DEF: Complete Solaria Seeks Stockholder Approval for Director Elections, Auditor Ratification, and Equity Incentive Plan Amendment

Complete Solaria is holding its 2025 annual meeting of stockholders to elect directors, ratify the selection of its auditor, and approve an amendment to its equity incentive plan.

Summary

• Complete Solaria, Inc. will hold its 2025 annual meeting of stockholders virtually on May 29, 2025.
• Stockholders will vote on three proposals: electing eleven director nominees, ratifying the selection of BDO USA, P.C. as the independent registered public accounting firm for the fiscal year ending December 28, 2025, and approving an amendment to the 2023 Equity Incentive Plan to reserve an additional 21,555,584 shares of common stock for issuance.
• The record date for the meeting is March 31, 2025.
• The proxy materials are being mailed on or about May 5, 2025.
• The Board of Directors recommends voting for all director nominees, for the ratification of BDO USA, P.C., and for the approval of the Equity Incentive Plan amendment.

Sentiment

Score: 6

Explanation: The document is neutral in tone, presenting factual information about the upcoming annual meeting and proposals. While there are some positive financial results mentioned, there are also negative aspects such as material weaknesses and dilution.

Positives

• The proposed amendment to the 2023 Equity Incentive Plan is intended to align employee interests with those of stockholders and to attract and retain top talent.
• The company believes that equity-based compensation helps conserve cash.
• The company's revenues increased from approximately $87.6 million for FY 2023 to approximately $108.7 million for FY 2024.
• The company's net loss from continuing operations decreased from approximately $96.2 million for FY 2023 to approximately $54.4 million for FY 2024.

Negatives

• The proposed amendment to the 2023 Equity Incentive Plan will cause dilution to existing stockholders.
• The company had material weaknesses in its internal control over financial reporting as of December 31, 2024.
• Several executive officers and directors were late in filing Form 4s during fiscal 2024.

Risks

• The company's ability to obtain a deduction for amounts paid under the Amended Plan could be limited by Section 162(m) of the Code.
• The company's ability to obtain a deduction for future payments under the Amended Plan could also be limited by the golden parachute rules of Section 280G of the Code.
• The company's future performance and ability to achieve profitability and positive cash flows are subject to various risks and uncertainties.
• The company's ability to integrate the SunPower Businesses and to achieve the benefits of the SunPower Acquisition is subject to risks and uncertainties.

Future Outlook

The company expects to file final voting results with the SEC within four business days after the Annual Meeting.

Industry Context

The document does not provide specific details on how this announcement relates to broader industry trends or competitors beyond mentioning the intense competition for talented employees in the solar industry.

Management Changes

Corporate Governance

Related Party Transactions

• On January 31, 2024, the company 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 us.
• On February 15, 2024, the company entered into a second simple agreement for future equity (the Second SAFE ) with the Purchaser in connection with the Purchaser investing $3.5 million in us.
• On May 13, 2024, the company entered into a further simple agreement for future equity (the Rodgers Group SAFE ) with the Purchaser in connection with the Purchasers investment of $1,000,000.
• On July 1, 2024, the company entered into an Exchange Agreement (the Exchange Agreemen t ) with CRSEF Solis Holdings, L.L.C., a Delaware limited liability company ( Carlyle ), Kline Hill Partners Fund LP, a Delaware limited partnership ( Kline Fund ), Kline Hill Partners IV SPV LLC, a Delaware limited liability company ( Kline Partners ) and Kline Hill Partners Opportunity IV SPV LLC, a Delaware limited liability company ( Kline Opportunity and together with Kline Fund and Kline Partners, Kline Hill ) providing for, among other things: the cancellation of all indebtedness owed to Carlyle and Kline Hill by the Company; termination of all debt instruments by and between the Company and Carlyle and by and between Kline Hill; the satisfaction of all obligations owed to Carlyle and Kline Hill by the Company under the terminated debt instruments; the issuance of convertible notes to Carlyle and Kline Hill (as further detailed below under July 2024 Note Financing ); and the issuance of 1,500,000 shares of Common Stock to Kline Hill (as further discussed in the paragraph below).
• On July 1, 2024, the company entered into the Purchase Agreements with Kline Hill. Pursuant to the terms of the Purchase Agreements, Kline Hill purchased an aggregate of 1,500,000 shares of Common Stock in consideration for the cancellation of indebtedness owed to Kline Hill.
• In consideration for the entry of Carlyle and Kline Hill into the Exchange Agreement, on July 1, 2024, the company entered into that certain Designated Board Observer Agreement with Carlyle Entity and Kline Partners, pursuant to which Kline Partners and Carlyle each have the right to designate a person to attend certain meetings of the Board in solely a non -voting , observer capacity.
• In October 2023, the Company entered into an Assignment Agreement whereby Structural Capital Investments III, LP ( SCI ) assigned the debt payable by the Company and its affiliates to SCI (the SCI Debt ) to Kline Hill and Rodgers Massey Revocable Living Trust for a total purchase price of $5.0 million.
• The principal portion of the SCI Debt owing to the Rodgers Massey Revocable Living Trust of $1.5 million (plus accrued interest) remained outstanding as of December 29, 2024 and is outstanding as of the date of this Proxy Statement.
• On July 1, 2024, the company entered into Note Purchase Agreements and the Exchange Agreement (together the July 2024 Purchase Agreement ), pursuant to which the company issued to certain accredited investors and qualified institutional buyers approximately $50.0 million in aggregate principal amount in convertible promissory notes (the July 2024 Notes ).
• On September 8, 2024, September 11, 2024 and September 22, 2024, the company entered into note purchase agreements with certain accredited investors and qualified institutional buyers relating to the sale and issuance of $80.0 million in aggregate principal amount of our 7.0% Convertible Notes due 2029 (the September 2024 Notes ).
• During 2024, Pegasus Solar entered into commercial agreements with Complete Solaria. Devin Whatley, a director, is the general partner of Ecosystem Integrity Fund, which holds an equity investment in Pegasus Solar.
• Complete Solaria previously entered into commercial agreements with SameDay Solar, a residential solar installer. William Anderson, a director and our former Chief Executive Officer, owns 60% of the equity securities of SameDay Solar, and he is Chief Executive Officer of SameDay Solar.

Stakeholder Impact

• Approval of the equity incentive plan amendment could impact employee morale and retention.
• The election of directors will determine the leadership and strategic direction of the company.
• The ratification of the auditor ensures the integrity of the company's financial reporting.
• The related party transactions could raise concerns about potential conflicts of interest.

Next Steps

• Stockholders are encouraged to vote on the proposals.
• The company will file final voting results with the SEC.

Key Dates

Keywords

proxy statement, annual meeting, stockholders, election of directors, auditor ratification, equity incentive plan, BDO USA, executive compensation, corporate governance, Complete Solaria