Complete Solaria, Inc., a semiconductor and related devices manufacturer, has announced the private offering of its 7.00% Convertible Senior Notes due 2029, with an aggregate principal amount of $52.5 million. The offering was detailed in a recent 8-K filing with the Securities and Exchange Commission.
The notes were sold via Note Purchase Agreements with several investors, including an entity affiliated with the company's CEO, T.J. Rodgers. The notes are set to mature on September 15, 2029, and interest is payable semiannually at a rate of 7.00% per year starting March 15, 2025.
Holders of the notes may convert their investment into shares of Complete Solaria's common stock at any time before maturity, at a rate initially set at 467.8363 shares per $1,000 principal amount, which equates to a conversion price of approximately $2.14 per share. This price represents a 25% premium over the Common Stock's last reported sale price on The Nasdaq Global Select Market as of September 6, 2024.
The company has outlined specific terms for early redemption, repurchase in case of a fundamental change, and events of default in the Indenture agreement with U.S. Bank Trust Company, National Association, which will serve as the trustee.
Complete Solaria may redeem the notes, in whole or in part, for cash after the second anniversary of the issuance date, under certain conditions. In the event of the company undergoing a fundamental change, holders may require the company to repurchase their notes at a price equal to the principal amount plus accrued interest.
If the company fails to close the transactions under the previously announced Asset Purchase Agreement with SunPower (OTC:SPWRQ) by the specified outside date, and the agreement is terminated, note holders will have the right to have their notes repurchased by the company.
In other recent news, Complete Solar Holdings raised $40.5 million via a convertible debenture to fund its acquisition of certain SunPower business units. Additionally, it established a $30 million Equity Line Of Credit (ELOC) with financial services provided by Cantor Fitzgerald & Co. and legal advice from Arnold & Porter. In other financial restructuring, Complete Solaria eliminated $67.6 million in long-term debt, providing an additional $18 million in working capital.
The company also amended its stock purchase agreement with White Lion Capital and forward purchase agreements with Meteora Capital Partners, Polar Multi-Strategy Master Fund, and Sandia Investment Management LP.
In response to identified weaknesses in its internal control over financial reporting, Complete Solaria replaced Deloitte & Touche LLP with BDO USA, P.C. as its new auditor.
Leadership changes include Aaron Semliatschenko's appointment as the new Vice President of U.S. Operations. Despite a revenue drop from $20.7 million to $10.0 million, Complete Solaria maintained a gross margin of 24%, with an expectation to increase over 30% in the upcoming quarter.
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