrued and unpaid interest thereon, is due on July 17, 2023. Standby letters of credit of $801 thousand and $357 thousand, issued as part of our insurance program, were outstanding under the Credit Agreement as of December 31, 2020 and 2019, respectively.

Term loan:     The Company has a Senior Secured Term Credit and Guaranty Agreement (“Term Loan”) with Fifth Third Bank for $280 million, which was increased to $380 million on October 4, 2019. The amendment also replaced Fifth Third Bank with Citi Bank as the administrative agent on the Term Loan. The additional $100 million raised during 2019 was used to purchase Vinculums and Aerial (See Note 3) as well as for working capital needs. The Term Loan interest is payable either monthly or quarterly, in arrears, based on the Company’s interest election. The Company may elect either a Base Rate plus an applicable rate (8.50% at December 31, 2020), or an adjusted Eurodollar rate, plus an applicable rate (7.25% at December 31, 2020), as defined in the agreement. On a quarterly basis, the Company is required to make principal payments of $2.4 million with all unpaid principal and interest due at maturity on July 17, 2025. The Term Loan agreement requires an excess cash calculation, as defined in the agreement which could result in additional required principal payments on the loan. As of December 31, 2020, management determined there was no excess cash payment due.

The obligations of QualTek under the PNC Credit Agreement are secured (a) on a first priority basis, by liens on the ABL Priority Collateral, as defined in the ABL Intercreditor Agreement (“Intercreditor Agreement”), dated as of July 18, 2018 including accounts receivable and inventory and (b) on a second priority basis, by liens on the Term Priority Collateral, as defined in the Intercreditor Agreement.

The obligations of QualTek under the Term Loan are secured (a) on a first priority basis, by liens on the Term Priority Collateral of QualTek and (b) on a second priority basis, by liens on the ABL Priority Collateral. Generally, Term Priority Collateral includes all assets, other than the ABL Priority Collateral, and equity interests of QualTek.

F-56

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 7.     Long-Term Debt and Capital Lease Obligations (continued)

Acquisition debt:     Acquisition debt consists of deferred purchase price due to the sellers from the RLI, Vertical Limit, and Vinculums acquisitions (See Note 3). The obligations interest rates range between 1.00% and 3.25%. For the year ended December 31, 2020, the Company had $68 thousand of interest expense to the sellers. There was 0 interest expense incurred during the year ended December 31, 2019.

Subordinated debt — related party:     During 2019, the Company entered into a $25.1 million subordinated loan agreement with its majority member which was repaid in full as of December 31, 2019. For the year ended December 31, 2019, the Company had $241 thousand of interest expense to the majority member.

Debt outstanding as of December 31, 2020 and 2019, whose carrying value approximates fair market value due to variable interest rates based on current rates available to the Company for similar instruments, was as follows (in thousands):

    

2020

    

2019

Line of credit

$

59,837

$

46,554

Term loan

 

361,045

 

370,609

Acquistion debt

 

10,575

 

Capital lease obligations

 

25,751

 

11,959

Less: amounts representing interest

 

(2,682)

 

(1,327)

Less: unamortized financing fees

 

(13,854)

 

(16,830)

 

440,672

 

410,965

Less: current portion of long-term debt

 

(20,139)

 

(9,564)

Less: current portion of capital lease obliations, net of capital lease interest

 

(7,110)

 

(3,902)

$

413,423

$

397,499

The minimum payments of the Company’s long-term debt and capital lease obligations are as follows (in thousands):

    

    

    

Capital

    

Line of

Term

Acquisition

lease

    

credit

    

loan

    

debt

    

obligations

    

Total

2021

$

$

9,564

$

10,575

$

8,287

$

28,426

2022

 

 

9,564

 

 

7,318

 

16,882

2023

 

59,837

 

9,564

 

 

6,397

 

75,798

2024

 

 

9,564

 

 

3,105

 

12,669

2025

 

 

9,564

 

 

644

 

10,208

Thereafter

 

 

313,225

 

 

 

313,225

Total

$

59,837

$

361,045

$

10,575

$

25,751

$

457,208

F-57

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 8.     Fair Value Measurements

The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). GAAP specifies a three-level hierarchy that is used when measuring and disclosing fair value. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e. observable inputs) and the lowest priority to data lacking transparency (i.e. unobservable inputs). An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant inputs to its valuation. The following is a description of the three hierarchy levels.

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Active markets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in inactive markets.

Level 3 Unobservable inputs are not corroborated by market data. This category is comprised of financial and non-financial assets and liabilities whose fair value is estimated based on internally developed models or methodologies using significant inputs that are generally less readily observable from objective sources.

Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfers occurred. There were 0 transfers between any levels during the years ended December 31, 2020 and 2019.

The information following is provided to help readers gain an understanding of the relationship between amounts reported in the accompanying financial statements and the related market or fair value. The disclosures include financial instruments.

Acquisition-related contingent consideration, which resulted from the Acquisitions in Note 3, is measured at fair value on a recurring basis using unobservable inputs such as projections of financial results and cash flows for the acquired businesses and a discount factor based on the weighted average cost of capital which fall within Level 3 of the fair value hierarchy.

In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial liabilities that are required to be measured at fair value on a recurring basis at December 31, 2020 and 2019 and the related activity for the years ended December 31, 2020 and 2019.

Fair Value at December 31, 2020

Carrying

(in thousands)

    

Value

    

Level 1

    

Level 2

    

Level 3

Financial liabilities

 

  

 

  

 

  

 

  

Contingent consideration – Vertical Limit

$

4,711

$

$

$

4,711

Contingent consideration – Vinculums

 

13,418

 

 

 

13,418

$

18,129

$

$

$

18,129

Fair Value at December 31, 2019

Carrying

(in thousands)

    

Value

    

Level 1

    

Level 2

    

Level 3

Financial liabilities Contingent consideration – RLI

$

2,075

$

$

$

2,075

Contingent consideration – Vertical Limit

 

9,195

 

 

 

9,195

Contingent consideration – Vinculums

 

22,973

 

 

 

22,973

Contingent consideration – Aerial

 

5,876

 

 

 

5,876

$

40,119

$

$

$

40,119

F-58

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 8.     Fair Value Measurements (continued)

The following table sets forth a summary of the changes in fair value of the Company’s Level 3 financial liabilities:

January 1, 2019

    

$

10,130

Acquisitions (see Note 3)

 

36,117

Payment of contingent consideration

 

(13,108)

Accretion

 

832

Change in fair value

 

6,148

December 31, 2019

 

40,119

Payment of contingent consideration

 

(6,000)

Accretion

 

1,666

Reclassification to acquisition debt

 

(10,575)

Change in fair value

 

(7,081)

December 31, 2020

$

18,129

Note 9.     Equity

Profits and losses of the Company are allocated to the Members in accordance with the BCP QualTek HoldCo, LLC Agreement (HoldCo LLC Agreement), as amended and restated on October 4, 2019. Distributions made by the Company are based on the HoldCo LLC agreement.

Preferred equity:     On October 4, 2019, an affiliate of the Company’s Majority Member, BCP QualTek II LLC, contributed $25.0 million in exchange for 25,000 Preferred Class B Units (Preferred Units), as defined in HoldCo LLC Agreement.

The Preferred Units have a liquidation preference equal to the initial price per unit of $1,000 plus a preferred return accrued through the date of liquidation of 12.0% per annum, compounding quarterly, as defined in the Holdco LLC Agreement. The Preferred Units have a perpetual term, with no fixed maturity date and no voting rights. The Company has the right to redeem any or all of the Preferred Units, including the accrued return, at any time. The Preferred Units are not convertible or exchangeable with any of the equity interest of the Company.

Profits interests:     The Company has granted certain Class P Units, as defined in the HoldCo LLC Agreement, to certain employees and executives of the Company. The Class P Units vest over five years, subject to certain criteria. All Class P Units vest immediately upon a sale of the Company, as defined in the HoldCo LLC Agreement. Each Class P Unit entitles a participant to a residual profits interest payable after certain thresholds are met. Such profits would be considered compensation expense for the Company. As of the grant dates through December 31, 2020, the Company determined that the thresholds described previously were not probable and therefore, the Company has not assigned any value to such Class P Units and 0 related expense were incurred during the years ended December 31, 2020 and 2019.

Distributions:     The Company had tax distributions of $6.7 million and $6.8 million on behalf of its members in 2020 and 2019, respectively. Tax distributions to the majority member of $11.4 million and $5.9 million were unpaid and are recorded as distributions payable on the consolidated balance sheets as of December 31, 2020 and 2019, respectively.

F-59

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 10.     Segments and Related Information

The Company manages its operations under two operating segments, which represent its two reportable segments: (1) Telecom and (2) Renewables and Recovery Logistics.

The Telecom segment performs site acquisition, engineering, project management, installation, testing, last mile installation, and maintenance solutions of communication infrastructure for telecommunication and cable providers, businesses, public venues, government facilities, and residential subscribers. The Renewables and Recovery Logistics segment derives its revenue from providing businesses with continuity and disaster relief services to telecommunication and utility companies as well as business-as-usual services such as generator storage and repair and cell maintenance services.

The accounting policies of the reportable segments are the same as those described in Note 1. All intercompany transactions and balances are eliminated in consolidation. Intercompany revenue and costs between entities within a reportable segment are eliminated to arrive at segment totals. Corporate results include amounts related to corporate functions such as administrative costs, professional fees, acquisition- related transaction costs and other discrete items.

We present adjusted EBITDA as the key metric used by our management to assess the operating and financial performance of our operations in order to make decisions on allocation of resources. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.

Summarized financial information for the Company’s reportable segments is presented and reconciled to the Company’s consolidated financial information in the following tables, all of which are presented in thousands.

    

2020

    

2019

Revenue:

 

  

 

  

Telecom

$

587,614

$

568,342

Renewables and Recovery Logistics

 

68,910

 

30,926

Total consolidated revenue

$

656,524

$

599,268

    

2020

    

2019

Total Assets:

 

  

 

  

Telecom

$

579,147

$

697,991

Renewables and Recovery Logistics

 

55,370

 

45,642

Corporate

 

6,351

 

3,597

Total consolidated assets

$

640,868

$

747,230

    

2020

    

2019

Capital Expenditures:

 

  

 

  

Telecom

$

8,831

$

10,693

Renewables and Recovery Logistics

 

12,251

 

1,090

Corporate

 

2,015

 

957

Total consolidated capital expenditures

$

23,097

$

12,740

    

2020

    

2019

Amortization and Depreciation:

 

  

 

  

Amortization and depreciation

 

  

 

  

Telecom

$

40,588

$

35,411

Renewables and Recovery Logistics

 

5,259

 

4,250

Corporate

 

628

 

442

Total consolidated amortization and depreciation

$

46,475

$

40,103

F-60

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 10.     Segments and Related Information (continued)

    

2020

    

2019

EBITDA Reconciliation:

 

  

 

  

Telecom adjusted EBITDA

$

2,409

$

37,063

Renewables and Recovery Logistics adjusted EBITDA

 

28,943

 

11,442

Corporate adjusted EBITDA

 

(18,213)

 

(16,635)

Total adjusted EBITDA

 

13,139

 

31,870

Less:

 

  

 

  

Management fees

 

(518)

 

(541)

Transaction expenses

 

(988)

 

(4,257)

Change in fair value of contingent consideration

 

7,081

 

(6,149)

Impairment of goodwill

 

(28,802)

 

(8,132)

Impairment of long-lived assets

 

 

(840)

Depreciation and amortization

 

(46,475)

 

(40,103)

Interest expense

 

(37,659)

 

(33,380)

Net loss

$

(94,222)

$

(61,532)

Revenue by Service Offerings

Revenue for each of the Company’s end-market service offerings is presented below:

    

2020

    

2019

Revenue by Service Offerings:

 

  

 

  

Telecom Wireless

$

458,155

$

397,203

Welecom Wireline

 

129,459

 

171,139

Recovery Logistics

 

68,910

 

30,926

Total

$

656,524

$

599,268

Significant Customers

Revenue for the years ended December 31, 2020 and 2019 include revenue concentration from significant customers as follows (in thousands):

2020

2019

 

    

Amount

    

% of Total

    

Amount

    

% of Total

 

Customers:

 

  

 

  

 

  

 

  

AT&T

$

356,026

 

54

%  

$

318,913

 

53

%

Verizon

 

116,444

 

18

%  

 

117,927

 

20

%

Total

$

472,470

 

72

%  

$

436,840

 

73

%

Note 11.     Commitments and Contingencies

Litigation:     From time to time, we are subject to certain legal proceedings and claims arising in the ordinary course of business. These matters are subject to many uncertainties, and it is possible that some of these matters ultimately could be decided, resolved or settled in a manner that could have an adverse effect on us. Although the resolution and amount of liability cannot be predicted with certainty, it is the opinion of management, based on information available at this time, that such legal proceedings and claims are not expected to have a material effect on the Company’s financial position, results of operations, and cash flows.

Operating leases:     The Company has entered into non-cancellable operating leases for various vehicles, equipment, office and warehouse facilities, which contain provisions for future rent increases or rent- free periods. The total amount of rental payments due over the lease terms is charged to rent expense on the straight-line method over the respective term of the lease. The leases expire at various dates through the year 2031. In addition, the agreements generally require the Company to pay executory costs (real estate

F-61

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

taxes, insurance, and repairs). Rent expense totaled $12.4 million and $7.8 million for the years ended December 31, 2020 and 2019, respectively. The Company leases two of its locations from lessors who are partially owned by members of the Company. During the years ended December 31, 2020 and 2019, the Company had $681 thousand and $488 thousand, respectively, of rent expense related to these leases.

The following is a schedule by year of future minimum rental payments required under the operating lease agreements (in thousands):

Years ending December 31:

    

  

2021

$

9,673

2022

 

8,048

2023

 

5,807

2024

 

3,534

2025

 

1,689

Thereafter

 

6,468

$

35,219

Note 12.     Related Party Transactions

On July 18, 2018, the Company entered into an Advisory Services Agreement with its majority member. The agreement requires quarterly advisory fees of $125 thousand paid at the beginning of each quarter. The Company incurred $500 thousand in advisory fees during each of the years ended December 31, 2020 and 2019.

Note 13.     Retirement Plan

On April 1, 2016, the Company adopted a defined contribution 401(K) plan, which covers all eligible employees. Contributions by the Company are discretionary. The Company made 0 contributions to the plan for the years ended December 31, 2020 and 2019.

Note 14.  Discontinued Operations

At the end of the third quarter of 2021, we suspended all operations associated with our Canadian subsidiary within the Telecom segment and disposed/abandoned the subsidiary, which ceased our foreign operations. The disposition of the Canadian subsidiary was considered a strategic shift that had a major effect on our operations and financial results. As a result of the suspension of operations, any new business with customers was terminated and remaining orders were canceled/settled. As long-lived assets ceased to be used, the property and equipment was either held for sale at auction and measured at the lower of the carrying amount or fair value, or the carrying amount was reduced to the salvage value until abandoned. The intangible assets were re-measured for their useful lives and an accelerated amortization charge was recognized in September 2021. The sale of the remaining property and equipment and collection of outstanding receivables are expected to be completed in the fourth quarter of 2021.

F-62

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations in the consolidated balance sheets as of December 31, 2020 and 2019 (in thousands):

2020

2019

Carrying amounts of assets included as part of discontinued operations:

    

    

    

    

 

Cash

$

93

$

237

Accounts receivable, net of allowance

5,743

6,223

Inventories, net

28

30

Prepaid expenses

71

223

Other current assets

599

23

Total current assets of discontinued operations

$

6,534

$

6,736

Property and equipment, net

3,280

4,585

Intangible assets, net

5,712

6,275

Other long-term assets

280

265

Total non-current assets of discontinued operations

$

9,272

$

11,125

Carrying amounts of liabilities included as part of discontinued operations:

Current portion of long-term debt and capital lease obligations

$

920

$

1,059

Accounts payable

809

1,180

Accrued expenses

1,636

607

Total current liabilities of discontinued operations

$

3,365

$

2,846

Capital lease obligations, net of current portion

1,793

2,634

Total non-current liabilities of discontinued operations

$

1,793

$

2,634

The financial results are presented as loss from discontinued operations on our consolidated statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019. The following table presents the financial results (in thousands):

    

2020

    

2019

 

Revenue

$

17,481

$

21,561

Costs and expenses:

Cost of revenues

18,331

19,807

General and administrative

804

939

Change in fair value of contingent consideration

(266)

Impairment of goodwill

5,119

Depreciation and amortization

2,022

2,012

Total costs and expenses

21,157

27,611

Loss from operations of discontinued operations

(3,676)

(6,050)

Other income (expense):

Gain on sale/ disposal of property and equipment

1

Interest expense

(189)

(213)

Loss from discontinued operations

$

(3,865)

$

(6,262)

F-63

BCP QualTek Holdco, LLC and Subsidiary

Notes to Consolidated Financial Statements

Note 15.     Subsequent Events

The Company has evaluated events occurring after December 31, 2020 through May 11, 2021, which represents the date the financial statements were issued.

On January 26, 2021, the Company purchased 100% of the membership interests of Fiber Network Solutions, LLC (“FNS”), a Texas based company that provides new fiber optic construction services, as well as maintenance and repair services to renewable energy, commercial, and utility clientele in the United States. The overall consideration transferred was $25.5 million of cash and rollover equity valued at $2.0 million. The purchase price is subject to adjustment based upon FNS exceeding pre-determined EBITDA thresholds for 2021, 2022, 2023, and 2024, as defined in the agreement, subject to a maximum additional payment of $20.0 million. The cash consideration was funded by the issuance of preferred equity, as well as the issuance of subordinated convertible notes with the majority member. The acquisition will be recognized as a business combination within our Renewables and Recovery Logistics Segment with identifiable assets acquired and liabilities assumed recorded at their estimated fair values on the acquisition date. The allocation of the purchase price to the fair value of assets acquired and liabilities is not complete.

F-64

BCP QUALTEK HOLDCO, LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited — in thousands, except unit information)

    

October 2, 2021

    

December 31, 2020

Assets

Current assets:

Cash

$

5,405

$

76

Accounts receivable, net of allowance

249,264

174,797

Inventories, net

5,633

5,765

Prepaid expenses

7,446

3,459

Other current assets

1,952

1,592

Current assets of discontinued operations

8,157

6,534

Total current assets

277,857

192,223

Property and equipment, net

42,187

33,794

Intangible assets, net

364,722

345,816

Goodwill

81,775

58,522

Other long-term assets

1,676

1,241

Non-current assets of discontinued operations

1,348

9,272

Total assets

$

769,565

$

640,868

Liabilities and Equity

Current liabilities:

Current portion of long-term debt and capital lease obligations

$

119,545

$

27,249

Current portion of contingent consideration

4,292

9,968

Accounts payable

74,217

55,749

Accrued expenses

60,713

65,172

Contract liabilities

14,950

14,945

Current liabilities of discontinued operations

3,941

3,365

Total current liabilities

277,658

176,448

Capital lease obligations, net of current portion

16,471

15,959

Long-term debt, net of current portion and deferred financing fees

429,033

397,464

Contingent consideration, net of current portion

24,137

8,161

Distributions payable

11,409

11,409

Non-current liabilities of discontinued operations

1,793

Total liabilities

758,708

611,234

Commitments and contingencies (Notes 8 and 12)

Equity:

Preferred units, 25,000 units authorized, issued and outstanding as of December 31, 2020

25,000

Class A units, 2,223,555 and 2,005,824 units authorized, issued and outstanding as of October 2, 2021 and December 31, 2020, respectively

248,595

208,324

Members’ deficit

(238,209)

(204,086)

Accumulated other comprehensive income

471

396

Total equity

10,857

29,634

Total liabilities and equity

$

769,565

$

640,868

See notes to the condensed consolidated financial statements.

F-65

BCP QUALTEK HOLDCO, LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited — in thousands, except per unit information)

For the Nine Months Ended

October 2, 2021

October 3, 2020

Revenue

    

$

465,184

    

$

524,080

Costs and expenses:

Cost of revenues

372,496

462,760

General and administrative

37,962

35,660

Transaction expenses

2,875

567

Change in fair value of contingent consideration

(4,544)

Depreciation and amortization

39,136

34,761

Total costs and expenses

447,925

533,748

Income / (loss) from operations

17,259

(9,668)

Other income (expense):

Gain on sale/ disposal of property and equipment

514

576

Interest expense

(35,778)

(28,824)

Loss on extinguishment of convertible notes

(2,436)

Total other expense

(37,700)

(28,248)

Loss from continuing operations

(20,441)

(37,916)

Loss from discontinued operations

(8,114)

(1,708)

Net loss

(28,555)

(39,624)

Other comprehensive income (loss):

Foreign currency translation adjustments

75

(244)

Comprehensive loss

$

(28,480)

$

(39,868)

Earnings per unit:

Basic and diluted net loss per unit from continuing operations

$

(10.21)

$

(20.15)

Basic and diluted net loss per unit from discontinued operations

(3.75)

(0.85)

Basic earnings net loss per unit

$

(13.96)

$

(21.00)

Basic and diluted weighted average common units outstanding

2,161,951

2,005,824

See notes to the condensed consolidated financial statements.

F-66

BCP QUALTEK HOLDCO, LLC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited — in thousands, except unit information)

Accumulated

Other

Preferred Units

Class A Units

Members’

Comprehensive

Total

    

Units

    

Amount

    

Units

    

Amount

    

Deficit

    

Income (Loss)

    

Equity

For the Nine Months Ended October 2, 2021

Balance, January 1, 2021

25,000

$

25,000

2,005,824

$

208,324

$

(204,086)

$

396

$

29,634

Issuance of class A units

150,000

15,000

15,000

Issuance of class A units – non-return

367

367

Beneficial conversion feature on convertible notes

16,904

16,904

Acquisitions (see Note 4)

67,731

8,000

8,000

Paid in kind preferred unit distribution

5,568

(5,568)

Preferred units exchanged for convertible notes

(25,000)

(30,568)

(30,568)

Other comprehensive income

75

75

Net loss

(28,555)

(28,555)

Balance, October 2, 2021

$

2,223,555

$

248,595

$

(238,209)

$

471

$

10,857

For the Nine Months Ended October 3, 2020

Balance, January 1, 2020

25,000

$

25,000

2,005,824

$

208,324

$

(99,323)

$

157

$

134,158

Tax distributions

(6,694)

(6,694)

Other comprehensive loss

(244)

(244)

Net loss

(39,624)

(39,624)

Balance, October 3, 2020

25,000

$

25,000

2,005,824

$

208,324

$

(145,641)

$

(87)

$

87,596

See notes to the condensed consolidated financial statements.

F-67

BCP QUALTEK HOLDCO, LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited — in thousands)

For the Nine Months Ended

    

October 2, 2021

    

October 3, 2020

Cash flows from operating activities:

Net loss

$

(28,555)

$

(39,624)

Loss from discontinued operations

8,114

1,708

Adjustments:

Depreciation, amortization and accretion of debt discount

46,106

34,761

Loss on extinguishment of convertible notes

2,436

Amortization of debt issuance costs

3,201

2,308

Change in fair value of contingent consideration

(4,544)

Provision for bad debt expense

2,539

2,295

Gain on disposal of property and equipment

(514)

(576)

Changes in assets and liabilities:

Accounts receivable

(63,484)

5,717

Inventories

290

2,483

Prepaid expenses and other assets

(4,586)

(1,278)

Accounts payable and accrued liabilities

8,729

(9,639)

Contract liabilities

(2,691)

(5,731)

Net cash used in operating activities from continuing operations

(32,959)

(7,576)

Net cash used in operating activities from discontinued operations

(3,011)

(885)

Net cash used in operating activities

(35,970)

(8,461)

Cash flows from investing activities:

Purchases of property and equipment

(2,202)

(3,863)

Proceeds from sale of property and equipment

726

645

Acquisition of businesses, net of cash acquired (see Note 4)

(37,057)

Net cash used in investing activities from continuing operations

(38,533)

(3,218)

Net cash provided by (used in) investing activities from discontinued operations

2,178

(36)

Net cash used in investing activities

(36,355)

(3,254)

Cash flows from financing activities:

Proceeds from line of credit, net of repayments

36,405

32,575

Proceeds from convertible notes – related party

5,000

Repayment of convertible notes – related party

(5,000)

Proceeds from convertible notes

44,400

Repayment of long-term debt

(7,173)

(7,173)

Payments for financing fees

(2,220)

Payments of acquisition related contingent consideration

(6,000)

Repayment of capital leases

(7,000)

(3,694)

Proceeds from issuance of equity

15,367

Tax distributions to members

(1,213)

Net cash provided by financing activities from continuing operations

79,779

14,495

Net cash used in financing activities from discontinued operations

(911)

(767)

Net cash provided by financing activities

78,868

13,728

Effect of foreign currency exchange rate (translation) on cash

(35)

21

Net increase in cash

6,508

2,034

Cash:

Beginning of period

169

328

End of period

$

6,677

$

2,362

Balances included in the condensed consolidated balance sheets:

Cash

$

5,405

$

195

Cash included in current assets of discontinued operations

1,272

2,167

Cash at end of period

$

6,677

$

2,362

Supplemental disclosure of cash flow information:

Cash paid for:

Interest from continuing operations

$

24,041

$

27,147

Interest from discontinued operations

$

98

$

150

Non-cash investing and financing activities:

Assets acquired under capital leases from continuing operations

$

948

$

11,630

See notes to the condensed consolidated financial statements.

F-68

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1.   Nature of Business and Summary of Significant Accounting Policies

This summary of significant accounting policies of BCP QualTek Holdco, LLC (collectively with its subsidiaries, “QualTek”, “BCP QualTek”, the “Company”, “we”, “our”, or “us”) is presented to assist in understanding the Company’s unaudited condensed consolidated financial statements (financial statements). The financial statements and notes are the responsibility of the Company’s management, who is responsible for their integrity and objectivity.

Nature of business:   The Company is a leading provider of communication infrastructure services and renewable solutions, delivering a full suite of critical services to major telecommunications and utility customers throughout North America.

We operate in 2 reportable segments, which reflects the way performance is assessed and resources are allocated by our Chief Executive Officer, who is our chief operating decision maker. Our Telecom segment provides engineering, construction, installation, network design, project management, site acquisition and maintenance services to major telecommunication , utility, and cable carriers in various locations in the United States and Canada. Our Renewables and Recovery Logistics segment provides businesses with continuity and disaster recovery operations as well as new fiber optic construction services and maintenance and repair services for telecommunications, renewable energy, commercial and utilities customers across the United States.

On June 16, 2021, BCP QualTek Holdco, LLC and Roth CH Acquisition III Co. (“ROCR”) entered into a business combination agreement that would result in the Company becoming a publicly listed company. The combined company will be named QualTek Services, Inc. Completion of the proposed transaction is subject to customary closing conditions, including the approval of the stockholders of ROCR.

Principles of presentation:   The accompanying unaudited condensed consolidated financial statements, including the accounts of QualTek and its wholly owned subsidiaries, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The unaudited condensed consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Consolidated Financial Report for the year ended December 31, 2020. In the opinion of management, such interim financial statements reflect all adjustments considered necessary for a fair presentation of our results of operations, financial condition, and cash flows for the interim periods presented. This includes all normal and recurring adjustments and elimination of intercompany accounts and transactions. The results for the interim period are not necessarily indicative of the results expected for any subsequent interim or annual period. The historical results of our Canadian subsidiary are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. Throughout these financial statements, unless otherwise indicated, amounts and activity are presented on a continuing operations basis.

Each of our interim reporting periods, other than the fourth interim reporting period, ends on the Saturday closest to the last day of the corresponding quarterly calendar period. The third quarter of 2021 and the third quarter of 2020 ended on October 2, 2021 and October 3, 2020, respectively. Our fourth interim reporting period and our fiscal year end on December 31 regardless of the day of the week on which December 31 falls.

Use of estimates:   The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant of these estimates and assumptions relate to the recognition of contract revenues under the cost-to-cost method of progress, fair value estimates, the allowance for doubtful accounts, long-lived assets and intangible assets, asset impairment (including goodwill and other long-lived assets), valuation of assets acquired and liabilities assumed in business combinations, and acquisition-related contingent consideration. These estimates are based on historical experience and various other assumptions that management believes to be reasonable under the current facts and circumstances. Actual results could differ from those estimates.

There have been no material changes to the Company’s significant accounting policies described in the Company’s Consolidated Financial Report for the year ended December 31, 2020, with the exception of discontinued operations discussed in Note 3.

F-69

Recent accounting pronouncements:In August 2020, the FASB issued Accounting Standards Update (“ASU”)ASU 2020-06, Debt — DebtDebt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — ContractsHedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. This amendment is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We are currently evaluating the effect that the updated standard will have on our financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers to improve the accounting for acquired revenue contracts with customers in business combination by addressing diversity in practice and inconsistency related to (i) the recognition of an acquired contract liability and (ii) payment terms and their effect on subsequent revenue recognized by the acquirer. This amendment requires that, at acquisition date, an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“Topic 606”) as if it had originated the contracts, while also taking into account how the acquiree applied Topic 606. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. We are currently evaluating the effect that the updated standard will have on our financial statements.

Risks and uncertainties: On January 30, 2020, the World Health Organization declared the coronavirus outbreak a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to, amongst other provisions, provide emergency assistance for individuals, families and businesses affected by the coronavirus pandemic.

F-11

It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the Company.

Note 2.Earnings Per UnitShare

The Company calculated the basic and diluted net loss per share for the years ended December 21, 2021 and 2020. Shares of Class B common stock do not participate in the earnings or losses of the Company and, therefore, are not participating securities. As such, a separate presentation of basic and diluted net loss per share of Class B common stock under the two-class method has not been presented.

Basic net loss per unit is calculatedshare was computed by dividing net loss attributable to Class A memberscommon shareholders by the weighted average units outstanding during the period, without consideration fornumber of shares of Class A equivalents.common stock outstanding for the same period. Diluted net loss per unit is calculated by adjusting weighted average units outstanding for the dilutive effectshare was computed in a manner consistent with that of common unit equivalents outstanding for the period, determined using the treasury-stock method. If the Company reports a loss, rather than income, the computation of diluted loss per unit excludes the effect of dilutive common unit equivalents, as their effect would be anti-dilutive. For the nine months ended October 2, 2021, we excluded shares that would be issuable assuming conversion of all the Convertible Notes (See Note 8) as their effect would be anti-dilutive under the if-converted method. For the nine months ended October 3, 2020, there were no existing equity units considered to be Class A equivalents and therefore, basic and diluted net loss per unitshare while giving effect to all shares of potentially dilutive common stock that were outstanding during the same for all periods presented.periods.

The performance-based Class P units (See Note 10)(issued under the historical capital structure of BCP QualTek Holdco, LLC prior to the close of the Business Combination) are omitted from the calculation of diluted Earnings Per Unit untilearnings per share as it is determined that the performance criteria have not been met at December 31, 2021 and 2020. See Note 10 for additional information.

The basic and diluted net loss per share calculations for the endyears presented are as follows (in thousands, except share and per share amounts):

For the Years Ended

December 31,

    

2021

    

2020

Numerator:

 

  

 

  

Loss from continuing operations

$

(101,575)

$

(94,222)

Loss from discontinued operations

 

(8,851)

 

(3,865)

Net loss

 

(110,426)

 

(98,087)

Less: accrued preferred return

 

(1,638)

 

(3,287)

Net loss attributable to Class A common shareholders – basic and diluted

$

(112,064)

$

(101,374)

Denominator:

 

  

 

  

Weighted average Class A common shares outstanding – basic and diluted

 

11,859,955

 

10,989,751

Net loss per share:

 

  

 

  

Net loss per share – continuing operations – basic and diluted

$

(8.70)

$

(8.87)

Net loss per share – discontinued operations – basic and diluted

$

(0.75)

$

(0.35)

Net loss per share – basic and diluted

$

(9.45)

$

(9.22)

The consolidated statements of operations and comprehensive loss reflect a net loss in the period presented and therefore the effect of the reporting period.following securities are not included in the calculation of diluted loss per share as including them would have had an anti-dilutive effect:

    

For the Years Ended

 

December 31,

2021

2020

Excluded from the calculation:

Class B common stock

13,085,488

11,173,775

Pre-PIPE Notes

3,322,361

Total potentially dilutive shares excluded from calculation

16,407,849

11,173,775

F-70F-12

The basic and diluted earnings per unit calculations for the periods presented (in thousands, except share and per unit amounts):

For the Nine Months Ended

    

October 2, 2021

    

October 3, 2020

Numerator:

Loss from continuing operations

$

(20,441)

$

(37,916)

Loss from discontinued operations

(8,114)

(1,708)

Net loss

(28,555)

(39,624)

Less: accrued preferred return

(1,638)

(2,508)

Net loss attributable to Class A Units (basic)

$

(30,193)

$

(42,132)

Denominator:

Weighted-average number of units outstanding, basic and diluted

Class A – basic and diluted

2,161,951

2,005,824

EPU:

Continuing operations – Class A – basic and diluted

$

(10.21)

$

(20.15)

Discontinued operations – Class A – basic and diluted

$

(3.75)

$

(0.85)

Net loss – Class A – basic and diluted

$

(13.96)

$

(21.00)

Note 3.Discontinued Operations

At the end of the third quarter of 2021, we suspended all operations associated with our Canadian subsidiary within the Telecom segment and disposed/abandoned the subsidiary, which ceased our foreign operations. The disposition of the Canadian subsidiary was considered a strategic shift that had a major effect on our operations and financial results. As a result of the suspension of operations, any new business with customers was terminated and remaining orders were canceled/settled. As long-lived assets ceased to be used, the property and equipment was either held for sale at auction and measured at the lower of the carrying amount or fair value, or the carrying amount was reduced to the salvage value until abandoned. The intangible assets were fully re-measured for their useful lives, and an accelerated amortization charge of $5,239 thousand was recognized. The sale of the remaining property and equipment and collection of outstanding receivables are expected to be completedrecognized in the fourth quarter ofyear ended December 31, 2021.

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations in the condensed consolidated balance sheets (in thousands):

    

October 2, 2021

    

December 31, 2020

Carrying amounts of assets included as part of discontinued operations:

Cash

$

1,272

$

93

Accounts receivable, net of allowance

 

4,663

 

5,743

Inventories, net

 

 

28

Prepaid expenses

 

177

 

71

Other current assets

 

2,045

 

599

Total current assets of discontinued operations

$

8,157

$

6,534

Property and equipment, net

 

1,348

 

3,280

Intangible assets, net

 

 

5,712

Other long-term assets

 

 

280

Total non-current assets of discontinued operations

$

1,348

$

9,272

Carrying amounts of liabilities included as part of discontinued operations:

 

  

 

  

Current portion of long-term debt and capital lease obligations

$

1,832

$

920

Accounts payable

 

519

 

809

Accrued expenses

 

1,590

 

1,636

Total current liabilities of discontinued operations

$

3,941

$

3,365

Capital lease obligations, net of current portion

 

 

1,793

Total non-current liabilities of discontinued operations

$

$

1,793

F-71

December 31,

    

2021

    

2020

Carrying amounts of assets included as part of discontinued operations:

 

  

 

  

Cash

$

1,545

$

93

Accounts receivable, net of allowance

 

1,292

 

5,743

Inventories, net

 

 

28

Prepaid expenses

 

 

71

Other current assets

 

1,665

 

599

Total current assets of discontinued operations

$

4,502

$

6,534

Property and equipment, net

 

 

3,280

Intangible assets, net

 

 

5,712

Other long-term assets

 

 

280

Total non-current assets of discontinued operations

$

$

9,272

Carrying amounts of liabilities included as part of discontinued operations:

 

  

 

  

Current portion of long-term debt and capital lease obligations

$

14

$

920

Accounts payable

 

559

 

809

Accrued expenses

 

1,475

 

1,636

Total current liabilities of discontinued operations

$

2,048

$

3,365

Capital lease obligations, net of current portion

 

 

1,793

Total non-current liabilities of discontinued operations

$

$

1,793

The financial results are presented as a loss from discontinued operations on our condensed consolidated statements of operations and comprehensive loss.loss for the years ended December 31, 2021 and 2020. The following table presents the financial results (in thousands):

For the Nine Months Ended

October 2, 2021

October 3, 2020

Revenue

    

$

5,850

    

$

13,923

Costs and expenses:

 

 

  

Cost of revenues

 

8,025

 

13,222

General and administrative

 

275

 

693

Depreciation and amortization

 

6,667

 

1,566

Total costs and expenses

 

14,967

 

15,481

Loss from operations of discontinued operations

 

(9,117)

 

(1,558)

Other income (expense):

 

  

 

  

Gain on sale/ disposal of property and equipment

 

1,101

 

Interest expense

 

(98)

 

(150)

Loss from discontinued operations

$

(8,114)

$

(1,708)

For the Years Ended

December 31,

    

2021

    

2020

Revenue

$

5,850

$

17,481

Costs and expenses:

 

  

 

  

Cost of revenues

 

9,562

 

18,331

General and administrative

 

381

 

804

Depreciation and amortization

 

6,798

 

2,022

Total costs and expenses

 

16,741

 

21,157

Loss from operations of discontinued operations

 

(10,891)

 

(3,676)

Other income (expense):

 

  

 

  

Gain on sale/ disposal of property and equipment

 

2,235

 

Interest expense

 

(195)

 

(189)

Loss from discontinued operations

$

(8,851)

$

(3,865)

F-13

Note 4.Acquisitions

On January 26, 2021, the Company purchased 100% of the membership interests of Fiber Network Solutions, LLC (“FNS”), a Texas based company that provides new fiber optic construction services, as well as maintenance and repair services to renewable energy, commercial, and utility clientele in the United States. The overall consideration transferred was $20,059 thousand of cash and rollover equity valued at $2,000 thousand. The purchase price is subject to adjustment based upon FNS exceeding pre-determined EBITDA thresholds for the years ending 2021, 2022, 2023, and 2024, as defined in the agreement, subject to a maximum additional payment of $20.0 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $8,200 thousand. The cash consideration was funded by the issuance of equity, as well as, the issuance of convertible notes with the majority member.

On August 6, 2021, the Company acquired certain assets and liabilities from Broken Arrow Communications, Inc. (“Broken Arrow”), a New Mexico based company that provides a wide variety of services for the installation, construction, and maintenance of wireless communication facilities. The consideration transferred was $5,000 thousand of cash. The purchase price is subject to adjustment based upon Broken Arrow exceeding pre-determined crew count and EBITDA thresholds for certain markets for the 5-month5-month period of August 2021 through December 2021 and for the year ending December 31, 2022, as defined in the agreement, subject to a maximum additional payment of $10.0 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $5,735$7,552 thousand. The cash consideration was funded by the issuance of convertible notes in June 2021.

On August 30, 2021, the Company purchased 100% of the membership interests of Concurrent Group LLC (“Concurrent”), a Florida based company that provides construction, maintenance, and restoration services for utilities, electric membership co-ops, and municipally owned power providers. The overall consideration transferred was $13,828 thousand of cash, rollover equity valued at $6,000 thousand, and acquisition debt of $14,143 thousand. The purchase price is subject to adjustment based upon Concurrent exceeding pre-determined EBITDA thresholds for LTM periods ending in the third quarter of 2022, 2023 and 2024, as defined in the agreement, subject to a maximum additional payment of $30.0 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $10,210$7,000 thousand. The cash consideration was funded by the issuance of convertible notes in June 2021.

On October 15, 2021, the Company purchased 100% of the membership interests of Urban Cable Technology, LLC (“Urban Cable”), a Pennsylvania based company that provides a range of services, including aerial and underground construction, engineering, multiple dwelling units wiring and rewiring, and fiber placement to broadband and telecom cable operators. The overall consideration transferred was $8,436 thousand of cash and rollover equity valued at $4,000 thousand. The purchase price is subject to adjustment based upon Urban Cable exceeding pre-determined EBITDA for the years ending 2021, 2022, 2023, and 2024, as defined in the agreement. As of the acquisition date, the fair value of the contingent consideration was determined to be $3,450 thousand. The cash consideration was funded by line of credit.

The acquisitions were recognized as business combinations with FNS reporting within our Renewables and Recovery Logistics Segment and Broken Arrow, Concurrent, and ConcurrentUrban Cable reporting within our Telecom Segment. The identifiable assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition dates. Goodwill resulted from expected synergies and revenue growth from combining operations with the Company.

Due to the limited time since the closing of the Broken ArrowThe working capital amounts for Concurrent and Concurrent acquisitions, the valuation effortsUrban are considered provisional and related acquisition accounting are incomplete for both acquisitions at the time of filing of the condensed consolidated financial statements. As a result, the Company recognized provisional amounts that are subject to adjustment as the Company obtains additional information. In particular, additional time is needed to finalize the results of the valuation of assets acquired and liabilities assumed, specifically goodwill, intangible assets, and contingent consideration. Any adjustments to the purchase price allocation will be made as soon as practicable, but no later than one year from the acquisition date.

F-72F-14

The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisitions (in thousands):

FNS

Broken Arrow

Concurrent

    

FNS

    

Broken Arrow

    

Concurrent

    

Urban Cable

Purchase consideration:

    

 

  

 

  

 

  

 

  

Cash paid

$

20,059

$

5,000

$

13,828

$

20,059

$

5,000

$

13,828

$

8,436

Rollover equity

2,000

6,000

 

2,000

 

 

6,000

 

4,000

Contingent consideration

8,200

5,735

10,210

 

8,200

 

7,552

 

7,000

 

3,450

Acquisition debt

14,143

 

 

 

14,143

 

Due from seller

 

 

 

(510)

 

(151)

$

30,259

$

10,735

$

44,181

$

30,259

$

12,552

$

40,461

$

15,735

Purchase price allocations:

 

  

 

  

 

  

 

  

Cash

$

$

$

1,830

$

$

$

1,289

$

185

Accounts receivable

5,121

8,402

 

 

5,126

 

8,458

 

3,695

Inventories

133

25

 

 

133

 

25

 

Prepaid expenses

94

 

 

94

 

 

14

Other current assets

10

 

 

 

10

 

28

Property and equipment

9,978

219

4,164

 

9,978

 

219

 

5,263

 

1,361

Other long-term assets

32

60

 

 

32

 

60

 

Customer relationships

17,370

4,690

24,186

 

17,370

 

5,750

 

22,330

 

10,910

Trademarks and trade names

270

80

1,330

 

270

 

80

 

760

 

340

Goodwill

8,082

4,433

10,738

 

8,082

 

5,319

 

8,552

 

735

35,700

14,802

50,745

 

35,700

 

16,753

 

46,747

 

17,268

Accounts payable

(1,853)

(1,932)

 

 

(1,987)

 

(1,938)

 

(1,120)

Accrued expenses

(156)

(830)

 

 

(156)

 

(799)

 

(323)

Contract liabilities

(2,058)

(639)

 

 

(2,058)

 

(367)

 

Capital lease obligations

(5,441)

(3,163)

 

(5,441)

 

 

(3,182)

 

(90)

$

30,259

$

10,735

$

44,181

$

30,259

$

12,552

$

40,461

$

15,735

During Q4 2021, the Company adjusted the provisional amounts within purchase price allocation for Broken Arrow and Concurrent, which resulted in an increase in goodwill of $886 thousand for Broken Arrow and a decrease of $2,186 in goodwill for Concurrent. The Company made this measurement period adjustment to reflect facts and circumstances that related to accounts receivable, customer relationships, accounts payable, and contingent consideration for Broken Arrow and cash, accounts receivable, property and equipment, customer relationships, trademarks and trade names, accounts payable, and contingent consideration for Concurrent. The changes existed at the acquisition date and did not result from intervening events subsequent to such date.

Costs incurred to affect the acquisitions, including the ROCR business combination, as well as, costs associated with failed transactions, are recognized separately rather than included in the cost allocated to the assets acquired and liabilities assumed. Total transaction related costs of $3,826 thousand and $988 thousand were reflected in the consolidated statements of operations and comprehensive loss during the years ended December 31, 2021 and 2020, respectively.

F-15

Note 5.Property and Equipment

Property and equipment consisted of the following (in thousands):

December 31,

    

2021

    

2020

Office furniture

$

1,382

$

1,249

Computers

 

1,856

 

1,217

Machinery, equipment and vehicles

 

17,331

 

10,275

Land

 

140

 

Building

 

340

 

Leasehold improvements

 

4,552

 

3,354

Software

 

2,320

 

2,199

Assets under capital lease

 

50,941

 

32,153

Construction in process

 

1,335

 

605

 

80,197

 

51,052

Less: accumulated depreciation

 

(29,515)

 

(17,258)

Property and equipment, net

$

50,682

$

33,794

Property and equipment include assets acquired under capital leases of $50,941 thousand and $32,153 thousand and accumulated depreciation of $14,899 thousand and $8,062 thousand as of December 31, 2021 and December 31, 2020, respectively. Depreciation expense was $13,017 thousand and $8,997 thousand for the years ended December 31, 2021 and 2020, respectively.

Note 5.   Property and Equipment

Property and equipment consisted of the following (in thousands):

    

October 2,

    

December 31,

 2021

 2020

Office furniture

$

1,331

$

1,249

Computers

1,591

1,217

Machinery, equipment and vehicles

15,482

10,275

Land

140

Leasehold improvements

4,695

3,354

Software

2,281

2,199

Assets under capital lease

41,349

32,153

Construction in process

1,263

605

68,132

51,052

Less: accumulated depreciation

(25,945)

(17,258)

Property and equipment, net

$

42,187

$

33,794

Property and equipment include assets acquired under capital leases of $41,349 thousand and $32,153 thousand and accumulated depreciation of $13,028 thousand and $8,062 thousand as of October 2, 2021 and December 31, 2020, respectively. Depreciation and amortization expense was $9,418 thousand and $6,584 thousand for the nine months ended October 2, 2021 and October 3, 2020, respectively.

Note 6.Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration

The following provides further details on the condensed consolidated balance sheet accounts of accounts receivable, net and contract liabilities. See Note 1 for further information on our policies related to these consolidated balance sheet accounts, as well as, our revenue recognition policies.

Accounts Receivable, Net of Allowance

Accounts receivable, net classified as current, consisted of the following (in thousands):

December 31,

    

2021

    

2020

Trade accounts receivable

$

74,601

$

44,419

Contract assets

 

132,858

 

134,311

 

207,459

 

178,730

Less: allowance for doubtful accounts

 

(5,614)

 

(3,933)

Accounts receivable, net

$

201,845

$

174,797

Contract Assets and Liabilities

Net contract assets consisted of the following (in thousands):

December 31,

    

2021

    

2020

Contract assets

$

132,858

$

134,311

Contract liabilities

 

(14,773)

 

(14,945)

Contract assets, net

$

118,085

$

119,366

The amount of revenue recognized in the years ended December 31, 2021 and 2020 that was previously included in contact liabilities at the beginning of the period was $13,747 thousand and $17,434 thousand, respectively.

F-73F-16

Customer Credit Concentration

Customers whose combined amounts of accounts receivable and contract assets exceeded 10% of total combined accounts receivable and contract assets were as follows (in thousands):

    

December 31,

 

2021

2020

 

    

Amounts

    

% of Total

    

Amounts

    

% of Total

 

AT&T

$

56,280

 

27.1

%  

$

81,796

 

45.8

%

T-Mobile

 

35,756

 

17.2

%  

 

*

 

*

Verizon

 

50,218

 

24.2

%  

 

65,346

 

36.6

%

Total

$

142,254

 

68.5

%  

$

147,142

 

82.4

%

*

Accounts receivable and contract assets from T-Mobile did not exceed 10% of total combined accounts receivable and contract assets for the year ended December 31, 2020.

Accounts Receivable, NetNote 7.Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of Allowance

Accounts receivable, net classifiedgoodwill by reportable segment is as current, consisted of the followingfollows (in thousands):

    

October 2,

    

December 31,

    

Renewables and

    

    

 2021

 2020

Recovery Logistics

Telecom

Total

Trade accounts receivable

$

97,506

$

44,419

Contract assets

157,155

134,311

254,661

178,730

Less: allowance for doubtful accounts

(5,397)

(3,933)

Accounts receivable, net

$

249,264

$

174,797

Goodwill as of January 1, 2020

$

13,598

$

72,905

$

86,503

Measurement period adjustments, net

 

 

821

 

821

Impairment loss

 

 

(28,802)

 

(28,802)

Goodwill as of December 31, 2020 (a)

$

13,598

$

44,924

$

58,522

Additions from acquisitions (Note 4)

 

8,082

 

14,606

 

22,688

Impairment loss

 

 

(52,487)

 

(52,487)

Goodwill as of December 31, 2021 (a)

$

21,680

$

7,043

$

28,723

(a)

Goodwill is net of accumulated impairment charges of $89,421 thousand and $36,934 thousand for the years ended December 31, 2021 and 2020, respectively in the Telecom segment. There have been no impairment charges within the Renewables and Recovery Logistics segment.

TheFor the years ended December 31, 2021 and 2020, the Company is party to non-recourse financing arrangements inrecognized goodwill impairment within the ordinary courseTelecom segment of business, under which certain receivables are settled with the customer’s bank in return for a nominal fee. Discount charges related to these arrangements, which are included within interest expense, totaled $770$52,487 thousand and $1,356$28,802 thousand, forrespectively. Impairment resulted from a change in projected future discounted cash flows of the nine months ended October 2, 2021 and October 3, 2020, respectively.reporting units within the segment which resulted in an carrying value in excess of the estimated fair value.

ContractIntangible Assets and Liabilities

Net contractIntangible assets consisted of the following (in thousands):

    

October 2,

    

December 31,

 2021

 2020

Contract assets

$

157,155

$

134,311

Contract liabilities

(14,950)

(14,945)

Contract assets, net

$

142,205

$

119,366

The amount of revenue recognized in the nine-months ended October 2, 2021 and October 3, 2021 that was previously included in contact liabilities at the beginning of the period was $8,132 thousand and $9,589 thousand, respectively.

Customer Credit Concentration

Customers whose combined amounts of accounts receivable and contract assets exceeded 10% of total combined accounts receivable and contract assets were as follows (in thousands):

    

October 2, 2021

    

December 31, 2020

Amounts

    

% of Total

Amounts

    

% of Total

AT&T

$

61,797

24.3

%  

$

81,796

45.8

%

Entergy

67,776

26.6

%  

*

*

T-Mobile

34,447

13.5

%  

*

*

Verizon

47,892

18.8

%  

65,346

36.6

%

Total

$

211,911

83.2

%  

$

147,142

82.3

%

* Accounts receivable and contract assets from Entergy and T-Mobile did not exceed 10% of total combined accounts receivable and contract assets for the year ended December 31, 2020.

    

December 31, 2021

    

Weighted

    

    

    

Average

Remaining

Gross carrying

Accumulated

Net carrying

Useful Life

amount

amortization

amount

Customer relationships

9.5

$

424,560

$

(98,307)

$

326,253

Trademarks and trade names

9.5

 

59,969

 

(22,048)

 

37,921

$

484,529

$

(120,355)

$

364,174

F-74F-17

Note 7.   Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of goodwill by reportable segment is as follows (in thousands):

    

Renewables

    

    

and

Recovery

Logistics

Telecom

Total

Goodwill as of December 31, 2020(a)

$

13,598

$

44,924

$

58,522

Additions from acquisitions (Note 4)

8,082

15,171

23,253

Goodwill as of October 2, 2021(a)

$

21,680

$

60,095

$

81,775

(a)Goodwill is net of accumulated impairment charges of $36,934 thousand in the Telecom segment. There have been 0 impairment charges within the Renewables and Recovery Logistics segment.

For the nine months ended October 2, 2021 and October 3, 2020, there were 0 goodwill impairment charges.

Intangible Assets

Intangible assets consisted of the following (in thousands):

October 2, 2021

    

Weighted

    

    

    

Average 

Gross 

Remaining

carrying

Accumulated

Net carrying

Useful Life

amount

amortization

amount

Customer relationships

9.7

$

414,446

$

(89,681)

$

324,765

Trade names

9.7

60,200

(20,243)

39,957

$

474,646

$

(109,924)

$

364,722

December 31, 2020

December 31, 2020

    

Weighted

    

    

    

    

Weighted

    

    

    

Average 

Gross 

Average

Remaining

carrying

Accumulated

Net carrying

Remaining

Gross carrying

Accumulated

Net carrying

Useful Life

amount

amortization

amount

Useful Life

amount

amortization

amount

Customer relationships

10.8

$

368,200

$

(65,868)

$

302,332

 

10.8

$

368,200

$

(65,868)

$

302,332

Trade names

9.9

58,519

(15,035)

43,484

Trademarks and trade names

 

9.9

 

58,519

 

(15,035)

 

43,484

$

426,719

$

(80,903)

$

345,816

$

426,719

$

(80,903)

$

345,816

Amortization expense of intangible assets was $29,020$39,453 thousand and $26,818$35,812 thousand for the nine monthsyears ended October 2,December 31, 2021 and October 3, 2020, respectively.

The following table provides estimated future amortization expense related to the intangible assets (in thousands):

Years ending December 31:

    

2022

$

42,916

2023

 

41,539

2024

 

39,520

2025

 

38,685

2026

 

37,885

Thereafter

 

163,629

$

364,174

Note 8.Debt and Capital Lease Obligations

Convertible notes — related party:On January 20, 2021, the Company issued convertible promissory notes (the “Convertible Notes — Related Party”) with its majority member with an aggregate principal amount of $5,000 thousand. There was a beneficial conversion feature of $4,946 thousand related to the Convertible Notes — Related Party that was amortized over the life of the note, using the effective interest method. On June 24, 2021, the Convertible Notes — Related Party werewas repaid in full and treated as an extinguishment, which resulted in a loss on extinguishment of $2,436 thousand for the nine monthsyear ended October 2,December 31, 2021. The accretion of the discount up to the extinguishment date was $2,198 thousand for the nine monthsyear ended October 2,December 31, 2021. The Company recorded interest expense of $70 thousand for the nine months ended October 2, 2021.

On June 16, 2021, the Company issued a convertible note “Convertible Note — Related Party — June 2021”) in the aggregate principal amount of $30,568 thousand to BCP QualTek II LLC, an affiliate of its majority member, in exchange for the 25,000 outstanding Preferred Class B Units (Preferred Units) and the associated accumulated preferred return (see Note 10). The Convertible Note — Related Party — June 2021 bears interest at an annual rate of 12.00%, which accrues and is payable together with the

F-75

principal balance. The Company recorded interest expense of $1,105$2,055 thousand for the nine monthsyear ended October 2,December 31, 2021. There iswas no fixed maturity date, however, cash payments arewere required equal to tax distributions, which the note holder would be entitled if the Convertible Note — Related Party — June 2021 were a Preferred Unit. The Convertible Note — Related Party - June 2021 includes aconverted under its mandatory conversion provision, at the earlier of immediately prior to the consummation of the SPAC Combination, as defined in the agreement, with ROCR or March 13, 2022. Uponupon the consummation of the SPAC Combination, the Convertiblebusiness combination on February 14, 2022, as noted in Note — June 2021 will automatically convert into of the Company’s Class A units at a price of $83.23 per unit. If the SPAC Combination is not consummated by March 13, 2022, the Convertible Note — June 2021 — Related Party will automatically convert into Preferred Units equal to the accreted principal amount at a price of $1,000 per unit.15.

Convertible notes — June 2021: On June 16, 2021, the Company issued convertible promissory notes (the “Convertible Notes — June 2021”) with an aggregate principal amount of $44,400 thousand. The Convertible Notes — June 2021 dodid not require interest to be accrued or payable and dodid not have a fixed maturity date. The Convertible Notes — June 2021 include aconverted under its mandatory conversion provision, at the earlier of the consummation of the SPAC Combination, as defined in the agreement, with ROCR or March 13, 2022. Uponupon the consummation of the SPAC Combination, the Convertible Notes — June 2021 will automatically convert into common equity of the entity which is, or remains, listedbusiness combination on February 14, 2022, as noted in connection with the transaction of the same class, which is listed following such transaction at $8.00 per share of common equity (subject to equitable and proportionate adjustment in the event of any stock splits, reverse splits or stock dividends). In the event, that the purchase price payable by any person that has executed a Subscription Agreement (“PIPE Investors”) is less than $10.00 per share of common equity (subject to equitable and proportionate adjustment in the event of any stock splits, reverse splits or stock dividends), then the conversion price shall be automatically reduced to an amount equal to eighty percent (80%) of such purchase price payable by the PIPE Investors. If the SPAC Combination is not consummated by March 13, 2022, the Convertible Notes — June 2021 will automatically convert into a number of Preferred Units at an initial price of $1,000 per unit. The Preferred Units have a liquidation preference of the initial per unit price plus a preferred return accrued through the date of liquidation of 8.00% per annum, compounding quarterly. The Preferred Units may, at the option of the note holders, be convertible into Company’s Class A Units at a conversion price of $83.23 per unit (533,461 units).Note 15. There was a beneficial conversion feature of $12,269 thousand related to the Convertible Notes — June 2021 that was amortized over the life of the notes, using the effective interest method. The notes are presented net of a discount of $7,498$3,408 thousand as of October 2,December 31, 2021 on the condensed consolidated balance sheet with accretion of $4,771$8,861 thousand for the nine monthsyear ended October 2,December 31, 2021.

Line of credit:The Company has an Asset Based Lending Credit Agreement (“Credit Agreement”) with PNC Bank, N.A. (“PNC”). Under the Credit Agreement, the Company has available a revolving credit facility in the amount of $103.5 million, for

F-18

working capital needs and general corporate purposes. The amount the Company may borrow is limited to the lesser of the maximum available amount and the borrowing base. The borrowing base is calculated primarily as a percentage of the Company’s eligible accounts receivable, unbilled revenue and eligible inventory, as defined in the Credit Agreement. Interest on the outstanding principal amount, payable in arrears monthly, is based on either an elected Base Rate plus an applicable margin (4.75% at October 3,December 31, 2021), or an adjusted Eurodollar rate, plus an applicable margin (ranging from 2.59%2.60% to 2.63% at October 2,December 31, 2021), as defined in the agreement. There was $2,198$6,691 thousand available under this facility as of October 2,December 31, 2021. The entire unpaid principal amount of the line of credit together with accrued and unpaid interest thereon, is due on July 17,18, 2023. Standby letters of credit of $3,977 thousand and $801 thousand, issued for our insurance carriers and in support of performance under certain contracts, were outstanding under the Credit Agreement as of October 2,December 31, 2021 and December 31, 2020, respectively.

Term loan: The Company has a Senior Secured Term Credit and Guaranty Agreement (“Term Loan”) with Citi Bank for $380.0 million. The Term Loan interest is payable either monthly or quarterly, in arrears, based on the Company’s interest election. The Company may elect either a Base Rate plus an applicable rate (8.50% at October 2,December 31, 2021), or an adjusted Eurodollar rate, plus an applicable rate (7.25% at October 2,December 31, 2021), as defined in the agreement. On a quarterly basis, the Company is required to make principal payments of $2.4 million with all unpaid principal and interest due at maturity on July 17, 2025. The Term Loan agreement requires an excess cash calculation, as defined in the agreement, which could result in additional required principal payments on the loan. There were no excess cash principal payments due December 31, 2021.

The obligations of QualTek under the PNC Credit Agreement are secured (a) on a first priority basis, by liens on the ABL Priority Collateral as defined in the ABL Intercreditor Agreement (“Intercreditor Agreement”), dated as of July 18, 2018 of QualTek including accounts receivable and inventory and (b) on a second priority basis, by liens on the Term Priority Collateral, as defined in the Intercreditor Agreement.

The obligations of QualTek under the Term Loan are secured (a) on a first priority basis, by liens on the Term Priority Collateral of QualTek and (b) on a second priority basis, by liens on the ABL Priority Collateral. Generally, Term Priority Collateral includes all assets, other than the ABL Priority Collateral, and equity interests of QualTek.

F-76

Acquisition debt:Acquisition debt consists of deferred purchase price due to sellers from the RLI, Vertical Limit, Vinculums, and Concurrent acquisitions. The RLI, Vertical Limit, and Vinculums’ acquisition related obligations were due through February 2021. The Concurrent acquisition related obligation is due on December 31, 2021. The interest rates range between . 18%.18% and 3.25%. The Company recorded $606$791 thousand of interest expense for nine monthsyear ended October 2,December 31, 2021. The acquisition debt was paid in full with proceeds from the ROCR business combination on February 14, 2022 (see Note 15).

Debt outstanding, whose carrying value approximates fair market value due to variable interest rates based on current rates available to the Company for similar instruments, was as follows (in thousands):

    

October 2,

    

December 31,

December 31,

2021

2020

    

2021

    

2020

Line of credit

$

96,242

$

59,837

$

87,633

$

59,837

Term loan

353,872

361,045

 

351,481

 

361,045

Acquisition debt

34,718

10,575

 

34,718

 

10,575

Convertible notes – related party

30,568

0

 

30,568

 

Convertible notes – June 2021

44,400

0

 

44,400

 

Capital lease obligations

25,620

23,069

 

35,162

 

25,751

Less: amounts representing interest

 

(3,161)

 

(2,682)

Less: unamortized financing fees

(12,873)

(13,854)

 

(11,354)

 

(13,854)

Less: convertible debt discount

(7,498)

 

(3,408)

 

565,049

440,672

 

566,039

 

440,672

Less: current maturities of long-term debt

(110,395)

(20,139)

 

(115,224)

 

(20,139)

Less: current portion of capital lease obligations, net of capital lease interest

(9,150)

(7,110)

 

(12,151)

 

(7,110)

$

445,504

$

413,423

$

438,664

$

413,423

F-19

The minimum payments of the Company’s long-term debt and capital lease obligations are as follows (in thousands):

    

    

    

    

    

Capital

    

Line of

Term

Convertible

Acquisition

lease

credit

loan

notes

debt

obligations

Total

2022

$

$

9,564

$

74,968

$

34,718

$

13,760

$

133,010

2023

 

87,633

 

9,564

 

 

 

10,874

 

108,071

2024

 

 

9,564

 

 

 

6,621

 

16,185

2025

 

 

322,789

 

 

 

2,785

 

325,574

2026

 

 

 

 

 

1,052

 

1,052

Thereafter

 

 

 

 

 

70

 

70

Total

$

87,633

$

351,481

$

74,968

$

34,718

$

35,162

$

583,962

Note 9.Fair Value Measurements

The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). GAAP specifies a three-level hierarchy that is used when measuring and disclosing fair value. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e. observable inputs) and the lowest priority to data lacking transparency (i.e. unobservable inputs). An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant inputs to its valuation. The following is a description of the three hierarchy levels.

Level 1

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Active markets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2

Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in inactive markets.

Level 3

Unobservable inputs are not corroborated by market data. This category is comprised of financial and non-financial assets and liabilities whose fair value is estimated based on internally developed models or methodologies using significant inputs that are generally less readily observable from objective sources.

Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfers occurred. There were no transfersbetweenany levels during the year ended December 31, 2021.

The information following is provided to help readers gain an understanding of the relationship between amounts reported in the accompanying financial statements and the related market or fair value. The disclosures include financial instruments.

Acquisition-related contingent consideration is measured at fair value on a recurring basis using unobservable inputs such as projections of financial results and cash flows for the acquired businesses and a discount factor based on the weighted average cost of capital which fall within Level 3 of the fair value hierarchy.

In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial liabilities that are required to be measured at fair value on a recurring basis at December 31, 2021 and December 31, 2020 and the related activity for the year ended December 31, 2021 and December 31, 2020.

Fair Value at December 31, 2021

(in thousands)

    

Carrying Value

    

Level 1

    

Level 2

    

Level 3

Financial liabilities

 

  

 

  

 

  

 

  

Contingent consideration

$

30,756

$

$

$

30,756

$

30,756

$

$

$

30,756

F-20

Fair Value at December 31, 2020

(in thousands)

    

Carrying Value

    

Level 1

    

Level 2

    

Level 3

Financial liabilities

Contingent consideration

$

18,129

$

$

$

18,129

$

18,129

$

$

$

18,129

The following table sets forth a summary of the changes in fair value of the Company’s Level 3 financial liabilities:

January 1, 2020

    

$

40,119

Payment of contingent consideration

 

(6,000)

Accretion

 

1,666

Reclassification to acquisition debt

 

(10,575)

Change in fair value

 

(7,081)

December 31, 2020

 

18,129

Acquisitions (see Note 4)

 

26,202

Accretion

 

1,205

Change in fair value

 

(4,780)

Reclassification to acquisition debt

 

(10,000)

December 31, 2021

$

30,756

Note 10.Equity

Prior to the Business Combination (See Note 15 for additional information), profits and losses of the Company are allocated to the Members in accordance with the BCP QualTek Holdco, LLC Agreement (“HoldCo LLC Agreement”), as amended and restated on October 4, 2019. Distributions made by the Company are based on the HoldCo LLC agreement.

Preferred equity: On October 4, 2019, an affiliate of the Company’s majority member, BCP QualTek II LLC, contributed $25,000 thousand in exchange for 25,000 Preferred Units, as defined in the Holdco LLC Agreement. The Preferred Units had a liquidation preference equal to the initial price per unit of $1,000 plus a preferred return accrued through the date of liquidation of 12.00% per annum, compounding quarterly, as defined in the Holdco LLC Agreement. The Preferred Units had a perpetual term, with no fixed maturity date and no voting rights. The Company had the right to redeem any or all of the Preferred Units, including the accrued return, at any time. The Preferred Units were not convertible or exchangeable with any of the equity interest of the Company.

On June 16, 2021, the 25,000 Preferred Units and accumulated preferred return, which totaled $5,568 thousand was exchanged for the Convertible Note — Related Party — June 2021 (see Note 8).

Profits interests: The Company has granted certain Class P Units, as defined in the Holdco LLC Agreement, to certain employees and executives of the Company. The Class P Units vest over five years, subject to certain criteria. All Class P Units vest immediately upon a sale of the Company, as defined in the Holdco LLC Agreement. Each Class P Unit entitles a participant to a residual profits interest payable after certain thresholds are met. Such profits would be considered compensation expense for the Company. From the grant dates through December 31, 2021, the Company determined that the thresholds described previously were not probable and therefore, the Company has not assigned any value to such Class P Units and no related expense were incurred during the years ended December 31, 2021 and 2020.

Distributions: The Company recorded tax distributions of $6,676 thousand on behalf of its members for the year ended December 31, 2020. There were no tax distributions for the year ended December 31, 2021. Tax distributions to the majority members of $11,409 thousand were unpaid and are recorded as distributions payable on the consolidated balance sheets as of December 31, 2021 and 2020, respectively.

In connection with the Business Combination, the shares and corresponding equity amounts related to the Company’s Class A Units prior to the Business Combination have been retroactively restated to reflect the post-combination Common Stock capital structure of QualTek Services, Inc. as follows.

F-21

QualTek Services Inc. Preferred Stock: The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. At December 31, 2021 and 2020, there were 0 and 25,000 shares of preferred stock issued and outstanding, respectively.

QualTek Services Inc. Class A common stock: The Company is authorized to issue 500,000,000 thousand shares of Class A Common Stock with a par value of $0.0001 per share. At December 31, 2021 and 2020, there were 10,989,751 and 11,923,941 shares issued and outstanding, respectively.

QualTek Services Inc. Class B common stock: The Company is authorized to issue 500,000,000 shares of Class B Common Stock with a par value of $0.0001 per share. At December 31, 2021 and 2020, there were 13,085,488 and 11,173,776 shares issued and outstanding, respectively. Holders of Class B Common Stock do not have economic rights but are entitied to one vote for each share of Class B Common Stock held. Upon liquidation of the Company, holders are not entitled to any assets remaining after payment of debts and other liabilities.

Holders of Class A Common Stock and Class B Common Stock vote as a single class on all matters requiring a shareholder vote.

Note 11.Segments and Related Information

The Company manages its operation under two operating segments, which represent its two reportable segments: (1) Telecom and (2) Renewables and Recovery Logistics.

The Telecom segment performs site acquisition, engineering, project management, installation, testing, last mile installation, and maintenance solutions of communication infrastructure for telecommunication and utility providers, businesses, public venues, government facilities, and residential subscribers. The Renewables and Recovery Logistics segment derives its revenue from providing new fiber optic construction services, maintenance and repair services as well as businesses with continuity and disaster relief services to renewable energy, commercial, telecommunication and utility companies. The segment also provides business-as-usual services such as generator storage and repair and services.

The accounting policies of the reportable segments are the same as those described in Note 1. All intercompany transactions and balances are eliminated in consolidation. Intercompany revenue and costs between entities within a reportable segment are eliminated to arrive at segment totals. Corporate results include amounts related to corporate functions such as administrative costs, professional fees, acquisition-related transaction costs and other discrete items.

We present adjusted EBITDA as the key metric used by our management to assess the operating and financial performance of our operations in order to make decisions on allocation of resources. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.

F-22

Summarized financial information for the Company’s reportable segments is presented and reconciled to the Company’s consolidated financial information in the following tables, all of which are presented in thousands.

For the Years Ended

December 31,

    

2021

    

2020

Revenue:

Telecom

$

498,221

$

587,614

Renewables and Recovery Logistics

 

114,020

 

68,910

Total consolidated revenue

$

612,241

$

656,524

December 31,

    

2021

    

2020

Total Assets:

Telecom

$

570,750

$

579,147

Renewables and Recovery Logistics

 

90,638

 

55,370

Corporate

 

10,371

 

6,351

Total consolidated assets

$

671,759

$

640,868

For the Years Ended

December 31,

    

2021

    

2020

Capital Expenditures:

Telecom

$

11,109

$

8,831

Renewables and Recovery Logistics

 

330

 

12,251

Corporate

 

1,379

 

2,015

Total consolidated capital expenditures

$

12,818

$

23,097

For the Years Ended

December 31,

    

2021

    

2020

Amortization and Depreciation:

Amortization and depreciation

Telecom

$

41,105

$

40,588

Renewables and Recovery Logistics

 

11,588

 

5,259

Corporate

 

982

 

628

Total consolidated amortization and depreciation

$

53,675

$

46,475

F-23

For the Years Ended

December 31,

    

2021

    

2020

Adjusted EBITDA Reconciliation:

Telecom adjusted EBITDA

$

32,542

$

2,409

Renewables and Recovery Logistics adjusted EBITDA

 

44,869

 

28,943

Corporate adjusted EBITDA

 

(17,376)

 

(18,213)

Total adjusted EBITDA

$

60,035

$

13,139

Less:

Management fees

 

(889)

 

(518)

Transaction expenses

 

(3,826)

 

(988)

Loss on legal settlement

 

(2,600)

 

Change in fair value of contingent consideration

 

4,780

 

7,081

Impairment of goodwill

 

(52,487)

 

(28,802)

Depreciation and amortization

 

(53,675)

 

(46,475)

Interest expense

 

(50,477)

 

(37,659)

Loss on extinguishment of convertible notes

 

(2,436)

 

Loss from continuing operations

$

(101,575)

$

(94,222)

Revenue by Service Offerings

Revenue for each of the Company’s end-market services offerings is presented below:

For the Years Ended

December 31,

    

2021

    

2020

Telecom Wireless

$

382,743

$

458,155

Telecom Wireline

 

102,194

 

129,459

Telecom Power

 

13,284

 

Renewables

 

29,216

 

Recovery Logistics

 

84,804

 

68,910

Total

$

612,241

$

656,524

Significant Customers

Revenue concentration information for significant customers as a percentage of total consolidated revenue was as follows (in thousands):

For the Year Ended December 31,

 

2021

2020

 

    

Amount

    

% of Total

    

Amount

    

% of Total

 

Customers:

AT&T

$

249,389

 

41

%  

$

356,026

 

54

%

Entergy

 

69,268

 

11

%  

 

*

 

*

T-Mobile

 

78,442

 

13

%  

 

*

 

*

Verizon

 

72,584

 

12

%  

 

116,444

 

18

%

Total

$

469,683

 

77

%  

$

472,470

 

72

%

*

Revenue from Entergy and T-Mobile did not exceed 10% of total consolidated revenue for the year ended December 31, 2020.

Note 12.Commitments and Contingencies

Litigation: During the fourth quarter of 2021, we recognized a $2,600 thousand expense for a legal settlement with a customer in our Renewables and Recovery Logistics segment to settle a dispute regarding the progress of work on a specific project and to release

F-24

the Company for any future liability regarding the project. The settlement is reflected as loss on legal settlement within the accompanying consolidated statements of operations and comprehensive loss.

From time to time, we are subject to certain legal proceedings and claims arising in the ordinary course of business. These matters are subject to many uncertainties, and it is possible that some of these matters ultimately could be decided, resolved or settled in a manner that could have an adverse effect on us. Although the resolution and amount of liability cannot be predicted with certainty, it is the opinion of management, based on information available at this time, that such legal proceedings and claims are not expected to have a material effect on the Company’s financial position, results of operations, and cash flows.

Operating leases: The Company has entered into non-cancellable operating leases for various vehicles, equipment, office and warehouse facilities, which contain provisions for future rent increases or rent-free periods. The total amount of rental payments due over the leases terms is charged to rent expense on the straight-line method over the respective term of the lease. The leases expire at various dates through the year 2031. In addition, the agreements generally require the Company to pay executory costs (real estate taxes, insurance, and repairs). Rent expense totaled $10,502 thousand and $12,407 thousand for the years ended December 31, 2021 and 2020, respectively. The Company leases six of its locations from lessors, who are partially owned by members of the Company. The rent expense related to these leases totaled $889 thousand and $681 thousand for the years ended December 31, 2021 and 2020.

The following is a schedule by year of future minimum rental payments required under the operating lease agreements (in thousands):

Years ending December 31:

    

    

2022

$

9,699

2023

 

7,124

2024

 

5,089

2025

 

3,013

2026

 

2,017

Thereafter

 

5,124

$

32,066

Note 13.Related Party Transactions

On July 18, 2018, the Company entered into an Advisory Services Agreement with its majority member. The agreement requires quarterly advisory fees of $125 thousand paid at the beginning of each quarter. The Company incurred $889 thousand and $518 thousand in advisory fees for the years ended December 31, 2021 and 2020, respectively.

Note 14.Retirement Plan

On April 1, 2016, the Company adopted a defined contribution 401(K) plan, which covers all eligible employees. Contributions by the Company are discretionary. The Company made no contributions to the plan for the years ended December 31, 2021 and 2020.

Note 15.Subsequent Events

The Company has evaluated events occurring after December 31, 2021 through March 31, 2022, which represents the date the financial statements were issued.

On January 28, 2022, the Company executed an amendment to the Credit Agreement to temporarily increase the maximum availability of the revolving credit facility to the amount of $115,000 thousand until February 15, 2022. On February 14, 2022, the maximum availability was automatically reduced to the amount of $103,500 thousand.

As described in Note 1, QualTek Holdco, LLC completed the business combination with the ROCR on February 14, 2022. In connection with the consummation of the business combination, the combined company changed its name from Roth CH Acquisition III Co. to QualTek Services Inc.

F-25

Pursuant to the Business Combination Agreement, Blocker Merger Sub merged with and into the Blocker (the “Blocker Merger”), resulting in the equity interests of the Blocker being converted into the right to receive 11,923,940 shares of Class A Common Stock under the Business Combination Agreement, and the owners of such equity interests in the Blocker (the “Blocker Owners”) being entitled to such shares of Class A Common Stock at the Closing, and thereafter, the surviving blocker merged with and into ROCR, with ROCR as the surviving company (the “Buyer Merger”), resulting in the cancellation of the equity interests of the surviving blocker and ROCR directly owning all of the units of QualTek (the “QualTek Units”) previously held by the Blocker in QualTek.

Immediately following the Buyer Merger, Company Merger Sub merged with and into QualTek, with QualTek as the surviving company (the “QualTek Merger”), resulting in (i) QualTek becoming a subsidiary of ROCR, (ii) the QualTek Units (excluding those held by the Blocker and ROCR) being converted into the right to receive 18,764,898 shares of Class B common stock, par value $0.0001 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), under the Business Combination Agreement and the holders of QualTek Units being entitled to such shares of Class B Common Stock at the Closing, (iii) the QualTek Units held by ROCR being converted into the right to receive a number of common units of BCP QualTek (the “Common Units”) equal to the number of shares of Class A Common Stock issued and outstanding (i.e., 21,571,283 QualTek Units), less the number of Common Units received in connection with the contribution described immediately below (i.e., 16,160,418 QualTek Units).

With respect to the portion of merger consideration under the Business Combination Agreement at the Closing to which the Blocker Owners and holders of QualTek Units were entitled as described above, the cumulative value of merger consideration to which they are together entitled equals the Equity Value. The “Equity Value” is the sum of (i) $294,318,544, plus (ii) the value of any Equity Interests of the Company issued as consideration for any acquisitions by the Company prior to the Closing (i.e., $10,000,000), plus (iii) the amount of interest accrued on that certain convertible promissory note in an aggregate principal amount of $30,557,501 issued by the Company to BCP QualTek II in exchange for all of BCP QualTek II’s Class B Units. The exact amount was allocated between the Blocker Owners and holders of QualTek Units as follows (i) 3,642,750 shares of Class A Common Stock to BCP AIV Investor Holdings-3, L.P., (ii) 4,184,290 shares of Class A Common Stock to BCP Strategic AIV Investor Holdings-2, L.P., (iii) 4,096,901 shares of Class A Common Stock to BCP QualTek Investor Holdings, L.P., (iv) 11,780,782 shares of Class B Common Stock and 11,780,782 Common Units to BCP QualTek, LLC, (v) 2,158,223 shares of Class B Common Stock and 2,158,223 Common Units to BCP QualTek II, LLC, and (vi) 4,825,893 shares of Class B Common Stock and 4,825,893 Common Units to QualTek Management HoldCo, LLC (f/k/a BCP QualTek Management, LLC) (“QualTek Management”). No portion of the merger consideration was paid in cash. The foregoing represents the total consideration to be paid to the Blocker Owners and holders of QualTek Units in connection with the Business Combination.

ROCR contributed, as a capital contribution in exchange for a portion of the QualTek Units it acquired in the QualTek Merger (i.e., 16,160,418 QualTek Units), $161,604,181 representing the amount of cash available after payment of the merger consideration under the Business Combination Agreement, which will be used by QualTek or its Subsidiaries to pay the transaction expenses under the Business Combination Agreement.

In conjunction with the completed business combination, the Company repaid the acquisition debt, as noted in Note 8, plus accrued interest with the proceeds from the transaction.

F-26

On February 14, 2022, in connection with the Closing, QualTek Services Inc. entered into an indenture (the “Indenture”) with Wilmington Trust, National Association, as trustee, and certain guarantors party thereto, including, among others, certain subsidiaries of the Company, in respect of $124,685 thousand in aggregate principal amount of senior unsecured convertible notes due 2027 (“February 2022 — Convertible Notes”) that were issued to certain investors (collectively, the “February 2022 Convertible Note Investors”). The February 2022 — Convertible Notes were purchased by the Convertible Note Investors pursuant to certain convertible note subscription agreements, dated as of February 14, 2022, between the Company and each of the Convertible Note Investors.

Pursuant to the Convertible Note Subscription Agreements, the Convertible Note Investors, upon the terms and subject to the conditions set forth in the respective Convertible Note Subscription Agreements, purchased from QualTek Services Inc., and QualTek Services Inc. issued to the Convertible Note Investors, subject to the terms and conditions of the Indenture, $124,685 thousand in aggregate principal amount of Convertible Notes at a purchase price of 98.00% of the principal amount. The Convertible Notes are guaranteed by QualTek Services Inc.’s subsidiaries that guarantee its credit facilities. The Convertible Notes are convertible into shares of QualTek Services Inc.’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), at an initial conversion price of $10.00 (subject to adjustment) in accordance with the terms thereof, and shall mature on February 15, 2027. The Convertible Note Investors may convert their Convertible Notes into shares of Class A Common Stock at any time, subject to the terms of the Indenture. Certain offering-related expenses were payable by QualTek Services Inc., including customary fees payable to the placement agents, Roth and Craig-Hallum, aggregating $5,000 thousand. The Convertible Notes are not redeemable by QualTek Services Inc.

F-27

QUALTEK SERVICES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited - in thousands, except share and per share information)

    

July 2, 2022

    

December 31, 2021

Assets

Current assets:

Cash

$

302

$

606

Accounts receivable, net of allowance

243,135

201,845

Inventories, net

11,010

5,409

Prepaid expenses

8,040

12,140

Other current assets

2,625

2,021

Current assets of discontinued operations

1,498

4,502

Total current assets

266,610

226,523

Property and equipment, net

54,729

50,682

Intangible assets, net

343,052

364,174

Goodwill

28,943

28,723

Other long-term assets

1,775

1,657

Total assets

$

695,109

$

671,759

Liabilities and Deficit

Current liabilities:

Current portion of long-term debt and capital lease obligations

$

22,925

$

127,375

Current portion of contingent consideration

4,428

9,299

Accounts payable

83,010

60,726

Accrued expenses

40,484

52,986

Contract liabilities

15,344

14,773

Current liabilities of discontinued operations

32

2,048

Total current liabilities

166,223

267,207

Capital lease obligations, net of current portion

20,149

19,851

Long-term debt, net of current portion and deferred financing fees

515,120

418,813

Contingent consideration, net of current portion

22,128

21,457

Distributions payable

11,409

Warrant liabilities

77

Tax receivable agreement liabilities

34,092

Total liabilities

757,789

738,737

Commitments and contingencies (Notes 8 and 16)

Deficit:

Class A common stock, $0.0001 par value; 500,000,000 shares authorized, 24,446,284 issued and outstanding at July 2, 2022; 11,923,941 shares authorized, issued, and outstanding at December 31, 2021

2

1

Class B common stock, $0.0001 par value; 500,000,000 shares authorized, 26,663,575 issued and outstanding at July 2, 2022; 13,085,488 shares authorized, issued, and outstanding at December 31, 2021

3

1

Additional paid in capital

178,435

252,593

Accumulated deficit

(206,690)

(320,080)

Noncontrolling interest

(34,430)

Accumulated other comprehensive income

507

Total deficit

(62,680)

(66,978)

Total liabilities and deficit

$

695,109

$

671,759

See notes to the condensed consolidated financial statements.

F-28

QUALTEK SERVICES INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited - in thousands, except share and per share information)

For the Three Months Ended

For the Six Months Ended

    

July 2, 2022

    

July 3, 2021

    

July 2, 2022

    

July 3, 2021

Revenue

    

$

184,222

    

$

130,609

$

332,383

$

249,722

Costs and expenses:

Cost of revenues

164,180

111,828

296,285

215,339

General and administrative

16,637

11,396

38,778

23,923

Transaction expenses

1,320

903

10,588

1,452

Depreciation and amortization

14,794

13,023

29,560

25,645

Total costs and expenses

196,931

137,150

375,211

266,359

Loss from operations

(12,709)

(6,541)

(42,828)

(16,637)

Other income (expense):

Gain on sale/disposal of property and equipment

145

114

2,060

304

Interest expense

(13,085)

(11,227)

(25,428)

(21,138)

Loss on extinguishment of convertible notes

(2,436)

(2,436)

Total other expense

(12,940)

(13,549)

(23,368)

(23,270)

Loss from continuing operations

(25,649)

(20,090)

(66,196)

(39,907)

Loss from discontinued operations

(1,740)

(3,129)

Net loss

(25,649)

(21,830)

(66,196)

(43,036)

Less: Net loss attributable to noncontrolling interests

(13,931)

(49,478)

Net loss attributable to QualTek Services Inc.

(11,718)

(21,830)

(16,718)

(43,036)

Other comprehensive income:

Foreign currency translation adjustments

(13)

172

Comprehensive loss

$

(11,718)

$

(21,843)

$

(16,718)

$

(42,864)

Earnings per share:

Three months ended

Three months ended

February 14, 2022

Six months ended

July 2, 2022

July 3, 2021

through July 2, 2022

July 3, 2021

Net loss per share - continuing operations - basic

$

(0.48)

$

(1.75)

$

(0.68)

$

(3.52)

Net loss per share - continuing operations - diluted

$

(0.50)

$

(1.75)

$

(0.71)

$

(3.52)

Net loss per share - discontinued operations - basic and diluted

$

$

(0.15)

$

$

(0.27)

Weighted average Class A common shares outstanding - basic

22,171,350

11,923,941

22,171,350

11,797,013

Weighted average Class A common shares outstanding - diluted

11,923,941

11,797,013

Weighted average Class A and B common shares outstanding - diluted

44,998,748

44,998,748

See notes to the condensed consolidated financial statements.

F-29

QUALTEK SERVICES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited - in thousands, except share information)

Accumulated

Other

Class A Shares

Class B Shares

Additional Paid-In-

Accumulated

Comprehensive

Noncontrolling

Total

    

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Deficit

    

Income

    

Interest

    

Equity (Deficit)

Balance, January 1, 2022

11,923,941

$

1

13,085,488

$

1

$

252,593

$

(320,080)

$

507

$

$

(66,978)

Adoption of ASU 2020-06

-

(12,270)

8,861

(3,409)

Share based compensation

462,572

6,711

6,711

Business Combination

12,522,343

1

13,115,515

2

(35,621)

121,247

(507)

15,048

100,170

Tax receivable agreement liability

(34,092)

(34,092)

Net loss

-

(5,000)

(35,547)

(40,547)

Balance, April 2, 2022

24,446,284

$

2

26,663,575

$

3

$

177,321

$

(194,972)

$

$

(20,499)

(38,145)

Share based compensation

1,114

1,114

Net loss

(11,718)

(13,931)

(25,649)

Balance, July 2, 2022

24,446,284

$

2

26,663,575

$

3

$

178,435

$

(206,690)

$

$

(34,430)

$

(62,680)

Accumulated

Other

Preferred Shares

Class A Shares

Class B Shares

Additional Paid-in-

Accumulated

Comprehensive

Total

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

Capital

Deficit

    

Income

    

Equity (Deficit)

Balance, January 1, 2021

25,000

$

25,000

10,989,751

$

1

11,173,776

$

1

$

208,322

$

(204,086)

$

396

$

29,634

Issuance of Common Stock

934,190

683,344

15,000

15,000

Issuance of Common Stock - non-return

367

367

Beneficial conversion feature on convertible notes

4,946

4,946

Acquisition (see Note 4)

176,978

2,000

2,000

Other comprehensive income

172

172

Net loss

(21,206)

(21,206)

Balance, April 3, 2021

25,000

$

25,000

11,923,941

$

1

12,034,098

$

1

$

230,635

$

(225,292)

$

568

$

30,913

Beneficial conversion feature on convertible notes

11,958

11,958

Paid in kind preferred share distribution

5,568

(5,568)

Preferred shares exchanged for convertible notes

(25,000)

(30,568)

(30,568)

Net loss

(21,830)

(21,830)

Balance, July 3, 2021

$

11,923,941

$

1

12,034,098

$

1

$

242,593

$

(252,690)

$

568

$

(9,527)

See notes to the condensed consolidated financial statements.

F-30

QUALTEK SERVICES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited - in thousands)

For the Six Months Ended

    

July 2, 2022

    

July 3, 2021

Cash flows from operating activities:

Net loss

$

(66,196)

$

(43,036)

Loss from discontinued operations

3,129

Adjustments:

Depreciation, amortization and accretion of debt discount

29,560

28,525

Loss on extinguishment of convertible notes

2,436

Amortization of debt issuance costs

2,945

1,682

Share based compensation

7,825

Provision for bad debt expense

(879)

782

Gain on disposal of property and equipment

(2,060)

(304)

Changes in assets and liabilities:

Accounts receivable

(40,409)

17,931

Inventories

(5,601)

352

Prepaid expenses and other assets

3,584

(3,319)

Accounts payable and accrued liabilities

11,927

(17,809)

Contract liabilities

571

(2,526)

Net cash used in operating activities from continuing operations

$

(58,733)

$

(12,157)

Net cash used in operating activities from discontinued operations

(1,774)

Net cash used in operating activities

$

(58,733)

$

(13,931)

Cash flows from investing activities:

Purchases of property and equipment

(2,593)

(1,569)

Proceeds from sale of property and equipment

2,531

420

Acquisition of businesses, net of cash acquired (see Note 4)

(20,059)

Net cash used in investing activities from continuing operations

$

(62)

$

(21,208)

Net cash used in investing activities

$

(62)

$

(21,208)

Cash flows from financing activities:

Proceeds from line of credit

351,173

291,673

Repayment of line of credit

(373,100)

(266,566)

Proceeds from convertible notes – related party

44,400

Proceeds from senior unsecured convertible notes

124,685

Repayment of long-term debt

(4,782)

(4,782)

Repayment of acquisition debt

(34,718)

Repayment of promissory note

(500)

Payments for financing fees

(8,928)

(2,220)

Payments of capital leases

(7,955)

(4,610)

Proceeds from issuance of common stock

36,948

Proceeds from issuance of preferred units

15,367

Payments for equity issuance costs

(24,999)

Tax distributions to members

(128)

Net cash provided by financing activities from continuing operations

$

57,696

$

73,262

Net cash used in financing activities from discontinued operations

(14)

(482)

Net cash provided by financing activities

$

57,682

$

72,780

Effect of foreign currency exchange rate (translation) on cash

(310)

(13)

Net (decrease) increase in cash

$

(1,423)

$

37,628

Cash:

Beginning of period

2,151

169

End of period

$

728

$

37,797

Balances included in the condensed consolidated balance sheets:

Cash

$

302

$

37,218

Cash included in current assets of discontinued operations

426

579

Cash at end of period

$

728

$

37,797

Supplemental disclosure of cash flow information:

Cash paid for:

Interest from continuing operations

$

24,646

$

16,142

Interest from discontinued operations

$

$

33

Non-cash investing and financing activities:

Assets acquired under capital leases from continuing operations

$

9,463

$

162

See notes to the condensed consolidated financial statements.

F-31

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1.Nature of Business and Summary of Significant Accounting Policies

This summary of significant accounting policies of QualTek Services Inc. (f/k/a Roth CH Acquisition III Co. (“ROCR”)) (collectively with its consolidated subsidiaries, “QualTek”, the “Company”, “we”, “our”, or “us”) is presented to assist in understanding the Company’s unaudited condensed consolidated financial statements (financial statements). The financial statements and notes are the responsibility of the Company’s management, who is responsible for their integrity and objectivity.

Nature of Business: The Company is a leading provider of communication infrastructure services and renewable solutions, delivering a full suite of critical services to major telecommunications and utility customers throughout North America.

We operate in two reportable segments, which reflects the way performance is assessed and resources are allocated by our Chief Executive Officer, who is our chief operating decision maker. Our Telecom segment provides engineering, construction, installation, network design, project management, site acquisition and maintenance services to major telecommunication carriers, cable providers and utility companies in various locations in the United States. Our Renewables and Recovery Logistics segment provides businesses with continuity and disaster recovery operations as well as new fiber optic construction services and maintenance and repair services for telecommunications, renewable energy, commercial and utilities customers across the United States.

On February 14, 2022, QualTek Services Inc. closed its business combination (the “Business Combination”) with QualTek HoldCo, LLC (“QualTek HoldCo”) (f/k/a BCP QualTek HoldCo, LLC), a Delaware limited liability company (“BCP QualTek”) (the “Closing”), pursuant to that certain Business Combination Agreement (the “Business Combination Agreement”) dated as of June 16, 2021, by and among (i) ROCR, (ii) Roth CH III Blocker Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of ROCR (“Blocker Merger Sub”), (iii) BCP QualTek Investors, LLC, a Delaware limited liability company (the “Blocker”), (iv) Roth CH III Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of ROCR (“Company Merger Sub”), (v) BCP QualTek and (vi) BCP QualTek, LLC, a Delaware limited liability company, solely in its capacity as representative of the Blocker’s equityholders and BCP QualTek’s equityholders.

The cumulative value of the merger consideration in the Business Combination was $306,888 thousand. Blocker Merger Sub merged with and into the Blocker (the “Blocker Merger”), resulting in the equity interests of the Blocker being converted into the right to receive 11,924 thousand shares of Class A common stock of the Company (the “Class A Common Stock”), and the owners of such equity interests in the Blocker (the “Blocker Owners”) being entitled to such shares of Class A Common Stock at the Closing, and thereafter, the surviving blocker merged with and into ROCR, with ROCR as the surviving company (the “Buyer Merger”), resulting in the cancellation of the equity interests of the surviving blocker and ROCR directly owning all of the units of QualTek HoldCo (the “QualTek Units”) previously held by the Blocker. Immediately following the Buyer Merger, Company Merger Sub merged with and into QualTek HoldCo, with QualTek HoldCo as the surviving company (the “QualTek Merger”), resulting in (i) QualTek HoldCo becoming a subsidiary of ROCR, (ii) the QualTek Units (excluding those held by the Blocker and ROCR) being converted into the right to receive 18,765 thousand shares of Class B common stock, par value $0.0001 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”) and the holders of QualTek Units being entitled to such shares of Class B Common Stock at the Closing, (iii) the QualTek Units held by ROCR being converted into the right to receive a number of common units of QualTek HoldCo (the “Common Units”) equal to the number of shares of Class A Common Stock issued and outstanding (i.e., 21,571 thousand QualTek Units), less the number of Common Units received in connection with the contribution described immediately below (i.e., 16,160 thousand QualTek Units). With respect to the portion of merger consideration to which the Blocker Owners and holders of QualTek Units were entitled as described above, the cumulative value of such merger consideration equaled the Equity Value. The “Equity Value” is the sum of (i) $294,319 thousand, plus (ii) the value of any Equity Interests of the Company issued as consideration for any acquisitions by the Company prior to the Closing (i.e., $10,000 thousand), plus (iii) the amount of interest accrued on that certain convertible promissory note (see Note 8-Debt and Capital Lease Obligations) in an aggregate principal amount of $30,558 thousand issued by the Company to BCP QualTek II in exchange for all of BCP QualTek II’s Class B Units. No portion of the merger consideration was paid in cash. The foregoing represents the total consideration to be paid to the Blocker Owners and holders of QualTek Units in connection with the Business Combination. The Company contributed, as a capital contribution in exchange for a portion of the QualTek Units it acquired in the QualTek Merger (i.e., 16,160 thousand QualTek Units), $161,604 thousand, representing the amount of cash available after payment of the merger consideration under the Business

F-32

Combination Agreement, which was used in part by QualTek or its Subsidiaries to pay the transaction expenses under the Business Combination Agreement.

On February 14, 2022, in connection with the Closing of the Business Combination, the Company:

-entered into an indenture (the “Indenture”) with Wilmington Trust, National Association, as trustee, and certain guarantors party thereto, including, among others, certain subsidiaries of the Company, in respect of $124,685 thousand in aggregate principal amount of senior unsecured convertible notes due 2027 (“Convertible Notes”, see Note 8 — Debt and Capital Lease Obligations) that were issued to certain investors (collectively, the “Convertible Note Investors”). The Convertible Notes were purchased by the Convertible Note Investors pursuant to certain convertible note subscription agreements, dated as of February 14, 2022, between the Company and each of the Convertible Note Investors (collectively, the “Convertible Note Subscription Agreements”);
-received $35,915 thousand in aggregate consideration from Private Investment in Public Equity (“PIPE”) Subscribers Investors in exchange for 3,989 thousand shares of Class A common stock, pursuant to PIPE Subscription Agreements (“PIPE Financing”);
-received $1,033 thousand from ROCR at closing, comprised of $1,004 thousand from the trust account for 100 thousand shares that were not redeemed by the public shareholders and $29 thousand of cash from ROCR’s closing balance sheet;
-issued 2,275 thousand shares of Class A Common Stock (“Blocker Owner Earnout Shares”) and 3,836 thousand shares of Class B Common Stock (“Earnout Voting Shares”) (collectively, the “Earnout Shares”) that are subject to certain restriction on transfer and voting and potential forfeiture pending the achievement of the earnout targets (see Note 1- Nature of Business and Summary of Significant Accounting Policies);
-converted Convertible notes – June 2021 (see Note 8-Debt and Capital Lease Obligations) into 2,875 thousand shares of Class A common stock and 4,063 thousand shares of Class B common stock;
-assumed 2,875 thousand Public Warrants and 102 thousand Private Placement Warrants sold by ROCR as part of its initial public offering;
-fully repaid $34,718 thousand of acquisition debt (see Note 8-Debt and Capital Lease Obligations) plus accrued interest with the proceeds from the transaction;
-paid down $73,000 thousand of debt associated with the line of credit (see Note 8-Debt and Capital Lease Obligations);
-paid down $500 thousand of ROCR’s promissory note; and
-pursuant to the Tax Receivable Agreement (“TRA”) entered into by and between the Company, QualTek HoldCo, LLC, the TRA Holders (as defined in the TRA) and the TRA Holder Representative (as defined in the TRA), the Company will be required to pay the TRA Holders 85% of the amount of savings, if any, that the Company is deemed to realize in certain circumstances as a result of certain tax attributes that exist following the Business Combination and that are created thereafter, including as a result of payments made under the TRA. Refer to Note 14-Tax Receivable Agreement regarding the disclosures of the impact of the TRA as of the Closing Date and as of July 2, 2022.

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The Business Combination is accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”) with QualTek HoldCo treated as the accounting acquirer. Accordingly, our consolidated financial statements represent a continuation of the financial statements of QualTek HoldCo with net assets of QualTek Services Inc. stated at historical cost. Following the closing of the Business Combination, the combined company is organized in an “Up-C” structure in which QualTek Services Inc. became the sole managing member of QualTek HoldCo and therefore, operates and controls all of the business and affairs of QualTek HoldCo. Accordingly, QualTek Services Inc. consolidates the financial results of QualTek HoldCo, and reports a non-controlling interest in its consolidated financial statements representing the economic interest in QualTek HoldCo owned by the members, other than the Blocker, of QualTek HoldCo referred to as the “Flow-Through Sellers.” As of July 2, 2022, the Company owned an economic interest of approximately 45% in QualTek HoldCo. The remaining approximately 55% economic interest is owned by the Flow-Through Sellers.

Summary of Significant Accounting Policies: The Company’s significant accounting policies are discussed in Note 1 to BCP QualTek HoldCo’s consolidated financial statements in the Form 8-K/A filed with the SEC on April 1, 2022. There have been no significant changes to these policies which have had a material impact on the Company’s interim unaudited consolidated financial statements and related notes during the three and six months ended July 2, 2022, except as noted below.

Stock-Based Compensation: The Company provides the QualTek Services Inc. 2022 Long-Term Incentive Plan (the “LTIP”), which was adopted by the board of directors and was approved by the Company’s stockholders on February 14, 2022. The Company measures all stock-based awards granted to employees based on the fair value on the date of grant in accordance with ASC Topic 718, Compensation - Stock Compensation (“ASC 718”). Compensation expense of those awards is recognized over the requisite service period, which is generally the vesting period of the respective award. Generally, the Company issues awards with service-only vesting conditions and records the expense using the straight-line method. The Company accounts for forfeitures as they occur. The Company uses the Black-Scholes option-pricing model to determine the fair value of its option awards at the time of grant. The Company classifies stock-based compensation expense in its unaudited condensed consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified.

Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with existing GAAP, under the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and on a basis consistent with the audited consolidated financial statements and related notes thereto of QualTek HoldCo and its wholly-owned subsidiaries as of and for the year ended December 31, 2021, except the shares and corresponding equity amounts and loss per share related to QualTek Services Inc.’s Class A Units prior to the Business Combination have been retroactively restated to reflect the post-combination Common Stock capital structure. The consolidated balance sheet of QualTek HoldCo as of December 31, 2021, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with such audited consolidated financial statements and related notes thereto of QualTek HoldCo and its wholly-owned subsidiaries, which are included in the Company’s Form 8-K/A filed with the SEC on April 1, 2022. As a result of the Business Combination, the shares and corresponding equity amounts and loss per share related to QualTek Services Inc’s Class A Units prior to the Business Combination have been retroactively restated to reflect the post-combination Common Stock capital structure. The retrospective restatement had no effect on the reported results of operations.

These unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments) that management considers necessary for a fair statement of the Company’s results of operations, comprehensive loss, financial condition, cash flows and stockholders’ equity for the interim periods presented. Interim results are not necessarily indicative of the results to be expected for the full year.

For the six months ended July 2, 2022, these unaudited condensed consolidated financial statements reflect the consolidated results of operations, comprehensive loss, cash flows and changes in equity of QualTek HoldCo and its wholly-owned subsidiaries for the period of January 1, 2022 through February 14, 2022, the Closing Date of the Business Combination, and the consolidated results of operations, comprehensive loss, cash flows and changes in stockholders’ equity of QualTek Services Inc. for the period of February 14, 2022 through July 2, 2022. The condensed consolidated balance sheet at July 2, 2022 presents the financial condition of QualTek Services Inc. and its consolidated subsidiary, QualTek HoldCo and its wholly-owned subsidiaries, and reflects the initial recording of the assets and liabilities of QualTek Services Inc. at their historical cost. All intercompany balances and transactions of QualTek HoldCo prior to the Business Combination have been eliminated. All intercompany balances and transactions of QualTek Services Inc. after the Business Combination have been eliminated.

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For the three and six months ended July 3, 2021, these unaudited condensed consolidated financial statements present the consolidated results of operations, comprehensive loss, cash flows and changes in equity of QualTek HoldCo. The consolidated balance sheet as of December 31, 2021 presents the financial condition of QualTek HoldCo and its wholly-owned subsidiaries. All intercompany balances and transactions of QualTek HoldCo have been eliminated.

Principles of Consolidation: For the period of February 14, 2022 through July 2, 2022, the condensed consolidated financial statements comprise the accounts of the Company and its consolidated subsidiaries, including QualTek HoldCo. All intercompany accounts and transactions among the Company and its consolidated subsidiaries have been eliminated. For the periods subsequent to the Business Combination, the Company consolidates QualTek HoldCo and records the profits interests held in QualTek HoldCo that the Company does not own as non-controlling interests (see Note 11-Equity). All intercompany transactions and balances have been eliminated in consolidation.

For the periods prior to the Business Combination, the consolidated financial statements of the Company comprise the accounts of QualTek HoldCo and its wholly-owned subsidiaries. All intercompany accounts and transactions among QualTek HoldCo and its consolidated subsidiaries were eliminated.

Emerging Growth Company: The Company is an “emerging growth company (“EGC”),” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(l) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an EGC nor an EGC which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates: The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant of these estimates and assumptions relate to the recognition of contract revenues under the cost-to-cost method of progress, fair value estimates, the allowance for doubtful accounts, long-lived assets and intangible assets, asset impairment (including goodwill and other long-lived assets), valuation of assets acquired and liabilities assumed in business combinations, acquisition-related contingent consideration, the valuation of warrants and earnouts, and the fair values of the Company’s liabilities with respect to the TRA (as defined below). These estimates are based on historical experience and various other assumptions that management believes to be reasonable under the current facts and circumstances. Actual results could differ from those estimates.

Noncontrolling Interests: The Company presents non-controlling interests as a component of equity on its unaudited condensed consolidated balance sheets and reports the portion of its loss for non-controlling interest as net loss attributable to non-controlling interests in the unaudited condensed consolidated statements of operations and comprehensive loss.

Income Taxes: Prior to the Business Combination, QualTek HoldCo was treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, QualTek HoldCo’s taxable income and losses were passed through to and included in the taxable income of its members. Accordingly, amounts related to income taxes were zero for QualTek HoldCo prior to the Business Combination.

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Following the Business Combination, the Company is subject to income taxes at the U.S. federal, state, and local levels for income tax purposes, including with respect to its allocable share of any taxable income and other separately stated items of QualTek HoldCo.

Income taxes are accounted for using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequence on differences between the carrying amounts of assets and liabilities and their respective tax basis, using tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is “more-likely-than-not” that some portion or all of the deferred tax assets will not be realized. The realization of the deferred tax assets is dependent on the amount of future taxable income.

Tax Receivable Agreement Liability: The TRA liability represents amounts payable to the Flow-through Sellers. The TRA liability is carried at a value equal to the undiscounted expected future payments due under the TRA. The Company recorded its initial estimate of future payments as an increase in TRA liability and a decrease to additional paid-in capital in the consolidated financial statements. Subsequent adjustments to the liability for future payments under the TRA related to changes in estimated future tax rates or state income tax apportionment are recognized through current period net loss in the consolidated statements of operations and comprehensive loss.

Basic and Diluted Loss Per Share: The Company applies the two-class method for calculating and presenting loss per share, and separately presents loss per share for Class A Common Stock. Shares of Class B Common Stock do not participate in the loss of the Company. As a result, the shares of Class B Common Stock are not considered participating securities and are not included in the weighted-average shares outstanding for purposes of loss per share. The Company has issued and outstanding Earnout Shares, including the Blocker Owner Earnout Shares and Earnout Voting Shares, which are subject to forfeiture if the achievement of certain stock price thresholds are not met within five years of the Business Combination. The basic and diluted net loss per share is presented in conformity with the two-class method required for participating securities, as the Blocker Owner Earnout Shares are considered participating securities. Unvested Blocker Owner Earnout Shares will not be included in the denominator of the basic and diluted loss per share calculation until the contingent condition is met. The Earnout Voting Shares are not considered participating securities and are not included in the weighted-average shares outstanding for purposes of calculating loss per share. As a result of the Business Combination, the shares and corresponding equity amounts and loss per share related to the Company’s Class A Units prior to the Business Combination have been retroactively restated to reflect the post-combination Common Stock capital structure.

Warrant Accounting: The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. The Company recorded the Public Warrants assumed as part of the Business Combination as equity (see Note 11-Equity). For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the consolidated statements of operations. The Company recorded the Private Placement Warrants assumed as part of the Business Combination as a liability. The fair value of the Private Placement Warrants (see Note 9-Warrants) was estimated using Black-Scholes call option model (see Note 10-Fair Value Measurements).

Earnout Shares: During the five-year period following the closing of the Business Combination (the “Earnout Period”), (i) if the closing sale price per share of Class A Common Stock equals or exceeds $15.00 per share for 20 trading days of any 30 consecutive trading day period, 50% of the Earnout Shares will be earned, (ii) if the closing sale price per share of Class A Common Stock equals or exceeds $18.00 per share for 20 trading days of any 30 consecutive trading day period, the remaining 50% of the Earnout Shares will be earned. Once the Earnout Shares are earned, they are no longer subject to the restrictions on transfer and voting.

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The Earnout Shares are considered legally issued and outstanding shares of common stock subject to restrictions on transfer and voting and potential forfeiture pending the achievement of the earnout targets described above. The Company evaluated the Earnout Shares and concluded that they meet the criteria for equity classification under ASC 815-40. The Earnout Shares were classified in stockholders’ equity, recognized at fair value upon the closing of the Business Combination and will not be subsequently remeasured.

Convertible Instruments: In August 2020, the FASB issued ASU No. 2020-06, “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which is intended to reduce complexity in applying GAAP to certain financial instruments with characteristics of liabilities and equity. The guidance in ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. The amendments in ASU 2020-06 further revise the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (“EPS”) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares.

Public business entities should apply the amendments in ASU 2020-06 for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, with early adoption permitted but no earlier than fiscal years beginning after December 15, 2020. For nonpublic business entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted but no earlier than fiscal years beginning after December 15, 2020. The Company, as an EGC, is allowed the extended transition period offered to nonpublic business entities and is not required to apply this new standard until fiscal years beginning after December 15, 2023. Adoption of the standard requires using either a modified retrospective or a full retrospective approach.

Effective January 1, 2022, the Company early adopted ASU 2020-06 using the modified retrospective method which enables entities to apply the transition requirements in this ASU at the effective date of ASU 2020-06 (rather than as of the earliest comparative period presented) with the effect of initially adopting ASU 2020-06 recognized as a cumulative-effect adjustment to accumulated deficit on the first day of the period adopted. Therefore, this transition method applies the amendments in ASU 2020-06 to outstanding financial instruments as of the beginning of the fiscal year of adoption (January 1, 2022), with the cumulative effect of the change recognized as an adjustment to the opening balance of accumulated deficit as of the date of adoption.

The Company applied ASU-2020-06 to all outstanding financial instruments as of January 1, 2022 (the date of adoption of ASU 2020-06). The Convertible Notes-June 2021 (see in Note 8-Debt and Capital Lease Obligations) issued on June 16, 2021 was the only outstanding financial instrument affected by this new accounting standard as of January 1, 2022. Therefore the application of ASU-2020-06 to this convertible note payable was used to determine the cumulative effect of the adoption of the new accounting standard (see Note 8-Debt and Capital Lease Obligations).

Transaction Costs: The Company incurred $24,999 thousand in direct and incremental costs associated with the Business Combination and PIPE Financing related to the equity issuance, consisting primarily of investment banking, legal, accounting and other professional fees, which were capitalized and charged against the proceeds of the Business Combination and PIPE Financing as a reduction of additional paid-in-capital in the accompanying unaudited condensed consolidated balance sheets in accordance with Staff Accounting Bulletin (“SAB”) Topic 5.A, Expenses of Offering. The Company also incurred $8,594 thousand of costs that were not direct and incremental costs and accordingly, were recorded in transaction expenses in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

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Recent accounting pronouncements: In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), requiring an entity to recognize assets and liabilities arising from operating leases with terms longer than 12 months. The updated standard will replace most existing lease recognition guidance in GAAP when it becomes effective. The updated standard will be effective for annual reporting periods beginning after December 15, 2021. We have adopted this standard effective January 1, 2022, for non-interim periods, with the impact resulting in the Company recognizing right-of-use assets and operating lease liabilities on our balance sheets upon adoption, which increases our total assets and liabilities.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU No. 2016-13”), which requires the measurement and recognition of expected credit losses for certain financial assets, including trade accounts receivable. ASU No. 2016-13 replaces the existing incurred loss impairment model with an expected loss model that requires the use of relevant information, including an entity’s historical experience, current conditions and other reasonable and supportable forecasts that affect collectability over the life of a financial asset. The amendments in ASU No. 2016-13 are effective for fiscal years beginning after December 15, 2022, with early adoption permitted. We are currently evaluating the impact that the adoption of this new standard will have on its financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805)—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers to improve the accounting for acquired revenue contracts with customers in business combination by addressing diversity in practice and inconsistency related to (i) the recognition of an acquired contract liability and (ii) payment terms and their effect on subsequent revenue recognized by the acquirer. This amendment requires that, at acquisition date, an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“Topic 606”) as if it had originated the contracts, while also taking into account how the acquiree applied Topic 606. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. We are currently evaluating the effect that the updated standard will have on our financial statements.

Risks and uncertainties: On January 30, 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. COVID-19 and actions taken to mitigate its spread have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates.

It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the Company.

Note 2.Earnings Per Share

Prior to the Business Combination, the QualTek HoldCo membership structure included Class A Units, Preferred Class B Units, and Class P Units with only Class A Units outstanding upon the Closing of the Business Combination. The Company analyzed the calculation of net loss per unit for periods prior to the Business Combination and determined that it resulted in values that would not be meaningful to the users of these unaudited condensed consolidated financial statements. Therefore, loss per unit information has not been presented for the three months ended April 3, 2021. The basic and diluted loss per share for the six months ended July 2, 2022 represents only the period from February 14, 2022 to July 2, 2022.

The Company calculated the basic and diluted loss per share for the period following the Business Combination under the two-class method. The Earnout Shares are considered legally issued and outstanding shares of Class A and Class B common stock, subject to restrictions on transfer and voting. The Blocker Owner Earnout Shares are entitled to receive, ratably with the other outstanding Class A common stock, dividends, and other distributions prior to vesting. The Earnout Voting Shares have only voting rights and therefore are not entitled to receive any distributions. The basic and diluted net loss per share is presented in conformity with the two-class method required for participating securities, as the Blocker Owner Earnout Shares are considered participating securities. The net loss per share amounts is the same for Class A common stock and the Blocker Owner Earnout Shares because the holders of each are legally entitled to equal per share earnings, losses, and distributions, whether through dividends or liquidation. Shares of Class B common stock do not participate in the earnings or losses of the Company and, therefore, are not participating securities. As such, a

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separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented.

The basic loss per share was computed by dividing net loss attributable to common shareholders for the period subsequent to the Business Combination by the weighted average number of shares of Class A common stock outstanding for the same period. Diluted loss per share was computed in a manner consistent with that of basic loss per share while giving effect to all shares of potentially dilutive common stock that were outstanding during the period.

The following tables present the calculation of basic and diluted loss per share for the three months ended July 2, 2022 and for the period from February 14, 2022 to July 2, 2022 following the Business Combination when the Company had Class A common stock outstanding (in thousands, except share and per share data):

Basic:

 

Three months
ended

 

February 14, 2022
through

 

July 2, 2022

 

July 2, 2022

Numerator:

    

  

    

  

Net loss

$

(25,649)

$

(36,593)

Less: Loss attributable to noncontrolling interests

 

(13,931)

 

(19,947)

Net loss attributable to QualTek Services, Inc.

 

(11,718)

 

(16,646)

Less: Loss attributable to participating securities

 

(1,084)

 

(1,549)

Net loss attributable to Class A common shareholders, basic

$

(10,634)

$

(15,097)

Denominator:

 

  

 

  

Weighted average Class A common shares outstanding

 

24,446,284

 

24,446,284

Less: weighted average unvested Blocker Owner Earnout Shares outstanding

 

(2,274,934)

 

(2,274,934)

Weighted average Class A common shares outstanding, basic

 

22,171,350

 

22,171,350

Net loss per share - basic

$

(0.48)

$

(0.68)

Diluted:

    

    

    

    

Three months
ended

February 14, 2022
through

July 2, 2022

July 2, 2022

Numerator:

 

  

 

  

Net loss

$

(25,649)

$

(36,593)

Less: Loss attributable to noncontrolling interests

 

(2,009)

 

(2,875)

Net loss attributable to Class A and B common shareholders, diluted

 

(23,640)

 

(33,718)

Less: Loss attributable to participating securities

 

(1,134)

 

(1,622)

Net loss attributable to Class A common shareholders, diluted

$

(22,506)

$

(32,096)

Denominator:

 

  

 

  

Weighted average Class A common shares outstanding

 

24,446,284

 

24,446,284

Less: weighted average unvested Blocker Owner Earnout Shares outstanding

 

(2,274,934)

 

(2,274,934)

Add: Weighted-average Class B common shares if converted to Class A common shares outstanding (excluding Earnout Voting shares)

 

22,827,398

 

22,827,398

Weighted average Class A and B common shares outstanding, diluted

 

44,998,748

 

44,998,748

Net loss per share - diluted

$

(0.50)

$

(0.71)

F-39

The unaudited condensed consolidated statements of operations and comprehensive loss reflect a net loss in the period presented and therefore the effect of the following securities are not included in the calculation of diluted loss per share as including them would have had an anti-dilutive effect:

    

Three months ended

February 14, 2022 through

July 2, 2022

July 2, 2022

Excluded from the calculation (1)

 

  

  

Stock options

 

5,161,375

5,161,375

Private Placement Warrants

 

101,992

101,992

Public Warrants

 

2,874,979

2,874,979

Convertible Notes

 

12,468,500

12,468,500

Total potentially dilutive shares excluded from calculation

 

20,606,846

20,606,846

(1)   This table excludes Earnout Voting Shares as the earnout contingency has not been met at period end.

Three months ended

    

Six months ended

    

July 3, 2021

July 3, 2021

Numerator

Loss from continuing operations

$

(20,090)

$

(39,907)

Loss from discontinued operations

(1,740)

(3,129)

Net loss

(21,830)

(43,036)

Less: accrued preferred return

738

1,638

Net loss attributable to Class A common shareholders - basic and diluted

$

(22,568)

$

(44,674)

Denominator

Weighted average Class A common shares outstanding - basic and diluted

11,923,941

11,797,013

Continuing operations - Class A - basic and diluted

$

(1.75)

$

(3.52)

Discontinued operations - Class A - basic and diluted

$

(0.15)

$

(0.27)

Net loss - Class A - basic and diluted

$

(1.90)

$

(3.79)

Three months ended

Six months ended

July 3, 2021

July 3, 2021

Excluded from the calculation

Class B common stock

12,034,098

12,034,098

Pre-PIPE Notes

3,322,361

3,322,361

Total potentially dilutive shares excluded from calculation

15,356,459

15,356,459

Note 3.Discontinued Operations

At the end of the third quarter of 2021, we suspended all operations associated with our Canadian subsidiary within the Telecom segment and disposed/abandoned the subsidiary, which ceased our foreign operations. The disposition of the Canadian subsidiary was considered a strategic shift that had a major effect on our operations and financial results. As a result of the suspension of operations, any new business with customers was terminated and remaining orders were canceled/settled.

F-40

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations in the condensed consolidated balance sheets (in thousands):

    

July 2, 2022

    

December 31, 2021

Carrying amounts of assets included as part of discontinued operations:

Cash

$

426

$

1,545

Accounts receivable, net of allowance

 

1,015

 

1,292

Other current assets

 

57

 

1,665

Total current assets of discontinued operations

$

1,498

$

4,502

Carrying amounts of liabilities included as part of discontinued operations:

 

  

 

  

Current portion of long-term debt and capital lease obligations

$

$

14

Accounts payable

 

32

 

559

Accrued expenses

 

 

1,475

Total current liabilities of discontinued operations

$

32

$

2,048

The financial results are presented as loss from discontinued operations on our condensed consolidated statements of operations and comprehensive loss. The following table presents the financial results (in thousands):

For The Three Months Ended

For The Six Months Ended

July 3, 2021

July 3, 2021

Revenue

    

$

2,331

    

$

5,396

Costs and expenses:

 

 

  

Cost of revenues

 

3,481

 

7,329

General and administrative

 

63

 

142

Depreciation and amortization

 

484

 

977

Total costs and expenses

 

4,028

 

8,448

Loss from operations of discontinued operations

 

(1,697)

 

(3,052)

Other expense:

 

  

 

  

Interest expense

 

(43)

 

(77)

Loss from discontinued operations

$

(1,740)

$

(3,129)

Note 4.Acquisitions

On January 26, 2021, the Company purchased 100% of the membership interests of Fiber Network Solutions, LLC (“FNS”), a Texas based company that provides new fiber optic construction services, as well as maintenance and repair services to renewable energy, commercial, and utility clientele in the United States. The overall consideration transferred was $20,059 thousand of cash and rollover equity valued at $2,000 thousand. The purchase price is subject to adjustment based upon FNS exceeding pre-determined EBITDA thresholds for the years ending 2021, 2022, 2023, and 2024, as defined in the agreement, subject to a maximum additional payment of $20,000 thousand. As of the acquisition date, the fair value of the contingent consideration was determined to be $8,200 thousand. The cash consideration was funded by the issuance of equity, as well as the issuance of convertible notes with the majority member of HoldCo.

On August 6, 2021, the Company acquired certain assets and liabilities from Broken Arrow Communications, Inc. (“Broken Arrow”), a New Mexico based company that provided a wide variety of services for the installation, construction, and maintenance of wireless communication facilities. The consideration transferred was $5,000 thousand of cash. The purchase price is subject to adjustment based upon Broken Arrow exceeding pre-determined crew count and EBITDA thresholds for certain markets for the 5-month period of August 2021 through December 2021 and for the year ending December 31, 2022, as defined in the agreement, subject to a maximum additional payment of $10,000 thousand. As of the acquisition date, the fair value of the contingent consideration was determined to be $7,552 thousand. The cash consideration was funded by the issuance of convertible notes in June 2021.

On August 30, 2021, the Company purchased 100% of the membership interests of Concurrent Group LLC (“Concurrent”), a Florida based company that provides construction, maintenance, and restoration services for utilities, electric membership co-ops, and municipally owned power providers. The overall consideration transferred was $13,828 thousand of cash, rollover equity valued at

F-41

$6,000 thousand, and acquisition debt of $14,143 thousand. The purchase price is subject to adjustment based upon Concurrent exceeding pre-determined EBITDA thresholds for LTM periods ending at the closing of the third quarter of 2022, 2023 and 2024, as defined in the agreement, subject to a maximum additional payment of $30,000 thousand. As of the acquisition date, the fair value of the contingent consideration was determined to be $7,000 thousand. The cash consideration was funded by convertible notes issued by the Company in June 2021. Refer to Footnote 8 for more information.

On October 15, 2021, the Company purchased 100% of the membership interests of Urban Cable Technology, LLC (“Urban Cable”), a Pennsylvania based company that provides a range of services, including aerial and underground construction, engineering, multiple dwelling units wiring and rewiring, and fiber placement to broadband and telecom cable operators. The overall consideration transferred was $8,436 thousand of cash and rollover equity valued at $4,000 thousand. The purchase price is subject to adjustment based upon Urban Cable exceeding pre-determined EBITDA for the years ending 2021, 2022, 2023, and 2024, as defined in the agreement. As of the acquisition date, the fair value of the contingent consideration was determined to be $3,450 thousand. The cash consideration was funded by line of credit.

The acquisitions were recognized as business combinations with FNS reporting within our Renewables and Recovery Logistics Segment and Broken Arrow, Concurrent, and Urban Cable reporting within our Telecom Segment. The identifiable assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition dates. Goodwill resulted from expected synergies and revenue growth from combining operations with the Company.

The working capital amounts for Concurrent and Urban Cable that are provisional are subject to adjustment as the Company obtains additional information. Any adjustments to the purchase price allocation will be made as soon as practicable, but no later than one year from the acquisition date.

The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisitions (in thousands):

FNS

Broken Arrow

Concurrent

Urban Cable

Purchase consideration:

    

    

    

    

Cash paid

$

20,059

$

5,000

$

13,828

$

8,436

Rollover equity

2,000

6,000

4,000

Contingent consideration

8,200

7,552

7,000

3,450

Acquisition debt

14,143

Due from seller

(510)

(151)

$

30,259

$

12,552

$

40,461

$

15,735

Purchase price allocations:

Cash

$

$

$

1,289

$

185

Accounts receivable

5,126

8,458

3,695

Inventories

133

25

Prepaid expenses

94

14

Other current assets

10

28

Property and equipment

9,978

219

5,263

1,361

Other long-term assets

32

60

Customer relationships

17,370

5,750

22,330

10,910

Trademarks and trade names

270

80

760

340

Goodwill

8,082

5,319

8,552

799

35,700

16,753

46,747

17,332

Accounts payable

(1,987)

(1,938)

(1,184)

Accrued expenses

(156)

(799)

(323)

Contract liabilities

(2,058)

(367)

Capital lease obligations

(5,441)

(3,182)

(90)

$

30,259

$

12,552

$

40,461

$

15,735

During the first quarter ended April 2, 2022, the Company adjusted the provisional amounts within the purchase price allocation for Urban Cable, which resulted in an increase in goodwill of $64 thousand. The Company made this measurement period adjustment to reflect facts and circumstances that related to accounts payable. During the second quarter ended July 2, 2022, the Company

F-42

adjusted the provisional amounts within the purchase price allocation for Broken Arrow, which resulted in an increase in goodwill of $156 thousand. The Company made this measurement period adjustment to reflect facts and circumstances that related to inventory. All changes existed at the acquisition date and did not result from intervening events after such date.

Note 5.Property and Equipment

Property and equipment consisted of the following (in thousands):

    

July 2,

    

December 31,

2022

2021

Office furniture

$

1,966

$

1,382

Computers

2,260

1,856

Machinery, equipment and vehicles

25,470

17,331

Land

140

140

Building

340

340

Leasehold improvements

4,711

4,552

Software

2,368

2,320

Assets under capital lease

52,531

50,941

Construction in process

1,605

1,335

91,391

80,197

Less: accumulated depreciation

(36,662)

(29,515)

Property and equipment, net

$

54,729

$

50,682

Property and equipment include assets acquired under capital leases of $52,531 thousand and $50,941 thousand and accumulated depreciation of $15,418 thousand and $14,899 thousand as of July 2, 2022 and December 31, 2021, respectively. Depreciation expense was $3,858 thousand and $7,613 thousand for the three and six months ended July 2, 2022, respectively, and was $3,554 thousand and $6,933 for the three and six months ended July 3, 2021, respectively.

Note 6.Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration

The following provides further details on the condensed consolidated balance sheet accounts of accounts receivable, net and contract liabilities.

(a)Accounts Receivable, Net of Allowance

Accounts receivable, net classified as current, consisted of the following (in thousands):

    

July 2,

    

December 31,

2022

2021

Trade accounts receivable

$

79,633

$

74,601

Contract assets

166,329

132,858

245,962

207,459

Less: allowance for doubtful accounts

(2,827)

(5,614)

Accounts receivable, net

$

243,135

$

201,845

The Company is party to non-recourse financing arrangements in the ordinary course of business, under which certain receivables are settled with the customer’s bank in return for a nominal fee. Discount charges related to these arrangements, which are included within interest expense, totaled $439 thousand and $645 thousand for the three and six months ended July 2, 2022, respectively, and totaled $266 thousand and $550 thousand for the three and six months ended July 3, 2021, respectively.

F-43

Contract Assets and Liabilities

Net contract assets consisted of the following (in thousands):

    

July 2,

    

December 31,

2022

2021

Contract assets

$

166,329

$

132,858

Contract liabilities

(15,344)

(14,773)

Contract assets, net

$

150,985

$

118,085

Contract assets represent unbilled receivables for the estimated value of unbilled work for projects with performance obligations recognized over time. The amount of revenue recognized that was previously included in contract liabilities at the beginning of the period was $7,146 thousand and $14,362 thousand during the three-months and six months ended July 2, 2022, respectively, and was $7,381 thousand and $13,507 thousand during the three-months and six months ended July 3, 2021, respectively.

Customer Credit Concentration

Customers whose combined amounts of accounts receivable and contract assets exceeded 10% of total combined accounts receivable and contract assets were as follows (in thousands):

    

July 2, 2022

    

December 31, 2021

Amounts

    

% of Total

Amounts

    

% of Total

AT&T

$

69,841

28.4

%  

$

56,280

27.1

%

Verizon

59,950

24.4

%  

35,756

17.2

%

T-Mobile

38,249

15.6

%  

50,218

24.2

%

Total

$

168,040

68.4

%  

$

142,254

68.5

%

Note 7.Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of goodwill by reportable segment is as follows (in thousands):

    

Renewables

    

    

and

Recovery

Logistics

Telecom

Total

Goodwill as of December 31, 2021 (a)

$

21,680

$

7,043

$

28,723

Measurement period adjustments, net

220

220

Goodwill as of July 2, 2022 (a)

$

21,680

$

7,263

$

28,943

(a)Goodwill is net of accumulated impairment charges of $89,421 thousand as of July 2, 2022 and December 31, 2021 in the Telecom segment. There have been no impairment charges within the Renewables and Recovery Logistics segment.

For the three months and six months ended July 2, 2022 and July 3, 2021, respectively, there were no goodwill impairment charges.

F-44

Intangible Assets

Intangible assets consisted of the following (in thousands):

July 2, 2022

    

Weighted

    

    

    

Average 

Gross 

Remaining

Carrying

Accumulated

Net carrying

Useful Life

Amount

amortization

Amount

Customer relationships

9.3

$

424,560

$

(115,920)

$

308,640

Trademarks and trade names

9.5

59,969

(25,557)

34,412

$

484,529

$

(141,477)

$

343,052

December 31, 2021

    

Weighted

    

    

    

Average 

Gross 

Remaining

carrying

Accumulated

Net carrying

Useful Life

amount

amortization

Amount

Customer relationships

9.5

$

424,560

$

(98,307)

$

326,253

Trademarks and trade names

9.5

59,969

(22,048)

37,921

$

484,529

$

(120,355)

$

364,174

Amortization expense of intangible assets was $10,533 thousand and $21,105 thousand for the three and six months ended July 2, 2022, respectively and was $10,650 thousand and $21,110 thousand for the three and six months ended July 3, 2021, respectively.

Note 8.Debt and Capital Lease Obligations

Convertible notes – related party: On June 16, 2021, the Company issued a convertible note (“Convertible Note – Related Party – June 2021”) in the aggregate principal amount of $30,568 thousand to BCP QualTek II LLC, an affiliate of its majority member, in exchange for the 25,000 thousand outstanding Preferred Class B Units (Preferred Units) and the associated accumulated preferred return. The Convertible Note – Related Party – June 2021 bears interest at an annual rate of 12.00%, which accrues and is payable together with the principal balance. The Company recorded interest expense of $0 and $489 thousand for the three months and six months ended July 2, 2022, respectively. There was no fixed maturity date, however, cash payments were required, which were to be equal to tax distributions, which the noteholder would be entitled if the Convertible Note – Related Party – June 2021 were a Preferred Unit. The Convertible Note – Related Party - June 2021 converted under its mandatory conversion provision, as defined in the agreement, upon the consummation of the Business Combination on February 14, 2022, as noted in Note 1 - Nature of Business and Summary of Significant Accounting Policies.

Convertible notes – June 2021: On June 16, 2021, the Company issued convertible promissory notes (the “Convertible Notes – June 2021”) with an aggregate principal amount of $44,400 thousand. The Convertible Notes – June 2021 did not require interest to be accrued or payable and did not have a fixed maturity date. The Convertible Notes – June 2021 converted under its mandatory conversion provision, as defined in the agreement, upon the consummation of the Business Combination on February 14, 2022, as noted in Note 1 - Nature of Business and Summary of Significant Accounting Policies. There was a beneficial conversion feature of $12,270 thousand related to the Convertible Notes – June 2021 that was amortized over the life of the notes, using the effective interest method. The notes are presented net of a discount of $3,409 thousand as of December 31, 2021 on the condensed consolidated balance sheet with accretion of $8,861 thousand for the year ended December 31, 2021.

Effective January 1, 2022, the Company early adopted ASU 2020-06 using the modified retrospective method. As a result of the adoption of ASU 2020-06, previously recognized beneficial conversion feature for the Convertible Notes – June 2021 outstanding as of January 1, 2022 was removed from additional paid-in capital and the debt discount. A cumulative impact adjustment was recorded to account for a reduction in interest expense due to a decrease in the discount, which is recognized as interest expense upon conversion of the convertible debt. Adoption of the new standard resulted in a decrease to additional paid-in capital of $12,270 thousand, an increase to convertible debt, net of $3,409 thousand, and an increase to accumulated deficit of $8,861 thousand.

F-45

Line of credit: The Company has an Asset Based Lending Credit Agreement (“Credit Agreement”) with PNC Bank, National Association (“PNC”). Under the Credit Agreement, the Company has available a revolving credit facility in the amount of $103,500 thousand, for working capital needs and general corporate purposes. The amount the Company may borrow is limited to the lesser of the maximum available amount and the borrowing base. The borrowing base is calculated primarily as a percentage of the Company’s eligible accounts receivable, unbilled revenue and eligible inventory, as defined in the Credit Agreement. Interest on the outstanding principal amount, payable in arrears monthly, is based on either an elected Base Rate plus an applicable margin (6.25% at July 2, 2022), or an adjusted Eurodollar rate, plus an applicable margin, as defined in the agreement. On January 28, 2022, the Company executed an amendment to the Credit Agreement to temporarily increase the maximum availability of the revolving credit facility to the amount of $115,000 thousand until February 15, 2022. On February 14, 2022, the maximum availability was automatically reduced to the amount of $103,500 thousand. In connection with the Business Combination, on February 14, 2022, the Company repaid $73,000 thousand of debt associated with the line of credit. There was $25,384 thousand available under this facility as of July 2, 2022. The entire unpaid principal amount of the line of credit together with accrued and unpaid interest thereon, is due on July 17, 2025. Standby letters of credit totaling $5,031 thousand and $3,977 thousand, issued for our insurance carriers and in support of performance under certain contracts, were outstanding under the Credit Agreement as of July 2, 2022 and December 31, 2021, respectively.

On May 13, 2022, the Company executed an amendment to the Credit Agreement that extended the maturity date by two years from July 18, 2023 to July 17, 2025 and clarified certain provisions to exclude the payment of the earn-out obligations made in February 2022 from the proceeds from the Business Combination in the calculation of the Consolidated Fixed Charges Coverage Ratio.

Term loan: The Company has a Senior Secured Term Credit and Guaranty Agreement (“Term Loan”) with Citibank as the administrative agent for $380,000 thousand. The Term Loan interest is payable either monthly or quarterly, in arrears, based on the Company’s interest election. The Company may elect either a Base Rate plus an applicable rate (10.00% at July 2, 2022), or an adjusted Eurodollar rate, plus an applicable rate (8.54% at July 2, 2022), as defined in the agreement. On a quarterly basis, the Company is required to make principal payments of $2,391 thousand with all unpaid principal and interest due at maturity on July 17, 2025. The Term Loan agreement requires an excess cash calculation, as defined in the agreement, which could result in additional required principal payments on the loan. There were no excess cash principal payments due July 2, 2022.

The obligations of QualTek under the Credit Agreement are secured (a) on a first priority basis, by liens on the ABL Priority Collateral as defined in the ABL Intercreditor Agreement (“Intercreditor Agreement”), dated as of July 18, 2018 between QualTek HoldCo and among PNC Bank and Fifth Third Bank, including accounts receivable and inventory and (b) on a second priority basis, by liens on the Term Priority Collateral, as defined in the Intercreditor Agreement.

As a result of the Intercreditor Agreement, the obligations of QualTek under the Term Loan are secured (a) on a first priority basis, by liens on the Term Priority Collateral and (b) on a second priority basis, by liens on the ABL Priority Collateral. Generally, Term Priority Collateral includes all assets, other than the ABL Priority Collateral, and equity interests of QualTek.

Acquisition debt: Acquisition debt consists of deferred purchase price due to the sellers from in the Recovery Logistics, Inc., Vertical Limit LLC, Vinculums Services, LLC, and Concurrent acquisitions. The interest rates range between .44% and 3.25%. For the three months ended July 2, 2022 and July 3, 2021, the Company recorded $0 thousand and $270 thousand of interest expense, respectively. The Company recorded $434 thousand and $363 thousand of interest expense for six months ended July 2, 2022, and July 3, 2021, respectively. The acquisition debt was paid in full with proceeds from the Business Combination on February 14, 2022 (see Note 1 - Nature of Business and Summary of Significant Accounting Policies).

Senior Unsecured Convertible Notes: In connection with the Business Combination, on February 14, 2022, the Company entered into an Indenture with Wilmington Trust, National Association (the “Trustee”) where the Company has issued senior unsecured convertible notes (the “Convertible Notes”) due February 15, 2027, in an aggregate principal amount of $124,685 thousand, receiving $122,191 thousand in net cash proceeds. The Convertible Notes have an original issue discount of $2,494 thousand. Further, $6,384 thousand in debt issuance costs were incurred. The total of $8,878 thousand recorded as debt discount is being amortized using the effective interest method through the maturity dates of the Convertible Notes. The Convertible Notes provide for an interest rate that is set quarterly based on gross leverage with a minimum interest rate of 9.50% per annum and up to a maximum of 11.75% per annum, with an additional interest of 2% per annum upon the occurrence of an event of default (as defined in the Indenture). Interest is payable on a quarterly basis commencing on June 15, 2022. For the three and six months ended July 2, 2022, the Company recorded

F-46

interest expense of $3,703 thousand and $5,616 thousand, respectively. As of July 2, 2022, the Convertible Notes are presented net of a debt discount of $8,212 thousand on the condensed consolidated balance sheet with accretion of $444 thousand and $666 thousand for the three and six months ended July 2, 2022, respectively.

Subject to and upon compliance with the provisions of the Indenture, each holder of a Convertible Note is provided with the right, at such holder’s option, to convert all or any portion (if the portion to be converted is $1 thousand principal amount or an integral multiple thereof) of such Convertible Note at any time prior to the close of business on the second scheduled trading day immediately preceding February 15, 2027, at an initial conversion rate of 100 shares of the Company’s Class A common stock, which is equal to an initial conversion price of $10 per share (subject to adjustment as provided in the Indenture) per $1 thousand principal amount of the Convertible Note. If a fundamental change (as defined in the Indenture) occurs prior to February 15, 2027, holders of the Convertible Notes will have the right to require the Company to repurchase all or any portion of their Convertible Notes in principal amounts of $1 thousand or an integral multiple thereof, at a repurchase price equal to the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest.

The Convertible Notes may be converted by the Company any time after the two-year anniversary of the Closing of the Business Combination on February 14, 2022 (the “Company Forced Conversion Date” ) subject to the following conditions: (i) the Company’s share price trading at or above $14 for 20 out of any 30 consecutive trading days after the Company Forced Conversion Date; (ii) the holders receive a make-whole payment in the form of cash or additional shares at the time of such conversion; (iii) the 60-day average daily trading volume ending on the last trading day of the applicable exercise period being greater than or equal to $15,000 thousand; (iv) the conversion of the Convertible Notes being made on a pro-rata basis across all Convertible Note investors; and (v) the conversion of the Convertible Notes, together with all previously converted Convertible Notes, resulting in no more than 20% of the free float of the Company’s Class A Common Stock.

The Company determined that there was no derivative liability associated with the Convertible Notes under ASC 815-15, Derivatives and Hedging. Per ASC 815-10-15-74(a), contracts that are both indexed to its own stock and classified in stockholders’ equity in its statement of financial position are not considered to be derivative instruments. The conversion feature is indexed to the Company’s own stock and is classified in stockholders’ equity in the Company’s statement of financial position. As the conversion features would meet the scope exception as described in paragraphs ASC 815-15-74(a), the conversion features are not required to be separated from the host instrument and accounted for separately. As a result, at July 2, 2022, the conversion feature does not meet derivative classification.

The Convertible Notes have customary anti-dilution protections and customary negative covenants, including limitations on indebtedness, restricted payments, and permitted investments. As of July 2, 2022, the Company was in compliance with the covenants under the Indenture.

F-47

Debt outstanding, whose carrying value approximates fair market value due to variable interest rates based on current rates available to the Company for similar instruments, was as follows (in thousands):

    

July 2,

    

December 31,

2022

2021

Current Maturities:

Current maturities of long-term debt

$

9,563

$

115,224

Current portion of capital lease obligations, net of capital lease interest

13,362

12,151

Current portion of long term debt and capital lease obligations

$

22,925

$

127,375

Long-term borrowings:

Line of credit

$

70,707

$

87,633

Term loan

346,698

351,481

Acquisition debt

34,718

Convertible notes – related party

30,567

Convertible notes – June 2021

44,400

Senior unsecured convertible notes

124,685

Less: current maturities of long-term debt

(9,563)

(115,224)

Less: unamortized financing fees

(9,195)

(11,354)

Less: convertible debt discount

(8,212)

(3,408)

Long-term debt, net of current portion and deferred financing fees

$

515,120

$

418,813

Capital lease obligations:

Capital lease obligations

$

33,511

$

32,002

Less: current portion of capital lease obligations, net of capital lease interest

(13,362)

(12,151)

Capital lease obligations, net of current portion

20,149

19,851

Total long-term borrowings

$

535,269

$

438,664

Debt issuance costs are presented in the condensed consolidated balance sheets as a direct reduction from the carrying amount of long-term debt and are amortized over the term of the related debt. The Company amortized $3,201 thousand$1,241 thousands and $2,307$2,945 thousand for the ninethree and six months ended OctoberJuly 2, 20212022, respectively, and Octoberamortized $810 thousand and $1,682 thousand for the three and six months ended July 3, 2020,2021, respectively, which is included in interest expense on the accompanying condensed consolidated statements of operations and comprehensive loss.

Note 9.Warrants

Prior to the Business Combination, ROCR issued 2,875 thousand Public Warrants and 102 thousand Private Placement Warrants (collectively, the “Warrants”). Upon the closing of the Business Combination, the Company assumed the Warrants. The Public Warrants become exercisable on 30 days after the completion of the Business Combination. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of Class A Common Stock issuable upon exercise of the warrants and a current prospectus relating to such shares of Class A Common Stock. Notwithstanding the foregoing, if there is no effective registration statement covering the shares of Class A Common Stock issuable upon exercise of the Public Warrants within 120 days following the consummation of the Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. The warrants will expire five years from the closing of the Business Combination.

Once the warrants become exercisable, the Company may redeem the Public Warrants:

in whole and not in part;
at a price of $0.01 per warrant;
at any time after the warrants become exercisable;
upon not less than 30 days’ prior written notice of redemption to each warrant holder;

F-48

if, and only if, the reported last sale price of the shares of Class A Common Stock equals or exceeds $18.00 per share, for any 20 trading days within a 30-day trading period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and
if, and only if, there is a current registration statement in effect with respect to the shares of Class A Common Stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A Common Stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of Class A Common Stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the warrants.

The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of Class A Common Stock issuable upon the exercise of the Private Placement Warrants were not transferable, assignable or saleable until completion of the Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are nonredeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants are redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

Note 10.Fair Value Measurements

The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). GAAP specifies a three-level hierarchy that is used when measuring and disclosing fair value. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e. observable inputs) and the lowest priority to data lacking transparency (i.e. unobservable inputs). An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant inputs to its valuation. The following is a description of the three hierarchy levels.

Level 1

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Active markets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2

Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in inactive markets.

Level 3

Unobservable inputs are not corroborated by market data. This category is comprised of financial and non-financial assets and liabilities whose fair value is estimated based on internally developed models or methodologies using significant inputs that are generally less readily observable from objective sources.

Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfers occurred. There were 0 no transfersbetweenanylevelsduringthenine three and six months ended OctoberJuly 2, 2021.2022 and July 3, 2021, respectively.

The information following is provided to help readers gain an understanding of the relationship between amounts reported in the accompanying financial statements and the related market or fair value. The disclosures include financial instruments.

Acquisition-related contingent consideration is measured at fair value on a recurring basis using unobservable inputs such as projections of financial results and cash flows for the acquired businesses and a discount factor based on the weighted average cost of capital which fall within Level 3 of the fair value hierarchy.

F-77F-49

Acquisition-related contingent consideration is measured at fair valueAs a result of the Business Combination, the Company has issued and outstanding Private Placement Warrants and Public Warrants. The Private Placement Warrants are substantially similar to the Public Warrants, but not directly traded or quoted on a recurring basis using unobservable inputs suchan active market and not subject to the redemption right under certain circumstances (see Note 9-Warrants). The Private Placement Warrants are accounted for as projections of financial resultsliabilities in accordance with ASC 815-40 and cash flows for the acquired businesses and a discount factor basedare presented within warrant liability on the weighted average costaccompanying condensed consolidated balance sheet. As of capital which fall within Level 3 ofthe Closing Date and July 2, 2022, the Private Placement Warrants were valued using a Black-Scholes call option model. The Black-Scholes call option model’s primary unobservable input utilized in determining the fair value hierarchy.of the Private Placement Warrants is the Public Warrants implied volatility adjusted for the redemption feature, which is considered to be a Level 3 fair value measurement.

In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial liabilities that are required to be measured at fair value on a recurring basis at OctoberJuly 2, 20212022 and December 31, 20202021 and the related activity for the ninesix months ended OctoberJuly 2, 20212022 and OctoberJuly 3, 2020.2021.

Fair Value at October 2, 2021

Fair Value at July 2, 2022

(in thousands)

    

Carrying Value

    

Level 1

    

Level 2

    

Level 3

    

Carrying Value

    

Level 1

    

Level 2

    

Level 3

Financial liabilities

Contingent consideration

$

28,429

$

$

$

28,429

$

26,556

$

$

$

26,556

Warrant liability - private placement warrants

77

77

$

28,429

$

$

$

28,429

$

26,633

$

$

$

26,633

    

Fair Value at December 31, 2020

 

Fair Value at December 31, 2021

(in thousands)

    

Carrying Value

    

Level 1

Level 2

Level 3

    

Carrying Value

    

Level 1

    

Level 2

    

Level 3

Financial liabilities

Contingent consideration

$

18,129

$

$

$

18,129

$

30,756

$

$

$

30,756

$

18,129

$

$

$

18,129

$

30,756

$

$

$

30,756

The following table sets forth a summary of the changes in fair value of the Company’s Level 3 financial liabilities:

January 1, 2021

    

18,129

Acquisitions (see Note 4)

24,145

Accretion

699

Change in fair value

(4,544)

Reclassification to acquisition debt

(10,000)

October 2, 2021

$

28,429

January 1, 2020

$

40,119

Payment of contingent consideration

(6,000)

Accretion

1,306

October 3, 2020

$

35,425

Warrant

Contingent

liability

consideration

January 1, 2022

    

$

    

$

30,756

Assumption of private placement warrants in Business Combination

77

Accretion

800

Reclassification to short term debt

(5,000)

July 2, 2022

$

77

$

26,556

Contingent

Consideration

January 1, 2021

    

$

18,129

Acquisition (see Note 4)

8,200

Accretion

440

Reclassification to acquisition debt

(10,000)

July 3, 2021

$

16,769

Note 11.Equity

Immediately prior to the Business Combination, management made a non-cash discretionary distribution to effectively settle all existing Class P Units in exchange for Historical LLC Interests in QualTek HoldCo. In addition, as mentioned in Note 1 - Nature of Business and Summary of Significant Accounting Policies, per the Business Combination Agreement, QualTek HoldCo issued the Convertible Note – Related Party – June 2021 (see in Note 8-Debt and Capital Lease Obligations) in an aggregate principal amount of $30,568 thousand to BCP QualTek II, LLC in exchange for all the Preferred Class B units, which automatically converted into Common Units upon closing of the Business Combination.

F-50

QualTek Services Inc. Preferred Stock: The Company is authorized to issue 1,000 thousand shares of preferred stock with a par value of $0.0001 per share. At July 2, 2022, there were no shares of preferred stock issued or outstanding.

QualTek Services Inc. Class A Common Stock: The Company is authorized to issue 500,000 thousand shares of Class A Common Stock with a par value of $0.0001 per share. At July 2, 2022, there were 24,446 thousand shares of Class A Common Stock (inclusive of 2,275 thousand shares of Blocker Owner Earnout Shares) issued and outstanding. Holders of Class A Common Stock are entitled to full economic rights, including the right to receive dividends when and if declared by the Board. Each holder of Class A Common Stock is entitled to one vote for each share of Class A Common Stock held. Upon liquidation of the Company, holders of Class A Common Stock are entitled to share ratably in all assets remaining after payment of debts and other liabilities.

QualTek Services Inc. Class B Common Stock: The Company is authorized to issue 500,000 thousand shares of Class B Common Stock with a par value of $0.0001 per share. At July 2, 2022, there were 26,664 thousand shares of Class B Common Stock (inclusive of 3,836 thousand shares of Earnout Voting Shares) issued and outstanding. Holders of Class B Common Stock do not have economic rights but are entitled to one vote for each share of Class B Common Stock held. Upon liquidation of the Company, holders are not entitled to receive any assets remaining after payment of debts and other liabilities.

Holders of Class A Common Stock and Class B Common Stock vote as a single class on all matters requiring a shareholder vote.

Non-controlling Interests: QualTek Services Inc. is the sole managing member of QualTek HoldCo and consolidates the financial results of QualTek HoldCo. The non-controlling interests balance represents the economic interest in QualTek HoldCo held by the Flow-through Sellers. The following table summarizes the ownership of QualTek HoldCo as of July 2, 2022:

    

    

Ownership

 

Common Units

Percentage

 

Common Units held by QualTek Services Inc.

 

22,171,350

 

45

%

Common Units held by Flow-through Sellers

 

26,663,575

 

55

%

Balance at end of period

 

48,834,925

 

100

%

Each Common Unit corresponds to a share of Class B Common Stock. Common Unit holders share in QualTek HoldCo’s profits or loss and distributions on a pro rata basis. The Flow-through Sellers have the right to exchange their Common Units in QualTek HoldCo for shares of Class A Common Stock of QualTek Services Inc. on a one-to-one basis after the expiration of the Lock-Up Period (as defined in the Third Amended and Restated Third Amended and Restated Limited Liability Company Agreement of Qualtek HoldCo, LLC). In connection with the exercise of the exchange of the Common Units, the Flow-through Sellers will be required to surrender a number of shares of Class B Common Stock, which the Company will cancel for no consideration on a one-for-one basis with the number of Common Units so exchanged. As of July 2, 2022, no exchanges have occurred or been requested.

Public Warrants: In connection with the Business Combination, the Company assumed the Public Warrants which are recorded as a component of equity. At July 2, 2022, there were 2,875 thousand Public Warrants outstanding. Refer to Note 9-Warrants for additional information.

Earnout Shares: As discussed in Note 1 - Nature of Business and Summary of Significant Accounting Policies, the Company issued 2,275 thousand shares of Class A Common Stock (Blocker Owner Earnout Shares) and 3,836 thousand shares of Class B Common Stock (Earnout Voting Shares) that are subject to certain restriction on transfer and voting and potential forfeiture pending the achievement of the earnout targets. Blocker Owner Earnout Shares are entitled to receive, ratably with the other outstanding shares of Class A Common Stock, dividends, and other distributions prior to vesting. Earnout Voting Shares have only voting rights and therefore are not entitled to receive any distributions. Each Earnout Voting Share has a corresponding Common Unit of QualTek HoldCo, LLC which is subject to the same vesting conditions. At July 2, 2022, the earnout targets have not been achieved and all Earnout Shares are unvested.

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Note 12.Stock-Based Compensation

Long-term Incentive Plan

The Company’s LTIP allows for the award of equity incentives, including stock options, restricted shares, performance awards, stock appreciation rights, other share-based awards and other cash-based awards to certain employees, directors, officers, or consultants to the Company or its subsidiaries. As of July 2, 2022, there were 2.3 million shares of Class A Common Stock available for future grant under the Plan. The number of shares of Class A common stock reserved for issuance under the 2022 Plan will automatically increase on January 1st each year, starting on January 1, 2023 and continuing through January 1, 2032, by the lesser of (a) the lesser of (i) two percent (2%) of the total number of shares of the Company’s Class A Common Stock and Class B Common Stock outstanding on December 31st of the immediately preceding calendar year and (ii) such number of shares of Class A Common Stock that would result in the number of shares of Class A Common Stock reserved being equal to 15% of the aggregate number of shares of Class A Common Stock and Class B Common Stock outstanding as of the final day of the immediately preceding calendar year, and (b) a lesser number determined by the Company’s board of directors prior to the applicable January 1st. There was not a similar plan in 2021.

Stock Options

Stock options under the LTIP are granted at the discretion of the Board of Directors or its Committee and expire no more than ten years from the grant date. Outstanding stock options generally vest in equal installments over a four-year period subject to the grantee’s continued service on each applicable vesting. All options under the Plan are exercisable, upon vesting, for shares of Class A Common Stock of the Company. Outstanding stock options expire 10 years from the grant date.

During the six months ended July 2, 2022, the Company granted options for 5.2 million shares of Class A Common Stock under the LTIP, with an aggregate grant date fair value of $7,605 thousand. During the six months ended July 2, 2022, 645,563 stock options vested and the total fair value of stock options vested was $936.1 thousand. There were no stock options exercised during the six months ended July 2, 2022.

As of July 2, 2022, 4.5 million outstanding stock options were unvested, which had a weighted average grant date fair value of $1.45. There were 5.2 million stock options outstanding as of July 2, 2022, with a weighted average exercise price of $1.45. There were no stock options outstanding as of June 30, 2021.

The following table summarizes stock-based compensation expense recognized in the condensed consolidated statements of operations:

Three Months Ended

Six Months Ended

     

July 2, 2022

    

July 3, 2021

    

July 2, 2022

    

July 3, 2021

Cost of revenue

$

121

$

$

121

$

General and administrative expenses

 

993

 

 

7,704

 

Total

$

1,114

$

$

7,825

$

As of July 2, 2022, there was $6,370 thousand of total unrecognized compensation cost related to unvested stock options. The unrecognized compensation cost as of July 2, 2022 is expected to be fully amortized over the next 3.9 years. Absent the effect of forfeiture of stock compensation cost for any departures of employees, the following tables summarize the unrecognized

F-52

compensation cost, the weighted average period the cost is expected to be amortized, and the estimated annual compensation cost for the future periods indicated below (excludes any future award):

Weighted

 Average 

Remaining

 Period to be

Unrecognized Compensation Cost

 Recognized

    

July 2,

    

July 3,

    

July 2,

July 3,

 2022

 2021

2022

2021

Stock options

$

6,370

$

 

3.6

 

Total Unrecognized Compensation Cost

    

Total

    

2022

    

2023

    

2024

    

2025 and beyond

Stock options

 

$

6,370

 

$

875

 

$

1,755

 

$

1,755

 

$

1,985

Note 10.   Equity13.Income Taxes

ProfitsPrior to the Business Combination, QualTek HoldCo was treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, QualTek HoldCo’s is not subject to U.S. federal and certain state and local income taxes. Any taxable income and losses were passed through to and included in the taxable income of its members.

Following the Business Combination, the Company are allocatedis subject to income taxes at the Members in accordanceU.S. federal, state, and local levels for income tax purposes, including with the BCPrespect to its allocable share of any taxable income of QualTek HoldCo, LLC Agreement (“HoldCo LLC Agreement”), as amendedHoldCo.

The effective tax rate was 0% for three and restated on October 4, 2019. Distributions made by thesix months ended July 2, 2022. The Company, are based on the HoldCo LLC agreement.

Preferred equity:   On October 4, 2019, an affiliateconsideration of the Company’s majority member, BCP QualTek II LLC, contributed $25,000 thousand in exchange for 25,000 Preferred Units, as defined in HoldCo LLC Agreement. The Preferred Units hadrelevant positive and negative evidence available, maintained a liquidation preference equal to the initial price per unit of $1,000 plus a preferred return accrued through the date of liquidation of 12.00% per annum, compounding quarterly, as defined in the Holdco LLC Agreement. The Preferred Units had a perpetual term, with no fixed maturity date and no voting rights. full valuation allowance against its deferred tax assets.

The Company hadprovides for income taxes and related accounts using the rightasset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequence on differences between the carrying amounts of assets and liabilities and their respective tax basis, using tax rates in effect for the year in which the differences are expected to redeem anyreverse. Deferred tax assets are reduced by a valuation allowance when it is “more-likely-than-not” that some portion or all of the Preferred Units, including the accrued return, at any time.deferred tax assets will not be realized. The Preferred Units were not convertible or exchangeable with anyrealization of the equity interestdeferred tax assets is dependent on the amount of future taxable income.

Note 14.Tax Receivable Agreement

As part of the Company.

On June 16, 2021,Business Combination, the 25,000 Preferred Units and accumulated preferred return, which totaled $5,568 thousand was exchanged forCompany entered into the Convertible Note — Related Party — June 2021 (see Note 8).

Profits interests:   TheTRA. Under the terms of the TRA, the Company has granted certain Class P Units, as definedwill be required to pay to the TRA Holders 85% of the applicable cash tax savings, if any, in the U.S. federal, state and local tax that the Company realizes or is deemed to realize in certain circumstances as a result of (i) existing tax basis in certain assets of QualTek HoldCo LLC Agreement,and certain of its direct and indirect Subsidiaries allocable to certain employees and executivesthe Company as a result of the Company. The Class Pacquisition of Common Units vest over five years, subjectby the Company as part of the Business Combination, (ii) tax basis adjustments resulting from taxable exchanges of Common Units acquired by the Company, (iii) tax deductions in respect to portions of certain criteria. All Class P Units vest immediately upon a salepayments made under the TRA, and (iv) certain tax attributes of the Company that were acquired directly or indirectly pursuant to the Business Combination. The Company generally retains the benefit of the remaining 15% of the applicable tax savings.

The TRA liability is carried at a value equal to the undiscounted expected future payments due under the TRA. The Company recorded $34,092 thousand as definedan estimate of future payments as an increase in TRA liability and a decrease to additional paid-in capital in the HoldCo LLC Agreement. Each Class P Unit entitles a participantcondensed consolidated financial statements. The Company estimates it will be able to a residual profits interest payable after certain thresholds are met. Such profitsutilize some, but not all, of the tax attributes based on current tax forecasts. If there was sufficient income to utilize all tax attributes, the TRA liability would be considered compensation expense$44,008 thousand. If subsequent adjustments to the liability for future payments occur, those changes would be recognized through current period net income (loss) in the Company. From the grant dates through October 2, 2021, the Company determined that the thresholds described previously were notcondensed consolidated statements of operations and comprehensive income (loss).

F-78F-53

probable and therefore, the Company has not assigned any value to such Class P Units and 0 related expense were incurred during the nine months ended October 2, 2021 and October 3, 2020.

Distributions:   The Company recorded tax distributions of $6,694 thousand on behalf of its members for the nine months ended October 3, 2020. There were 0 tax distributions for the nine months ended October 2, 2021. Tax distributions to the majority members of $11,409 thousand were unpaid and are recorded as distributions payable on the condensed consolidated balance sheets as of October 2, 2021 and December 31, 2020, respectively.

Note 11.   15.Segments and Related Information

The Company manages its operation under two operating segments, which represent its two reportable segments: (1) Telecom and (2) Renewables and Recovery Logistics.

The Telecom segment performs site acquisition, engineering, project management, installation, testing, last mile installation, and maintenance solutions of communication infrastructure for telecommunication and cable providers, businesses, public venues, government facilities, and residential subscribers. The Renewables and Recovery Logistics segment derives its revenue from providing new fiber optic construction services, maintenance and repair services as well as businesses with continuity and disaster relief services to renewable energy, commercial, telecommunication and utility companies. The segment also provides business-as- usualbusiness-as-usual services such as generator storage and repair and cell maintenance services.

The accounting policies of the reportable segments are the same as those described in Note 1 - Nature of Business and Summary of Significant Accounting Policies. All intercompany transactions and balances are eliminated in consolidation. Intercompany revenue and costs between entities within a reportable segment are eliminated to arrive at segment totals. Corporate results include amounts related to corporate functions such as administrative costs, professional fees, acquisition-related transaction costs and other discrete items.

We present adjusted EBITDA as the key metric used by our management to assess the operating and financial performance of our operations in order to make decisions on allocation of resources. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.

Summarized financial information for the Company’s reportable segments is presented and reconciled to the Company’s condensed consolidated financial information in the following tables, all of which are presented in thousands. Note the information below excludes amounts from discontinued operations.

For the Nine Months Ended

For the Three Months Ended

For The Six Months Ended

Revenue:

    

October 2, 2021

    

October 3, 2020

    

July 2, 2022

    

July 3, 2021

    

July 2, 2022

    

July 3, 2021

Telecom

$

360,020

$

468,729

$

175,173

$

117,959

$

307,837

$

224,439

Renewables and Recovery Logistics

105,164

55,351

9,049

12,650

24,546

25,283

Total consolidated revenue

$

465,184

$

524,080

$

184,222

$

130,609

$

332,383

$

249,722

    

October 2,

    

December 31,

    

July 2,

    

December 31,

Total Assets:

2021

2020

2022

2021

Telecom

$

602,749

$

579,147

$

615,135

$

570,750

Renewables and Recovery Logistics

151,926

55,370

81,541

90,638

Corporate(1)

14,890

6,351

(1,567)

10,371

Total consolidated assets

$

769,565

$

640,868

$

695,109

$

671,759

(1)Corporate includes both corporate assets and eliminations

For The Six Months Ended

Capital Expenditures:

    

July 2, 2022

    

July 3, 2021

Telecom

$

10,692

$

682

Renewables and Recovery Logistics

854

179

Corporate

510

870

Total consolidated capital expenditures

$

12,056

$

1,731

For the Nine Months Ended

For the Three Months Ended

For The Six Months Ended

Capital Expenditures:

    

October 2, 2021

    

October 3, 2020

Amortization and Depreciation:

    

July 2, 2022

    

July 3, 2021

    

July 2, 2022

    

July 3, 2021

Amortization and depreciation

Telecom

$

1,843

$

6,712

$

11,705

$

9,742

$

23,366

$

19,562

Renewables and Recovery Logistics

248

7,936

2,885

3,037

5,780

5,604

Corporate

1,059

845

204

244

414

479

Total consolidated capital expenditures

$

3,150

$

15,493

Total consolidated amortization and depreciation

$

14,794

$

13,023

$

29,560

$

25,645

F-79F-54

For the Nine Months Ended

Amortization and Depreciation:

    

October 2, 2021

    

October 3, 2020

Amortization and depreciation

Telecom

$

29,767

$

30,539

Renewables and Recovery Logistics

8,644

3,734

Corporate

726

487

Total consolidated amortization and depreciation

$

39,136

$

34,761

For the Nine Months Ended

Adjusted EBITDA Reconciliation:

    

October 2, 2021

    

October 3, 2020

Telecom adjusted EBITDA

$

26,907

$

16,028

Renewables and Recovery Logistics adjusted EBITDA

42,181

24,227

Corporate adjusted EBITDA

(13,097)

(13,628)

Total adjusted EBITDA

$

55,991

$

26,627

Less:

Management fees

(751)

(391)

Transaction expenses

(2,875)

(567)

Change in fair value of contingent consideration

4,544

Depreciation and amortization

(39,136)

(34,761)

Interest expense

(35,778)

(28,824)

Loss on extinguishment of convertible notes

(2,436)

$

(20,441)

$

(37,916)

For the Three Months Ended

For The Six Months Ended

Adjusted EBITDA Reconciliation:

    

July 2, 2022

    

July 3, 2021

    

July 2, 2022

    

July 3, 2021

Telecom adjusted EBITDA

$

17,031

$

11,202

$

21,843

$

16,016

Renewables and Recovery Logistics adjusted EBITDA

(601)

1,141

4,708

4,019

Corporate adjusted EBITDA

(6,276)

(4,720)

(12,366)

(8,649)

Total adjusted EBITDA continuing operations

$

10,154

$

7,623

$

14,185

$

11,386

Total adjusted EBITDA - discontinuing operations

(1,212)

(2,075)

Total adjusted EBITDA

$

10,154

$

6,411

$

14,185

$

9,311

Less:

Management fees

(124)

(126)

(622)

Transaction expenses

(1,320)

(903)

(10,588)

(1,452)

Share based compensation

(1,114)

(7,825)

Depreciation and amortization

(14,794)

(13,023)

(29,560)

(25,645)

Interest expense

(13,085)

(11,227)

(25,428)

(21,138)

Loss on extinguishment of convertible notes

(2,436)

(2,436)

Integration, public company readiness and close out costs

(5,490)

(6,854)

Net loss from continuing operations

$

(25,649)

$

(20,090)

$

(66,196)

$

(39,907)

Net loss from discontinued operations

(1,740)

(3,129)

Net loss

$

(25,649)

$

(21,830)

$

(66,196)

$

(43,036)

Revenue by Service Offerings

Revenue for each of the Company’s end-market services offerings is presented below:

For the Nine Months Ended

For the Three Months Ended

For The Six Months Ended

Revenue by Service Offerings:

    

October 2, 2021

    

October 3, 2020

    

July 2, 2022

    

July 3, 2021

    

July 2, 2022

    

July 3, 2021

Telecom Wireless

$

278,125

$

359,792

$

122,693

$

91,673

$

217,059

$

175,646

Telecom Wireline

73,296

108,937

44,504

26,287

75,935

48,794

Telecom Power

8,598

0

7,976

14,843

Renewables

25,086

5,381

11,238

7,648

13,518

Recovery Logistics

80,079

55,351

3,668

1,411

16,898

11,764

Total

$

465,184

$

524,080

$

184,222

$

130,609

$

332,383

$

249,722

Significant Customers

Revenue concentration information for significant customers as a percentage of total consolidated revenue was as follows (in thousands):

For the Nine Months Ended

October 2, 2021

October 3, 2020

Customers:

    

Amount

    

% of Total

    

Amount

    

% of Total

AT&T

$

189,381

41

%  

$

282,807

54

%

Entergy

67,776

15

%

*

*

T-Mobile

59,369

13

%  

*

*

Verizon

51,773

11

%  

98,165

19

%

Total

$

368,299

80

%  

$

380,972

73

%

*

Revenue from Entergy and T-Mobile did not exceed 10% of total consolidated revenue for the nine months ended October 3, 2020.

F-80

For the Three Months Ended

For The Six Months Ended

July 2, 2022

July 3, 2021

July 2, 2022

July 3, 2021

Customers:

    

Amount

    

% of Total

    

Amount

    

% of Total

    

Amount

    

% of Total

    

Amount

    

% of Total

AT&T

$

77,262

41.9

%  

$

62,909

48.2

%

$

133,245

40.1

%  

$

123,692

49.5

%

T-Mobile

24,714

13.4

%  

19,231

14.7

%

41,179

12.4

%  

36,552

14.6

%

Verizon

29,793

16.2

%  

17,026

13.0

%

52,643

15.8

%  

34,876

14.0

%

Total

$

131,769

71.5

%  

$

99,166

75.9

%

$

227,067

68.3

%  

$

195,120

78.1

%

Note 12.   16.Commitments and Contingencies

Litigation: From time to time, we are subject to certain legal proceedings and claims arising in the ordinary course of business. These matters are subject to many uncertainties, and it is possible that some of these matters ultimately could be decided, resolved or settled in a manner that could have an adverse effect on us. Although the resolution and amount of liability cannot be predicted with certainty, it is the opinion of management, based on information available at this time, that such legal proceedings and claims are not expected to have a material effect on the Company’s financial position, results of operations, and cash flows.

F-55

Operating leases: The Company has entered into non-cancellable operating leases for various vehicles, equipment, office and warehouse facilities, which contain provisions for future rent increases or rent-free periods. The total amount of rental payments due over the lease terms is charged to rent expense on the straight-line method over the respective term of the lease. The leases expire at various dates through the year 2031. In addition, the agreements generally require the Company to pay executory costs (real estate taxes, insurance, and repairs). Rent expense totaled $7,517$3,120 thousand and $7,686$6,234 thousand for the ninethree and six months ended OctoberJuly 2, 20212022, respectively, and October 3, 2020, respectively. The Company leases two of its locations from lessors who are partially owned by members of the Company. The rent expense related to these leases totaled $503$2,475 thousand and $393$4,959 thousand for the ninethree and six months ended October 2,July 3, 2021, and October 3, 2020, respectively.

Note 13.   17.Related Party Transactions

On July 18, 2018, the Company entered into an Advisory Services Agreement with its majority member. The agreement requires quarterly advisory fees of $125 thousand paid at the beginning of each quarter. For the three months ended July 2, 2022 and July 3, 2021, the Company incurred $0 thousand and $124 thousand in advisory fees, respectively. The Company incurred $751$126 thousand and $391$622 thousand in advisory fees for the ninesix months ended OctoberJuly 2, 2022 and July 3, 2021, respectively. Effective as of the date of the Business Combination, the advisory fees were suspended.

The Company has rental agreements for facilities, each of which are owned or partially owned directly or indirectly by various members of Company’s management. The Company incurred $253 thousand and October$507 thousand in rental expenses for the three and six months ended July 2, 2022, respectively. The Company incurred $168 thousand and $336 thousand in rental expenses for the three and six months ended July 3, 2020,2021, respectively.

Note 14.   18.Subsequent Events

The Company has evaluated all events occurring after October 2, 2021that occurred through February 2, 2022, which represents the date the financial statements were issued.

On October 7, 2021, the Company executed an amendment to the Credit Agreement to temporarily increase the maximum availability of the revolving credit facility to the amount of $130.0 million until December 31, 2021. On December 31, 2021, the maximum availability will automatically be reduced to the amount of $103.5 million.

On October 15, 2021, the Company purchased 100% of the membership interests of Urban Cable Technology, Inc. (“Urban Cable”), a Pennsylvania based company that provides a range of services, including aerial and underground construction, engineering, multiple dwelling units wiring and rewiring, and fiber placement to broadband and telecom cable operators. The purchase price included a mixture of cash and earn-outs based on pre-determined EBITDA for the years ending 2021, 2022, 2023, and 2024. The acquisition will be recognized as a business combination within our Telecom segment with identifiable assets acquired and liabilities assumed recorded at fair values on the acquisition date. The allocation of the purchase price to the fair value of assets acquired and liabilities assumed is not complete.

this filing.

F-81F-56

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.Other Expenses of Issuance and DistributionDistribution.

The following table sets forth the estimated expenses to be borne by the registrant in connection with this registration statement.the issuance and distribution of the shares of Class A Common Stock being registered hereby.

    

Amount

  

to be paid

SEC registration fee

    

$

10,744.65

 

Accounting fees and expenses

*

Legal fees and expenses

*

Printing and miscellaneous expenses

*

Total

*

*

Securities and Exchange Commission registration fee

    

$

11,559

Accounting fees and expenses

$

50,000

Legal fees and expenses

$

100,000

Financial printing and miscellaneous expenses

$

50,000

Total

$

211,559

These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be determined at this time.

Item 14.Indemnification of Directors and OfficersOfficers.

Section 145(a)145 of the DGCL authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities, including reimbursement for expenses incurred, arising under the Securities Act of 1933, as amended, or the Securities Act.

Our certificate of incorporation provides that our directors shall not be liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL, as amended. Our amended and restated bylaws provide for indemnification of our directors and officers to the maximum extent permitted by the DGCL.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in general,the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is theretofore unenforceable.

QualTek LLC, QualTek Wireline LLC, QualSat, LLC, AdvanTek Electrical Construction, LLC, QualTek Wireless LLC, Site Safe, LLC, QualTek Recovery Logistics LLC, QualTek Fulfillment LLC, QualTek Buyer, LLC, QualTek MidCo, LLC and QualTek Management, LLC are each organized under the laws of the State of Delaware. Section 18-108 of the Delaware Limited Liability Company Act provides that a corporationlimited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever. The limited liability company agreements of QualTek LLC, QualTek Wireline LLC, QualSat, LLC, AdvanTek Electrical Construction, LLC, QualTek Wireless LLC, Site Safe, LLC, QualTek Recovery Logistics LLC, QualTek Fulfillment LLC, QualTek Buyer, LLC, QualTek MidCo, LLC and QualTek Management, LLC provide for the indemnification of any member, manager or officer to the fullest extent permitted by the Delaware Limited Liability Company Act, except that neither entity will indemnify a member, manager or officer if the damage, loss or liability arises from such member, manager or officer’s fraud, gross negligence, willful misconduct, intentional and material breach of the respective entity’s limited liability company agreement or any other agreement between such member, manager or officer and the respective entity, or, in the case of a criminal matter, knowingly unlawful action.

QualTek Renewables LLC is organized under the laws of the State of Texas. The Texas Business Organizations Code, or TBOC, provides that a limited liability company shall have the power to indemnify members and managers, officers and other persons, pay in advance or reimburse expenses incurred by such persons and purchase and maintain liability insurance for such persons. The limited liability company agreement of QualTek Renewables LLC provides for the indemnification of its member, its manager or any officer to the fullest extent permitted by Section 8 of the TBOC, whether or not constituting negligence or gross negligence.

NX Utilities ULC is organized under the laws of the Province of British Columbia. The Business Corporations Act (British Columbia) provides that an unlimited liability company must indemnify a director, former director or alternate director, and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the rightother person. The incorporation agreement of the corporation), because he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

Section 145(b) of the DGCLNX Utilities ULC provides in general, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor because the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made with respect to any claim, issue or matter as to which he or she shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, he or she is fairly and reasonably entitled to indemnity for such expenses that the Court of Chancery or other adjudicating court shall deem proper.

Section 145(g) of the DGCL provides, in general, that a corporationit may purchase and maintain insurance on behalffor the benefit of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as aalternate director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterpriseNX Utilities ULC against any liability asserted against such person and incurred by such person in any such capacity, or arising out of hishim or her status as such whetherdirector, alternate director, officer, employee or notagent, or person who holds or held such equivalent position.

II-1

Concurrent Group LLC is organized under the corporation would havelaws of the State of Florida. Section 608.4229 of the Florida Limited Liability Company Act indemnifies members, managers, managing members, officers, employees, and agents subject to such standards and restrictions, if any, as are set forth in its articles of organization or operating agreement. A limited liability company may, and has the power to, indemnify the person against such liability under Section 145 of the DGCL.

The Charter will contain provisions limiting the liability of the members of the Combined Company’s board of directors, and the Combined Company’s amended and restated bylaws, which willbut is not be effective upon the consummation of the Business Combination, will provide that the Combined Company will indemnify each of the members of the Combined Company’s board of directors and officers to the fullest extent permitted under Delaware law. The Combined Company’s bylaws will also provide the board of directors with discretionrequired to, indemnify employees and agents of the Combined Company.

The Combined Company intends to enter into indemnification agreements with each of its directorshold harmless any member or manager or other person from and executive officers and certain other key employees. The indemnification agreements will provide that the Combined Company will indemnify each of its directors and executive officers and such other key employees against any and all claims and demands whatsoever. Notwithstanding the foregoing, indemnification or advancement of expenses should not be made to or on behalf of any member, manager, managing member, officer, employee, or agent if a judgment or other final adjudication establishes that the actions, or omissions to act, of such member, manager, managing member, officer, employee, or agent were material to the cause of action so adjudicated and constitute any of the following: (i) a violation of criminal law, unless the member, manager, managing member, officer, employee, or agent had no reasonable cause to believe such conduct was unlawful; (ii) a transaction from which the member, manager, managing member, officer, employee, or agent derived an improper personal benefit; (iii) in the case of a manager or managing member, a circumstance under which the liability provisions of s. 608.426 are applicable; or (iv) willful misconduct or a conscious disregard for the best interests of the limited liability company in a proceeding by or in the right of the limited liability company to procure a judgment in its favor or in a proceeding by or in the right of a member.

The operating agreements of both of the Florida limited liability company registrants indemnify their officers and managers against all reasonable expense incurred by them in defending claims or suits, irrespective of the time of the occurrence of the claims or causes of action in such director, executivesuits, made or brought against them as officers or managers of the company, and against all liability in such suits, except in such cases as involve gross negligence or willful misconduct in the performance of their duties. Such indemnification extends to the payment of judgments against such officers and managers and to reimbursement of amounts paid in settlement of such claims or actions and may apply to judgments in favor of the company or amounts paid in settlement to the company. Such indemnification also extends to the payment of counsel fees and expenses of such officers and managers in suits against them where successfully defended by them or where unsuccessfully defended, if there is no finding or judgment that the claim or action arose from the gross negligence or willful misconduct of such officers or managers. Such right of indemnification is not exclusive of any right to which such officer or other key employee becausemanager may be entitled as a matter of his or her status as one of the Combined Company’s directors, executive officers or other key employees,law and shall extend and apply to the fullest extent permitted by Delaware law, the Charter and the Combined Company’s amended and restated bylaws. In addition, the indemnification agreements will provide that, to the fullest extent permitted by Delaware law, the Combined Company

II-1

will advance all expenses incurred by its directors, executiveestates of deceased officers and other key employees in connection with a legal proceeding involving his or her status as a director, executive officer or key employee.managers.

Item 15.Recent Sales of Unregistered SecuritiesSecurities.

The Company has not sold any securities within the past three years which were not registered under the Securities Act except as follows:

Private Placements in Connection with the ROCR IPO

Simultaneously with the closing of the ROCR IPO, ROCR consummated the sale of 408,000 units (the “Private Units”) at a price of $10.00 per Private Unit in a private placement to its stockholders, generating gross proceeds of $4,080,000. These purchases took place on a private placement basis simultaneously with the consummation of the ROCR IPO. The Private Units are identical to the units sold as part of the public units in the ROCR IPO except that the (i) warrants included in the Private Units were non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees, and (ii) the Private Units could not be transferred prior to the close of a business combination (except on the same terms as the Founder Shares would be transferable). ROCR’s stockholders approved the issuance of the Private Units and underlying securities upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation of our initial business combination.

Because this offer and sale was made to existing stockholders, the sale does not involve a public offering and is being made in reliance on the exemption from registration contained in Section 4(a)(2) of the Securities Act.

No underwriting discounts or commissions were paid with respect to the foregoing sales.

Pre-PIPE Investment

In connection with the Business Combination, accredited investors (each a “Pre-PIPE Investor”) purchased convertible notes of QualTek, as issuer (the “Notes Issuer”), in an aggregate principal amount of $44.4 million (the “Pre-PIPE Notes”) in a private placement, issuable pursuant to Note Purchase Agreements (the “Note Purchase Agreements”), among the Notes Issuer, ROCR and the Pre- PIPEPre-PIPE Investors (the “Pre-PIPE Investment”). The Pre-PIPE Notes are senior unsecured unsubordinated obligations of the Notes Issuer and are not transferable without the consent of the Notes Issuer (other than customary exceptions for transfers to

II-2

affiliates). The Notes Issuer intends to use the proceeds from the sale of the Pre-PIPE Notes for general working capital or to fund acquisitions of accretive business targets.

Unless earlier converted or redeemed in accordance with the terms of the Pre-PIPE Notes, the Pre- PIPE Notes have a perpetual maturity. The Pre-PIPE Notes will not bear interest and are subject to certain customary information rights.

Under the initial terms, the Pre-PIPE Notes were to automatically convert into Class A Common Stock at $8.00 per share upon consummation of the Business Combination. Pursuant to an amendment to the Notes Purchase Agreement and Amendment No. 1 to the Note, each effective as of January 14, 2022, the Pre-PIPE Notes, upon consummation of the Business Combination, the Pre-PIPE Notes were to automatically convert into Class A Common Stock at $6.40 per share, subject to certain adjustments . adjustments.

Pursuant to an amendment to the Notes Purchase Agreement and Amendment No. 1 to the Note, each effective as of January 14, 2022, upon consummation of the Business Combination, the Pre-PIPE Notes would automatically convert into Class A Common Stock at $6.40 per share, subject to certain adjustments. However, the Note Purchase Agreements provide that the parties will use commercially reasonable efforts to amend the Pre-PIPE Notes and any other agreements deemed necessary such that upon the consummation of the Business Combination, the Pre-PIPE Notes automatically convert into Common Units (along with a corresponding number of shares of Class B Common Stock) in lieu of converting into Class A Common Stock. Accordingly, in connection with the close of the Business Combination, the Notes Purchase Agreement and the Note are beingwere further amended such that the Pre-PIPE Notes automatically convertconverted into Common Units (along with a corresponding number of shares of Class B Common Stock). The number of Common Units and Class B Common Stock will be equal to the quotient that results from dividing the aggregate principal amount of the Note by $6.40, subject to certain adjustments.

The shares issued to such institutions and accredited investors in the Pre-PIPE Investment on the Closingclosing of the Business Combination were issued pursuant to and in accordance with the exemption from registration under the Securities Act, under Section 4(a)(2) and/or Regulation D promulgated under the Securities Act.

II-2

PIPE Investment

In connection with the Business Combination, ROCR obtained commitments from certain accredited investors (each a “SubscriberSubscriber”) to purchase shares of Class A Common Stock issued in connection with the Closingclosing of the Business Combination (the “PIPE Shares”), for an aggregate cash amount of $66.1 million initially at a purchase price of $10.00 per share, in a private placement (the “PIPE Investment”). Such commitments are being made by way of the subscription agreements, by and between each Subscriber and ROCR (collectively, the “Subscription Agreements”). The terms of the Subscription Agreements were amended on January 14, 2022, to adjust the cost basis of the per share price from $10.00 per share to $8.00 per share. Additionally, pursuant to the amendment, Subscribers could elect to participate in the Convertible Note Investment in lieu of purchasing shares of Class A Common Stock pursuant to the Subscription Agreements. A total of approximately $24.7 million of the PIPE Investment elected to invest in the Convertible Note Investment in lieu of the PIPE Investment. In connection with the amendment, QualTek, the Sponsor, Craig-Hallum, Roth, ROCR’s officers and directors and certain affiliates of ROCR’s management waived (i) the right to purchase Convertible Notes in lieu of the PIPE Investment, and (i) the reduced per share price, and accordingly will continue to pay $10.00 per share pursuant to the Subscription Agreements. Such shares in the aggregate are equal to 2,001,500 shares. Following that certain amendment to the PIPE Amendment,Investment, dated as of January 14, 2022, the aggregate number of shares to be issued pursuant to the Subscription Agreements is 4,676,500 shares of Class A Common Stock for gross proceeds of $41.4 million (or 7,145,000 shares of Class A Common Stock for gross proceeds of $66.1 million including the impact from PIPE investorsSubscribers who elected to participate in the Convertible Note Investment in lieu of the PIPE Investment).

The purpose of the sale of the PIPE Shares is to raise additional capital for use in connection with the Business Combination and to meet the minimum cash requirements provided in the Business Combination Agreement. Certain offering-related expenses are payable by ROCR, including customary fees payable to the placement agents, Roth Capital Partners, LLC and Craig-Hallum, aggregating $5,150,000.

The PIPE Investment is anticipated to close immediately prior to the Business Combination on the Closing Date.closing of the Business Combination. The shares issued to such institutions and accredited investors in the PIPE Investment on the Closing Dateclosing of the Business Combination will be issued pursuant to and in accordance with the exemption from registration under the Securities Act, under Section 4(a)(2) and/or Regulation D promulgated under the Securities Act.

II-3

Item 16.Exhibits and Financial Statement Schedules.

The following is a list of exhibits filed as a part of this registration statement:

(a) Exhibits

Exhibits.

Exhibit
Number

    

Description of Exhibit

2.12.1†

Business Combination Agreement, dated as of June 16, 2021, by and among ROTHBCP QualTek HoldCo, LLC, Roth CH Acquisition III Co., Roth CH III Blocker Merger Sub, LLC, BCP QualTek Investors, LLC, Roth CH III Merger Sub, LLC and BCP QualTek, LLC (incorporated by reference to Exhibit 2.1 of Roth CH Acquisition III Co.’s Current Report on Form 8-K filed on June 16, 2021).

2.2†

Waiver and Consent Agreement, dated as of January 14, 2022, by and among Roth CH Acquisition III Co., Roth CH III Blocker Merger Sub, LLC, BCP QualTek Investors, LLC, Roth CH III Merger Sub, LLC, BCP QualTek HoldCo, LLC and BCP QualTek, LLC.(1)LLC (incorporated by reference to Exhibit 2.1 of Roth CH Acquisition III Co.’s Current Report on Form 8-K filed on January 14, 2022).

2.23.1

Waiver and Consent Agreement, dated as of January 14, 2022, by and among ROTH CH Acquisition III Co., Roth CH III Blocker Merger Sub, LLC, BCP QualTek Investors LLC, Roth CH III Merger Sub, LLC, BCP QualTek HoldCo, LLC and BCP QualTek LLC.(2)

3.1

Amended and Restated Certificate of Incorporation.(3)

3.2

Bylaws.(4)

3.3

Form of the Second Amended and Restated Certificate of Incorporation of QualTek Services Inc. (incorporated by reference to be effective upon consummation ofExhibit 3.1 to the Business Combination.Current Report on Form 8-K filed by QualTek Services Inc. on February 16, 2022).(5)

3.43.2

Bylaws of QualTek Services Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form of Amended and Restated Bylaws, to be effective upon consummation of the Business Combination.8-K filed by QualTek Services Inc. on February 16, 2022).(5)

4.13.3

Specimen Common Stock Certificate.Certificate of Formation of QualTek LLC (f/k/a QualTek USA, LLC), amended by the Certificate of Amendment dated December 18, 2019, changing the entity’s name to QualTek LLC.(6)*

4.23.4

Specimen Warrant Certificate.Fifteenth Amended and Restated Limited Liability Company Agreement of QualTek LLC, dated April 19, 2022.*(6)

3.5

4.3

Certificate of Formation of QualTek Wireline LLC (f/k/a NX Utilities, LLC), amended by the Certificate of Amendment dated December 18, 2019, changing the entity’s name to QualTek Wireline LLC.*

3.6

Fourth Amended and Restated Limited Liability Company Agreement of QualTek Wireline LLC, dated April 19, 2022.*

3.7

Certificate of Formation of QualSat, LLC, dated August 15, 2013.*

3.8

Second Amended and Restated Limited Liability Company Agreement of QualSat, LLC, dated April 19, 2022.*

3.9

Certificate of Formation of Advantek Electrical Construction, LLC, dated January 19, 2018.*

3.10

Second Amended and Restated Limited Liability Company Agreement of Advantek Electrical Construction, LLC, dated April 19, 2022.*

3.11

Certificate of Formation of QualTek Wireless LLC (f/k/a QualTek Acquisition, LLC and Velocitel, LLC), amended by the Certificate of Amendment dated December 18, 2019, changing the entity’s name to QualTek Wireless LLC, the Certificate of Merger of Vertical Limit Construction, LLC merging with and into QualTek Wireless LLC dated July 16, 2020, and the Certificate of Merger of Empire Telecom USA, LLC merging with and into QualTek Wireless LLC, dated July 23, 2020.*

3.12

Sixth Amended and Restated Limited Liability Company Agreement of QualTek Wireless LLC, dated April 19, 2022.*

3.13

Certificate of Formation of QualTek Recovery Logistics LLC (f/k/a ANS Acquisition, LLC), amended by the Certificate of Amendment dated January 4, 2018, changing the entity’s name to Site Safe, LLC.*

3.14

Second Amended and Restated Limited Liability Company Agreement of Site Safe, LLC, dated April 19, 2022.*

3.15

Certificate of Formation of QualTek Recovery Logistics LLC (f/k/a Recovery Logistics, LLC and QualTek Recovery LLC), amended by the Certificate of Amendment dated December 18, 2019, changing the entity’s name to QualTek Recovery LLC and amended by the Certificate of Amendment dated January 15, 2020, changing the entity’s name to QualTek Recovery Logistics LLC.*

3.16

Second Amended and Restated Limited Liability Company Agreement of QualTek Recovery Logistics LLC, dated April 19, 2022.*

3.17

Certificate of Formation of QualTek Fulfillment LLC (f/k/a ACI USA, LLC), amended by the Certificate of Amendment dated December 18, 2019, changing the entity’s name to QualTek Fulfillment LLC.*

3.18

Second Amended and Restated Limited Liability Company Agreement of QualTek Fulfillment LLC, dated April 19, 2022.*

3.19

Certificate of Formation of QualTek Renewables LLC (f/k/a Fiber Network Solutions, LLC), amended by the Certificate of Amendment dated June 15, 2021, changing the entity’s name to QualTek Renewables LLC.*

3.20

Fourth Amended and Restated Limited Liability Company Agreement of QualTek Renewables LLC, dated April 19, 2022.*

3.21

Certificate of Formation of QualTek Buyer, LLC, dated May 15, 2018.*

3.22

Limited Liability Company Agreement of QualTek Buyer, LLC, dated May 15, 2018.*

3.23

Certificate of Formation of QualTek MidCo, LLC, dated June 26, 2014.*

II-4

Exhibit
Number

Description

3.24

Fourth Amended and Restated Limited Liability Company Agreement of QualTek MidCo, LLC, dated April 19, 2022.*

3.25

Certificate of Formation of QualTek Management LLC, dated June 26, 2014.*

3.26

Second Amended and Restated Limited Liability Company Agreement of QualTek Management, LLC, dated April 19, 2022.*

3.27

Certificate of Incorporation of NX Utilities LLC, dated July 3, 2018.*

3.28

Incorporation Agreement of NX Utilities ULC, dated June 29, 2018.*

3.29

Articles of Organization of Concurrent Group LLC, dated June 7, 2017.*

3.30

Sixth Amended and Restated Operating Agreement of Concurrent Group LLC, dated April 19, 2022.*

4.1

Warrant Agreement, dated as of March 2, 2021, between Continental Stock Transfer & Trust Company and Roth CH Acquisition III Corp.Co. (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by Roth CH Acquisition III Co. on March 8, 2021).(3)

4.2

Indenture, dated as of February 14, 2022, by and among QualTek Services Inc., the Guarantors (as defined in the Indenture) party thereto and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by QualTek Services Inc. on February 16, 2022).

4.3

Form of Convertible Notes (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by QualTek Services Inc. on February 16, 2022).

4.4

First Supplemental Indenture, dated as of July 28, 2022, by and among QualTek Services Inc., the guarantors party thereto and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by QualTek Services Inc. on August 8, 2022).

5.1

Opinion of LoebKirkland & LoebEllis LLP.*

10.15.2

Letter Agreements, dated March 2, 2021, by and between the Company and the Company’s officers, directors and Initial Stockholders.Opinion of Boughton Law Corporation.*(3)

10.25.3

Investment Management Trust Agreement, dated March 2, 2021, by and between the Company and Continental Stock Transfer & Trust Company.Opinion of K&L Gates LLP.*(3)

10.310.1

Stock EscrowTax Receivable Agreement, dated March 2, 2021,as of February 14, 2022, by and among QualTek Services Inc., the Company, Continental Stock Transfer & Trust CompanyTRA Holder Representative (as defined in the Tax Receivable Agreement) and the Initial StockholdersTRA Holders (as defined in the Tax Receivable Agreement) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by QualTek Services Inc. on February 16, 2022).

10.2

Investor Rights Agreement, dated February 14, 2022, by and among QualTek Services Inc., the Equityholder Representative, the Sponsor Representative, the Sponsors, the Sellers and the Other Holders (each as defined in the Investor Rights Agreement) (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by QualTek Services Inc. on February 16, 2022).

10.3

Third Amended and Restated Limited Liability Company Agreement of QualTek HoldCo, LLC, dated as of February 14, 2022, by and among QualTek Services Inc. and the Company.Members (as defined therein) set forth on Exhibit A thereto (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by QualTek Services Inc. on February 16, 2022).(3)

10.4

QualTek Services Inc. 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed by QualTek Services Inc. on February 16, 2022).

10.5

Form of Nonqualified Stock Option Agreement pursuant to the QualTek Services Inc. 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed by QualTek Services Inc. on February 16, 2022).

10.6

QualTek Services Inc. 2022 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed by QualTek Services Inc. on February 16, 2022).

10.7

Form of Indemnification Agreement (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed by QualTek Services Inc. on February 16, 2022).

10.8

ABL Credit and Guaranty Agreement, dated as of July 18, 2018, as amended by that Seventh Amendment dated May 13, 2022, by and among QualTek Buyer, LLC, QualTek LLC, and certain of its subsidiaries, the lenders party thereto, and PNC Bank, National Association, as administrative and collateral agent (conformed copy through Seventh Amendment) (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by QualTek Services Inc. on May 17, 2022).

10.9

Term Credit and Guaranty Agreement, dated as of July 18, 2018, as amended by Amendment No. 2, dated as of February 14, 2022, by and among QualTek Buyer, LLC, QualTek LLC, and certain of its subsidiaries, the lenders party thereto, and Citibank, N.A. as administrative and collateral agent (conformed copy through Amendment No. 2) (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed by QualTek Services Inc. on May 17, 2022).

II-3II-5

Exhibit
Number

    

Description of Exhibit

10.414.1

Registration Rights Agreement, dated March 2, 2021,QualTek Services Inc. Code of Ethics. (incorporated by and betweenreference to Exhibit 14.1 to the Company and the Initial Stockholders of the Company.Current Report on Form 8-K filed by QualTek Services Inc. on February 16, 2022)(3)

10.516.1

Indemnity Agreements,Letter from Marcum LLP to Securities and Exchange Commission, dated March 2, 2021,February 16, 2022 (incorporated by and betweenreference to Exhibit 16.1 to the Company and the directors and officers of the Company.Current Report on Form 8-K filed by QualTek Services Inc. on February 16, 2022)(3)

10.621.1

Subscription Agreement, dated March 2, 2021,List of subsidiaries of QualTek Services Inc. (incorporated by and betweenreference to Exhibit 21.1 to the Company and the Initial Stockholders of the Company.Annual Report on Form 10-K filed by QualTek Services Inc. on April 15, 2022).(3)

10.722.1

Business Combination Marketing Agreement, dated March 2, 2021, by and between the Company, Roth Capital Partners, LLC and Craig-Hallum Capital Group LLC.(3)

10.8

FormList of Tax Receivable Agreement, by and among QualTek Services Inc., QualTek HoldCo, LLC, the TRA Holder Representative (as defined therein), and each of the Purchase TRA Holders, the Exchange TRA Holders and the Blocker TRA Holders (each as defined therein).(2)

10.9

Buyer Voting and Support Agreement, by and among by BCP QualTek HoldCo, LLC, a Delaware limited liability company, BCP QualTek Investors, LLC, a Delaware limited liability company and the stockholders on the signature pages thereto.(2)

10.10

Form of Company/ Blocker Voting and Support Agreement., by and among ROTH CH Acquisition III Co. and the Unitholders on the signature pages thereto.(2)

10.11

Form of Investor Rights Agreement, by and among (i) Roth CH Acquisition III Co.; (ii) each of the parties listed on Schedule 1 attached thereto; (iii) the Equityholder Representative; (iv) the Sponsors; the Sponsor Representative; and (v) the Persons listed as Other Holders on the signature pages thereto and other Persons who execute a joinder as an “Other Holder”.(2)

10.12

Form of Third Amended and Restated Limited Liability Company Agreement of QualTek HoldCo, LLC.(2)

10.13

Form of Note Purchase Agreement, by and among BCP QualTek HoldCo, Roth CH Acquisition III Co. and the Pre-PIPE Investors.(2)

10.14

Form of Registration Rights Agreement, by and between ROTH CH Acquisition III Co. and the Pre-PIPE Investors.(2)

10.15

Form of Subscription Agreement, by and between ROTH CH Acquisition III Co. and the PIPE Investors.(2)

10.16

Form of Registration Rights Agreement, by and between ROTH CH Acquisition III Co. and the PIPE Investors.(2)

10.17

Form of Acknowledgement, Waiver and Consent Agreement, dated as of January 14, 2022, by and between BCP QualTek HoldCo, LLC, Roth CH Acquisition III Co. and Pre-PIPE Investors.Guarantor Subsidiaries.*

10.18

Form of Waiver and Amendment No. 1, dated as of January 14, 2022, by and between ROTH CH Acquisition III Co. and PIPE Investors.

10.19

Form of Acknowledgement, Waiver and Consent Agreement, by and among BCP QualTek HoldCo, LLC, the purchasers of the Notes listed as signatories thereto, and Roth CH Acquisition III Co.

21.1

Subsidiaries of the Registrant.

23.1

Consent of Marcum LLP.

23.2

Consent of RSM US LLP.*

23.323.2

Consent of LoebKirkland & LoebEllis LLP (included in Exhibit 5.1).

23.3

Consent of Boughton Law Corporation (included in Exhibit 5.2).

23.4

Consent of K&L Gates LLP (included in Exhibit 5.3).

24.1

Power of Attorney (included on the signature page to this Registrationhereto).

25.1

Form T-1 Statement on Form S-1).of Eligibility under the Trust Indenture Act of 1939, as amended, of Trustee.*

101.INS

Inline XBRL Instance Document the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL documentDocument.*

101.SCH

Inline XBRL Taxonomy Extension Schema DocumentDocument.*

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase DocumentDocument.*

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase DocumentDocument.*

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase DocumentDocument.*

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase DocumentDocument.*

104

Cover Page Interactive Data File, the cover page interactive data file does not appearformatted in the Interactive Data File because itsInline XBRL tags are embedded(included within the Inline XBRL documentExhibit 101 attachments).*

107

Filing Fee Tablefee table*

(1)Previously filed as an exhibit to Roth CH Acquisition III Co.’s Current Report on Form 8-K filed on June 17, 2021.
(2)Previously filed as an exhibit to Roth CH Acquisition III Co.’s Current Report on Form 8-K filed on January 14, 2022.
(3)Previously filed as an exhibit to Roth CH Acquisition III Co.’s Current Report on Form 8-K filed on March 8, 2021.
(4)Previously filed as an exhibit to Roth CH Acquisition III Co.’s Registration Statement on Form S-1 filed on January 12, 2021 (File No. 333-252044).

II-4

(5)Previously filed as an annex to Roth CH Acquisition III Co.’s Preliminary Proxy Statement filed on August 11, 2021.
(6)Previously filed as an exhibit to Roth CH Acquisition III Co.’s Amendment No. 1 to the Registration Statement on Form S-1 filed on February 11, 2021 (File No. 333-252044).

*

Previously filed.Filed herewith.

Schedules and similar attachments to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakesCompany agrees to furnish copiessupplementally a copy of any ofsuch omitted materials to the omitted schedulesSEC upon request by the Securities and Exchange Commission.request.

II-5

Item 17.Undertakings

The undersigned registrant, hereby undertakes:

(1)To file, during any period in which offers or sales are being made, a post effectivepost-effective amendment to this registration statement:
(i)(a)To include any prospectusregistration statement required by Section 10(a)(3) of the Securities Act of 1933;
(ii)(b)To reflect in the prospectusregistration statement any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectusregistration statement filed with the Securities and Exchange Commission (the “Commission”) pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.statement; and
(iii)(c)To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2)That, for the purpose of determining any liability under the Securities Act of 1933, each such post effectivepost-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-6

(3)To remove from registration by means of a post effectivepost-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4)That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5)(4)That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)

Anyany preliminary prospectus or prospectus of the undersigned registrantRegistrant relating to the offering required to be filed pursuant to Rule 424;

(ii)

Any freeany “free writing prospectusprospectus” relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii)

Thethe portion of any other free“free writing prospectusprospectus” relating to the offering containing material information about the undersigned registrantRegistrant or its securities provided by or on behalf of the undersigned registrant; and

(iv)

Anyany other communication that is an offer in the offering made by the undersigned registrantRegistrant to the purchaser.

II-6

(5)Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions set forth or described in Item 14 of this registration statement, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-7

SignaturesSIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the City16th day of Newport Beach, State of California on February 2,September, 2022.

ROTH CH ACQUISITION III CO.QUALTEK SERVICES INC.

By:

/s/ Byron RothChristopher S. Hisey

Name:

Byron Roth Christopher S. Hisey

Title:

Co-Chief   Chief Executive Officer and

Chairman of the Board Director

KNOW ALL BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Christopher S. Hisey and Adam Spittler, or any of them, severally, as his or her attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in such person’s name, place, and stead, in any and all capacities, to sign any and all amendments to this registration statement, and to file the same with all exhibits hereto, and all other documents in connection herewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and any of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

    

TitlePosition

    

Date

/s/ Byron RothChristopher S. Hisey

Co-ChiefChief Executive Officer and Chairman of the BoardDirector

September 16, 2022

Christopher S. Hisey

(Principal Executive Officer)

February 2, 2022

Byron Roth

/s/ Adam Spittler

Chief Financial Officer

September 16, 2022

Adam Spittler

(Principal Accounting and Financial Officer)

/s/ Andrew Weinberg

Chairman

September 16, 2022

Andrew Weinberg

/s/ Gordon RothMatthew Allard

Chief Financial Officer

(Principal Financial and Accounting Officer)Director

February 2,September 16, 2022

Gordon RothMatthew Allard

/s/ *Maha Eltobgy

Co-Chief Executive Officer and Director

February 2,September 16, 2022

John LipmanMaha Eltobgy

/s/ *Daniel Lafond

Director

February 2,September 16, 2022

Molly MontgomeryDaniel Lafond

/s/ *Sam Totusek

Director

February 2,September 16, 2022

Sam Totusek

II-8

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

QUALTEK LLC

By:

/s/ Adam Spittler

Name:

Adam Spittler

Title:

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

·

Daniel M. FriedbergSignature

Position

Date

/s/ Christopher S. Hisey

Manager

September 16, 2022

Christopher S. Hisey

/s/ *Adam Spittler

DirectorChief Financial Officer

February 2,September 16, 2022

Adam RothsteinSpittler

(Principal Executive, Accounting and Financial Officer)

II-9

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

QUALTEK WIRELINE LLC

By:

/s/ Adam Spittler

Name:

Adam Spittler

Title:

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Position

Date

/s/ *Christopher S. Hisey

DirectorManager

February 2,September 16, 2022

James GoldChristopher S. Hisey

/s/ *Adam Spittler

DirectorChief Financial Officer

February 2,September 16, 2022

Sam Chawla

Adam Spittler

(Principal Executive, Accounting and Financial Officer)

II-10

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

*By:

/s/ Byron RothQUALSAT, LLC

By:

/s/ Adam Spittler

Name:

Byron RothAdam Spittler

Title:

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Position

Date

/s/ Christopher S. Hisey

Manager

September 16, 2022

Christopher S. Hisey

/s/ Adam Spittler

Chief Financial Officer

September 16, 2022

Adam Spittler

(Principal Executive, Accounting and Financial Officer)

II-11

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

ADVANTEK ELECTRICAL CONSTRUCTION, LLC

By:

/s/ Adam Spittler

Name:

Adam Spittler

Title:

Attorney-in-FactChief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

·

Signature

Position

Date

/s/ Christopher S. Hisey

Manager

September 16, 2022

Christopher S. Hisey

/s/ Adam Spittler

Chief Financial Officer

September 16, 2022

Adam Spittler

(Principal Executive, Accounting and Financial Officer)

II-12

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

QUALTEK WIRELESS LLC

By:

/s/ Adam Spittler

Name:

Adam Spittler

Title:

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

·

Signature

Position

Date

/s/ Christopher S. Hisey

Manager

September 16, 2022

Christopher S. Hisey

/s/ Adam Spittler

Chief Financial Officer

September 16, 2022

Adam Spittler

(Principal Executive, Accounting and Financial Officer)

II-13

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

SITE SAFE, LLC

By:

/s/ Adam Spittler

Name:

Adam Spittler

Title:

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Position

Date

/s/ Christopher S. Hisey

Manager

September 16, 2022

Christopher S. Hisey

/s/ Adam Spittler

Chief Financial Officer

September 16, 2022

Adam Spittler

(Principal Executive, Accounting and Financial Officer)

II-14

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

QUALTEK RECOVERY LOGISTICS LLC

By:

/s/ Adam Spittler

Name:

Adam Spittler

Title:

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Position

Date

/s/ Christopher S. Hisey

Manager

September 16, 2022

Christopher S. Hisey

/s/ Adam Spittler

Chief Financial Officer

September 16, 2022

Adam Spittler

(Principal Executive, Accounting and Financial Officer)

II-15

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

QUALTEK FULFILLMENT LLC

By:

/s/ Adam Spittler

Name:

Adam Spittler

Title:

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

·

Signature

Position

Date

/s/ Christopher S. Hisey

Manager

September 16, 2022

Christopher S. Hisey

/s/ Adam Spittler

Chief Financial Officer

September 16, 2022

Adam Spittler

(Principal Executive, Accounting and Financial Officer)

II-16

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

QUALTEK RENEWABLES LLC

By:

/s/ Adam Spittler

Name:

Adam Spittler

Title:

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

·

Signature

Position

Date

/s/ Christopher S. Hisey

Manager

September 16, 2022

Christopher S. Hisey

/s/ Adam Spittler

Chief Financial Officer

September 16, 2022

Adam Spittler

(Principal Executive, Accounting and Financial Officer)

II-17

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

QUALTEK BUYER, LLC

By:

/s/ Adam Spittler

Name:

Adam Spittler

Title:

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Position

Date

/s/ Christopher S. Hisey

Chief Executive Officer

September 16, 2022

Christopher S. Hisey

(Principal Executive Officer)

/s/ Adam Spittler

Chief Financial Officer

September 16, 2022

Adam Spittler

(Principal Accounting and Financial Officer)

II-18

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

NX UTILITIES ULC

By:

/s/ Adam Spittler

Name:

Adam Spittler

Title:

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Position

Date

/s/ Christopher S. Hisey

Director

September 16, 2022

Christopher S. Hisey

/s/ Adam Spittler

Chief Financial Officer

September 16, 2022

Adam Spittler

(Principal Executive, Accounting and Financial Officer)

II-19

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

QUALTEK MIDCO, LLC

By:

/s/ Adam Spittler

Name:

Adam Spittler

Title:

Chief Financial Officer

KNOW ALL BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints Christopher S. Hisey as his attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in such person’s name, place, and stead, in any and all capacities, to sign any and all amendments to this registration statement, and to file the same with all exhibits hereto, and all other documents in connection herewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agents, and any of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents, or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.

·

Signature

Position

Date

/s/ Adam Spittler

Chief Financial Officer

September 16, 2022

Adam Spittler

(Principal Accounting and Financial Officer)

II-20

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

QUALTEK MANAGEMENT, LLC

By:

/s/ Adam Spittler

Name:

Adam Spittler

Title:

Chief Financial Officer

KNOW ALL BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints Christopher S. Hisey as his attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in such person’s name, place, and stead, in any and all capacities, to sign any and all amendments to this registration statement, and to file the same with all exhibits hereto, and all other documents in connection herewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agents, and any of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents, or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Position

Date

/s/ Adam Spittler

Chief Financial Officer

September 16, 2022

Adam Spittler

(Principal Executive, Accounting and Financial Officer)

II-21

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Blue Bell, Pennsylvania on the 16th day of September, 2022.

CONCURRENT GROUP LLC

By:

/s/ Adam Spittler

Name:

Adam Spittler

Title:

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this registration statement, has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Position

Date

/s/ Christopher S. Hisey

Manager

September 16, 2022

Christopher S. Hisey

/s/ Adam Spittler

Chief Financial Officer

September 16, 2022

Adam Spittler

(Principal Executive, Accounting and Financial Officer)

II-8II-22