EX-99.2 4 ea022484401ex99-2_complete.htm UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS OF COMPLETE SOLARIA, INC. FOR THE THIRTY-NINE WEEKS ENDED SEPTEMBER 29, 2024 AND FOR THE YEAR ENDED DECEMBER 31, 2023

Exhibit 99.2

 

UNAUDITED PRO FORMA

 

COMBINED FINANCIAL INFORMATION

 

The following unaudited pro forma combined financial statements are derived from the historical consolidated Complete Solaria, Inc. (the “Company”, “Complete Solaria”, or “CSLR”) the historical combined financial statements of SunPower Businesses, respectively and reflects (1) the acquisition of certain businesses from SunPower Corporation which closed on September 30, 2024 (the “Acquisition”), and (2) the financing of the Acquisition (the “Financing”).

 

The unaudited pro forma combined financial information related to the Acquisition has been prepared by the Company using the acquisition method of accounting in accordance with GAAP. The Company has been treated as the acquirer for accounting purposes and thus accounts for the Acquisition as a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). The estimated fair value of the assets acquired and liabilities assumed and the related purchase price allocation is preliminary and have been made solely for the purpose of providing unaudited pro forma combined financial information. As a result of the foregoing, the pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma combined financial information.

 

The unaudited pro forma combined balance sheet as of September 29, 2024 combines the historical balance sheet of the Company and the historical balance sheet of SunPower Businesses, on a pro forma basis as if the Acquisition had been consummated on September 29, 2024 (the Financing is included in the Company’s historical balance sheet as of September 29, 2024). The unaudited pro forma combined statements of operations for the year ended December 31, 2023 and the thirty nine weeks ended September 29, 2024, combine the historical statements of operations of the Company and SunPower Businesses on a pro forma basis as if the Acquisition and the Financing, summarized below, had been consummated on January 1, 2023, the beginning of the earliest period presented.

 

The unaudited pro forma combined financial information does not give effect to any cost savings, operating synergies or revenue synergies that may result from the Acquisition.

 

The unaudited pro forma combined financial statements have been developed from and should be read in conjunction with:

 

●the accompanying notes to the Unaudited Pro Forma Combined Financial Statements;

 

●the historical audited financial statements of the Company for the year ended December 31, 2023 and the related notes in its Annual Report on Form 10-K for such fiscal year;

 

●the historical unaudited financial statements of the Company as of and for the thirty-nine weeks ended September 29, 2024 and the related notes in its Quarterly Report on Form 10-Q for such period;

 

●the audited carveout financial statements of the SunPower Businesses as of and for the year ended December 31, 2023, and the audited carveout financial statements of the SunPower Businesses as of and for the thirty-nine weeks ended September 29, 2024, which are attached as Exhibit 99.1 of this Current Report on Form 8-K.

 

Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the unaudited pro forma combined financial statements are described in the accompanying notes. The unaudited pro forma combined financial statements have been presented for illustrative purposes only and are not necessarily indicative of the operating results and financial position that would have been achieved had the Acquisition and Financing occurred on the dates indicated. Further, the unaudited pro forma combined financial statements do not purport to project the future operating results or financial position of CSLR following the completion of the Acquisition. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma combined financial statements and are subject to change as additional information becomes available and analyses are performed.

 

 

 

 

UNAUDITED PRO FORMA COMBINED BALANCE-SHEET

AS OF SEPTEMBER 29, 2024

(In thousands, except share par values)

 

   CSLR  

SunPower

Businesses

  

Transaction

Adjustments

  

Pro Forma

Balance-Sheet

 
ASSETS                
Current assets:                
Cash and cash equivalents  $79,502   $1,863   $(52,733)(A)  $28,632 
Accounts receivable, net   8,482    42,294    (35,737)(A)   15,039 
Contract assets   -    35,759    (25,826)(A)   9,933 
Inventories   607    11,432    -    12,039 
Forward purchase agreement assets with related parties   907    -    -    907 
Forward purchase agreement   169    -    -    169 
Prepaid expenses and other current assets   12,816    59,244    (56,047)(A)   16,013 
Total current assets   102,483    150,592    (170,343)   82,732 
Restricted cash   3,841    -    -    3,841 
Property and equipment, net   590    9,557    -    10,147 
Operating lease right-of-use assets   868    2,507    -    3,375 
Goodwill   -    22,070    13,089(A)   35,159 
Other noncurrent assets   154    640    -    794 
Total asset  $107,936   $185,366   $(157,254)  $136,048 
LIABILITIES AND STOCKHOLDERS’ DEFICIT                    
Current liabilities:                    
Accounts payable  $4,627   $69,047   $(62,817)(A)  $10,857 
Accrued expenses and other current liabilities   29,825    32,584    (41,703)(A)     
              19,058(B)   39,764 
Notes payable, net   2,696    -    -    2,696 
Notes payable to related parties   1,574    -    -    1,574 
Operating lease liabilities, current portion   -    908    -    908 
Deferred revenue, current   1,092    -    -    1,092 
SAFE Agreement with related party   1,900    -    -    1,900 
Contract liabilities   -    19,058    (19,058)(B)   - 
Total current liabilities   41,714    121,597    (104,520)   58,791 
Warranty provision, noncurrent   3,322    -    -    3,322 
Warrant liability   6,597    -    -    6,597 
Deferred revenue, noncurrent   952    -    -    952 
Notes payable and derivative liabilities, net of current portion   154,215    -    -    154,215 
Notes payable to related parties   43,458    -    -    43,458 
Operating lease liabilities, net of current portion   382    2,055    -    2,437 
Other long-term liabilities   -    8,980    -    8,980 
Total liabilities   250,640    132,632    (104,520)   278,752 
Stockholders’ (deficit) equity:                    
Common stock, $0.0001 par value; Authorized 1,000,000,000 and 1,000,000,000 shares as of September 29, 2024 and December 31, 2023, respectively; issued and outstanding 72,977,921, and 49,065,361 shares as of September 29, 2024 and December 31, 2023, respectively   14    -    -    14 
Additional paid-in capital   315,485    -    -    315,485 
Accumulated other comprehensive loss   165    -    -    165 
Accumulated deficit   (458,368)   -    -    (458,368)
Net parent investment   -    52,734    (52,734)(C)   - 
Total stockholders’ deficit   (142,704)   52,734    (52,734)   (142,704)
Total liabilities and stockholders’ equity  $107,936   $185,366   $(157,254)  $136,048 

 

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UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE THIRTY-NINE WEEKS ENDED SEPTEMBER 29, 2024

(In thousands, except per share data)

 

   CSLR   SunPower
Businesses		   Reclassification
Adjustments		    Financing
Adjustments		   Pro Forma
Income
Statement		 
Revenues  $20,068   $273,118   $-   $-   $293,186 
Cost of revenues   21,834    173,062    -    -    194,896 
Gross (loss) profit   (1,766)   100,056    -    -    98,290 
Operating expenses:   -    -    -    -    - 
Sales commissions   11,691    -    33,398(D)        45,089 
Sales and marketing   3,762    -    13,257(D)   -    17,019 
General and administrative   29,789    -    177,238(D)   -    207,027 
Sales, general, and administrative   -    219,932    (219,932)(D)   -    - 
Loss on goodwill impairment   -    103,926    -    -    103,926 
Research and development expenses   -    3,961    (3,961)(D)   -    - 
Total operating expenses   45,242    327,819    -    -    373,061 
Loss from continuing operations   (47,008)   (227,763)   -    -    (274,771)
Interest expense   (8,230)   (285)   -    (3,507)(E)   (12,022)
Interest income   102    -    -    -    102 
Other expense, net   (66,234)   (12)   -    -    (66,246)
Gain on extinguishment of debt   19,948    -    -    -    19,948 
Total other (expense)   (54,414)   (297)   -    (3,507)   (58,218)
Loss from continuing operations before income taxes   (101,422)   (228,060)   -    (3,507)   (332,989)
Income tax (provision) benefit   (11)   572    -    -    561 
Net loss from continuing operations   (101,433)   (227,488)   -    (3,507)   (332,428)
Discontinued operations:                         
Loss from discontinued operations, net of tax   (2,007)   -    -    -    (2,007)
Net loss   (103,440)   (227,488)   -    (3,507)   (334,435)
Other comprehensive income:                         
Foreign currency translation adjustment   22    -    -    -    22 
Comprehensive loss (net of tax)  $(103,418)  $(227,488)   -   $(3,507)  $(334,413)
                          
Net loss from continuing operations per share attributable to common stockholders, basic and diluted  $(1.64)                 $(5.37)
Net loss from discontinued operations per share attributable to common stockholders, basic and diluted  $(0.03)                 $(0.03)
Net loss per share attributable to common stockholders, basic and diluted  $(1.67)                 $(5.40)
Weighted-average shares used to compute net loss per share, basic and diluted   61,868,747                   61,868,747 

 

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UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2023

(In thousands, except per share data)

 

   CSLR   SunPower
Businesses		   Reclassification
Adjustments		    Financing
Adjustments		   Pro Forma
Income
Statement		 
Revenues  $87,616   $610,035   $-   $-   $697,651 
Cost of revenues   69,828    345,217    -    -    415,045 
Gross profit   17,788    264,818    -    -    282,606 
Operating expenses:   -    -    -    -    - 
Sales commissions   31,127    -    69,382(F)   -    100,509 
Sales and marketing   6,920    -    25,020(F)   -    31,940 
General and administrative   32,099    -    205,121(F)        237,220 
Sales, general, and administrative   -    290,693    (290,693)(F)   -    - 
Research and development expenses   -    8,830    (8,830)(F)   -    - 
Total operating expenses   70,146    299,523    -    -    369,669 
Loss from continuing operations   (52,358)   (34,705)   -    -    (87,063)
Interest expense   (14,033)   (436)   -    (4,676)(G)   (19,145)
Interest income   36    -    -    -    36 
Other expense, net   (29,862)   (28)   -    -    (29,890)
Total other (expense)   (43,859)   (464)   -    (4,676)   (48,999)
Loss from continuing operations before income taxes   (96,217)   (35,169)   -    (4,676)   (136,062)
Income tax (provision) benefit   20    (267)   -    -    (247)
Net loss from continuing operations   (96,197)   (35,436)   -    (4,676)   (136,309)
Discontinued operations:                         
Loss from discontinued operations, net of tax   (25,853)   -    -    -    (25,853)
Impairment loss from discontinued operations   (147,505)                  (147,505)
Net loss from discontinued operations, net of taxes   (173,358)   -    -    -    (173,358)
Net loss   (269,555)   (35,436)        (4,676)   (309,667)
Other comprehensive income:                         
Foreign currency translation adjustment   116    -    -    -    116 
Comprehensive loss (net of tax)  $(269,439)  $(35,436)   -   $(4,676)  $(309,551)
                          
Net loss from continuing operations per share attributable to common stockholders, basic and diluted  $(3.89)                 $(5.51)
Net loss from discontinued operations per share attributable to common stockholders, basic and diluted  $(1.05)                 $(1.05)
Net loss per share attributable to common stockholders, basic and diluted  $(4.94)                 $(6.56)
Weighted-average shares used to compute net loss per share, basic and diluted   24,723,370                   24,723,370 

 

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Notes to Unaudited Pro Forma Combined Financial Statements

 

1.Basis of Presentation

 

The unaudited pro forma combined financial information was prepared in accordance with Article 11 of Regulation S-X, and presents the pro forma financial condition and results of operations of the Company based on the historical financial information of the Company and SunPower Businesses after giving effect to the Acquisition and Financing as set forth in the notes to the unaudited pro forma combined financial information.

 

The unaudited pro forma combined financial information does not reflect any management adjustments for expected effects of the Acquisition.

 

The Unaudited Pro Forma Combined Balance Sheet as of September 29, 2024 gives pro forma effect to the Acquisition as if it had been consummated on September 29, 2024. No adjustments related to the Financing as described in the section entitled “Financing of the Acquisition” have been applied to the unaudited pro forma combined balance sheet as of September 29, 2024, as these impacts are already reflected in the Company’s historical consolidated balance sheet as of September 29, 2024.

 

The Unaudited Pro Forma Combined Statement of Operations for the year ended December 31, 2023 and the thirty nine weeks ended September 29, 2024, give pro forma effect to the Acquisition and Financing as if it had been consummated on January 1, 2023.

 

The Asset Purchase Transaction

 

On August 5, 2024, Complete Solaria entered into an Asset Purchase Agreement (the “APA”) among Complete Solaria, SunPower and SunPower’s direct and indirect subsidiaries (collectively, the “SunPower Debtors”) providing for the sale and purchase of certain assets relating to the Blue Raven Solar business, New Homes Business and Non-Installing Dealer network previously operated by the SunPower Debtors. The APA was entered into in connection with a voluntary petition filed by SunPower under Chapter 11 of the United States Code, 11 U.S.C.§§ 101-1532. The sale by SunPower was approved on September 23, 2024, by the United States Bankruptcy Court for the District of Delaware. The Company completed the acquisition of the Acquired Assets (as defined in the APA) effective September 30, 2024, in consideration for a cash purchase price of $52.7 million. The acquisition transactions under the APA are referred to herein as the “Acquisition,” and the assets and businesses acquired by the Company under the APA are referred to as the “SunPower Businesses.” The acquisition was closed on September 30, 2024.

 

Financing of the Acquisition

 

Complete Solaria financed the acquisition by issuing 7% convertible senior notes (“the Convertible Notes”) in September 2024, which are due in 2029. The Convertible Notes matures on July 1, 2029 and are convertible into the Company’s common stock at the option of the holder at a conversion rate of $2.14 per share. The Convertible 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.

 

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  2. Notes to the Unaudited Pro Forma Combined Balance Sheet

 

The following adjustments were made related to the unaudited pro forma combined balance sheet as of September 29, 2024:

 

A.Reflects the $52.7 million of cash consideration transferred to consummate the Acquisition and recognize the assets acquired and liabilities assumed as detailed below.

 

The consideration transferred was allocated amongst the assets acquired and liabilities assumed. As the consideration transferred exceeded the fair value of the net assets acquired, the Company has estimated goodwill totaling $35.2 million. The goodwill recognized represents premium paid for the net assets acquired in the transaction. The Company continues to evaluate whether intangible assets were acquired in connection with the acquisition, and the estimates of fair value are based upon preliminary valuation assumptions.

 

  (In Thousands) 
Net assets acquired:    
Cash  $1,863 
Accounts receivable   6,557 
Contract assets   9,933 
Inventories   11,432 
Prepaid expenses and other current assets   3,197 
Property and equipment   9,557 
Operating lease right-of-use assets   2,507 
Other noncurrent assets   640 
Accounts payable   (6,230)
Accrued expenses and other current liabilities   (9,939)
Operating lease liabilities   (2,963)
Other long-term liabilities   (8,980)
Fair value of net assets acquired  $17,574 
Consideration transferred  $52,733 
Goodwill recognized  $35,159 

 

B.To conform the financial statement presentation for SunPower Businesses to the Company within the Balance Sheet as of September 29, 2024.

 

C.Net parent investment is eliminated upon the consummation of the business combination and has been eliminated herein.

 

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3. Notes to the Unaudited Pro Forma Combined Statements of Operations

 

The pro forma adjustments included in the unaudited pro forma combined statements of operations for the thirty-nine weeks ended September 29, 2024 and for the are as follows:

 

D.To conform the financial statement presentation for SunPower Businesses to the Company within the Statement of Operations for the 39 weeks ended September 29, 2024.

 

E.Reflects the impact of interest expense on the 7% Convertible Senior Notes for the thirty-nine weeks ended September 29, 2024 assuming the Convertible Notes were issued on January 1, 2023.

 

The pro forma adjustments included in the unaudited pro forma combined statements of operations for the year ended December 31, 2023 are as follows:

 

F.To conform the financial statement presentation for SunPower Businesses to the Company within the Statement of Operations for the fiscal year ended December 31, 2023.

 

G.Reflects the impact of interest expense on the 7% Convertible Senior Notes for the fiscal year ended December 31, 2023 assuming the Convertible Notes were issued on January 1, 2023.

 

 

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