Annual Report for Fiscal Year Ending December 28, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled "Risk Factors" included elsewhere in this Annual Report on Form 10-K. Please also see the section titled "Special Note Regarding Forward-Looking Statements."

Overview

SunPower Inc. is the rebranded name of Complete Solaria, Inc. The rebranding was effective April 22, 2025 and our legal name change became effective on October 16, 2025. We are headquartered in Orem, Utah.

Our Company was originally incorporated in Delaware as Complete Solar, Inc. on February 22, 2010. In 2022, Complete Solar, Inc. implemented a holding company reorganization creating Complete Solar Holding Corporation ("Complete Solar Holding") as successor to Complete Solar, Inc. Complete Solar Holding then acquired The Solaria Corporation in November 2022 and we changed our name to Complete Solaria, Inc. We created a technology platform to offer clean energy products to homeowners by enabling a national network of sales partners and build partners. Our sales partners generate solar installation contracts with homeowners on our behalf. To facilitate this process, we provide the software tools, sales support and brand identity to our sales partners, making them competitive with national providers. This turnkey solution makes it easy for anyone to sell solar.

On July 18, 2023, we consummated a series of merger transactions contemplated by an Amended and Restated Business Combination Agreement entered into with wholly-owned subsidiaries of Freedom Acquisition I Corp. ("FACT") ("Mergers"), equating to a reverse recapitalization for accounting purposes. Under the reverse recapitalization of accounting, FACT was treated as the acquired company for financial statement reporting purposes. This determination was based on us having a majority of the voting power of the post-combination company, our senior management comprising substantially all of the senior management of the post-combination company, and our operations comprising the ongoing operations of the post-combination company. Accordingly, for accounting purposes, the Mergers were treated as the equivalent of a capital transaction in which we issued stock for the net assets of FACT. The net assets of FACT were stated at historical cost, with no goodwill or other intangible assets recorded.

In October 2023, we completed the sale of our solar panel business. On September 30, 2024, we acquired certain assets relating to the Blue Raven Solar business, New Homes business and Non-Installing Dealer network (collectively the "SunPower Businesses") from the SunPower Debtors, the successor entity in bankruptcy to SunPower Corporation and its direct and indirect subsidiaries. The acquired SunPower Businesses sell products to residential customers and home builders through a network of installing and non-installing dealers and resellers and internal sales team. On September 24, 2025, we completed the acquisition of Sunder Energy, LLC, ("Sunder"), which contracts with customers for solar installations performed by third-party installation companies through a dealer network. On November 21, 2025, we completed the acquisition of Ambia Energy LLC, ("Ambia") a residential solar energy system installer.

We fulfill our customer contracts by using in-house installation experts and by engaging with local construction specialists. We manage the customer experience and complete all pre-construction activities prior to delivering build-ready projects including hardware, engineering plans, and building permits to our builder partners. We manage and coordinate this process through our proprietary software system.

There is substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. The consolidated financial statements included in this Annual Report on Form 10-K have been prepared assuming that we will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business. They do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern.

Growth Strategy and Outlook

Our growth strategy contains the following elements:

●

Increase revenue by expanding installation capacity and developing new geographic markets - We continue to expand our network of partners who will install systems resulting from sales generated by our sales partners. By leveraging this network of skilled builders in addition to our in-house installation experts, we aim to increase our installation capacity in our traditional markets and expand our offering into new geographies throughout the U.S. This will enable greater sales growth in existing markets and create new revenue in expansion markets.

●

Increase revenue and margin by engaging national-scale sales partners - We aim to offer a turnkey solar solution to prospective sales partners with a national footprint. These include electric vehicle manufacturers, national home security providers, and real estate brokerages. We expect to create a consistent offering with a single execution process for such sales partners throughout their geographic territories. These national accounts have unique customer relationships that we believe will facilitate meaningful sales opportunities and low cost of acquisition to both increase revenue and improve margin.

●

Increase revenue and margin by executing on a battery storage opportunity - We have an opportunity to increase our revenue and margin in the battery space through our partnership with Enphase. By providing homeowners with an option to include battery storage as part of their solar system install, we believe there will be a greater need for battery storage as the demand and costs of energy will increase.

The Mergers

We entered into an Amended and Restated Business Combination Agreement with FACT, First Merger Sub, Second Merger Sub, and Solaria on October 3, 2022. The Merger was consummated on July 18, 2023. Upon the terms and subject to the conditions of the Merger, (i) First Merger Sub merged with and into Complete Solaria with Complete Solaria surviving as a wholly-owned subsidiary of FACT (the "First Merger"), (ii) immediately thereafter and as part of the same overall transaction, Complete Solaria merged with and into Second Merger Sub, with Second Merger Sub surviving as a wholly-owned subsidiary of FACT (the "Second Merger"), and FACT changed its name to "Complete Solaria, Inc." and Second Merger Sub changed its name to "CS, LLC" and (iii) immediately after the consummation of the Second Merger and as part of the same overall transaction, Solaria merged with and into a newly formed Delaware limited liability company and wholly-owned subsidiary of FACT and changed its name to "The SolarCA LLC" ("Third Merger Sub"), with Third Merger Sub surviving as a wholly-owned subsidiary of FACT (the "Additional Merger", and together with the First Merger and the Second Merger, the "Mergers").

The Mergers between Complete Solaria and FACT were accounted for as a reverse recapitalization. Under this method of accounting, FACT was treated as the acquired company for financial statement reporting purposes. This determination was primarily based on the Company having a majority of the voting power of the post-combination company, the Company's senior management comprising substantially all of the senior management of the post-combination company, and the Company's operations comprising the ongoing operations of the post-combination company. Accordingly, for accounting purposes, the Mergers were treated as the equivalent of a capital transaction in which Complete Solaria issued stock for the net assets of FACT. The net assets of FACT were stated at historical cost, with no goodwill or other intangible assets recorded.

Disposal Transaction

In October 2023, we completed the divestiture of our solar panel business to Maxeon ("Divestiture"), pursuant to the terms of the Disposal Agreement. Under the terms of the Disposal Agreement, Maxeon agreed to acquire certain assets and employees of Complete Solaria, for an aggregate purchase price of approximately $11.0 million consisting of 1,100,000 shares of Maxeon ordinary shares. We determined that the criteria were met for discontinued operations classification as the divestiture represented a strategic shift in our business. In connection with the Divestiture, we recognized a loss from discontinued operations of $1.1 million, $2.0 million and $173.4 million in the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023, respectively. We also sold all the Maxeon shares in the year ended December 31, 2023, and recorded a $4.2 million loss on the sale of these shares in our consolidated statements of operations and comprehensive loss.

Acquisitions

Certain Assets of SunPower Debtors

On September 30, 2024, we acquired the SunPower Businesses for consideration of $54.5 million which we financed through the issuance of $66.8 million of 7.0% senior unsecured convertible notes in September 2024. These notes mature on July 1, 2029 and are convertible into shares of the Company's common stock at the option of the holder at a current conversion rate of $1.71 per share. The SunPower Businesses operated as a solar technology and energy services provider that offered fully integrated solar, storage, and home energy solutions to customers in the United States through an array of hardware, software, and "Smart Energy" solutions. This transaction was accounted for as a business combination under Accounting Standards Codification ("ASC") 805, Business Combinations.

Sunder Energy LLC

On September 24, 2025, we acquired all of the membership interests in Sunder Energy LLC ("Sunder") for consideration of $57.8 million. We financed this transaction through (1) $20.7 million in cash, subject to certain working capital and other adjustments; (2) a promissory note to the seller in the principal amount of $20.0 million ("Seller Note"); and (3) 10.0 million shares of the Company's common stock valued at $17.1 million (based on the $1.71 closing share price of the Company's common stock on September 24, 2025). We issued 3.3 million shares at the acquisition date and will issue the remining shares in two equal tranches of 3.3 million shares at 12 months and 18 months following the date of acquisition. Sunder is a solar sales company. Sunder provides a third-party solar energy sales force to initiate and execute contracts with customers throughout the United States. Sunder's sales force works with solar installation companies in which Sunder acts as the agent for each transaction entered. Sunder earns revenue from contracts sold to customers for solar installations performed by third-party installation companies. We acquired Sunder as a strategic acquisition to expand its overall market share and its penetration into more U.S. states. We accounted for this transaction as a business combination under ASC 805.

Ambia Energy LLC

On November 21, 2025, we acquired all of the membership interests in Ambia Energy LLC ("Ambia") for consideration of $33.4 million. We financed this acquisition through the issuance of 10.2 million shares of our common stock with a fair value of $16.5 million on the date of acquisition and an agreement to issue an additional $16.9 million in shares of our common stock in two tranches with the final issuance on the 12-month anniversary of the Ambia closing. Ambia is a residential solar energy system installer and operates in various markets throughout the United States.

Supply Chain Constraints and Risk

The global supply chain and our industry have experienced significant disruptions in recent periods. We have seen supply chain challenges and logistics constraints increase, including shortages of panels, inverters, batteries and associated component parts for inverters and solar energy systems available for purchase, which materially impacted our results of operations. These shortages and delays can be attributed in part to the broader macroeconomic conditions and have been exacerbated by the conflicts in Ukraine and Israel. If any of our suppliers of solar modules experienced disruptions in the supply of the modules' component parts, for example semiconductor solar wafers or inverters, this may decrease production capabilities and restrict our inventory and sales. In addition, we have experienced and are experiencing varying levels of volatility in costs of equipment and labor resulting in part from disruptions caused by general global economic conditions. While inflationary pressures have resulted in higher costs of products, in part due to an increase in the cost of the materials and wage rates, these additional costs have been offset by the related rise in electricity rates.

We cannot predict the full effects the supply chain constraints will have on our business, cash flows, liquidity, financial condition and results of operations at this time due to numerous uncertainties. Given the dynamic nature of these circumstances on our ongoing business, results of operations and overall financial performance, the full impact of macroeconomic factors, including the conflicts in Ukraine and Israel, cannot be reasonably estimated at this time. In the event we are unable to mitigate the impact of delays or price volatility in solar energy systems, raw materials, and freight, it could materially adversely affect our business, prospects, financial condition and results of operations.

For additional information on risk factors that could impact our results, please refer to "Risk Factors" located elsewhere in this Annual Report on Form 10-K.

Key Financial Definitions/Components of Results of Operations

Revenues

We recognize revenue for the Residential Solar Installation and New Homes Business reportable segments when installation is substantially complete, the system is capable of interconnection to the local power grid, and control has transferred to the customer.

Installation activities-including system design, equipment delivery, installation, and grid interconnection-are treated as a single performance obligation. For most contracts, revenue is recognized over time beginning upon installation, using an input method based on direct installation costs. Installation costs incurred prior to this point are deferred.

Residential Solar Installation revenue is generated through cash sales, third-party financing arrangements, and power purchase or lease structures. Homeowners are the customers in cash and financing arrangements, while leasing partners are the customers in power purchase and lease arrangements. New Homes Business revenue is primarily generated from sales to homebuilders, with limited lease arrangements recognized upon system acceptance.

Revenue is recorded at the transaction price, net of customer incentives and financing-related fees, and may include estimated variable consideration. Deferred revenue represents amounts billed or collected in advance of performance. None of the Company's arrangements contain a significant financing component.

With respect to our Dealer reportable segment, we earn revenue from contracts in which solar installations are performed by third-party installation companies. In these arrangements, our performance obligation is to facilitate the transaction and arrange for installation services rather than provide those services directly. As a result, we act as an agent and recognize revenue on a net basis, representing the fee retained by us.

Dealer revenue is recognized at a point in time when Permission to Operate ("PTO") is obtained, which indicates that installation is complete and the system is authorized for operation. These arrangements do not include significant financing components, and we do not provide warranty services related to dealer-installed systems.

Costs to Obtain and Fulfill Contracts

Our costs to obtain and fulfill contracts, when recognized, associated with systems sales are expensed as sales commission and cost of revenue, respectively. In addition, incentives we provide to our customers, such as discounts and rebates, are recorded net to the revenue we have recognized on the solar power system.

Costs of Revenues

Cost of revenues is comprised primarily of cost of material, internal labor costs, third-party subcontractors, design services, engineering personnel and employee-related expenses associated with permitting services, associated warranty costs, freight and delivery costs, depreciation, amortization of internally developed software and amortization of developed technology. Cost of revenues from these services is recognized when we transfer control of the product to the customer, which is generally upon installation.

Operating Expenses

Sales Commissions

Sales commissions are direct and incremental costs of obtaining customer contracts. These costs are paid to internal sales teams and third-party vendors who source residential customer contracts for the sale of solar energy systems.

Sales and Marketing

Sales and marketing expenses primarily consist of personnel related costs, including salaries and employee benefits, stock-based compensation, and other advertising and promotional expenses. We expense certain sales and marketing, including promotional expenses, as incurred.

General and Administrative

General and administrative expenses consist primarily of personnel and related expenses for employees, in our finance, research, engineering, and administrative teams including salaries, bonuses, payroll taxes, and stock-based compensation. It also consists of legal, consulting, and professional fees, rent expenses pertaining to our offices, depreciation expense, business insurance costs and other costs.

Other (Expense) Income, Net

Other non-operating income, net

We classify changes in the fair value of (i) derivative liabilities associated with our debt, (ii) warrant liabilities, (iii) Simple Agreements for Future Equity ("SAFE"), and (iv) forward purchase agreements ("FPAs") as non-operating gains and losses within this category.

Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. In many instances, we could have reasonably used different accounting estimates, and in other instances, changes in the accounting estimates are reasonably likely to occur from period-to-period. Actual results could differ significantly from our estimates. Our future financial statements will be affected to the extent that our actual results materially differ from these estimates. For further information on all of our significant accounting policies, see Note 2 - Summary of Significant Accounting Policies, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

We believe that policies associated with our revenue recognition and business combination have the greatest impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates.

Revenue Recognition

Revenue recognition involves significant judgment in determining the timing of control transfer, identification of the customer, estimation of variable consideration, and measurement of progress toward completion. For the Residential Solar Installation and New Homes Business segments, the Company's performance obligation is the design and installation of a fully functioning solar energy system, which includes design, equipment delivery, installation, and grid interconnection services. These activities are combined into a single performance obligation.

Revenue is generally recognized over time using an input method based on direct installation costs, beginning when installation is complete and control of the system begins to transfer to the customer. This approach requires management to estimate total expected installation costs, and changes in these estimates may impact the timing and amount of revenue recognized. Installation costs incurred prior to the transfer of control are deferred.

For certain New Homes Business lease arrangements, revenue is recognized at a point in time upon system acceptance. In arrangements involving financing partners or leasing partners, judgment is required to determine the appropriate customer, which affects revenue timing and presentation. Dealer segment revenue is recognized on a net basis at the point in time when Permission to Operate is obtained.

The transaction price may include variable consideration, which is estimated using the most likely amount and constrained to amounts for which a significant revenue reversal is not probable. Estimates are reassessed each reporting period, and changes are recognized prospectively. Revenue is recorded net of customer incentives and does not include a significant financing component. Changes in assumptions related to these estimates could materially affect reported revenue and deferred balances.

Dealer revenue is recognized at a point in time when PTO is obtained, which indicates that installation is complete and the system is authorized for operation. These arrangements do not include significant financing components, and we do not provide warranty services related to dealer-installed systems.

Accounting for Business Combinations

We record all acquired assets and liabilities, including goodwill, and other identifiable intangible assets at fair value. The initial recognition of identifiable intangible assets, requires certain estimates and assumptions concerning the determination of the fair values and useful lives. The judgments made in the context of the purchase price allocation can materially affect our future results of operations. Accordingly, when valuing identifiable intangible assets, we obtain assistance from third-party valuation specialists. The valuations calculated from estimates are based on information available at the acquisition date. Goodwill is not amortized but is subject to annual tests for impairment or more frequent tests if events or circumstances indicate it may be impaired. Other intangible assets are amortized over their estimated useful lives and are subject to impairment if events or circumstances indicate a possible inability to realize the carrying amount.

Recent Accounting Pronouncements

A discussion of recently issued accounting standards applicable to our Company is described in Note 2 - Summary of Significant Accounting Policies, in the accompanying notes to the consolidated financial statements.

Results of Operations

Fiscal year ended December 28, 2025 ("2025") compared to the fiscal year ended December 29, 2024 ("2024")

In this section, we discuss the results of our operations for fiscal 2025 compared to fiscal 2024. We discuss our cash flows and current financial condition under "Liquidity and Capital Resources".

The following table sets forth our statements of operations data for the fiscal years ended December 28, 2025 and December 29, 2024, respectively. We have derived this data from our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. This information should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The results of historical periods are not necessarily indicative of the results of operations for any future period. Within the tables presented, percentages are calculated based on the underlying whole-dollar amounts and, therefore, may not recalculate exactly from the rounded numbers used for disclosure purposes.

		Fiscal Year Ended
		December 28,				December 29,				$				%
(in thousands)		2025				2024				Change				Change
Revenues		$	300,000			$	108,742			$	191,258				176	%
Cost of revenues(1)			170,788				69,240				101,548				147
Gross profit			129,212				39,502				89,710				227
Gross margin %			43	%			36	%
Operating expenses:
Sales commissions			37,009				24,590				12,419				51
Sales and marketing(1)			29,030				6,827				22,203				325
General and administrative(1)			90,104				76,594				13,510				18
Total operating expenses			156,143				108,011				48,132				41
Loss from continuing operations			(26,931	)			(68,509	)			41,578				61
Interest expense(2)			(25,095	)			(16,223	)			(8,872	)			55
Interest income			3				19				(16	)			(84	)
Other non-operating income, net(3)			9,347				7,932				1,415				18
Gain on troubled debt restructuring(4)			-				22,337				(22,337	)			(100	)
Loss from continuing operations before taxes			(42,676	)			(54,444	)			11,768				22
Income tax (provision)			(1,578	)			-				(1,578	)			*
Net loss from continuing operations		$	(44,254	)		$	(54,444	)		$	10,190				19

(1)	Includes stock-based compensation expense as follows (in thousands):

		Fiscal Year Ended
		December 28				December 29,
		2025				2024
Cost of revenues		$	3,003			$	157
Sales and marketing			2,618				598
General and administrative			4,867				2,312
Total stock-based compensation expense		$	10,488			$	3,067

(2)	Includes interest expense and amortization of debt discount costs with related parties of $5.7 million and $7.6 million in 2025 and 2024, respectively.

(3)

Includes the following related party transactions in 2025 (i) a gain of $3.5 million due to the change in the fair value of derivative liabilities; and (ii) $0.1 million of other income due to a change in the fair value of a forward purchase agreement. Includes the following related party transactions in 2024; (i) $0.7 million of expense in connection with the conversion of SAFE Agreements into shares of common stock and the change in the fair value of SAFE Agreements, (ii) $3.0 million of expense in connection with the loss on issuance of a derivative liability and $0.3 million of income due to the change in the value of derivative liabilities, and (iii) $0.1 million of income in connection with the change in the fair value of forward purchase agreements.

(4)	Gain includes $12.5 million with a related party in 2024.

*	Percentage change not meaningful.

Revenues

We disaggregate our revenues based on the following reportable segments (in thousands):

		Fiscal Year Ended
		December 28,				December 29,				$				%
		2025				2024				Change				Change
Residential Solar Installation		$	160,987			$	67,460			$	93,527				139	%
New Homes Business			124,595				41,282				83,313				202
Dealer			14,418				-				14,418				*
Total revenues		$	300,000			$	108,742			$	191,258				176

*	Percentage change not meaningful.

Residential Solar Installation revenue increased primarily attributed to a full year of Solar Installation due to the acquisition of SunPower Businesses at the beginning of our fourth quarter in fiscal year ended December 29, 2024. New Homes Business increased due to the sale of solar system sales to home builders and the completion of backlog projects acquired with the SunPower Businesses. Dealer revenues are attributable to the acquisition of Sunder.

Cost of Revenues and Gross Margin

		Fiscal Year Ended
		December 28,				December 29,				$				%
		2025				2024				Change				Change
Residential Solar Installation		$	88,400			$	45,266			$	43,134				95	%
New Homes Business			82,288				23,974				58,314				243
Dealer			100				-				100				-
Total cost of revenues		$	170,788			$	69,240			$	101,548				147
Gross Margin			43	%			36	%

*	Percentage change not meaningful.

Residential Solar Installation cost of revenue increase is primarily attributed to a full year of Solar Installation as described above. New Homes Business cost of revenue increased as a result of a full year of completing backlog and the inventory costs associated with each solar system sale. Cost of revenues attributable to the Dealer network is attributable to the acquisition of Sunder.

The increase in gross margins is attributed to operational efficiencies gained through the synergies created by consolidating the various lines of business and streamlining direct overhead costs attributed to each solar installation.

Sales Commissions

		Fiscal Year Ended
		December 28,				December 29,				$				%
		2025				2024				Change				Change
Residential Solar Installation		$	26,298			$	23,388			$	2,910				12	%
New Homes Business			5,032				1,202				3,830				319
Dealer			5,679				-				5,679				*
Total sales commissions		$	37,009			$	24,590			$	12,419				51

*	Percentage change not meaningful.

Residential Solar and New Homes Business sales commission increased from the prior fiscal year ended December 28, 2025 is primarily attributable to the increase in revenue.

Sales and Marketing

		Fiscal Year Ended
		December 28,				December 29,				$				%
		2025				2024				Change				Change
Residential Solar Installation		$	25,154			$	6,827			$	18,327				268	%
New Homes Business			3,253				-				3,253				*
Dealer			623				-				623				*
Total sales & marketing		$	29,030			$	6,827				22,203				325

*	Percentage change not meaningful.

Residential Solar Installation expense increased in fiscal 2025 compared to fiscal 2024 due to increase in overall headcount due to combined business and increasing sales and marketing footprint. New Homes Business increased when compared to prior year primarily attributable to our decision to invest in sales and marketing efforts in fiscal 2025.

General and Administrative

		Fiscal Year Ended
		December 28,				December 29,				$				%
		2025				2024				Change				Change
Residential Solar Installation		$	58,597			$	57,641			$	956				2	%
New Homes Business			29,648				18,953				10,695				56
Dealer			1,859				-				1,859				*
Total general and administrative		$	90,104			$	76,594			$	13,510				18

*	Percentage change not meaningful.

Residential Solar Installation expenses decreased as a result of declines in our legacy operations following a strategic resizing of this reportable segment including reduction of personnel costs. New Homes Business increased due a full year of operations in fiscal 2025. Dealer reportable segment expenses increased entirely attributable to our acquisition of Sunder.

Interest Expense

Interest expense inclusive of amortization of debt issuance costs was $25.1 million in fiscal 2025 and principally consisted of $20.4 million attributable to our 7.0% senior unsecured convertible notes and $3.4 million attributable to our 12.0% senior unsecured convertible notes with the remainder attributable to interest expense on our other obligations.

Interest expense inclusive of amortization of debt issuance costs was $16.2 million in fiscal 2024 and principally consisted of (i) $5.5 million related to our 7.0% senior unsecured convertible notes, (ii) $3.5 million related to our 12.0% senior unsecured convertible notes, (iii) $5.8 million relating to obligations that were exchanged during fiscal 2024 for 12.0% senior unsecured convertible notes, and (iv) other of $1.4 million.

Other Non-Operating Income, Net

Other non-operating income, net, was $9.3 million in in fiscal 2025. Other income principally consisted of $11.5 million of gains from changes in the fair value of derivative liabilities associated with our 12.0% and 7.0% senior unsecured convertible notes and other non-cash income and other of $1.3 million. These gains were partially offset by a $2.8 million increase in the fair value of our public, private placement and working capital warrants accounted for as liabilities, $0.5 million increase in the fair value of our forward purchase agreements liabilities, and $0.2 million increase in the fair value of a SAFE Agreement liability.

Other non-operating income, net was $7.9 million in fiscal 2024. The amounts consisted primarily of a $34.0 million gain on remeasurement of derivative liabilities associated with our 12.0% and 7.0% senior unsecured convertible notes, a $2.9 million net gain due to changes in fair values of warrants accounted for as liabilities, a $0.6 million gain due to the change in the fair value of SAFE Agreements and net other of $0.2 million partially offset by a $24.7 million loss on issuance of a derivative liabilities, $3.8 million of other financing costs and $1.3 million loss on the conversion of SAFE Agreements.

Net Loss from Continuing Operations

Our net loss from continuing operations in 2025, was $44.3 million, a decrease in net loss of $10.1 million, as compared to a net loss from continuing operations of $54.4 million in 2024.

Liquidity and Capital Resources

Sources of Liquidity

Since inception, we have incurred losses and negative cash flows from operations. We incurred net losses of $41.7 million and $56.5 million, in 2025 and 2024, respectively, and had an accumulated deficit of $453.1 million and current debt of $24.3 million as of December 28, 2025. We had cash and cash equivalents (excluding restricted cash) of $9.6 million as of December 28, 2025, which is held for working capital expenditures. We believe our operating losses and negative operating cash flows will continue into the foreseeable future.

We finance our continuing operations through the revenue we collect and through the issuance of debt and equity instruments. For expenses related to mergers and acquisition and payments on our debt obligation we rely on sales of equity securities, the issuance of debt instruments, SAFE Agreements, leases and cash generated from operations. Our cash equivalents are on deposit with major financial institutions. Our cash position raises substantial doubt regarding our ability to continue as a going concern for 12 months following the issuance of the accompanying consolidated financial statements. In the fiscal year ended December 28, 2025, we issued a $20.0 million Seller note and $22.0 million of 7.0% senior unsecured convertible notes to finance our acquisition of Sunder. We also issued $7.0 million in 12.0% senior unsecured convertible notes to entities related to our CEO in fiscal 2025 to finance our operations.

As of December 28, 2025, we had negative working capital, including cash and cash equivalents, of $38.0 million.

Borrowings

Our contractual debt obligations consist of the following principal amounts excluding unamortized debt issuance costs and accrued interest (in thousands):

		As of
		December 28,				December 29,				$				%
		2025				2024				Change				Change
12.0% senior unsecured convertible notes (1)		$	63,801			$	59,587			$	4,214				7	%
7.0% senior unsecured convertible notes			87,293				79,800				7,493				9
Seller note - related party			20,000				-				20,000				*
Loan with related party			1,500				1,500				-				*
Total amount of debt outstanding		$	172,594			$	140,887			$	31,707				23

*	Not meaningful.

(1)

In connection with an exchange of debt in fiscal 2024 for $18.0 million of the principal amount of the 12% senior unsecured convertible notes, we also capitalized all future interest (including coupon interest, default interest and failure to file interest) associated with this portion of the notes which amounts to $10.8 million and $13.6 million as of December 28, 2025 and December 29, 2024, respectively. These amounts are included in the above table.

In the fiscal year ended December 28, 2025, we issued $7.0 million principal amount of 12.0% senior unsecured convertible notes to an entity controlled by our CEO, for an aggregate related party principal balance of $25.0 million principal amount of the 12.0% senior unsecured convertible notes. In the fiscal year ended December 28, 2025, we issued $22.0 million principal amount of 7% senior unsecured convertible notes and $14.7 million principal amount of 7% senior unsecured convertible notes were converted into approximately 8.6 million shares of our common stock. We pay interest on both the 7.0% and 12.0% senior unsecured convertible notes semi-annually on January 1 and July 1. The principal amount of these senior unsecured convertible notes is due in full on July 1, 2029.

In September 2025, we issued the Seller note in the principal amount of $20.0 million in connection with our acquisition of Sunder Energy LLC. Interest accrues under the Seller note at a rate of 7.0%. Principal and interest are payable upon maturity on the earlier of May 15, 2026, subject to certain terms that defer the maturity date to September 30, 2026, depending on the amount of outstanding indebtedness under our Yorkville facilities.

Refer to Note 10 - Borrowings and Derivative Liabilities, in Part II, Item 8 of this Annual Report on Form 10-K for more information on our debt obligations.

We received a deposit of $2.0 million from the Rodgers Revocable Trust, a party to our CEO, in the fiscal year ended December 28, 2025. In January 2026, we received an additional $1.3 million in proceeds from the Rodgers Revocable Trust and together with the $2.0 million, we issued a convertible promissory note in the principal amount of $3.3 million (the "January 2026 Note"). The January 2026 Note will mature on July 1, 2029, unless earlier converted, redeemed or repurchased. Interest on the January 2026 Note is payable semiannually in arrears on January1 and July 1 of each year, beginning on July 1, 2026.

Common stock purchase agreement with White Lion Capital LLC ("White Lion")

We have a common stock purchase agreement with White Lion for an equity line of credit financing facility ("White Lion SPA"). Pursuant to the White Lion SPA, we have the right, but not the obligation, to require White Lion to purchase, from time to time, up to $30 million in aggregate gross purchase price of newly issued shares of our common stock, subject to the caps and certain limitations and conditions set forth in the White Lion SPA, including terms that restrict our ability to issue shares of common stock to White Lion that would result in White Lion beneficially owning more than 9.99% of our outstanding common stock. On August 14, 2024, we entered into Amendment No. 2 to the White Lion SPA (collectively with the White Lion SPA "White Lion Amended SPA"). The White Lion Amended SPA provides that we may notify White Lion to exercise our right to sell shares of our common stock by delivering an Hour Rapid Purchase Notice. If we deliver an Hour Rapid Purchase Notice, we shall deliver to White Lion shares of our common stock not to exceed the lesser of (i) five percent of the Average Daily Trading Volume on the date of an Hour Rapid Purchase Notice and (ii) 100,000 shares of common stock. The closing of the transactions under an Hour Rapid Purchase Notice will occur one Business Day following the date on which the Hour Rapid Purchase Notice is delivered. At such closing, White Lion will pay us the Hour Rapid Purchase Investment Amount equal to the number of shares of our common stock subject to the applicable Hour Rapid Purchase Notice multiplied by the lowest traded price of our common stock during the one-hour period following White Lion's consent to the acceptance of the applicable Hour Rapid Purchase Notice. Under this arrangement, we received proceeds of $6.7 million and $6.7 million in the years ended December 28, 2025 and December 29, 2024, respectively. Refer to Note 14 - Common Stock and Common Stock Warrants, in Part II, Item 8 of this Annual Report on Form 10-K for more information on our lease obligations.

On January 11, 2026, we and White Lion entered into Amendment No. 3 ("Amendment No. 3") to the White Lion SPA. Amendment No. 3 extends the commitment period under the White Lion SPA (the "Commitment Period") to the earlier of December 31,2027 and the date on which White Lion has purchased an aggregate number of shares of our common stock equal to the Commitment Amount (as defined below). Further, Amendment No. 3 increases, subject to approval by our stockholders, the commitment amount under the Purchase Agreement to $55.0 million of shares of our common stock (the "Commitment Amount"), which we may elect to sell to White Lion pursuant to the White Lion SPA, from time to time in our sole discretion, during the Commitment Period. As a result of our total sales of common stock to White Lion as of January 12, 2026, we may receive up to an additional $48.5 million in gross proceeds after such date under the White Lion Purchase Agreement (assuming the shares to be issued are sold at a price of $1.00 per share) if our stockholders authorize the increase in the White Lion Commitment Amount to $55.0 million.

In addition, Amendment No. 3 adds an option for us to submit three hour rapid purchase notices to White Lion that, if accepted by White Lion and otherwise delivered in accordance with the Purchase Agreement, would enable us to sell shares of our common stock to White Lion based on the lowest traded price of our common stock during the three-hour valuation period following White Lion's written acceptance of a three hour purchase notice.

Forward Purchase Agreements

On and around July 13, 2023, FACT entered into separate Forward Purchase Agreements (the "Forward Purchase Agreements") with each of (i) Meteora Special Opportunity Fund I, LP ("MSOF"), Meteora Capital Partners, LP ("MCP") and Meteora Select Trading Opportunities Master, LP ("MSTO") (with MSOF, MCP, and MSTO collectively as "Meteora"); (ii) Polar Multi-Strategy Master Fund ("Polar"), and (iii) Diametric True Alpha Market Neutral Master Fund, LP, Diametric True Alpha Enhanced Market Neutral Master Fund, LP, and Pinebridge Partners Master Fund, LP (collectively, "Sandia", and each of Meteora, Polar, and Sandia, individually, an "FPA Investor", and together, the "FPA Investors"), pursuant to which FACT (now SunPower (f/k/a Complete Solaria, Inc.) following the closing of the Business Combination) agreed to purchase in the aggregate, on the date that was originally 24 months after the closing date of the Forward Purchase Agreements, up to 5,618,488 shares of common stock then held by the FPA Investors (subject to certain conditions and purchase limits set forth in the Forward Purchase Agreements). Pursuant to the terms of the Forward Purchase Agreements, each FPA Investor further agreed not to redeem any of the FACT Class A Ordinary Shares owned by it at such time. The per price at which the FPA Investors have the right to sell the shares to us on the original maturity date will not be less than $5.00 per share.

On December 18, 2023, we and each FPA Investor entered into separate amendments to the Forward Purchase Agreements (the "First Amendments"). The First Amendments lower the reset floor price of each Forward Purchase Agreement from $5.00 to $3.00 and allow us to raise up to $10.0 million of equity from existing stockholders without triggering certain anti-dilution provisions contained in the Forward Purchase Agreements; provided, the insiders pay a price per share for their initial investment equal to the closing price per share as quoted on the Nasdaq on the day of purchase; provided, further, that any subsequent investments are made at a price per share equal to the greater of (a) the closing price per share as quoted by Nasdaq on the day of the purchase or (b) the amount paid in connection with the initial investment.

On May 7 and 8, 2024, respectively, we entered into separate amendments to the Forward Purchase Agreements (the collectively the "Second Amendments") with Sandia (the "Sandia Second Amendment") and Polar (the "Polar Second Amendment"). The Second Amendments lower the reset price of each Forward Purchase Agreement from $3.00 to $1.00 per share and amend the VWAP (as defined below) Trigger Event provision to read: "After December 31, 2024, an event that occurs if the VWAP Price, for any 20 trading days during a 30 consecutive trading day-period, is below $1.00 per Share." The Sandia Second Amendment is not effective until we execute similar amendments with both Polar and Meteora. Subsequently, on June 14, 2024, we entered into an amendment to the Forward Purchase Agreement with Sandia (the "Sandia Third Amendment"). The Sandia Third Amendment sets the reset price of each Forward Purchase Agreement to $1.00 per share and amends the VWAP Trigger Event provision to read: "After December 31, 2024, an event that occurs if the VWAP Price, for any 20 trading days during a 30 consecutive trading day-period, is below $1.00 per Share." In the event either Polar or Meteora amend their Forward Purchase Agreements to include different terms from the $1.00 reset price and VWAP trigger adjustment, or file a notice of a VWAP trigger event, as referenced herein, the Sandia Forward Purchase Agreement will be retroactively amended to reflect those improved terms and liquidity on the Sandia Forward Purchase Agreement, including any of the 1,050,000 shares that were sold upon execution of the Sandia Forward Purchase Agreement.

On July 17, 2024, we entered into the third amendment to the Forward Purchase Agreement with Polar (the "Polar Third Amendment"), pursuant to which we and Polar agreed that Section 2 (Most Favored Nation) of the Forward Purchase Agreement is applicable to all 2,450,000 shares subject to the Forward Purchase Agreement. On July 15, 2025, we and Meteora entered into an amendment to the FPA between Meteora and us, on July 16, 2025, we and Sandia entered into an amendment to the FPA between Sandia and us, and on August 1, 2025, we and Polar entered in an amendment to the FPA between Polar and us (collectively, the "FPA Amendments"). The FPA Amendments extend the valuation date applicable to the Forward Purchase Agreements (the "Valuation Date") to the earliest to occur of (a) July 17, 2026, (b) the date specified by Meteora or Sandia, as applicable, in a written notice to be delivered to us at their discretion and (c) 90 days after delivery by us of a written notice in the event that for any 20 trading days during a 30 consecutive trading day-period that occurs at least six months after the closing date of the transactions under the Amended and Restated Business Combination Agreement entered into on May 26, 2023, the applicable volume-weighted average price ("VWAP Price") is less than the then applicable reset price, provided that a registration statement was effective and available for the entire measurement period and remains continuously effective and available during the entire 90 day notice period. The FPA Amendments further amend the definition of "Settlement Amount Adjustment" to provide that if the expected Settlement Amount (as defined in the FPA Amendments) determined by the VWAP Price over the 15 scheduled trading days ending on but excluding the valuation date exceeds the Settlement Amount Adjustment, then the Settlement Amount Adjustment shall be deemed to be zero, and that if the Settlement Amount Adjustment exceeds the Settlement Amount, then the Settlement Amount Adjustment shall be paid, at the Company's option, in cash or shares of our common stock. The FPA Amendments also amend the definition of "Cash Settlement Payment Date" to provide that if the Settlement Amount Adjustment exceeds the Settlement Amount, we shall remit to the applicable seller the difference between (i) the Settlement Amount Adjustment and (ii) the Settlement Amount. The FPA Amendments further provide that the Settlement Amount will be used solely as a calculation mechanism to determine any liability we may owe to the applicable seller via the Settlement Amount Adjustment, and notwithstanding anything to the contrary, the applicable seller shall not be required to remit the Settlement Amount to the Company or return any portion of the Prepayment Amount.

As a result of these terms, the Forward Purchase Agreements represent a potential use of liquidity that is sensitive to future trading prices of the Company's common stock. If, on the applicable maturity date or an earlier valuation date triggered by applicable VWAP-based events, our stock price is below the amended reset price, the FPA investors are expected to exercise their contractual repurchase rights. In such circumstances, we could be required to make substantial cash payments or issue additional shares, which would reduce liquidity and, in the case of share settlement, result in further dilution to existing stockholders.

Any required repurchase of shares pursuant to the Forward Purchase Agreements or early settlement obligations could materially reduce the cash available to fund operations, capital expenditures, and strategic initiatives. These obligations may also limit our ability to raise additional capital on favorable terms. We continue to evaluate the potential impacts of the Forward Purchase Agreements on future liquidity needs, and the Company's ability to satisfy any required cash settlements will depend on market conditions, operating performance, access to financing, and the market price of our common stock during the applicable measurement periods.

In connection with the Forward Purchase Agreements, we have recorded a liability on our consolidated balance sheets of $4.0 million and $3.5 million as of December 28, 2025 and December 29, 2024, respectively.

SAFE Agreements

SAFE obligations are a source of financing received which may be converted into shares of our common stock in an equity financing transaction, or upon a change in control arising from a liquidity event, the holder of a SAFE is entitled to a portion of the proceeds. We entered into three SAFE Agreements with the Rodgers Massey Freedom and Free Markets Charitable Trust, a related party affiliated with our CEO for an aggregate amount of $6.0 million in fiscal 2024. Two of the SAFEs with an original amount of $5.0 million were converted to shares of our common stock in fiscal 2024. As of December 28, 2025 and December 29, 2024, we had SAFE obligations recorded on our consolidated balance sheets of $0.5 million and $0.4 million, respectively. Refer to Note 9 - SAFE Agreements, in Part II, Item 8 of this Annual Report on Form 10-K for more information.

Leases

We enter into various non-cancelable operating and finance leases. Current operating leases are primarily for our facilities with original lease periods expiring through the year 2030. We had total operating lease obligations recorded on our consolidated balance sheets of $5.2 million and $3.7 million as of December 28, 2025 and December 29, 2024, respectively. We have entered into various non-cancelable finance leases for vehicles used in operations with original lease periods expiring through the year 2029. We had total finance lease obligations recorded on our consolidated balance sheets of $3.1 million and $3.9 million as of December 28, 2025 and December 29, 2024, respectively. Refer to Note 12 - Commitments and Contingencies, in Part II, Item 8 of this Annual Report on Form 10-K for more information on our lease obligations.

Standby Equity Purchase Agreement; Convertible Note, and Convertible Debenture

On January 27, 2026 (the "Effective Date"), we entered into a Standby Equity Purchase Agreement (the "SEPA") with YA IIPN, LTD., a Cayman Islands exempt limited company (the "Investor"). Pursuant to the SEPA, the Investor will advance up to $20.0 million to us in the form of a promissory note ("Promissory Note"). Promissory Notes will accrue interest on the outstanding principal balance at an annual rate equal to 0%, which will increase to an annual rate of 18% upon the occurrence of an Event of Default (as defined in the Promissory Notes) for so long as such event remains uncured. The Promissory Notes will mature on January 27, 2027, which may be extended at the option of the Investor. Each tranche of a Promissory Note will be advanced less a discount in the amount equal to 10% of the principal amount of such tranche. The first tranche was disbursed on January 27, 2026 in the principal amount of $1.9 million. Subject to the conditions set forth in the SEPA, a second tranche in a principal amount of up to $18.1 million may be advanced on the second trading day after the initial registration statement relating to the resale of the shares of our common stock issuable upon conversion of the Promissory Notes first becomes effective.

The Promissory Notes are convertible into shares of our common stock, $0.0001 par value per share at a conversion price equal to the lower of (i) a price per share equal to 125% of the VWAP of our common stock on the trading day prior to the issuance date of each Promissory Note, or (ii) 93% of the lowest daily VWAP during the five consecutive trading days immediately preceding the conversion date (but no lower than the "floor price" then in effect, subject to adjustment from time to time in accordance with the terms contained in the Promissory Notes).

Pursuant to the SEPA, we will have the right, from time to time, until January 27, 2029 (unless the SEPA is terminated earlier), to require the Investor to purchase up to $25.0 million of shares of our common stock ("Commitment Amount") subject to certain limitations and conditions set forth in the SEPA.

We may not issue or sell any shares of our common stock to the Investor under the SEPA or under the Promissory Notes, which, when aggregated with all other shares of our common stock then beneficially owned by the Investor and its affiliates would result in the Investor and its affiliates beneficially owning more than 4.99% of the then-outstanding shares of our common stock.

We paid the Investor a structuring and due diligence fee of $0.05 million and agreed to issue to the Investor 175,000 shares of our common stock within three days of the Effective Date as a commitment fee.

The SEPA will automatically terminate on the earliest to occur of (i) January 27, 2029 or (ii) the date on which the Investor has purchased from us under the SEPA the Commitment Amount in full. We may terminate the SEPA at any time upon five trading days' prior written notice to the Investor, provided that there are no outstanding advance notices under which we are yet to issue shares of our common stock, there are no amounts outstanding under the Promissory Notes, and provided that we have paid all amounts owed to the Investor pursuant to the SEPA. We and the Investor may also agree to terminate the SEPA by mutual written consent.

On March 6, 2026 we entered into a further Purchase Agreement pursuant to which the Investor purchased and we issued a convertible debenture in the principal amount of $10.0 million (the "Debenture"). At the closing under such purchase agreement, we issued the Debenture to the Investor in the original principal amount of $10.0 million for a purchase price of $9.0 million, less certain fees payable under the purchase agreement. The Debenture accrues interest on the outstanding principal balance at an annual rate equal to 0%, which will increase to an annual rate of 18% upon the occurrence of an event of default under the Debenture for so long as such event remains uncured. The Debenture will mature on March 6, 2027, which may be extended at the option of the Investor.

On each of May 6, 2026, June 6, 2026, July 6, 2026, August 6, 2026 and September 6, 2026 (each an "Installment Date"), the Company is required to pay an installment amount under the Debenture equal to (i) $2.0 million, plus (ii) a $0.06 million payment premium, and plus (iii) any accrued and unpaid interest (collectively, the "Installment Amount"). We may repay each applicable Installment Amount, at our option, (a) in cash on or before the applicable Installment Date or (b) by submitting an advance notice under the SEPA, or a combination of a payment in cash and delivery of such advance notice. At any time after the Effective Date, the Investor may convert any portion of the outstanding balance under the Debenture into shares of our common stock at a fixed price of $2.50 per share (the "Fixed Price"). Additionally, at any time on or after any Installment Date, the Investor may convert any portion of any due and unpaid Installment Amount outstanding under the Debenture into shares of our common stock at a price equal to 95% of the volume weighted average price ("VWAP") of our common stock during the five trading days prior to the conversion date (but the conversion price will not be lower than the "Floor Price" then in effect).

The Company, at our option, shall have the right to redeem early all or a portion of the amounts outstanding under the Debenture upon written notice to the Investor (an "Optional Redemption"), provided, that we may only deliver a notice of Optional Redemption if the VWAP of our common stock at the time the notice is delivered is less than the Fixed Price. In connection with an Optional Redemption, the redemption price payable by us will be equal to (i) the outstanding principal amount of the Debenture being redeemed, plus (ii) a payment premium equal to 3% of the principal amount being repaid, and plus (iii) accrued and unpaid interest under the Debenture; however, the prepayment premium shall not apply to any Optional Redemption of the Debenture if the redemption price is paid on or before April 30, 2026.

Sunder Seller Note - related party

On September 24, 2025, we issued a promissory note to the selling member of Sunder (as amended, the "Seller Note") in connection with the acquisition of 100% of the membership interests in Sunder. The Seller Note has an original principal amount of $20.0 million. The Seller Note bears interest at 7.0% per annum, compounded at the end of each calendar quarter. Interest is due and payable concurrent with the payment of the principal balance. The maturity date of the Seller Note is the earlier of (i) May 15, 2026 and (ii) the date on which all amounts under the Seller Note otherwise become due and payable following an event of default. The Seller Note must also be repaid in the event of a change of control of the Company or the sale of all or substantially all of the consolidated assets of the Company and our subsidiaries. We concluded that since the sellers joined the Company and have a level of influence that is not insignificant, they are related parties of the Company and therefore the Seller Note is a related party obligation.

On March 5, 2026, we entered into an amendment of the Seller Note ("Amendment") that if the SEPA Debenture restricts repayment of the Seller Note on May 15, 2026, then the maturity date of the Seller Note will be extended to the earlier of (a) the date that is two business days following the date on which the Seller Note may be repaid pursuant to the restrictions set forth in the Debenture and (b) September 30, 2026 (or, if the registration statement required to be filed pursuant to the Registration Rights Agreement has not been declared effective prior to April 30, 2026, then the outside maturity date will extend to December 31, 2026). Additionally, the interest rate applicable to the Seller Note will increase to 10.0% per annum if the principal amount of the Seller Note remains outstanding after May 15, 2026. As an inducement to agree to the foregoing, the Amendment also provides that, within two business days following approval by our stockholders of the issuance of shares under the purchase agreement in accordance with applicable Nasdaq rules, we will issue the remaining shares of common stock otherwise issuable to the seller pursuant to the purchase agreement. On April 8, 2026, we issued the remaining shares due under the Seller Note, 6.7 million shares of our common stock.

Proceeds from Warrant Exercises

We will receive the proceeds from any cash exercise of any warrants. The aggregate amount of proceeds could be up to $257.2 million if all the warrants are exercised for cash. However, to the extent the warrants are exercised on a "cashless basis," the amount of cash we would receive from the exercise of the warrants will decrease. The Private Warrants and Working Capital Warrants may be exercised for cash or on a "cashless basis." The Public Warrants and the Mergers Warrants may only be exercised for cash provided there is then an effective registration statement registering the shares of common stock issuable upon the exercise of such warrants. If there is not a then-effective registration statement, then such warrants may be exercised on a "cashless basis," pursuant to an available exemption from registration under the Securities Act. We expect to use any such proceeds for general corporate and working capital purposes, which would increase our liquidity. As of April 13, 2026, the price of our common stock was $1.20 per share. The weighted average exercise price of the warrants was $10.52 as of December 28, 2025. We believe the likelihood that warrant holders will exercise their warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the market price of our common stock. If the market price for our common stock remains less than the exercise price, we believe warrant holders will be unlikely to exercise. In which case we will not receive any proceeds from the cash exercise of the warrants.

Cash Flows

We expect that our principal short-term (over the next 12 months) cash needs related to our operations will be to fund working capital, acquisitions, payments on our outstanding debt, and legal settlements. We plan to fund any cash requirements for the next 12 months from our existing cash and cash equivalents, cash generated from operations and debt and equity financings. For the long-term period (beyond 12 months), we aim to generate cash flows from operations to support our ongoing business operations and strategic investment plans. We regularly evaluate our liquidity position, debt obligations and expected cash requirements. As part of this ongoing assessment, we may pursue additional financing through the issuance of equity or the debt financing, as necessary, to meet our operational and investment needs. Our ability to obtain debt or any other additional financing that we may choose to, or need to, obtain will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing.

As a result of not timely filing our Annual Report on Form 10-K for the fiscal year ended December 29, 2024, we are not currently eligible to use a registration statement on Form S-3 that would allow us to continuously incorporate by reference our SEC reports into the registration statement, to use "shelf" registration statements to conduct offerings, or to use our at-the-market offering facility until approximately one year from the date we have regained and maintained status as a current filer. Our inability to use Form S-3 significantly impairs our ability to raise the necessary capital to fund our operations and execute our strategy. If we seek to access to the capital markets through a registered offering during the period of time that we are unable to use Form S-3, we may be required to publicly disclose the proposed offering and the material terms thereof before the offering commences, we may experience delays in the offering process due to SEC review of a Form S-1 registration statement and we may incur increased offering and transaction costs and other considerations. If we are unable to raise capital through a registered offering, we would be required to conduct our equity financing transactions on a private placement basis, which may be subject to pricing, size and other limitations imposed under the Nasdaq rules, or seek other sources of capital. The foregoing limitations on our financing approaches could prevent us from pursuing transactions or implementing business strategies that would be beneficial to our business.

Cash Flows for the Fiscal Years Ended December 28, 2025 and December 29, 2024

The following table summarizes our cash flows from operating, investing, and financing activities for the fiscal years ended (in thousands):

		Fiscal Year Ended
		December 28,				December 29,
		2025				2024
Net cash used in operating activities from continuing operations		$	(15,327	)		$	(54,662	)
Net cash used in investing activities from continuing operations			(19,339	)			(54,657	)
Net cash provided by financing activities from continuing operations			30,905				120,100
Net (decrease) increase in cash, cash equivalents and restricted cash			(3,761	)			10,803

Cash Flows from Operating Activities

Net cash used in operating activities from continuing operations of $15.3 million for the fiscal year ended December 28, 2025 was primarily due to the net loss from continuing operations, net of tax of $44.3 million and net cash outflows of $3.1 million from changes in our operating assets and liabilities which was partially offset by non-cash adjustments of $32.1 million. The main drivers of non-cash charges of $31.3 million consisted of $15.3 million of amortization of debt issuance costs, $10.5 million of stock-based compensation expense, $9.1 million of depreciation and amortization expense, $3.6 million provision for credit losses, $2.8 million loss due to the changes in the fair value warrant liabilities, $1.4 million of non-cash lease expense, and $1.3 million of deferred tax expense, partially offset by an $11.5 million change in the fair value of derivative liabilities, a $0.5 million change in the fair value of our forward purchase agreement liabilities, and a $0.6 million change in the fair value of deferred consideration in connection with our acquisition of Sunder. The main drivers of net cash outflows from changes in operating assets and liabilities consisted of a $38.8 million increase in trade accounts receivable, an $15.9 million decrease in accrued expenses and other current liabilities, a $1.5 million decrease in operating lease liabilities, a $5.6 million increase in prepaid expenses and other assets and a $3.1 million decrease in contract liabilities, partially offset by a $38.4 million decrease in inventories, a $15.3 million increase in accounts payable and an $8.5 million decrease in contract assets.

Net cash used in operating activities from continuing operations of $54.6 million for the fiscal year ended December 29, 2024 was primarily due to the net loss from continuing operations, net of tax of $54.4 million and net cash outflows of $6.6 million from changes in our operating assets and liabilities which was partially offset by non-cash adjustments of $6.4 million. Non-cash charges primarily consisted of $24.7 million for loss on issuance of derivative liability, $9.1 million provision for credit losses, $5.8 million of amortization of debt issuance costs, $9.2 million of non-cash expense in connection with warrants issued for vendor services, $3.1 million of stock-based compensation expense, $3.9 million accretion of debt in CS Solis, $3.8 million for asset impairment and disposals, $2.7 million for depreciation and amortization, $1.8 million for non-cash interest expense, $0.8 million for lease expense, and $1.3 million for loss on conversion of SAFE Agreements to shares of common stock, and $0.4 million of other financing costs, partially offset by a decrease of $34.0 million for the change in fair value of derivative liabilities, $22.3 million gain on troubled debt restructuring, $2.9 million change in fair value of warrant liabilities, and $1.0 million change due to fair value adjustments. The main drivers of net cash outflows derived from the changes in operating assets and liabilities were related to an increase in contract assets of $21.5 million, a $10.4 million decrease in accounts payable, a $0.8 million decrease in operating lease liabilities, and a $0.2 million increase in prepaid expenses and other current assets, partially offset by an $8.7 million decrease in inventories, a $3.3 million decrease in accounts receivable, a $14.1 million increase in accrued expenses and $0.2 million of other.

Cash Flows from Investing Activities

Net cash used in investing activities from continuing operations of $19.3 million in 2025 is principally attributable to the cash paid for the acquisition of Sunder.

Net cash used by investing activities from continuing operations of $54.7 million for the fiscal year ended December 29, 2024 was primarily due to the acquisition of SunPower of $53.5 million (net of $1.0 million of cash) and $1.2 million in capital expenditures.

Cash Flows from Financing Activities

Net cash provided by financing activities from continuing operations in 2025 was $30.9 million and consisted of $19.8 million received in exchange for 7.0% senior unsecured convertible notes, $7.0 million received from related party trusts of T.J. Rodgers, our Chairman and CEO, in exchange for 12% senior unsecured convertible notes, an investor deposit of $2.0 million received from a related party trust of T.J. Rodgers, $6.7 million in proceeds from the issuance of shares of our common stock, and $0.6 million in proceeds from the exercise of stock options and a warrant in exchange for shares of our common stock, partially offset by $2.3 million of finance lease payments, $2.2 million in payments on our debt obligations and $0.7 million for taxes paid related to net share settlement of equity awards.

Net cash provided by financing activities from continuing operations in 2024 was of $120.1 million and consisted of $107.7 million in proceeds from the issuance of convertible notes, $6.0 million in proceeds from the issuance of SAFE agreement, $6.7 million in proceeds from the issuance of common stock and $0.5 million in proceeds from the exercise of common stock options. The proceeds were partially offset by finance lease payments and the payment of a note aggregating $0.8 million.

Emerging Growth Company Status

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable.

SunPower is an "emerging growth company" as defined in Section 2(a) of the Securities Act and has elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. Following the closing of the Mergers, our post-combination company remains an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of common stock that is held by non-affiliates exceeds $700 million as of the end of that year's second fiscal quarter, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which we have issued more than $1.0 billion in non-convertible debt in the prior three-year period, or (iv) the last day of the fiscal year ending after the fifth anniversary of our IPO. We expect to continue to take advantage of the benefits of the extended transition period, although we may decide to early adopt such new or revised accounting standards to the extent permitted by such standards. This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.