Complete Solaria Reports $31.4M in Related Party Stock Issuance Expenses

TL;DR

**Complete Solaria just disclosed $31.4M in related party stock issuance expenses, signaling potential dilution and value transfer.**

AI Summary

Complete Solaria, Inc. reported significant 'other expenses' related to transactions with related parties for the thirteen and thirty-nine weeks ended October 1, 2023. These expenses include $0.7 million for bonus shares issued in connection with the Mergers and a substantial $30.7 million for shares issued under forward purchase agreements. For investors, this indicates that a considerable amount of value, totaling $31.4 million, was transferred to related parties through stock issuances, which could dilute existing shareholders' ownership and impact the company's financial performance.

Why It Matters

These significant expenses to related parties, particularly the $30.7 million for shares issued under forward purchase agreements, represent a substantial outflow of value that could dilute existing shareholders and impact the company's profitability.

Risk Assessment

Risk Level: medium — The substantial related party transactions, especially the $30.7 million in stock issuances, introduce a medium risk of potential conflicts of interest and dilution for public shareholders.

Analyst Insight

A smart investor would carefully evaluate the impact of these significant related party transactions and stock issuances on shareholder dilution and the company's long-term financial health before making investment decisions.

Key Numbers

• $0.7 million — Other expense for bonus shares (Issued to related parties in connection with the Mergers for the thirteen and thirty-nine weeks ended October 1, 2023.)
• $30.7 million — Other expense for shares issued (Issued to related parties in connection with forward purchase agreements for the thirteen and thirty-nine weeks ended October 1, 2023.)
• $1.4 million — Other income from related parties (Recognized upon the conversion of related party convertible notes and SAFEs for the nine months ended September 30, 2022.)

Key Players & Entities

• Complete Solaria, Inc. (company) — the filer of the 8-K
• $0.7 million (dollar_amount) — other expense for bonus shares issued to related parties
• $30.7 million (dollar_amount) — other expense for shares issued to related parties in connection with forward purchase agreements
• October 1, 2023 (date) — end date for the thirteen and thirty-nine week periods reported
• $1.4 million (dollar_amount) — other income from related parties for gain on extinguishment of convertible notes and SAFEs

Forward-Looking Statements

• The significant related party transactions could lead to increased scrutiny from investors and analysts. (Complete Solaria, Inc.) — medium confidence, target: Q4 2023 earnings call
• The substantial stock issuances to related parties may result in further share dilution for existing public shareholders. (Complete Solaria, Inc. shareholders) — high confidence, target: Next financial report

FAQ

Key Financial Figures

• $0.0001 — ich registered Common Stock, par value $0.0001 per share CSLR The Nasdaq Global Ma
• $11.50 — of Common Stock at an exercise price of $11.50 per share CSLRW The Nasdaq Capital

Filing Documents

• d474289d8k.htm (8-K) — 547KB
• d474289dex991.htm (EX-99.1) — 2865KB
• d474289dex992.htm (EX-99.2) — 274KB
• d474289dex993.htm (EX-99.3) — 226KB
• d474289dex994.htm (EX-99.4) — 923KB
• 0001193125-24-002445.txt ( ) — 20381KB
• cslr-20240104.xsd (EX-101.SCH) — 154KB
• cslr-20240104_cal.xml (EX-101.CAL) — 72KB
• cslr-20240104_def.xml (EX-101.DEF) — 620KB
• cslr-20240104_lab.xml (EX-101.LAB) — 1052KB
• cslr-20240104_pre.xml (EX-101.PRE) — 863KB
• d474289d8k_htm.xml (XML) — 3930KB

01

Item 8.01 Other Events. As previously disclosed on a Current Report on Form 8-K filed with the Securities and Exchange Commission (the " SEC "), on July 24, 2023, Complete Solaria, Inc. (f/k/a Complete Solar Holding Corporation), a Delaware corporation (" Legacy Complete Solaria "), FACT Acquisition I Corp., a Cayman Islands exempted company (" FACT "), Jupiter Merger Sub I Corp., a Delaware corporation and wholly-owned subsidiary of FACT (" First Merger Sub "), Jupiter Merger Sub II LLC, a Delaware limited liability company and a wholly-owned subsidiary of FACT (" Second Merger Sub ") and The Solaria Corporation, a Delaware corporation and a wholly-owned indirect subsidiary of Complete Solaria (" Solaria "), consummated the closing of the transactions contemplated by that certain Amended and Restated Business Combination Agreement, dated as of May 26, 2023 (the transactions contemplated therein, the " Business Combination Agreement " and the " Business Combination "). Pursuant to the terms and subject to the conditions of the Business Combination, on July 18, 2023, (i) First Merger Sub merged with and into Legacy Complete Solaria with Legacy Complete Solaria surviving as a wholly-owned subsidiary of FACT (the " First Merger "), (ii) immediately thereafter and as part of the same overall transaction, Legacy Complete Solaria merged with and into Second Merger Sub, with Second Merger Sub surviving as a wholly-owned subsidiary of FACT (the " Second Merger "), and FACT changed its name to "Complete Solaria, Inc." (the " Company ") and Second Merger Sub changed its name to "CS, LLC" and (iii) immediately after the consummation of the Second Merger and as part of the same overall transaction, Solaria merged with and into a newly formed Delaware limited liability company and wholly-owned subsidiary of FACT and changed its name to "SolarCA LLC" (" Third Merger Sub "), with Third Merger Sub (now renamed "SolarCA LLC" (" SolarCA ")) surviving as a wholly-owned

Forward-Looking Statements

Forward-Looking Statements This Current Report on Form 8-K contains forward-looking statements that involve risks and uncertainties. All statements, other than statements of present or historical fact included in or incorporated by reference in this Current Report on Form 8-K, regarding the Company's future financial performance, as well as the Company's strategy, future operations, financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used herein, the words "potential," "believe," "expect," "expects," "expected," "anticipate," "may," "will," "enable," "should," "seek," "approximately," "intends," "intended," "plans," "planned," "planning," "estimates," "benefits," or the negative of these words or other comparable terminology and similar expressions, as they relate to the Company or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information available to the Company as of the date of this Current Report on Form 8-K and are subject to a number of risks, uncertainties, and other factors that could cause the Company's performance to differ materially from those expressed in, or implied by, these forward-looking statements. These risks and uncertainties include, among other things, risks related to the Company's product development activities and ongoing commercial business operations; risks related to the Company's ability and that of its business partners to implement development plans, launch plans, forecasts and other business expectations; risks related to unexpected variations in market growth and demand for the Company's commercial and developmental products and technologies; risks related to the Company's liquidity and its ability to maintain capital resources sufficient to conduct required clinical studies; the Company's ability to retain its listing on the Nasdaq exchange; and risks relatin

01 – Financial Statements and Exhibits

Item 9.01 – Financial Statements and Exhibits (b) Pro Forma financial information. The information set forth in Item 8.01 of this Current Report is incorporated herein by reference in its entirety. (d) Exhibits. Exhibit Number Description 99.1 Recast Consolidated Financial Statements of Complete Solaria, Inc. 99.2

Management's Discussion and Analysis of Results of Operations

Management's Discussion and Analysis of Results of Operations. 99.3 Unaudited Pro Forma Condensed Combined Financial Information 99.4 Consolidated Financial Statements of The Solaria Corporation 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). Table of Contents

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. C OMPLETE S OLARIA , I NC . Dated: January 4, 2024 By: /s/ Chris Lundell Chris Lundell Chief Executive Officer

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View this 8-K filing on SEC EDGAR