| Borrowing Arrangements | (16) Borrowing Arrangements Convertible notes, net and convertible notes, net, due
to related parties As of October 1, 2023 and December 31,
2022, the Company’s convertible notes consisted of the following (in thousands):
As of
October 1, 2023 December 31, 2022
Convertible notes, net, noncurrent
2022 Convertible Notes $ — $ 3,434
2022 Convertible Notes due to related parties — 15,510
Total convertible notes $ — $ 18,944 Convertible Promissory Notes with Ecosystem Integrity Fund
II, LP. On April 30, 2021, the Company issued
a short-term Subordinated Convertible Promissory Note to Ecosystem Integrity Fund II, LP (“EIF”) for a total principal of
$0.5 million plus accrued interest of 3.0% per annum due on June 30, 2021. The Note included a conversion feature which allows the holder
to convert any portion of the note plus any unpaid accrued interest (“Conversion Amount”) into shares of Series C-1 Preferred
Stock on the maturity date of June 30, 2021 or thereafter. As of December 31, 2021 the principal and accrued interest remained outstanding
and the holder did not elect to covert the note into Series C-1 Preferred shares. The principal and accrued interest of $0.5 million was
repaid in February 2022, and as such, the balance remaining at December 31, 2022 and thereafter remained zero. 2019-A Convertible Notes In 2019, the Company issued a series of
convertible notes (“2019-A Convertible Notes”) for $0.1 million in proceeds, with immaterial debt issuance costs, and which
were due and payable on demand by the holders after August 2020. The notes carried simple interest of 6.0% and contained a conversion
feature whereby the notes would convert at 80% of the issuance price of the preferred shares in the next equity financing. The notes also
contained other embedded features such as conversion options that were exercisable upon the occurrence of various contingencies. All of
the embedded features were analyzed to determine whether they should be bifurcated and separately accounted for as a derivative. Pursuant
to such analysis, the Company valued and bifurcated the share-settled redemption feature, which enabled the holders to convert the notes
to the preferred shares at a predefined discount from the issuance price and recorded its initial fair value of less than $0.1 million
as a discount on the convertible notes face amount. The debt discount was amortized to interest expense at a weighted-average effective
interest rate of 17.6% through the maturity dates of the notes. The fair
value of the share-settled redemption feature was estimated based on a probability-weighted analysis of the discounted value of the
notes converting under a Next Equity Financing, a change in control, default, or maturity, and the changes in fair value were
recognized as a component of other income (expense), net in the accompanying unaudited condensed consolidated statements of
operations and comprehensive income (loss). The Company recorded zero in expense during the thirteen and thirty-nine weeks ended
October 1, 2023 and the three and nine months ended September 30, 2022, related to the change in the fair value of the convertible
notes embedded derivative liability. The convertible notes were carried within the accompanying unaudited condensed consolidated
balance sheets at their original issuance value, net of unamortized debt discount and issuance costs. In March 2022, as part of the
Company’s Series D Preferred Stock issuance, the 2019-A Convertible Notes converted into 62,500 shares of Series D-2
redeemable convertible preferred stock. The Company recognized a gain on the conversion of less than $0.1 million in other income
(expense), net on the unaudited condensed consolidated statements of operations and comprehensive income (loss). As the full carrying
value of the note was converted to Series D Preferred Stock, the balance remaining for the note at December 31, 2022 and thereafter
remained zero. The Company did not recognize any interest
expense related to the 2019-A Convertible Notes during the thirteen and thirty-nine weeks ended October 1, 2023 and the three months ended
September 2022. Interest expense recognized related to the 2019-A Convertible Notes during the nine months ended September 30, 2022 was
immaterial. 2020-A Convertible Notes In 2020, the Company issued a series of
convertible notes (“2020-A Convertible Notes”) for $3.8 million in proceeds, with immaterial debt issuance costs, and which
are due and payable on demand by the holders after April 2021. The notes carried simple interest of 2.0% and contained a conversion feature
whereby the notes would convert at 80% of the issuance price of the preferred shares in the next equity financing. The notes also contained
other embedded features such as conversion options that were exercisable upon the occurrence of various contingencies. All of the embedded
features were analyzed to determine whether they should be bifurcated and separately accounted for as a derivative. Pursuant to such analysis,
the Company valued and bifurcated the share-settled redemption feature, which enables the holders to convert the notes to the preferred
shares at a predefined discount from the issuance price and recorded its initial fair value of $0.5 million as a discount on the convertible
notes face amount. The debt discount was amortized to interest expense at a weighted-average effective interest rate of 25.6% through
the maturity dates of the notes. The fair value of the
share-settled redemption feature was estimated based on a probability-weighted analysis of the discounted value of the notes
converting under a Next Equity Financing, a change in control, default, or maturity, and the changes in fair value were recognized
as a component of other income (expense), net in the accompanying unaudited condensed consolidated statements of operations and
comprehensive income (loss). The Company recorded zero in expense during the thirteen and thirty-nine weeks ended October 1, 2023 and the
three and nine months ended September 30, 2022, related to the change in the fair value of the convertible notes embedded derivative
liability. The convertible notes were carried within the accompanying unaudited condensed consolidated balance sheets at their
original issuance value, net of unamortized debt discount and issuance costs. In March 2022, as part of the Company’s Series D
Preferred Stock issuance, the 2020-A Convertible Notes converted into 785,799 shares of Series D-1 redeemable convertible preferred
stock. The Company recognized a gain on the conversion of $0.9 million in other income (expense), net on the unaudited condensed
consolidated statements of operations and comprehensive income (loss). As the full carrying value of the note was converted to Series D
Preferred Stock, the balance remaining for the note at December 31, 2022 and thereafter remained zero. The Company did not recognize any interest
expense related to the 2020-A Convertible Notes during the thirteen and thirty-nine weeks ended October 1, 2023 and the three months ended
September 2022. Interest expense recognized during the nine months ended September 30, 2022 was immaterial. 2021-A Convertible Notes In 2020, the Company issued a series of
convertible notes (“2021-A Convertible Notes”) for $4.3 million in proceeds, with immaterial debt issuance costs, and which
are due and payable on demand by the holders after February 2022. The holders are existing investors and are not expected to demand cash
settlement, as the Company expects to raise additional preferred financing under which the notes will convert into preferred shares. The
notes carry simple interest of 2.0% and contained a conversion feature whereby the notes would convert at 80% of the issuance price of
the preferred shares in the next equity financing. The notes also contained other embedded features such as conversion options that were
exercisable upon the occurrence of various contingencies. All of the embedded features were analyzed to determine whether they should
be bifurcated and separately accounted for as a derivative. Pursuant to such analysis, the Company valued and bifurcated the share-settled
redemption feature, which enables the holders to convert the notes to the preferred shares at a predefined discount from the issuance
price and recorded its initial fair value of $0.6 million as a discount on the convertible notes face amount. The debt discount is amortized
to interest expense at a weighted-average effective interest rate of 18.1% through the maturity dates of the notes. The fair value of the
share-settled redemption feature was estimated based on a probability-weighted analysis of the discounted value of the notes
converting under a Next Equity Financing, a change in control, default, or maturity, and the changes in fair value were recognized
as a component of other income (expense), net in the unaudited condensed consolidated statements of operations and comprehensive
income (loss). The Company recorded zero in expense during the thirteen and thirty-nine weeks ended October 1, 2023 and the three and nine
months ended September 30, 2022, related to the change in the fair value of the convertible notes embedded derivative liability. The
convertible notes were carried on the unaudited condensed consolidated balance sheets at their original issuance value, net of
unamortized debt discount and issuance costs. In March 2022, as part of the Company’s Series D Preferred Stock issuance, the
2021-A Convertible Notes converted into 869,640 shares of Series D-1 redeemable convertible preferred stock. The Company recognized
a gain on the conversion of $0.8 million in other income (expense), net on the unaudited condensed consolidated statements of
operations and comprehensive income (loss). As the full carrying value of the note was converted to Series D Preferred Stock, the balance
remaining for the note at December 31, 2022 and thereafter remained zero. As part of the 2021-A Convertible Notes
financing, the Company entered into an additional convertible note with an existing investor for $0.5 million. The note carries PIK interest
of 3.0% and is due and payable on demand at any time after June 30, 2021. The note contains an embedded conversion feature, which allows
the holder to convert the note into a fixed number of shares of Series C-1 preferred stock at any time after June 30, 2021. The Company concluded the
conversion feature is not required to be bifurcated as an embedded derivative liability, and the note is carried at its principal plus
accrued PIK interest. As the full carrying value of the note was converted to Series D Preferred Stock, the balance remaining for the
note at December 31, 2022 and thereafter remained zero. The Company did not recognize any interest
expense related to the 2021-A Convertible Notes during the thirteen and thirty-nine weeks ended October 1, 2023 and the three months ended
September 30, 2022. Interest expense recognized during the nine months ended September 30, 2022 was immaterial. 2022 Convertible Notes In connection with
the Original Business Combination Agreement, the Company has raised a series of convertible notes (“2022 Convertible Notes”)
during the fiscal year ended December 31, 2022 with an aggregate purchase price of $12.0 million, and during the thirty-nine weeks ended
October 1, 2023 for an additional total purchase price of $21.3 million. Additionally, as part of the acquisition of Solaria, the Company
assumed a note from an existing investor for its fair value of $6.7 million. The note contained the same terms as the other 2022 Convertible
Notes. The Company did not incur significant issuance costs associated with the 2022 Convertible Notes. The 2022 Convertible Notes accrued
interest at a rate of 5% per annum. Immediately prior to the closing of the Mergers, the 2022 Convertible Notes were converted into the
number of shares of common stock of Complete Solaria equal to (x) the principal amount together with all accrued interest of the 2022
Convertible Notes divided by 0.75, divided by (y) the price of a share of common stock of Complete Solaria used to determine the conversion
ratio in the Amended and Restated Business Combination Agreement. This resulted in the issuance of 5,316,460 shares of Complete Solaria
common stock to the noteholders and no debt remains outstanding associated with the 2022 Convertible Notes as of October 1, 2023. The Company has recognized
interest expense of less than $0.1 million and $0.7 million related to the 2022 Convertible Notes during the thirteen and thirty-nine
weeks ended October 1, 2023. The Company did not recognize any interest expense related to the 2022 Convertible Notes during the three
and nine months ended September 30, 2022. SAFE Agreements 2019 SAFE In September 2019, the Company
issued the 2019 SAFE for $0.1 million in proceeds, with immaterial debt issuance costs. No interest was accrued on the 2019 SAFE.
The 2019 SAFE contained conversion features that allowed the holder to convert the 2019 SAFE into shares of preferred stock upon the
next equity financing, subject to a valuation cap. The 2019 SAFE was reported at fair value based on the probability-weighted
expected return method (“PWERM”), which assigns value to the multiple settlement scenarios based on the probability of
occurrence. The fair value of the 2019 SAFE was $0.2 million as of December 31, 2021 was recorded in SAFE Agreements in the
accompanying unaudited condensed consolidated balance sheets. In March 2022, the Company converted the 2019 SAFE into 48,258 shares
of Series D-3 redeemable convertible preferred stock. The Company recognized a gain on the conversion of the 2019 SAFE of less than
$0.1 million in other income (expense), net on the unaudited condensed consolidated statements of operations and comprehensive
income (loss). As the full carrying value of the SAFE was converted to Series D Preferred Stock, the balance remaining for the SAFE at
December 31, 2022 and thereafter remained zero. 2021 SAFE In December 2021, the Company
issued the 2021 SAFE for $5.0 million in proceeds, with immaterial debt issuance costs. No interest is accrued on the 2021 SAFE. The
2021 SAFE contained conversion features that allowed the holder to convert the 2021 SAFE into shares of preferred stock upon the
next equity financing, subject to a valuation cap. The 2019 SAFE was reported at fair value based on the PWERM, which assigns value
to the multiple settlement scenarios based on the probability of occurrence. The fair value of the 2021 SAFE was $6.3 million as of
December 31, 2021 is recorded in SAFE Agreements in the accompanying unaudited condensed consolidated balance sheets. In March 2022,
the Company converted the 2021 SAFE into 1,005,366 shares of Series D-1 redeemable convertible preferred stock. The Company
recognized a gain on the conversion of the 2021 SAFE of $1.4 million in other income (expense), net on the unaudited condensed
consolidated statements of operations and comprehensive income (loss). As the full carrying value of the SAFE was converted to Series D
Preferred Stock, the balance remaining for the SAFE at December 31, 2022 and thereafter remained zero. Solaria SAFE As part of the acquisition of Solaria
(refer to Note 6 – Business Combination) the Company acquired the Solaria SAFEs. The number of shares to be issued upon conversion
of the SAFE notes contained various features to convert or redeem the Solaria SAFEs in the event of an equity financing, public offering,
change of control or a dissolution event. The Company historically elected
to account for all of the SAFE notes at estimated fair value pursuant to the fair value option and recorded the change in estimated
fair value as other income (expense), net in the unaudited condensed consolidated statements of operations and comprehensive income
(loss) until the notes are converted or settled. The SAFE notes were amended through the SAFE Assumption Amendment, Assignment and
Assumption Agreement on November 4, 2022, as part of the Business Combination with Complete Solar, whereby all the SAFE notes were
assumed by Complete Solar. As part of the purchase price accounting discussed in Note 4 – Reverse Recapitalization, the
estimated fair value of the SAFE notes was determined to be $60.5 million. Post consummation of the Business Combination the SAFE
notes were converted to 8,171,662 shares of Series D-8 preferred stock as discussed in Note 6 – Business Combination. Notes Payable Loan and Security Agreement In January 2020, the Company entered
into the Loan Agreement with SVB. The Loan Agreement, as amended, provided for a line of credit up to $7.0 million and has a maturity
date of February 2022. Advances under the line of credit bore interest at the greater of 5.25% or the prime rate (as published in the
Wall Street Journal) plus 3.5% per annum. All borrowings under the line of credit were to be secured by substantially all of the Company’s
assets. During 2021, the Company entered into
several amendments to the Loan Agreement, and in May and August 2021 in connection with the Fifth and Sixth Amendments, the Company issued
warrants to purchase 5,122 shares and 5,229 shares of common stock at exercise prices of $0.38 per share and $0.62 per share, respectively.
The fair value of the warrants were recorded as deferred issuance costs and amortized to interest expense. As of December 31, 2022 and
thereafter, there were no unamortized debt issuance costs. Under the Loan Agreement, the Company
was subject to certain reporting covenants, such as a requirement for the Company’s monthly unaudited condensed consolidated financial
statements and compliance certificate, as well as a financial covenant to maintain a minimum liquidity ratio of 1.75 to 1.00. In 2021,
the Loan Agreement was amended to add a new financial covenant, requiring the Company to obtain new equity of at least $15.0 million by
a specified date, which the Company did not meet; however, the default was later waived by SVB. In February 2022, as part of the transaction
to raise long-term debt in CS Solis, the Company repaid the principal and accrued interest of the Loan Agreement of $6.7 million, which
terminated the agreement with SVB. As such, as of December 31, 2022 and thereafter, there was no debt related to this agreement on the
Company’s balance sheet. 2021 Promissory Notes In July 2021, the Company issued a short-term
promissory note for $0.5 million in proceeds, with immaterial debt issuance costs. The promissory note carried simple interest of 2.0%
and were due and payable after February 2022. In February 2022, the Company repaid the 2021 Promissory Note. In October 2021, the Company issued a
short-term promissory note for $2.0 million in proceeds, with immaterial debt issuance costs. The promissory note contained a financing
fee of $0.3 million, which was due and payable along with the principal amount in January 2022. In connection with the promissory note,
the Company issued a warrant to purchase 50,000 shares of common stock at an exercise price of $0.01 per share. The principal and accrued
interest of the note payable was repaid in January 2022, and no amounts remained outstanding as of December 31, 2022 and thereafter. Current Insight Promissory Note In January 2021, the Company issued a
promissory note for a principal amount of $0.1 million in connection with the purchase of Current Insight, with immaterial debt issuance
costs. The promissory note bears interest at 0.14% per annum and has equal monthly installments due and payable through the maturity date
of January 2022. The principal and accrued interest was repaid in January 2022, and no amounts remained outstanding as of December 31,
2022 and thereafter. 2018 Bridge Notes In December 2018, Solaria Corporation
issued senior subordinated convertible secured notes (“2018 Notes”) totaling approximately $3.4 million in exchange for
cash. The notes bear interest at the rate of 8% per annum and the investors are entitled to receive twice of the face value of the notes
at maturity. The 2018 Notes are secured by substantially all of the assets of Solaria Corporation. In 2021, the 2018 Notes were amended
extending the maturity date to December 13, 2022. In connection with the 2021 amendment, Solaria had 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 as discussed in Note 6 – Business Combination. In December 2022, the Company entered
into an amendment to the 2018 Bridge Notes extending the maturity date from December 13, 2022 to December 13, 2023. In connection with
the amendment, the 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. The Company concluded that the modification
was a troubled debt restructuring as the Company was experiencing financial difficulty and the amended terms resulted in a concession
to the Company. As the future undiscounted cash payments under the modified terms exceeded the carrying amount of the Solaria Bridge 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 October 1, 2023 and December 31, 2022, the carrying value of the Bridge
Notes was $10.7 million and $9.8 million, respectively. Interest expense recognized for the thirteen and thirty-nine weeks ended October
1, 2023 was $0.3 million and $1.0 million, respectively. The Company did not recognize any interest expense related to the 2018 Bridge
Notes during the three and nine months ended September 30, 2022. As of October 1, 2023, the carrying value of the 2018 Bridge Notes approximates
their fair value. SCI Term Loan and Revolver Loan In October 2020, Solaria entered into
a loan agreement (“SCI Loan Agreement”) with Structural Capital Investments III, LP (“SCI”). The SCI Loan Agreement comprises of
two facilities, a term loan (the “Term Loan”) and a revolving loan (the “Revolving Loan”) (together “Original
Agreement”) 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. The Revolving Loan also has a term
of thirty-six months, principal repayments at the end of the term and an annual interest rate of 7.75% or Prime rate plus 4.5%, whichever
is higher. The SCI Loan Agreement required the Company to meet certain financial covenants relating to maintenance of specified restricted
cash balance, achieving specified revenue target and maintaining specified contribution margin (“Financial Covenants”) over
the term of each of the Revolving Loan. The Revolving Loan is collateralized substantially by all assets and property of the Company. In the years ended December 31, 2022
and December 31, 2021, Solaria entered into several Amended and Restated Loan and Security Agreements as a forbearance agreement for SCI
to forbear from exercising any rights and remedies available to it as a result of Company not meeting certain Financial Covenants required
by the Original Agreement. As a result of these amendment changes were made to the Financial Covenants and Solaria recorded a total of
$1.9 million amendment fees in Other Liabilities and was included in the acquired liabilities for purchase price accounting. Solaria had historically issued warrants
to purchase shares of Series E-1 redeemable convertible preferred stock of Solaria (“SCI Series E-1 warrants”). The warrants
were fully exercisable in whole or in part at any time during the term of the Original agreement. As part of the Business Combination
with Complete Solar, all the outstanding SCI Series E-1 warrants were assumed by the parent company, Complete Solaria as discussed in
Note 6 – Business Combination. The Revolving Loan outstanding on the
date of the Business Combination was fair valued at $5.0 million for the purpose of purchase price accounting discussed in Note 6 –
Business Combination. The Revolving Loan principal balance at October 1, 2023 and December 31, 2022 amounted to $5.0 million. Interest
expense recognized for the thirteen and thirty-nine weeks ended October 1, 2023 was $0.2 million and $0.5 million, respectively. The Company
was in compliance with all the Financial Covenants as of October 1, 2023. In October 2023, the Company entered into an Assignment and
Acceptance Agreement whereby Structural Capital Investments III, LP assigns 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,
as discussed in Note 22 – Subsequent Events. Secured Credit Facility In December 2022, the Company entered
into a secured credit facility agreement with Kline Hill Partners IV SPV LLC and Kline Hill Partners Opportunity IV SPV LLC. The secured
credit facility agreement allows the Company to borrow up to 70% of the net amount of its 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 serves as a 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. The Company 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. The Company is in the process of amending the secured credit
facility agreement to extend its maturity date. At October 1, 2023, the outstanding net
debt amounted to $11.7 million, including accrued financing cost of $4.1 million, compared to December 31, 2022, where the outstanding
net debt amounted to $5.6 million, including accrued financing cost of $0.1 million. The Company has recognized interest expense of zero
and $3.1 million related to the Secured Credit Facility during the thirteen and thirty-nine weeks ended October 1, 2023, respectively.
The Company did not recognize any interest expense related to the Secured Credit Facility during the three and nine months ended September
30, 2022. As of October 1, 2023, the total estimated fair value of the Secured Credit Facility approximates its carrying value. Polar Settlement Agreement In September 2023, in connection with
the Mergers, the Company entered into a settlement and release agreement with Polar Multi-Strategy Master Fund (“Polar”) for
the settlement of a working capital loan that had been made by Polar to the Sponsor, prior to the closing of the Mergers. As part of the
settlement agreement, the Company agreed to pay Polar $0.5 million as a return of capital, which is paid in ten equal monthly installments
and does not accrue interest. During the thirteen and thirty-nine weeks ended October 1, 2023, the Company made one payment of less than
$0.1 million, and as of October 1, 2023, and $0.5 million remains outstanding. Debt in CS Solis As described above, as part of the
reorganization in February 2022 of the Company, the Company received an investment from Carlyle. 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 and the
Company contributed the net assets of Complete Solar, Inc. in exchange for 100 Class A Membership Units. The Class B Membership Units
are mandatorily redeemable by the Company on the three-year anniversary of the effective date of the CS Solis amended and restated LLC
agreement (February 14, 2025). The Class B Membership Units accrue interest that is payable upon redemption at a rate of 10.5% (which
is structured as a dividend payable based on 25% of the investment amount measured quarterly), compounded annually, and subject to increases
in the event the Company declares any dividends. In connection with the investment, the Company issued a warrant to purchase 5,978,960
shares of the Company’s common stock at a price of $0.01 per share, of which, 4,132,513 shares are immediately exercisable. The
Company has accounted for the mandatorily redeemable investment from Carlyle in accordance with ASC 480, Distinguishing Liabilities from
Equity, and has recorded the investment as a liability, which was accreted to its redemption value under the effective interest method.
The Company has recorded the warrants as a discount to the liability. Refer to Note 14 – Common Stock, for further discussion of
the warrants issued in connection with the Class B Membership Units. On July 17 and July 18, 2023, and in
connection with obtaining consent for the Mergers, Legacy Complete Solaria, FACT and Carlyle entered into an Amended and Restated Consent
to the Business Combination Agreement (“Carlyle Debt Modification Agreement”) and an amended and restated warrant agreement
(“Carlyle Warrant Amendment”), which modified the terms of the mandatorily redeemable investment made by Carlyle in Legacy
Complete Solaria. The Carlyle Debt Modification Agreement
accelerates the redemption date of the investment, which was previously February 14, 2025 and is March 31, 2024 subsequent to the modification.
Additionally, as part of the amendment, the parties entered into an amended and restated warrant agreement. As part of the Carlyle Warrant
Amendment, Complete Solaria issued Carlyle a warrant to purchase up to 2,745,879 shares of Complete Solaria Common Stock at a price per
share of $0.01, which is inclusive of the outstanding warrant to purchase 1,995,879 shares at the time of modification. The warrant, which
expires on July 18, 2030, provides Carlyle with the right to purchase shares of Complete Solaria Common Stock based on (a) the greater
of (i) 1,995,879 shares and (ii) the number of shares equal to 2.795% of Complete Solaria’s issued and outstanding shares of common
stock, on a fully-diluted basis; plus (b) on and after the date that is ten (10) days after the date of the agreement, an additional
350,000 shares; plus (c) on and after the date that is thirty (30) days after the date of the agreement, if the original investment
amount has not been repaid, an additional 150,000 shares; plus (d) on and after the date that is ninety (90) days after the date
of the agreement, if the original investment amount has not been repaid, an additional 250,000 shares, in each case, of Complete Solaria
Common Stock at a price of $0.01 per share. The warrants are classified as liabilities under ASC 815 and are recorded within warrant liability
on the unaudited condensed consolidated statements of operations and comprehensive income (loss). The Company accounted for the
modification of the long-term debt in CS Solis as a debt extinguishment in accordance with ASC 480 and ASC 470. As a result of the
extinguishment, the Company recorded a loss on extinguishment, of $10.3 million, which is recorded within other expense on the
unaudited condensed consolidated statements of operations and comprehensive income (loss). As of the modification date, the Company
recorded the fair value of the new debt of $28.4 million as short-term debt in CS Solis, and the amount will be accreted to its
redemption value of $31.9 million under the effective interest method. The Company has recorded a
liability of $29.2 million and zero included in short-term debt in CS Solis on the unaudited condensed consolidated balance sheets
as of October 1, 2023 and December 31, 2022, respectively. The Company has recorded a liability of zero and $25.2 million included
in long-term debt in CS Solis on the unaudited condensed consolidated balance sheets as of October 1, 2023 and December 31, 2022,
respectively. The Company has recorded accretion of the liability as interest expense of $1.2 million and $2.7 million for the
thirteen and thirty-nine weeks ended October 1, 2023, respectively, and made payments of interest expense of $0.2 million for each
of the thirteen and thi |
