Complete Solaria Inc
For the period ended Sep 29, 2024. Filed Nov 18, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 29, 2024 · Filed Nov 18, 2024
SPWR$0.27+11.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001213900-24-068973
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-29; filed 2024-11-18.
0001213900-24-099667
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 145 previous paragraphs and 144 current paragraphs.
76 unchanged; 42 reworded; 25 added; 27 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 23 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Other expense, net consists of loss on issuance and remeasurement of derivative liability, changes in the fair value of forward purchase agreements and warrant liabilities, loss on the conversion of two SAFE Agreements to shares of common stock, and other costs.
Current report
Allowance for Credit Losses
Current report
We maintain an allowance for credit losses for estimated losses inherent in our accounts receivable portfolio. We apply judgment in estimating the required allowance by considering historical losses adjusted to take into account current market conditions and our customers’ financial condition, the amount of receivables in dispute, the current receivables aging and our customers’ payment patterns.
Current report
General and administrative costs for the thirteen weeks ended September 29, 2024 was $18.5 million compared to $6.3 million for the thirteen weeks ended October 1, 2023. The increase was primarily attributed to the impairment of our proprietary HelioTrack TM software system, an increase in accounts receivable reserve, and recognition of the Ayna warrants expense during the period.
Current report
Other expense, net for the thirteen weeks ended October 1, 2023 was expense of $38.0 million and was principally comprised of $35.5 million of expense related to the issuance of common stock in connection with our forward purchase agreements, the loss on extinguishment of debt in CS Solis of $10.3 million, $6.7 million of expense related to changes in the fair value of our forward purchase agreements, and $2.4 million expense related to the issuance of bonus shares in connection with the Mergers, partially offset by $16.9 million of income related to changes in the fair value of warrant liabilities.
Current report
Gain on Extinguishment of Debt
Current report
The gain on extinguishment of debt arose from the exchange of certain of our debt obligations.
Current report
Thirty-nine weeks ended September 29, 2024 compared to the thirty-nine weeks ended October 1, 2023
Current report
General and administrative costs for the thirty-nine weeks ended September 29, 2024 was $29.8 million compared to $23.0 million for the thirty-nine weeks ended October 1, 2023. The increase was primarily attributed to the impairment of our proprietary HelioTrack TM software system, an increase in accounts receivable reserve, and recognition of the Ayna warrants expense during the period.
Current report
Interest expense was $8.2 million for the thirty-nine weeks ended September 29, 2024 compared to $8.9 million for the thirty-nine weeks ended October 1, 2023. The decrease was due to a decrease of $2.2 million in interest expense due to the termination of the CS Solis debt, SCI Revolving Loan, and 2018 Bridge Loan, partially offset with the interest expense arising from our convertible notes of $1.5 million.
Current report
Other expense, net for the thirty-nine weeks ended October 1, 2023 was expense of $28.3 million and was comprised of $35.5 million of expense related to the issuance of common stock in connection with our forward purchase agreements, the loss on extinguishment of debt in CS Solis of $10.3 million, $6.7 million of expense related to changes in the fair value of our forward purchase agreements, and $2.4 million expense related to the issuance of bonus shares in connection with the Mergers, partially offset by $26.3 million of income related to changes in fair value of warrant liabilities, and $0.3 million of other income.
Current report
Gain on Extinguishment of Debt
Current report
The gain on extinguishment of debt arose from the exchange of certain of our debt obligations.
Current report
In the thirteen weeks ended September 29, 2024, we entered into an exchange agreement which resulted in the cancellation of our existing debt in exchange for new debt obligations and issued senior notes for cash as described below.
Current report
July 2024 Notes
Current report
In July 2024, we issued $46.0 million of senior unsecured convertible notes to various lenders, $18.0 million of which were issued to a related party, and another $18.0 million of which were issued in exchange for the cancellation of all indebtedness with Kline Hill and Carlyle (the “July 2024 Notes”). The July 2024 Notes bear interest at 12% per annum and mature on July 1, 2029. The interest rate increases by 3% in the case of an event of default. The July 2024 Notes are convertible into shares of our common stock at the option of the holder at a conversion rate of $1.68 per share. The July 2024 Notes will become immediately due and payable at the option of the holder in the event of default and upon a qualifying change of control event. The conversion option is required to be bifurcated as a derivative liability, and we recorded a derivative liability of $28.7 million on the issuance date with a corresponding debt discount. We additionally issued a warrant to purchase shares of common stock to our broker, as described in Note 12 – Warrants, the Cantor Warrant, with a fair value of $1.4 million. As of September 29, 2024, the carrying amount of the July 2024 Notes was $107.8 million, which reflects a derivative liability of $65.9 million and convertible notes of $70.6 million, less an unamortized debt discount of $28.7 million.
Current report
Interest expense recognized on the July 2024 Notes was $0.8 million in the thirteen and thirty-nine weeks ended September 29, 2024 of which $0.5 million was interest expense attributable to a related party.
Current report
7% Convertible Senior Notes
Current report
In September 2024, we issued $66.8 million of senior unsecured convertible notes to various lenders, $8.0 million of which were issued to a related party (the “September 2024 Notes”). The September 2024 Notes bear interest at 7% per annum and mature on July 1, 2029. The September 2024 Notes are convertible into shares of our common stock at the option of the holder at a conversion rate of $2.14 per share. The September 2024 Notes will become immediately due and payable at the option of the holder in the event of default and upon a qualifying change of control event. The conversion option is required to be bifurcated as a derivative liability, and we recorded a derivative liability of $91.5 million on the issuance date. As the fair value of the derivative liability exceeds the proceeds received, we recorded a corresponding financing loss of $24.7 million and debt discount for $66.8 million. As of September 29, 2024, the carrying amount of the September 2024 Notes was $89.2 million, which reflects a derivative liability of $92.1 million and convertible notes of $66.8 million, less an unamortized debt discount of $69.7 million.
Current report
Interest expense recognized on the 7.0% Notes was $0.05 million in the thirteen and thirty-nine weeks ended September 29, 2024.
Current report
On May 13, 2024, we entered into a simple agreement for future equity (the “Third SAFE” and together with the First SAFE and Second SAFE, the “SAFEs”) with the Purchaser in connection with the Purchaser investing $1.0 million in the Company. The Third SAFE is convertible into shares of our common stock upon the initial closing of an Equity Financing at a per share conversion price which is equal to 50% of the price per share of our common stock sold in the Equity Financing. If we consummate a change of control prior to the termination of the Third SAFE, the Purchaser will be automatically entitled to receive a portion of the proceeds of such liquidity event equal to $1.0 million, subject to certain adjustments as set forth in the Third SAFE. The Third SAFE is convertible into a maximum of 2,750,000 shares of our common stock, assuming a per share conversion price of $0.275, which is the product of (i) $0.55, the closing price of our common stock on May 13, 2024, multiplied by (ii) 50%.
Current report
Common Stock Purchase Agreement
Current report
On July 16, 2024, we entered into a common stock purchase agreement with White Lion Capital, LLC (“White Lion”), as amended on July 24, 2024 (“White Lion SPA”), and a related registration rights agreement for an equity line of credit financing facility. Pursuant to the White Lion SPA, we have the right, but not the obligation, to require White Lion to purchase, from time to time up to $30 million in aggregate gross purchase price of newly issued shares of our common stock, subject to the caps and certain limitations and conditions set forth in the White Lion SPA, including terms that restrict our ability to issue shares of common stock to White Lion that would result in White Lion beneficially owning more than 9.99% of our outstanding common stock.
Current report
On August 14, 2024, we entered into Amendment No. 2 to the White Lion SPA (collectively with the White Lion SPA “White Lion Amended SPA”). The White Lion Amended SPA provides that we may notify White Lion to exercise our right to sell shares of our common stock by delivering an Hour Rapid Purchase Notice (as defined in the White Lion Amended SPA). If we deliver an Hour Rapid Purchase Notice, we shall deliver to White Lion shares of our common stock not to exceed the lesser of (i) five percent of the Average Daily Trading Volume (as defined in the White Lion SPA) on the date of an Hour Rapid Purchase Notice and (ii) 100,000 shares of common stock. The closing of the transactions under an Hour Rapid Purchase Notice will occur one Business Day (as defined in White Lion Amended SPA following the date on which the Hour Rapid Purchase Notice is delivered. At such closing, White Lion will pay us the Hour Rapid Purchase Investment Amount (as defined in White Lion Amended SPA) equal to the number of shares of common stock subject to the applicable Hour Rapid Purchase Notice multiplied by the lowest traded price of our common stock during the one-hour period following White Lion’s consent to the acceptance of the applicable Hour Rapid Purchase Notice. Under the White Lion Amended SPA, we issued a total of 2.8 million shares of common stock for net proceeds of $6.1 million during the period ended September 29, 2024.
Current report
Net cash provided by financing activities of $45.6 million for the thirty-nine weeks ended October 1, 2023 was primarily due to $21.3 million in net proceeds from the issuance of convertible notes, $19.8 million in proceeds from the Mergers and PIPE Financing and $14.1 million in net proceeds from the issuance of notes payable, partially offset by repayment of notes payable of $9.7 million.
Removed paragraphs (27)
Previous report
Other (expense) income, Net
Previous report
Other (expense) income, net consists of changes in the fair value of our convertible notes, the impact of debt extinguishment, changes in the fair value of stock warrant liabilities and forward purchase agreements and other costs.
Previous report
Our contracts with customers generally contain a performance guarantee of system output, and we will issue payments to customers if output falls below contractually stated thresholds over the performance guarantee period, which is typically 10 years. We apply judgment in estimating the reduction in revenue associated with the performance guarantee, which historically has not been material. However, due to the long-term nature of the guarantee, changes in future estimates could have a material impact on the estimate of our revenue reserve.
Previous report
General and administrative costs for the thirteen weeks ended June 30, 2024 was $6.2 million compared to $7.7 million for the thirteen weeks ended July 2, 2023. The decrease was primarily attributed to a decrease in workforce and reductions in legal expenses previously incurred through negotiations of final payments with various law firms.
Previous report
Other Income, Net
Previous report
Other income, net for the thirteen weeks ended July 2, 2023 was income of $9.4 million and was principally comprised of $9.2 million change in the fair value of liability-classified warrants and $0.2 million of net other income.
Previous report
Twenty-six weeks ended June 30, 2024 compared to the twenty-six weeks ended July 2, 2023
Previous report
General and administrative costs for the twenty-six weeks ended June 30, 2024 was $11.3 million compared to $16.6 million for the twenty-six weeks ended July 2, 2023. The decrease was primarily attributed to a decrease in workforce and reductions in legal expenses incurred through negotiations of final payments with law firms.
Previous report
Interest expense was $5.9 million for the twenty-six weeks ended June 30, 2024 compared to $7.0 million for the twenty-six weeks ended July 2, 2023. Interest expense attributable to our Secured Credit Facility decreased $2.1 million and interest on convertible notes decreased $0.7 million. These decreases were partially offset by a $1.7 increase in interest expense attributable to the debt in CS Solis.
Previous report
Other Income, Net
Previous report
Other income, net for the twenty-six weeks ended July 2, 2023 was income of $9.7 million and was comprised of a $9.4 million change in the fair value of liability-classified warrants and $0.3 million of net other income.
Previous report
2018 Bridge Notes
Previous report
In December 2018, The Solaria Corporation issued senior subordinated convertible secured notes (“2018 Notes”) totaling approximately $3.4 million in exchange for cash. The 2018 Notes bear interest at the rate of 8% per annum and the investors are entitled to receive twice the face value of the 2018 Notes at maturity. In 2021, the 2018 Notes were amended extending the maturity date to December 13, 2022. In connection with the 2021 amendment, Solaria issued warrants to purchase shares of Series E-1 redeemable convertible preferred stock of Solaria. The warrants were exercisable immediately in whole or in part at and expire on December 13, 2031. As part of the Business Combination with Complete Solar, all the outstanding warrants issued to the lenders were assumed by the parent company, Complete Solaria. The 2018 Notes are secured by substantially all of the assets of Complete Solaria.
Previous report
In December 2022, we entered into an amendment to the 2018 Notes extending the maturity date from December 13, 2022 to December 13, 2023, and the 2018 Notes remain outstanding as of June 30, 2024. In connection with the amendment, the 2018 Notes will continue to bear interest at 8% per annum and are entitled to an increased repayment premium from 110% to 120% of the principal and accrued interest at the time of repayment.
Previous report
We concluded that the amendment represented was a troubled debt restructuring as we were experiencing financial difficulty, and the amended terms resulted in a concession to us. As the future undiscounted cash payments under the modified terms exceeded the carrying amount of the 2018 Notes on the date of modification, the modification was accounted for prospectively. The incremental repayment premium is being amortized to interest expense using the effective interest rate method. As of June 30, 2024 and December 31, 2023, the carrying value of the 2018 Notes was $11.7 million and $11.0 million, respectively. Interest expense recognized for the thirteen and twenty-six weeks ended June 30, 2024 was $0.4 million and $0.7 million, respectively. The terms of the 2018 Notes are currently being renegotiated.
Previous report
Revolver Loan
Previous report
In October 2020, Solaria entered into a loan agreement (“Loan Agreement”) with Structural Capital Investments III, LP (“SCI”). The Loan Agreement with SCI is comprised of two facilities, a term loan (the “Term Loan”) and a revolving loan (the “Revolving Loan”) for $5.0 million each with a maturity date of October 31, 2023. Both the Term Loan and the Revolving Loan were fully drawn upon closing. The Term Loan was repaid prior to the acquisition of Solaria by Complete Solar and was not included in the business combination.
Previous report
The Revolving Loan has a term of thirty-six months, with the principal due at the end of the term and an annual interest rate of 7.75% or Prime rate plus 4.5%, whichever is higher. Interest expense recognized for the thirteen and twenty-six weeks ended June 30, 2024 was $0.2 million and $0.4 million, respectively. In October 2023, the Company entered into an Assignment and Acceptance Agreement whereby Structural Capital Investments III, LP assigned the SCI debt to Kline Hill Partners Fund LP, Kline Hill Partners IV SPV LLC, Kline Hill Partners Opportunity IV SPV LLC, and Rodgers Massey Revocable Living Trust for a total purchase price of $5.0 million. The SCI Revolving Loan was outstanding as of June 30, 2024 and was subsequently exchanged for equity securities and other consideration on July 1, 2024 as described in Note 20 – Subsequent Events of the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Previous report
Secured Credit Facility
Previous report
In December 2022, we entered into a secured credit facility agreement with Kline Hill Partners IV SPV LLC and Kline Hill Partners Opportunity IV SPV LLC (“Secured Credit Facility”). The Secured Credit Facility agreement allows us to borrow up to 70% of the net amount of our eligible vendor purchase orders with a maximum amount of $10.0 million at any point in time. The purchase orders are backed by relevant customer sales orders which serve as collateral. The amounts drawn under the Secured Credit Facility may be reborrowed provided that the aggregate borrowing does not exceed $20.0 million. The repayment under the Secured Credit Facility is the borrowed amount multiplied by 1.15x if repaid within 75 days and borrowed amount multiplied by 1.175x if repaid after 75 days. We may prepay any borrowed amount without premium or penalty. Under the original terms, the Secured Credit Facility agreement was due to mature in April 2023. We are in the process of amending the secured credit facility agreement to extend its maturity date.
Previous report
As of June 30, 2024, the outstanding net debt amounted to $13.1 million, including accrued financing cost of $5.5 million, and as of December 31, 2023, the balance outstanding was $12.2 million, including accrued financing cost of $4.5 million. We recognized interest expense of $0.4 million and $1.0 million related to the Secured Credit Facility during the thirteen weeks and twenty-six weeks ended June 30, 2024, respectively.*** ***
Previous report
Revolver Loan and Secured Credit Facility Cancellation Agreement
Previous report
On May 1, 2024, we entered into a common stock purchase agreement (the “Common Stock Purchase Agreement”) with Kline Hill providing for (a) the cancellation of all indebtedness owed to Kline Hill by us, termination of all debt instruments by and between us and Kline Hill, and the satisfaction of all obligations owed to Kline Hill by us under the terminated debt instruments, (b) the issuance of 9,800,000 shares of our common stock to Kline Hill, (c) the issuance of warrants (the “Kline Hill Warrants” and the shares issuable therefrom, the “Warrant Shares”) to Kline Hill to purchase up to 3,700,000 shares of the our common stock, with an exercise price per share of $0.62 (the closing price per share of the our common stock as reported on the Nasdaq Capital Market of the date of the Agreement), and (d) a one-time $3,750,000 cash payment to Kline Hill upon the earlier of (i) us achieving $100,000,000 of trailing twelve month revenue, or (ii) us achieving $10,000,000 of trailing twelve month EBITDA. The Kline Hill Warrants will be sold to Kline Hill at a price of $0.125 per Warrant Share. The closing of the foregoing transactions will occur when the following conditions are met: Carlyle executes an agreement to cancel all debt owed to Carlyle by us, and all debt owed to Carlyle and its affiliates by the Company is no longer outstanding. As of June 30, 2024, the Carlyle debt remained outstanding.
Previous report
CS Solis Debt
Previous report
In February 2022, we received cash and recorded a liability for an investment by Carlyle into the Company. The investment was made pursuant to a subscription agreement, under which Carlyle contributed $25.6 million in exchange for 100 Class B Membership Units of CS Solis. The Class B Membership Units are mandatorily redeemable by us on the three-year anniversary of the effective date of the CS Solis amended and restated LLC agreement. The Class B Membership Units accrue interest that is payable upon redemption at a rate of 10.5% which is accrued as an unpaid dividend, compounded annually, and subject to increases in the event we declare any dividends. In July 2023, we amended the debt of with Carlyle as part of the closing of the Mergers. The modification did not change the interest rate. The modification accelerated the redemption date of the investment from February 15, 2025 to March 31, 2024.
Previous report
As of June 30, 2024 and December 31, 2023, we have recorded a liability of $37.2 million and $33.3 million, respectively, included in short-term debt in CS Solis on our unaudited condensed consolidated balance sheets. For the thirteen and twenty-six weeks ended June 30, 2024, we have recorded accretion of the liability as interest expense of $1.3 million and $3.9 million, respectively.
Previous report
Net cash provided by financing activities of $7.8 million for the twenty-six weeks ended June 30, 2024 was primarily due to $6.0 million in net proceeds from the issuance of SAFE agreements to a related party, $2.0 million deposit received from a related party in connection with a financing transaction, and $0.1 million in net proceeds from the exercise of stock options, partially offset by a $0.3 million final payment on the settlement of the amount due to Polar Multi-Strategy Master Fund.
Reworded paragraphs (42)
Previous wording
We fulfill our customer contracts by engaging with local construction specialists. We manage the customer experience and complete all pre-construction activities prior to delivering build-ready projects including hardware, engineering plans, and building permits to its builder partners. We manage and coordinate this process through our proprietary HelioTrack TM software system.
Current wording
We fulfill our customer contracts by engaging with local construction specialists. We manage the customer experience and complete all pre-construction activities prior to delivering build-ready projects including hardware, engineering plans, and building permits to its builder partners. We manage and coordinate this process through our proprietary HelioTrack TM software system. We impaired the value of our HelioTrack TMsoftware as this software has no future use following the completion of the migration to software acquired as part of the SunPower acquisition. Refer to Note 20 – Subsequent Events in our unaudited condensed consolidated financial statements for a further description of the SunPower acquisition.
Previous wording
In October 2023, we completed the sale of our solar panel business (“Disposal Transaction”) to Maxeon, Inc. (“Maxeon”), pursuant to the terms of an asset purchase agreement (“Disposal Agreement”). Under the terms of the Disposal Agreement, Maxeon agreed to acquire certain assets and employees of Complete Solaria, for an aggregate purchase price of approximately $11.0 million consisting of 1,100,000 shares of Maxeon ordinary shares. As of December 31, 2023, we had sold all the shares of Maxeon and recorded a loss of $4.2 million.
Current wording
In October 2023, we completed the sale of our solar panel business (“Disposal Transaction”) to Maxeon, Inc. (“Maxeon”), pursuant to the terms of an asset purchase agreement (“Disposal Agreement”). Under the terms of the Disposal Agreement, Maxeon agreed to acquire certain assets and employees of Complete Solaria, for an aggregate purchase price of approximately $11.0 million consisting of 1,100,000 shares of Maxeon ordinary shares.
Previous wording
We believe that policies associated with our revenue recognition, product warranties, inventory excess and obsolescence and stock-based compensation have the greatest impact on our unaudited condensed consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates.
Current wording
We believe that policies associated with our revenue recognition, product warranties, inventory excess and obsolescence, allowance for credit losses, and stock-based compensation have the greatest impact on our unaudited condensed consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates.
Previous wording
If any assumptions used in the Black-Scholes option pricing model change significantly, stock-based compensation for future awards may differ materially compared to the awards granted previously. For the thirteen-week periods ended June 30, 2024 and July 2, 2023, stock-based compensation expense was $1.2 million and $1.0 million, respectively, of which zero and $0.5 million, respectively, related to discontinued operations. For the twenty-six-week periods ended June 30, 2024 and July 2, 2023, stock-based compensation expense was $2.6 million and $2.0 million, respectively, of which zero and $1.3 million, respectively, related to discontinued operations. As of June 30, 2024, we had approximately $13.8 million of total unrecognized stock-based compensation expense related to stock options.
Current wording
If any assumptions used in the Black-Scholes option pricing model change significantly, stock-based compensation for future awards may differ materially compared to the awards granted previously. For the thirteen-week periods ended September 29, 2024 and October 1, 2023, stock-based compensation expense was $1.5 million and $2.1 million, respectively, of which zero and $0.5 million, respectively, related to discontinued operations. For the thirty-nine-week periods ended September 29, 2024 and October 1, 2023, stock-based compensation expense was $4.1 million and $4.2 million, respectively, of which zero and $1.8 million, respectively, related to discontinued operations. As of September 29, 2024, we had approximately $19.6 million of total unrecognized stock-based compensation expense related to stock options.
Previous wording
The following table sets forth our unaudited statements of operations data for the thirteen weeks ended June 30, 2024 and the thirteen weeks ended July 2, 2023. We have derived this data from our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. This information should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The results of historical periods are not necessarily indicative of the results of operations for any future period.
Current wording
The following table sets forth our unaudited statements of operations data for the thirteen weeks ended September 29, 2024 and October 1, 2023. We have derived this data from our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. This information should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The results of historical periods are not necessarily indicative of the results of operations for any future period.
Previous wording
Revenues from solar energy system installations for the thirteen weeks ended June 30, 2024 was $4.5 million compared to $24.8 million for the thirteen weeks ended July 2, 2023. The decrease in solar energy system installation revenues of $20.3 million was primarily due to a decrease in the volume of solar energy system installations.
Current wording
Revenues from solar energy system installations for the thirteen weeks ended September 29, 2024 were $5.5 million compared to $23.9 million for the thirteen weeks ended October 1, 2023. The decrease in solar energy system installation revenues of $18.4 million was primarily due to a decrease in the volume of solar energy system installations.
Previous wording
Revenues from software enhanced services for the thirteen weeks ended June 30, 2024 was $0.02 million compared to $0.9 million for the thirteen weeks ended July 2, 2023. The decrease was the result of a shift in focus towards solar energy installations.
Current wording
Revenues from software enhanced services for the thirteen weeks ended September 29, 2024 were zero compared to $0.7 million for the thirteen weeks ended October 1, 2023. The decrease was the result of a shift in focus towards solar energy installations.
Previous wording
Cost of revenues for the thirteen weeks ended June 30, 2024 was $5.4 million compared to $19.6 million for the thirteen weeks ended July 2, 2023. The decrease in cost of revenues of $14.2 million, or 73%, was primarily due to the decrease in revenue of 82% and emphasis on managing costs.
Current wording
Cost of revenues for the thirteen weeks ended September 29, 2024 was $8.7 million compared to $18.4 million for the thirteen weeks ended October 1, 2023. The decrease in cost of revenues of $9.7 million, or 53%, was primarily due to the decrease in revenue of 77% and emphasis on managing costs.
Previous wording
Gross margin for the thirteen weeks ended June 30, 2024 was negative 20% compared to 23% for the thirteen weeks ended July 2, 2023. The decline in the gross margin was principally attributable to the decrease in revenues, certain fixed costs included within cost of revenues, and write-offs of inventory.
Current wording
Gross margin for the thirteen weeks ended September 29, 2024 was negative 57% compared to 25% for the thirteen weeks ended October 1, 2023. The decline in the gross margin was principally attributable to the decrease in revenues, certain fixed costs included within cost of revenues, and write-offs of inventory.
Previous wording
Sales commissions for the thirteen weeks ended June 30, 2024 was $1.3 million compared to $8.8 million for the thirteen weeks ended July 2, 2023. The decrease of $7.5 million, or 85%, was primarily due to the decrease in revenues.
Current wording
Sales commissions for the thirteen weeks ended September 29, 2024 were $7.3 million compared to $8.8 million for the thirteen weeks ended October 1, 2023. The decrease of $1.5 million, or 17%, was primarily due to the decrease in revenues.
Previous wording
Sales and marketing expense for the thirteen weeks ended June 30, 2024 was $1.1 million compared to $2.3 million for the thirteen weeks ended July 2, 2023. The decrease is attributable to a reduction in workforce.
Current wording
Sales and marketing expense for the thirteen weeks ended September 29, 2024 was $1.1 million compared to $2.2 million for the thirteen weeks ended October 1, 2023. The decrease is attributable to a reduction in workforce.
Previous wording
Interest expense was $2.3 million for the thirteen weeks ended June 30, 2024 compared to $3.4 million for the thirteen weeks ended July 2, 2023. The decrease is principally due to a decrease in interest expense arising from our Secured Credit Facility.
Current wording
Interest expense was $2.3 million for the thirteen weeks ended September 29, 2024 compared to $1.9 million for the thirteen weeks ended October 1, 2023. The increase of $0.4 million was due to an increase in interest expense arising from our convertible notes of $2.2 million, partially offset with the decrease of $1.8 million in interest expense due to the termination of the CS Solis debt, SCI Revolving Loan, and 2018 Bridge Loan.
Previous wording
Other income, net for the twenty-six weeks ended June 30, 2024 decreased by 10.3 million compared to the twenty-six weeks ended July 2, 2023. Other income, net in the twenty-six weeks ended June 30, 2024 was expense of $0.6 million. We incurred expenses of $2.8 million relating to changes in the fair value of our forward purchase agreement and $1.3 million loss incurred on the conversion of two SAFE Agreements to shares of our common stock and $0.4 million of other expenses. These expenses were partially offset by $3.9 million of income arising from changes in the fair value of warrants issued for our common stock.
Current wording
Other expense, net for the thirteen weeks ended September 29, 2024, decreased by $27.7 million compared to the thirteen weeks ended October 1, 2023. Other expense, net in the thirteen weeks ended September 29, 2024 was expense of $65.7 million and was comprised of $62.6 million related to the recognition of a derivative liability and subsequent change in fair value, $6.0 million of expense arising from changes in the fair value of warrants issued for our common stock, $3.8 million of other financing costs, $0.9 million expense arising from the change in the fair value of a SAFE Agreement and $0.1 million of other expenses, partially offset by $7.7 million of income related to changes in the fair value of our forward purchase agreements.
Previous wording
As a result of the factors discussed above, our net loss from continuing operations for the thirteen-weeks ended June 30, 2024 was $13.9 million, an increase in loss by $7.1 million, as compared to a net loss from continuing operations of $6.8 million for the thirteen-weeks ended July 2, 2023.
Current wording
As a result of the factors discussed above, our net loss from continuing operations for the thirteen-weeks ended September 29, 2024 was $78.0 million, an increase in loss by $27.0 million, as compared to a net loss from continuing operations of $51.0 million for the thirteen-weeks ended October 1, 2023.
Previous wording
We recognized a loss of $2.0 million and $12.5 million in the twenty-six weeks ended June 30, 2024 and July 2, 2023, respectively, relating to the divestiture of our solar panel business.
Current wording
We recognized a loss of zero and $155.9 million in the thirteen weeks ended September 29, 2024 and October 1, 2023, respectively, relating to the divestiture of our solar panel business.
Previous wording
The following table sets forth our unaudited statements of operations data for the twenty-six weeks ended June 30, 2024 and the twenty-six weeks ended July 2, 2023. We have derived this data from our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. This information should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The results of historical periods are not necessarily indicative of the results of operations for any future period.
Current wording
The following table sets forth our unaudited statements of operations data for the thirty-nine weeks ended September 29, 2024 and the thirty-nine weeks ended October 1, 2023. We have derived this data from our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. This information should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The results of historical periods are not necessarily indicative of the results of operations for any future period.
Previous wording
Revenues from solar energy system installations for the twenty-six weeks ended June 30, 2024 was $14.4 million compared to $40.6 million for the twenty-six weeks ended July 2, 2023. The decrease in solar energy system installation revenues of $26.2 million was primarily due to a decrease in the volume of solar energy system installations.
Current wording
Revenues from solar energy system installations for the thirty-nine weeks ended September 29, 2024 was $19.9 million compared to $64.5 million for the thirty-nine weeks ended October 1, 2023. The decrease in solar energy system installation revenues of $44.6 million was primarily due to a decrease in the volume of solar energy system installations.
Previous wording
Revenues from software enhanced services for the twenty-six weeks ended June 30, 2024 was $0.1 million compared to $1.7 million for the twenty-six weeks ended July 2, 2023. The decrease was the result of a shift in focus towards solar energy installations.
Current wording
Revenues from software enhanced services for the thirty-nine weeks ended September 29, 2024 was $0.1 million compared to $2.4 million for the thirty-nine weeks ended October 1, 2023. The decrease was the result of a shift in focus towards solar energy installations.
Previous wording
Cost of revenues for the twenty-six weeks ended June 30, 2024 was $13.1 million compared to $33.4 million for the twenty-six weeks ended July 2, 2023. The decrease in cost of revenues of $20.3 million, or 61%, was primarily due to the decrease in revenue of 66% and emphasis on managing costs.
Current wording
Cost of revenues for the thirty-nine weeks ended September 29, 2024 was $21.8 million compared to $51.8 million for the thirty-nine weeks ended October 1, 2023. The decrease in cost of revenues of $30.0 million, or 58%, was primarily due to the decrease in revenue of 70% and emphasis on managing costs.
Previous wording
Gross margin for the twenty-six weeks ended June 30, 2024 was 10% compared to 21% for the twenty-six weeks ended July 2, 2023. The decrease in gross margin was principally attributable to a decrease in revenues.
Current wording
Gross margin for the thirty-nine weeks ended September 29, 2024 was negative 9% compared to 23% for the thirty-nine weeks ended October 1, 2023. The decrease in gross margin was principally attributable to a decrease in revenues.
Previous wording
Sales commissions for the twenty-six weeks ended June 30, 2024 was $4.4 million compared to $14.5 million for the twenty-six weeks ended July 2, 2023. The decrease of $10.0 million, or 69%, was primarily due to the decrease in revenues.
Current wording
Sales commissions for the thirty-nine weeks ended September 29, 2024 was $11.7 million compared to $23.2 million for the thirty-nine weeks ended October 1, 2023. The decrease of $11.5 million, or 50%, was primarily due to the decrease in revenues.
Previous wording
Sales and marketing expense for the twenty-six weeks ended June 30, 2024 was $2.7 million compared to $3.0 million for the twenty-six weeks ended July 2, 2023. The decrease is attributable to a decrease in the workforce.
Current wording
Sales and marketing expense for the thirty-nine weeks ended September 29, 2024 was $3.8 million compared to $5.2 million for the thirty-nine weeks ended October 1, 2023. The decrease is attributable to a decrease in the workforce.
Previous wording
Other income, net for the thirteen weeks ended June 30, 2024, decreased by $11.5 million compared to the thirteen weeks ended July 2, 2023. Other income, net in the thirteen weeks ended June 30, 2024 was expense of $2.1 million and was comprised of $3.3 million of expense arising from changes in the fair value of warrants issued for our common stock, $1.3 million loss incurred on the conversion of two SAFE Agreements to shares of our common stock and $0.3 million of other costs, partially offset by $2.8 million of expense relating to changes in the fair value of our forward purchase agreements.
Current wording
Other expense, net for the thirty-nine weeks ended September 29, 2024 increased by $37.9 million compared to the thirty-nine weeks ended October 1, 2023. Other expense, net in the thirty-nine weeks ended September 29, 2024 was expense of $66.2 million and was comprised of $62.6 million related to the recognition of a derivative liability and subsequent change in fair value, $3.8 million of other financing costs, $2.1 million of expense incurred on the conversion and changes in the fair value our SAFE Agreements, $2.1 million of expense arising from changes in the fair value of warrants issued for our common stock and $0.5 million of other expenses partially offset by income of $4.9 million related to changes in the fair value of our forward purchase agreements.
Previous wording
As a result of the factors discussed above, our net loss from continuing operations for the twenty-six-weeks ended June 30, 2024 was $23.5 million, an increase of $1.0 million, as compared to a net loss from continuing operations of $22.5 million for the twenty-six-weeks ended July 2, 2023.
Current wording
As a result of the factors discussed above, our net loss from continuing operations for the thirty-nine-weeks ended September 29, 2024 was $101.4 million, an increase in our loss by $28.0 million, as compared to a net loss from continuing operations of $73.4 million for the thirty-nine-weeks ended October 1, 2023.
Previous wording
We recognized a loss of $2.0 million and $4.7 million in the thirteen weeks ended June 30, 2024 and July 2, 2023, respectively, relating to the divestiture of our solar panel business.
Current wording
We recognized a loss of $2.0 million and $168.5 million in the thirty-nine weeks ended September 29, 2024 and October 1, 2023, respectively, relating to the divestiture of our solar panel business.
Previous wording
Since our inception, we have incurred losses and negative cash flows from operations. We incurred a net loss from continuing operations of $13.9 million and $23.5 million during the thirteen and twenty-six weeks ended June 30, 2024, respectively, and had an accumulated deficit of $380.4 million and current debt of $67.5 million as of June 30, 2024. We had cash and cash equivalents of $1.8 million as of June 30, 2024, which were held for working capital expenditures. We believe our operating losses and negative operating cash flows will continue into the foreseeable future. We have financed our operations primarily through sales of equity securities, issuances of convertible notes and other convertible securities and cash generated from operations. Our cash equivalents are on deposit with major financial institutions. Our cash position raises substantial doubt regarding our ability to continue as a going concern for 12 months following the issuance of these unaudited condensed consolidated financial statements.
Current wording
Since our inception, we have incurred losses and negative cash flows from operations. We incurred a net loss from continuing operations of $78.0 million and $101.4 million during the thirteen weeks and thirty-nine weeks ended September 29, 2024, respectively, and had an accumulated deficit of $458.4 million as of September 29, 2024. We had cash and cash equivalents of $79.5 million, excluding restricted cash of $3.8 million, as of September 29, 2024. Subsequent to September 29, 2024, we used $45.0 million to complete the acquisition of certain assets of SunPower as described in Note 20 – Subsequent Events in our unaudited condensed consolidated financial statements. Although we cannot be certain, we believe this acquisition will have a favorable effect on our operations and cash flows but initially, we expect losses and negative cash flows will continue to be incurred while we assimilate the acquisition and right-size our operations. We believe our operating losses and negative operating cash flows will continue into the foreseeable future. We have financed our operations primarily through sales of equity securities, issuances of convertible notes and other convertible securities and cash generated from operations. Our cash equivalents are on deposit with major financial institutions. Our cash position raises substantial doubt regarding our ability to continue as a going concern for 12 months following the issuance of these unaudited condensed consolidated financial statements.
Previous wording
We will receive the proceeds from any cash exercise of warrants for shares of our common stock. The aggregate amount of proceeds could be up to $252.2 million if all the warrants are exercised for cash. However, to the extent the warrants are exercised on a “cashless basis,” the amount of cash we would receive from the exercise of those warrants will decrease. The Private Warrants and Working Capital Warrants, as so identified in our unaudited condensed consolidated financial statements, may be exercised for cash or on a “cashless basis.” The Public Warrants and the Mergers Warrants may only be exercised for cash provided there is then an effective registration statement registering the shares of common stock issuable upon the exercise of such warrants. If there is not a then-effective registration statement, then such warrants may be exercised on a “cashless basis,” pursuant to an available exemption from registration under the Securities Act. We expect to use any such proceeds for general corporate and working capital purposes, which would increase our liquidity. As of August 13, 2024, the price of our common stock was $1.60 per share. The weighted average exercise price of the warrants was $7.80 as of June 30, 2024. We believe the likelihood that warrant holders will exercise their warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the market price of our common stock. If the market price for our common stock remains less than the exercise price, we believe warrant holders will be unlikely to exercise.
Current wording
We will receive the proceeds from any cash exercise of warrants for shares of our common stock. The aggregate amount of proceeds could be up to $257.3 million if all the warrants are exercised for cash. However, to the extent the warrants are exercised on a “cashless basis,” the amount of cash we would receive from the exercise of those warrants will decrease. The Private Warrants and Working Capital Warrants, as so identified in our unaudited condensed consolidated financial statements, may be exercised for cash or on a “cashless basis.” The Public Warrants and the Mergers Warrants may only be exercised for cash provided there is then an effective registration statement registering the shares of common stock issuable upon the exercise of such warrants. If there is not a then-effective registration statement, then such warrants may be exercised on a “cashless basis,” pursuant to an available exemption from registration under the Securities Act. We expect to use any such proceeds for general corporate and working capital purposes, which would increase our liquidity. As of November 15, 2024, the price of our common stock was $1.96 per share. The weighted average exercise price of the warrants was $8.12 as of September 29, 2024. We believe the likelihood that warrant holders will exercise their warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the market price of our common stock. If the market price for our common stock remains less than the exercise price, we believe warrant holders will be unlikely to exercise.
Previous wording
Pursuant to the terms of the FPAs, the FPA Sellers may (i) purchase through a broker in the open market, from holders of Shares other than the Company or affiliates thereof, FACT’s ordinary shares, par value of $0.0001 per share, (the “Shares”). While the FPA Sellers have no obligation to purchase any Shares under the FPAs, the aggregate total Shares that may be purchased under the FPAs shall be no more than 6,720,000 in aggregate. The FPA Sellers may not beneficially own greater than 9.9% of issued and outstanding Shares following the Mergers as per the Amended and Restated Business Combination Agreement.
Current wording
Pursuant to the terms of the FPAs, the FPA Sellers may purchase through a broker in the open market, from holders of Shares other than the Company or affiliates thereof, FACT’s ordinary shares, par value of $0.0001 per share, (the “Shares”). While the FPA Sellers have no obligation to purchase any Shares under the FPAs, the aggregate total Shares that may be purchased under the FPAs shall be no more than 6,720,000 in aggregate. The FPA Sellers may not beneficially own greater than 9.9% of issued and outstanding Shares following the Mergers as per the Amended and Restated Business Combination Agreement.
Previous wording
We entered into four separate FPAs, three of which, associated with the obligation to issue 6,300,000 Shares, were entered into prior to the closing of the Mergers. Upon signing the FPAs, we incurred an obligation to issue a fixed number of shares to the FPA Sellers contingent upon the closing of the Mergers in addition to the terms and conditions associated with the settlement of the FPAs. We accounted for the contingent obligation to issue shares in accordance with ASC 815, Derivatives and Hedging, and recorded a liability and other (expense) income, net based on the fair value upon of the obligation upon the signing of the FPAs. The liability was extinguished in July 2023 upon the issuance of Complete Solaria Common Stock to the FPA sellers.
Current wording
We entered into four separate FPAs, three of which, associated with the obligation to issue 6,300,000 Shares, were entered into prior to the closing of the Mergers. Upon signing the FPAs, we incurred an obligation to issue a fixed number of shares to the FPA Sellers contingent upon the closing of the Mergers in addition to the terms and conditions associated with the settlement of the FPAs. We accounted for the contingent obligation to issue shares in accordance with ASC 815 and recorded a liability and Other expense, net based on the fair value upon of the obligation upon the signing of the FPAs. The liability was extinguished in July 2023 upon the issuance of Complete Solaria Common Stock to the FPA sellers.
Previous wording
Additionally, in accordance with ASC 480, Distinguishing Liabilities from Equity, we have has determined that the forward contracts are financial instruments other than shares that represent or are indexed to obligations to repurchase the issuer’s equity shares by transferring assets, referred to herein as the “forward purchase liability” on its consolidated balance sheets. We initially measured the forward purchase liability at fair value and have subsequently remeasured it at fair value with changes in fair value recognized in earnings.
Current wording
Additionally, in accordance with ASC 480, we determined that the forward contracts are financial instruments other than shares that represent or are indexed to obligations to repurchase the issuer’s equity shares by transferring assets, referred to herein as the “forward purchase liability” on our unaudited condensed consolidated balance sheets. We initially measured the forward purchase liabilities at fair value and have subsequently remeasured them at fair value with changes in fair value recognized in earnings.
Previous wording
Through the date of issuance of the Complete Solaria Common Stock in satisfaction of our obligation to issue shares around the closing of the Mergers, we recorded $35.5 million to other (expense) income, net associated with the issuance of 6,720,000 shares of Complete Solaria Common Stock.
Current wording
Through the date of issuance of the Complete Solaria Common Stock in satisfaction of our obligation to issue shares around the closing of the Mergers, we recorded $35.5 million to Other expense, net associated with the issuance of 6,720,000 shares of Complete Solaria Common Stock.
Previous wording
As of the closing of the Mergers and issuance of the Complete Solaria Common Stock underlying the FPAs, the fair value of the prepaid FPAs was an asset balance of $0.1 million and was recorded on our unaudited condensed consolidated balance sheets and within other (expense) income, net on the unaudited condensed consolidated statements of operations and comprehensive loss. Subsequently, the change of fair value of the forward purchase liabilities amounted to income of $2.8 million for the thirteen weeks ended June 30, 2024, and expense of $2.8 million for the twenty-six weeks ended June 30, 2024, respectively. As of June 30, 2024, and December 31, 2023, the forward purchase liabilities amounted to $6.7 million and $3.8 million, respectively. Of the balances as of June 30, 2024 and December 31, 2023, $5.6 million and $3.2 million, respectively, are due to related parties. Refer to Note 19 – Related Party Transactions in our unaudited condensed consolidated financial statements for further details.
Current wording
As of the closing of the Mergers and issuance of the Complete Solaria Common Stock underlying the FPAs, the fair value of the prepaid FPAs was an asset balance of $0.1 million and was recorded on our unaudited condensed consolidated balance sheets and within Other expense, net on our unaudited condensed consolidated statements of operations and comprehensive loss. Subsequently, the change in the fair value of the forward purchase liabilities amounted to income of $7.7 million for the thirteen weeks ended September 29, 2024, and expense of $4.9 million for the thirty-nine weeks ended September 29, 2024. As of September 29, 2024 and December 31, 2023, the forward purchase agreements balance was an asset of $1.1 million and a liability of $3.8 million, respectively. Of the balances as of September 29, 2024 and December 31, 2023, $0.9 million asset balance and $3.2 million liability balance, respectively, are with related parties. Refer to Note 19 – Related Party Transactions in our unaudited condensed consolidated financial statements for further details.
Previous wording
On June 14, 2024, we entered into an amendment to the FPA with Sandia (the “Sandia Third Amendment”). The Sandia Third Amendment set the reset price of each FPA to $1.00 per share and amended the VWAP Trigger Event provision to read as “After December 31, 2024, an event that occurs if the VWAP Price, for any 20 trading days during a 30 consecutive trading day-period, is below $1.00 per Share.” Execution of the Sandia Third Amendment was conditioned on both Carlyle and Kline Hill consummating the terms of the Debt-Equity Swap as discussed in Note 20 – Subsequent Events of the notes to our unaudited condensed consolidated financial statements. In the event either Polar or Meteora amend their FPAs to include different terms from the $1.00 per share reset price and VWAP trigger adjustment, or file a notice of a VWAP trigger event, the Sandia FPA will be retroactively amended to reflect those improved terms and liquidity on their entire FPA, including any of the 1,050,000 shares that are sold upon execution of Sandia Third Amendment. For further details relating to certain amendments to the FPAs subsequent to June 30, 2024, refer to Note 20 – Subsequent Events of the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Current wording
On June 14, 2024, we entered into an amendment to the FPA with Sandia (the “Sandia Third Amendment”). The Sandia Third Amendment set the reset price of each FPA to $1.00 per share and amended the VWAP Trigger Event provision to read as “After December 31, 2024, an event that occurs if the VWAP Price, for any 20 trading days during a 30 consecutive trading day-period, is below $1.00 per Share.”
Previous wording
On January 31, 2024, we entered into a simple agreement for future equity (the “First SAFE”) with the Rodgers Massey Freedom and Free Markets Charitable Trust (the “Purchaser”) in connection with the Purchaser investing $1.5 million in the Company. The First SAFE was initially convertible into shares of our common stock, par value $0.0001 per share, upon the initial closing of a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which we have issued and sold common stock at a fixed valuation (an “Equity Financing”), at a per share conversion price which was equal to the lower of (i)(a) $53.54 million divided by (b) our capitalization immediately prior to such Equity Financing (such conversion price, the “SAFE Price”), and (ii) 80% of the price per share of our common stock sold in the Equity Financing. If we consummated a change of control prior to the termination of the First SAFE, the Purchaser will would have been automatically entitled to receive a portion of the proceeds of such liquidity event equal to the greater of (i) $1.5 million and (ii) the amount payable on the number of shares of our common stock equal to (a) $1.5 million divided by (b)(1) $53.54 million divided by (2) our capitalization immediately prior to such liquidity event (the “Liquidity Price”), subject to certain adjustments as set forth in the First SAFE. The First SAFE was convertible into a maximum of 1,431,297 shares of our common stock, assuming a per share conversion price of $1.05, which is the product of (i) $1.31, the closing price of our common stock on January 31, 2024, multiplied by (ii) 80%.
Current wording
On January 31, 2024, we entered into a simple agreement for future equity (the “First SAFE”) with the Rodgers Massey Freedom and Free Markets Charitable Trust (the “Purchaser”) in connection with the Purchaser investing $1.5 million in the Company. The First SAFE was initially convertible into shares of our common stock, par value $0.0001 per share, upon the initial closing of a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which we would have issued and sold our common stock at a fixed valuation (an “Equity Financing”), at a per share conversion price which was equal to the lower of (i) (a) $53.54 million divided by (b) our capitalization immediately prior to such Equity Financing (such conversion price, the “SAFE Price”), and (ii) 80% of the price per share of our common stock sold in the Equity Financing. If we consummated a change of control prior to the termination of the First SAFE, the Purchaser would have been automatically entitled to receive a portion of the proceeds of such liquidity event equal to the greater of (i) $1.5 million and (ii) the amount payable on the number of shares of our common stock equal to (a) $1.5 million divided by (b)(1) $53.54 million divided by (2) our capitalization immediately prior to such liquidity event (the “Liquidity Price”), subject to certain adjustments as set forth in the First SAFE. The First SAFE was convertible into a maximum of 1,431,297 shares of our common stock, assuming a per share conversion price of $1.05, which is the product of (i) $1.31, the closing price of our common stock on January 31, 2024, multiplied by (ii) 80%.
Previous wording
On February 15, 2024, we entered into a simple agreement for future equity (the “Second SAFE” and together with the First SAFE, the “SAFEs”) with the Purchaser in connection with the Purchaser investing $3.5 million in the Company. The Second SAFE was initially convertible into shares of our common stock upon the initial closing of an Equity Financing at a per share conversion price which was equal to the lower of (i) the SAFE Price, and (ii) 80% of the price per share of our common stock sold in the Equity Financing. If we consummated a change of control prior to the termination of the Second SAFE, the Purchaser would have been automatically entitled to receive an amount equal to the greater of (i) $3.5 million and (ii) the amount payable on the number of shares of our common stock equal to $3.5 million divided by the Liquidity Price, subject to certain adjustments as set forth in the Second SAFE. The Second SAFE was convertible into a maximum of 3,707,627 shares of our common stock, assuming a per share conversion price of $0.94, which is the product of (i) $1.18, the closing price of the Common Stock on February 15, 2024, multiplied by (ii) 80%.
Current wording
On February 15, 2024, we entered into a simple agreement for future equity (the “Second SAFE”) with the Purchaser in connection with the Purchaser investing $3.5 million in the Company. The Second SAFE was initially convertible into shares of our common stock upon the initial closing of an Equity Financing at a per share conversion price which was equal to the lower of (i) the Second SAFE Price, and (ii) 80% of the price per share of our common stock sold in the Equity Financing. If we consummated a change of control prior to the termination of the Second SAFE, the Purchaser would have been automatically entitled to receive an amount equal to the greater of (i) $3.5 million and (ii) the amount payable on the number of shares of our common stock equal to $3.5 million divided by the Liquidity Price, subject to certain adjustments as set forth in the Second SAFE. The Second SAFE was convertible into a maximum of 3,707,627 shares of our common stock, assuming a per share conversion price of $0.94, which is the product of (i) $1.18, the closing price of our common stock on February 15, 2024, multiplied by (ii) 80%.
Previous wording
Cash Flows for the Twenty-Six Weeks Ended June 30, 2024 and July 2, 2023
Current wording
Cash Flows for the Thirty-Nine Weeks Ended September 29, 2024 and October 1, 2023
Previous wording
The following table summarizes Complete Solaria’s cash flows from operating, investing, and financing activities for the twenty-six weeks ended June 30, 2024 and July 2, 2023 (in thousands):
Current wording
The following table summarizes Complete Solaria’s cash flows from operating, investing, and financing activities, excluding foreign currency translation adjustment, for the thirty-nine weeks ended September 29, 2024 and October 1, 2023 (in thousands):
Previous wording
Net cash used in operating activities from continuing operations of $7.6 million for the twenty-six weeks ended June 30, 2024 was primarily due to the net loss from continuing operations, net of tax of $23.5 million partially offset by non-cash charges of $12.3 million and net cash inflows of $3.6 million from changes in our operating assets and liabilities. Non-cash charges in our operating results consisted of $1.6 million of non-cash expense in connection with warrants issued for vendor services, a $2.8 million adjustment to our forward purchase agreement liabilities, $2.6 million stock-based compensation expense, $3.9 in million accretion of interest attributable to the CS Solis Debt, $2.0 million of other non-cash interest, $1.3 million loss arising from the loss on conversion of two SAFE Agreements to shares of our common stock, $0.7 million of depreciation and amortization, $0.3 million of non-cash lease costs, and $0.9 million of provision for credit losses, partially offset by $2.6 million of income from the change in the fair value of our warrant liabilities and a $1.2 million decrease in our reserve for excess and obsolete inventory. The main drivers of net cash inflows derived from the changes in operating assets and liabilities were related to a decrease in accounts receivable, net of $12.4 million and a decrease in inventories of $2.3 million, partially offset by an increase in prepaid and other current assets of $1.4 million, a decrease in accounts payable of $2.1 million, a decrease in accrued expenses and other liabilities of $6.1 million, a decrease in operating lease liabilities of $0.3 million and a decrease in deferred revenue of $1.2 million.
Current wording
Net cash used in operating activities from continuing operations of $29.1 million for the thirty-nine weeks ended September 29, 2024 was primarily due to the net loss from continuing operations, net of tax of $101.4 million, partially offset by non-cash adjustments of $70.8 million and net cash inflows of $1.5 million from changes in our operating assets and liabilities. Non-cash adjustments in our operating results consisted of $62.6 million arising from the issuance and subsequent change in fair value of derivative liabilities in connection with our convertible notes issued and outstanding, $5.4 million of expense in connection with warrants issued for vendor services, $3.1 million of expense related to changes in provision for credit losses, $4.1 million of stock-based compensation expense, $3.7 million of loss on impairment of assets, $3.9 million of expense in accretion of interest attributable to the CS Solis debt, $3.8 million of other noncash financing costs, $1.9 million of non-cash interest expense, $1.3 million of loss arising from the conversion of two SAFE Agreements to shares of our common stock, $1.0 million of depreciation and amortization, $0.9 million of expense related to changes in the fair value of the SAFE Agreements, $2.1 million of loss from the changes in the fair value of our warrant liabilities, $1.4 million of debt issuance costs, $0.5 million of lease expense and $0.1 million provision for excess and obsolete inventory. These adjustments were partially offset by a $19.9 million gain on extinguishment of debt, $4.9 million of income related to changes in fair value of our forward purchase agreements. The main drivers of net cash inflows derived from the changes in operating assets and liabilities were related to a decrease in accounts receivable, net of $14.7 million and a decrease in inventories of $2.4 million, partially offset by a decrease in accounts payable of $8.5 million, an increase in prepaid and other current assets of $3.2 million, a decrease in deferred revenue of $1.4 million, a decrease in accrued expenses and other liabilities of $1.6 million, and a decrease in operating lease liabilities of $0.9 million.
Previous wording
Net cash used in operating activities from continuing operations of $27.8 million for the twenty-six weeks ended July 2, 2023 was primarily due to the net loss from continuing operations, net of tax of $22.5 million and net cash outflows of $5.3 million arising from $8.8 million in changes in operating assets and liabilities adjusted for non-cash charges of $3.5 million. The main drivers of net cash outflows derived from the changes in operating assets and liabilities were related to an increase in accounts receivable, net of $8.0 million, an increase in prepaid and other current assets of $2.7 million, an increase in inventories of $1.9 million, an increase in other noncurrent assets of $4.0 million and net other increase of $0.3 million. These cash outflows were partially offset by a $4.8 million increase in accounts payable and a $3.3 million increase in accrued expenses and other current liabilities. Non-cash adjustments of $3.5 million consisted of a provision for credit losses of $4.7 million, non-cash interest expense of $3.7 million, a change in reserve for obsolete inventory of $1.4 million, accretion of long-term debt in CS Solis of $1.5 million, stock-based compensation of $0.7 million, and other changes, depreciation and amortization of $0.4 million and non-cash lease expense of $0.5 million, partially offset by a $9.4 million decrease in the fair value of warrant liabilities.
Current wording
Net cash used in operating activities from continuing operations of $47.2 million for the thirty-nine weeks ended October 1, 2023 was primarily due to the net loss from continuing operations, net of tax of $73.4 million and net cash outflows of $18.8 million from changes in our operating assets and liabilities, adjusted for non-cash charges of $45.1 million. Non-cash charges primarily consisted of $35.5 million for the issuance of common stock in connection with our forward purchase agreements, $10.3 million loss on CS Solis debt extinguishment, $6.7 million of expense related to changes in fair value of our forward purchase agreements, $4.3 million of expense due to changes in allowance for credit losses, $4.0 million of interest expense, $2.5 million of expense due to accretion of long-term debt in CS Solis, $2.4 million related to the issuance of bonus common stock shares in connection with the Mergers, $2.3 million of stock-based compensation expense, and $2.1 million relating to the change in reserve for excess and obsolete inventory, partially offset by a decrease in the fair value of warrant liabilities of $26.3 million. The main drivers of net cash outflows derived from the changes in operating assets and liabilities were related to an increase in accounts receivable, net of $11.8 million, an increase in prepaid expenses and other current assets of $8.3 million, an increase in inventory of $3.9 million, and a decrease in deferred revenue of $1.8 million, partially offset by an increase in accounts payable of $4.4 million, an increase in accrued expenses and other current liabilities of $1.6 million and a decrease in other noncurrent assets of $1.1 million.
Previous wording
The net increase in cash, cash equivalents and restricted cash from discontinued operations of $1.0 million for the twenty-six weeks ended July 2, 2023 was entirely attributable to net cash provided by operating activities from discontinued operations. This decrease was primarily due to the net loss from discontinued operations, net of tax of $12.5 million, adjusted for non-cash charges of $3.6 million and net cash inflows of $9.9 million from changes in our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization expense of $1.6 million, stock-based compensation expense of $1.3 million and a $0.7 million change in allowance for credit losses. The main drivers of net cash inflows derived from the $9.9 million change in operating assets and liabilities were related to a decrease in accounts receivable of $6.1 million, a decrease in inventories of $5.6 million and an increase in accrued expenses and other current liabilities of $5.2 million partially offset by a decrease in accounts payable of $4.2 million, an increase in prepaid expenses and other current assets of $2.3 million and a decrease in other liabilities of $0.5 million.
Current wording
The net increase in cash, cash equivalents and restricted cash from discontinued operations of $0.2 million for the thirty-nine weeks ended October 1, 2023 was entirely attributable to net cash provided by operating activities from discontinued operations. This increase was primarily due to the net loss from discontinued operations, net of tax of $168.5 million, adjusted for non-cash charges of $152.9 million and net cash inflows of $15.8 million from changes in our operating assets and liabilities. Non-cash charges primarily consisted of impairment of goodwill of $119.4 million, impairment of intangible assets of $28.1 million, depreciation and amortization expense of $2.4 million, stock-based compensation expense of $1.8 million and a $1.1 million change in allowance for credit losses. The main drivers of net cash inflows derived from the changes in operating assets and liabilities were related to a decrease in accounts receivable, net of $8.2 million, an increase in accrued expenses and other current liabilities of $6.0 million, a decrease in long-term deposits of $2.8 million, and a decrease in inventories of $2.3 million, partially offset by a decrease of $2.9 million in accounts payable.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
As of December 31, 2023, we had sold all the shares of Maxeon and recorded a loss of $4.2 million attributable to the sale of this investment.