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 | |
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 | |
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 | |
Notes to Unaudited Pro Forma Combined Financial Statements
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.
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. |
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. |
