SPWR - NASDAQ

Hello. My name is T.J. Rogers. You're at the Complete Solaria Earnings Release. Normally, I insist on having an in house Board Meeting. I was in Salt Lake a couple days ago. Orem is actually where our headquarters is now. A couple days ago and got sick and, tried to fly home. My airplane had a bad, bad valve in it, so I'm homesick with no airplane. Dan and I are going to handle this call. We've got a good report. We're going to handle this call, but in the future, you should expect to see a boardroom with me and the VPs in it ready to answer questions. Today, we'll handle that with just two of us. Okay. Presentation. This is our third quarter report. Q3 '24 and Q4 24 forecasts are as follows. This is for the old Complete Solaria, and then there'll be a new section on the combined company. We've emerged for weeks, decks, and more than a month, and we're looking forward, but this is the last official report of Complete Solaria. We've done the acquisition of SunPower's assets. We've taken three divisions, New Homes, Blue Raven and Dealer, I'll talk about that later. We had a little court battle for the rights to the SunPower brand. The Chinese tried to take it away from us. We won that one. We've also got, here's the SunPower brand. We've taken -- our company has only 65 people in it now. We've just hired 1,204 SunPower employees. In a way, it's not a technical way of saying it, but it's like a reverse merger, the minnows swallow the whale. We hired the people we wanted with interviews and then the new company goes away and the old SunPower takes care of its business without us. We raised $80 million last quarter through convertible debt offerings, to get the $45 million that we paid for SunPower. That was a stalking horse bid in SunPower's Chapter 11 bankruptcy. And we've got all of that in the bank except for the last $14 million is coming in from Chinese investors that will be here in early December. We've got $80 million to keep the company running. Here, we have the official reports. I've got GAAP and non-GAAP for old Complete Solaria. In the small company, we're not -- we were $5.5 million in revenue. We were having a hard time turning back on, but we're now in a company that's much bigger than that. This is not really that relevant. We've raised -- the write offs led to lousy gross margin, and we raised $79 million to affect the acquisition. This is a slide that's on our website. This is the slide I showed investors. This was Complete Solaria. We went into a period of decline when private equity cut off our funding and we literally couldn't buy panels to put on roofs. And this is the last quarter and we didn't really we're focusing on other things, but we didn't really grow from it. And I showed investors this number and said this number is possible. Today, I'm going to report on the number and what it looks like. The first five quarter plan is done. It's been through five revisions. It's what I've said, it needed $80 million funding and it promised $100 million I'm going to update you on that today. It also said that we had a start-up mentality where we took the revenue we could get and then we built the company from it. So when we built the company, we actually used old SunPower's 2,800 people as a hiring pool. There were many of them that worked on jobs that we weren't going to carry forward. And then in other cases, given it was a bigger company, we had a really high quality pool to choose from and we interviewed everybody and we got the best ones we could. We had a minimum of three interviews for each person. We then constructed our company to have minimal losses operating income in the first quarter of this plan, followed by profitability mid '25, so relatively low losses on the new company and I'll report on that today. We then reorganized the company along the lines of a start-up, that is you got $100 million in revenue. Everybody was saying, well, gee, SunPower needs $700 million to get that done. The investors in Texas were -- actually it was BAML, was saying no way, no more money, we've had it. So we were wondering what to do and I went through a series of planning steps. One was, we're not going to fund our customers anymore. There are professional funding companies, we will use them. There are sophisticated companies that are better than our engineers in the backroom at doing financing. And of the $750 million that SunPower was asking for to remain viable, $500 million was that -- then the $550 million and then they had $200 million for operating. That was too much too. Where debt was $470 million and they couldn't pay it. So that caused their Chapter 11 bankruptcy. My idea was the interesting thing is if you go in this direction, one jogging distance, I can get to Sand Hill Road. I said, we'll do a start-up. You got a name called SunPower. You got $100 million in revenue. I said, I would not need to jack more than two buildings down Sand Hill Road before I'd find the funding we needed for a start-up like that. It's a great deal. So that was the deal. We're going to do a start-up. We're going to take the revenue we can get and we're going to build a company around it. And that was a very difficult task. We had SunPower. We had a company called Blue Raven, which SunPower owned, but it never integrated. Blue Raven was in Orem, Utah, which is south of Salt Lake. And is -- if you wanted to say West of San Jose of the Salt Lake complex of solar companies, you'd pick Orem. And so, that company is totally different, different culture. Then we got SunPower, totally different, but they've gone to scale. So they knew a lot about how to scale up a company that we didn't know. And then, you've got Complete Solaria, which was a dealer company. We bought orders from the dealer network and then installed them and tried to make money. And that's what Complete Solaria did. I actually invested in a panel company that would compete with SunPower. I thought SunPower or the old SunPower is getting fat and we could take a bunch of business. So we made world class all black panels. That company I was with for year-and-a-half. We merged with Complete Solar, which is a sales and installation company. That company is called Complete Solaria when the two joined. Unfortunately, in the second quarter of last year, the Chinese came out with all black 400 watt panels that were right there with us and their prices were below our cost. So that was the end of that one. And then Complete Solaria had money, didn't make panels anymore, and we went forward with SunPower and Blue Raven to form a new company. We're in the process of doing that. The picture of the company is here. So we've got nine directors. We've got world-class directors because they're presidents of companies that have been associated one way or the other and they stayed with us. I wasn't the President. I came in to be President. I'm 76. I've done this before, and we're in the process of looking for a President, but until the same goes to college and is safe, I'll be around as CEO. This is our organization, and turns out that -- the reason that our chart looks simple is because it's done a lot of work, important work and people are in totally different places than they were before and this org chart is the right way to go. It's a Silicon Valley style org chart. So we have Blue Raven and they're staying as a separate division. Let me just show you, okay, I'm going to show you Blue Raven. Blue Raven is they do sales direct to customer. So they have over 1,000 people in their sales force, direct and indirect. They do all the way. They start with appointments, then the setters are called, assess an appointment, then the closer as they're called, that's the one that makes all the money. The closer goes in and gets the order. And then, Blue Raven executes with its own people to install it. So they are a vertically-oriented company, and they're good at every step of what they do. In particular, they're extremely good at manufacturing. They're going to do manufacturing for the company going forward. We're going to collapse the manufacturing organizations in the other two parts of the company into Blue Raven. They're in Orem. They're in a low-cost building. They're in all in one building. They've got a lot of company spirit and they can do this job. New homes is an old part of SunPower. It sounds like what's the difference between putting solar on somebody's house and putting solar in a new house and in development. The answer is totally different. In this case, your customer is a corporation that's building 300 houses in Springdale, Nevada. You've got to go in several times to rough in the conduits in the wall. Then you go in and install solar on a brand new roof. And then, you get paid when somebody buys it and they make it part of their mortgage or they have their own financing, not you. So the cost of selling is much lower, because you sell the one entity, this corporation. The customer is much more demanding because you got a customer who's got economic clout on you. The profits are better. They're not exceptional, but they're better. Right now, among these three divisions, that's the only one making money. Blue Raven is not. And then, we've got dealers. And this is a group and this includes the old company that you've worked with, where you go to a dealer and you buy a job. So that dealer has got a contract, got the person signed, which doesn't mean a lot. It means you have 70% chance of actually doing the solar, not a 100% chance even with a signed contract. Pardon me. So you go to a dealer and you buy a job, a signed contract. And a typical system will be the little bigger than typical. It's 40,000 watts. So I can do the math in my head. In a typical system, you will pay 28% to 32% of the retail value of the system. That is 30% of $40,000 which is $12,000. So the guy who sells it gets $12,000 out of the $40,000, and there's $28,000 left and you got to do everything, make money and support it on that $28,000. That's the dealer job that and we have two in the model. SunPower had a division that did it that way and that was the way Complete Solar did it. So these are our three divisions. If you look, now, I'm going to show you those. There's our three divisions. I just talked about SunPower and Complete Solar, 137 people. So their division was bigger than ours. We had 65 people and we roughly doubled the headcount to do dealers. They're in Texas and the Philippines, and they're different animal than the other guys. You can see 233 is new homes. They're in Utah and in the Philippines. SunPower had a superior Filipino organization. I'm very used to that. At Cypress, we did assembly and test there at 1,000 people. At SunPower, we built our manufacturing plants that actually made wafers for solar cells in the Philippines in automated equipment. So I have nothing but good experience with the Philippines, and SunPower had a great organization. We use it. A little bit more, these guys are about the same size. And then, excuse me, these guys are about the same size, then we have Blue Raven. These are the guys that do the dealer task and keep the money and then do the installation and then do the maintenance after that. And you can see, you more than double, almost triple your headcount by having that full sales organization. But given that you're paying $12,000 for an order, you can double headcount and that's their model. Right now, I can't tell you for a fact, which of these three models is going to work. I know all three of them can work. And I know to get our revenue, we're going to work on and we also have assets among them that we can deploy back and forth. They can help each other. That hadn't been the case. Blue Raven had been a start-up. They're alone pretty much in Utah and there wasn't any integration between SunPower and Blue Raven. So I'm doing that now. And it's -- sometimes it's not fun. They have their own culture, and they don't like being put upon. But, I'm trying to convince them, I think, I'm making ground to make our company work. We've got to integrate. This, if you look at it, it's 995 people. I look at revenue per employee and I look at profitability of each of the groups. Right now, making good money and losing a little bit of money for both of these guys, that's 1,000 people and that's a company. And here, we have Executive Vice Presidents and they're running independent businesses. I don't like to integrate them, give orders, have headquarters tell them what to do, none of that. That's the business. Then we've got other stuff, CFO, business development, operations and maintenance, taking care of stuff, old stuff, Chief Administrative Officer running legal HR and quality and then an IT guy, who's on the executive staff. But these are service functions here, and there's 209 of us, including me, and we keep the other 995 running, that's our job. Right now, there's some friction because all of our groups aren't doing as well serving the other groups as we would like. But that's about a quarter worth of getting things running right. So that's the organization. You can see the reason for it. Legal, we dropped from 39 to seven people. The head lawyer at SunPower wrote me a memo and said, I can run legal for you with seven people, and you won't be using outside lawyers too much. I called her up and talked a little bit, and then she got an offer letter the next day, and so did her people. HR, same story. Quality, same story. IT was the biggest story, where the three companies had three different very expensive IT systems. One included both Oracle and Salesforce in one company. That was this guy, right here. And it turns out Blue Raven had special software just made for solar, really good. It's called Albatross. And we're going to use that for everybody and I'm going to get rid of the software expenses and the other two, another example of synergy. By the way, in my prior life at Cypress, we acquired 16 companies excuse me, 26 companies in 34 years. So we actually have a spec for doing this. So then we have a matrix organization. Sometimes, we embed people, so you'll have your lawyer and HR rep there. Sometimes we just do service like this. So this is our organization and this organization can get profitable, and it is built to support $100 million a quarter in revenue. Okay. So I already explained that. This is the Q3 results. There are no official results for Q3, because our merger closed on September 30th. So all I did here was add together the results from the two companies. I did it myself. The auditors didn't do it. And I'm showing it to investors to give you feeling for what our deployment looks like. So Complete Solar, my old company, merged into dealer, the old SunPower company. And if you added up all the revenue from all three last quarter, it was $117 million. So companies have scale and they know how to do things with scale. That's good news. The bad news, in what would be called non-GAAP numbers, the GAAP -- what would be called GAAP number includes write offs, expenses, et cetera. But if you get back to what I would report, last quarter for the combined companies just adding together, I would have reported a $40 million loss. Okay, well, that's catastrophic, it's minus 35% or 30%. But there's reasons for it. We had all other sources of both companies, so we had over 2,000 some part people for the whole quarter last quarter and we had all that software, et cetera. So that number and I'll show you at the end, it's going to drop. It's going to get dramatically better going forward. By the way, this $20.6 million in revenue for the third quarter contains Complete Solar $5.5 million in $15 million from the internal group of SunPower. I think I made every point I want to make. I got to get my labels off so I can read it. So that was combined revenue, $117 million. I already told you this. Now it turns out that $117 million was hotter than our current run rate. And that's because SunPower had been shut down for capital, so to Complete Solaria that those dying numbers to Complete Solaria reflected private equity shutting us down. So both companies had some orders left over that they never were able to install. And when we finally got going in Q3, got some money and started working, we did $117 million. So right now, that backlog of orders is gone, and we're digging out orders one at a time or 10 at a time with our divisions with new organization. So right now, if you look at our order generation rate, our Q4 revenue is expected to be $80 million. So I gave you the bar, said I'm going to build a $100 million quarter company and I'm going to establish something underneath it, right now, when I look much more carefully than I have been in the past and our order rate and our backlog that we've got in the fab, the number we see is $80 million for the fourth quarter. So that's an informal expectation change for you. Obviously, going downward, but $80 million is not peanuts. We're a $320 million company. We're solid and we're well organized, and we got good people. So I presented this plan in Orem. By the way, I'll just talk for a minute on Orem. So south of Salt Lake is cheaper than Lehi, where we are. It is an industrial center. The industry is, I would call it, white collar in terms of the buildings. And we're in a Nobel Microsoft site. There are like 10 buildings. We have one building. The buildings are nice. If you refurbish them, they're very nice. They got a lot of square feet and there's like nine buildings. As we expand, Orem is our headquarters. I have a boardroom built in Orem and actually I'd be sitting in that boardroom right now except for the stuff I said. The operating loss is now expected to drop from $40 million which is what would have Q3 been if you just add it together to $2 million to $11 million in Q4 2024 due to a significant headcount reduction. So that's behind us. I'm shooting for the two, and I'm still working on it, but I'm giving a wide range here. That's what's going to come in on the top line and my ability to do what I need to do will give this range for a loss. We have that cash. I'll leave it there. So we showed this to Orem, Utah. They have a big auditorium downstairs. Another thing, they have enough square feet that they actually have a real auditorium where you can have an all hands meeting to over 1,000 people. The plan I'm showing you is the Rev 5 plan. We spent two months working on a plan. And I'm tough on plans and I'm tough on their format and their executability. And we have a real plan, Silicon Valley style. Like I said, the way we cut headcount was not to try to lay off, which is always terrible to do. We simply hired. We called it the Noah's Ark plan. And there are only so many tickets to get on the Ark, and that's it. The Ark sales, that's the company you're looking at, and old SunPower is left behind. Here's where I said $80 million a second time. I didn't want to kind of gloss it over because that is down from $100 million. I wanted to tell you that. $80 million is calculated by extrapolating shipments to known customers from mortars and mid process inter factory. So we're now starting to get a handle on rev rec and what our revenue is going to be. And it turns out the three companies all had different processes and had different rev rec points. And we've consolidated that, and we're now able to start counting better. On the mitigation side, and this is the end of my formal statement, we had OpEx in Q3 '24, everybody from both companies, and we spent $43.5 million in OpEx. SunPower was overstaffed beyond belief. Blue Raven is chubby and complete Solaria is very lean because I leaned them out before we went together. Our OpEx is going to go $17 million in the next quarter from $43 million to $17 million. And those actions have already been taken and they're not things we're about to do, they're things that are done, that is we'll start, we'll have a lower number and that number will get better with each successive quarter. So we are really working. We're already ahead of this, we're working on profitability. Now our target is higher. We have to work on achieving profitability from the gross margin of $80 million as opposed to the gross margin of $100 million, and that's a doable thing, and I'm working on that right now. All right. So we got forward looking statements. We got reconciliation. Before I go to questions, I just want to show you a couple of pictures about SunPower. That's Silicon Valley. That's San Francisco Bay. My fellow classmate from the Stanford PhD program across all the way, that's Dick Swanson. He started SunPower in 1985. I just put a brand new roof of British Petroleum Panels on Cyprus, and these are half panels, I'm showing here. They were 75 watts each. SunPower smaller panel was 95 watts, all black, pretty. The cell inside of that is what Dick Swanson invented. It's called the A300. And I worked with his people. We owned SunPower at 1 point in Cypress for a bunch of years. I worked with Dick and his people to learn how to make silicon and really make that thing work right. SunPower was a bigger company than installer companies are today. These are SunPower sales, 20% sales, back in 1999. It's 20 years before the Chinese had them. And they worked with a company to make an airplane that was solar powered. That is, it took off under its own power with solar energy and it flew to an altitude of 96,000 feet. Not bad. By the way, just so you understand, an F-15 Eagle, hot airplane, can fly vertical. The service ceiling on that airplane is 72,000 feet. The air so thin up there, they have to have these propellers that look like windmills. I made this point to the people of Blue Raven, because they considered SunPower to be the oppressor from Silicon Valley and I was the latest alien. And I pointed out that, they were working with a company that had a really storied history, and they needed to work better together. Now there was a solo crash, and that airplane actually got caught up. And they made a flight when the wind was marginal to fly and they made a decision to fly and that didn't work out. And I used that as an icon for the solar crash, which is happening. When the solar crash at SunPower, that's when they announced Chapter 11. Here's where they were hoping that Chapter 11 wasn't real. Here's the last heartbeat and that's it. And their stock is now worth $0.03 per share. It's over. And I pointed out to our folks, this could happen to you. And then not only the stock get wiped out, but they've been delisted. When SPR, SPWR without the queue becomes available, We have word first in line. At least court says that. We'll see. I made this point last week to people's solar closures and bankruptcies. This is the list that was alphabetized, and I point their SunPower there. But I pointed out to them, this is a great time to invest in solar, because right now, there's a market where you go out and you say, would you guys like a job? We'll give you stock options, Silicon Valley style. And you can get people and you can get companies and you therefore can get inorganic growth, and that is our plan that I'm going to acquire. When I get our act together, that's going to take me a couple of quarters. We can acquire solar companies for very low prices to grow more rapidly. The other thing SunPower brings that people don't appreciate enough is, its name. This is a report called EnergySage. They are actually a construction organizing firm that quotes solar. So their data is exactly where solar is. This is their last report, it came out in October. And I'll show just one slide from this report. This is the difference in price per watt of various kinds of solar. And it shows, for example, a new Tesla battery, which is wonderful, and an RC panel, which is wonderful. These guys are both trying to take market share, and that's a zero reference point. If you use the same battery in Q-Cells, Q-Cells likes a little bit higher price, they charge more. Let's see. And you go on and here's 51% premium. So let's say, these guys right here, and these are all important people, they kind of set the market. These guys are trying to gain share. There's one data point that's 20 percentage points above that. And you say, well, do they use a Tesla battery or an in phase battery or inverter? These are the Tesla battery has inverters in it, so it's both a battery and an inverter. And then, you go, no, they use SunPower inverters. That's the SunPower name. If you look under the hood, that's an Enphase inverter. They use Waaree panels, which are not so hot panels from India. And yet, because of that name right there, they get 20 percentage points more. So my hope is, we get this thing to break even very quickly. And then by that, I mean, a few quarters maximum and not lose a lot of money on the way there. There's -- they're right there as we won this name in court for the U.S., and we'll become the new SunPower. One thing we don't have is, we're just an installation company right now, but we have the technologist from SunPower. And I'm a technologist in solar. I built the fab for SunPower that made all those panels. And we're going to get some technology going. I have four solar companies I'm working with right now in my venture portfolio. So I'm planning on having this be our upside. And the point is, if I can only get half the premium in the future that they have historically gotten, and this, by the way, is up to last October, meaning a month ago, two months ago, there's a way you can make premium profit. One more thing, sales. This is a complete solar network. California, everybody does it, the Sun States and a little bit East Coast. This is the SunPower network also dealer. Again, California and the Sun States, much more concentration, plus they have Florida. We're going to merge it. We've already done it. So we're going to have a smaller but more effective better covering sales force. That's the Vision 1. Blue Raven, they have a different strategy. They're going to do the states that don't get covered. They can get more stable business. They can get a premium price. They can build their own name, which is getting well known. So that's a standalone. And then SunPower New Homes is again different. You see it's different kind of deployment, but that's where they're building new developments, 200, 300 new homes at a pop. That's a standalone business. So we will have three sales forces doing three different things in the new company. Therefore, we'll have a pretty powerful sales force. The opportunity is good. There's the obligatory market side. This one comes from the government. And all it says is that, in the United States, only 3.7% of homes have solar. That means, you've an unpenetrated market with 96.3% potential. And then you ask where can it go? The West and this is the whole West, so it's not California. California is actually higher than this. You got 9% penetration. So there's 3x just getting where the other guys already have been. And then, you see the Midwest where Blue Raven is penetrating. Northeast has got lousy utilities like California. There -- they've already got more penetration. After that, you're talking about dry cleaners, stores, Walmart outlets, whatever. They will all use it. The price of power is going up. The utilities are getting burdened with mandates from government and that the utilities are raising the power prices faster than inflation. You got to beat inflation these days. And that means these guys will be shortly behind. So if you add these numbers up, you get a market that's $7.5 billion in 2023 with a CAGR of 14% for a long time. So we got to make it through the tough times. We got to turn our company into an efficient company. Both Blue Raven and SunPower have excellent quality. They care about their customers, so they're not going to get kicked out, because of the rampant fraud, frankly, in the solar industry. So all we got to do is hang in there. In the basketball phrase, hang around the rim and the good thing will happen, you'll get the ball stuffed through the hoop. So that's our marketing plan, and, done. I'm ready for questions.

Thank you, T.J. [Operator Instructions] Our first question today comes from Derek Soderberg from Cantor Fitzgerald. It's a two part question. SunPower had a backlog in February of this year of 37,000 new homes and 15,000 retrofit homes in their backlog. Can you update us on the number of new homes and retrofit homes in the backlog currently?

Okay. Thanks, Derek. You got me right on the very first question. Dan Myers on board here?

Dan Myers is not on at this time.

Dan? Find a microphone. The answer is we lost some of our new homes business, and the number was on the order of 10% or 20%. And we have an account by account rent of that. Reason was the corporations freaked out two reasons. The corporations freaked out, when SunPower went bankrupt. In effect, their revenue is selling a new house to somebody. And all of a sudden, if an amenity, a $20,000 amenity, like an in wall vacuum cleaner, for example, shuts you down and selling a $500,000 house, not good. So they shifted some business right away. I've been in multiple calls with new homes people, and they are -- they get it. I've had to compromise with them. The deal was, we got some batteries we don't like. You need to take care of them. I go, they're not my batteries. They're SunPower's batteries. SunPower is bankrupt. All SunPower. Well, you got to do it. And I said, we're not the successor, even though I told you we're planning on being, to SunPower. SunPower went bankrupt. They're 4x bigger than us and their bankruptcy could have wiped us out. Let me try this one. If you want new business from my company and that's $45 million a quarter and it's good business, our most profitable business, you'll do something. So I get, I understand that logic, and I think I'm going to work on that problem. So once I decided to work on it, we have actually some pretty good solutions going for the problem. I'll give one example. SunPower made a battery called SunVault. And SunVault is a good battery. It's safe. It has a software problem. And the software locks up typically, and it takes a month. And then, the battery goes into a safe mode and shuts down. So the way you fix it is you have monitoring station. You monitor all your batteries and all your panels all the time, some part of that, real companies do that. And then, you see a battery and you're always testing the battery and the battery says, I'm locked up. There's through the Internet, you just press the reset button. It's a little protocol, but it's equivalent to pressing the reset button. Battery turns back on, runs fine. So you got 12,500 batteries in the world. So you set up your little center, and you look at everyone, every day and keep everybody happy. You shouldn't have to do that, of course. It's like you wouldn't tolerate that in a car. But what we did was, we worked with another company and we set up a center. And by the way, the bankruptcy guys weren't happy with SunPower. And they came in and took over the company and they flipped the switch on 1800 SunPower. So people couldn't call in and say, I'm worried about my battery. And you weren't monitoring the battery or the system anymore. So, there's a company called, HASI, they're public. And they are the lender for a bunch of those systems. They acquired our people who ran the monitoring system and our technology and our licenses, and they're going to run the monitoring system. So I cut a deal with them. They wanted some names from us and I said, fine, you got the names. I need my other customers get taken care of. And they said, okay, we'll do that. And then I said, how about, it was a modest payment. As opposed to replacing a $7,000 or $5,000 battery, it was a modest payment to keep the battery serviced. And they agreed to it. Now we're partners, and now we're going to work on other stuff. There, for those customers who have that battery in new homes, we will pay every month for them, and I agreed to pay for a year. We have several agreements like that where our company agreed to pay, it's a range depending upon parameters, but the middle number is $10.1 million plus or minus $1.8 million in one year. And we're going to pay that and we're going to demonstrate not only to our new homes customers, but to everybody else we're prepared to take care of the product. And I started I told them for the 1st year, we would pay that $2 a month, not that bad. So we're working on solutions like that, that are economically sane, to bring back the luster on the old SunPower. So long answer to your question, we lost 20% ish of new homes business. Did Dan get to a microphone yet?

Yes. We have Dan here. I'm handing him the microphone now.

Alright. So Dan, and by the way, get the other product line guys there if we get another question like that. You want to add to what I said?

Yes. I would just add that we're seeing a lot of positive response and support from builders. We have a backlog through Q4 and 2025 of over 10,000 homes. And, while we've seen some attrition from builders, we're rebuilding the relationships.

Are you next are you sitting next to Dan Foley?

I am.

You guys are broadcasting the wrong picture. You got my picture there. You should be broadcasting their picture. Believe it or not, I actually thank you. Well, flash for a minute. I actually have a spec. Here's Dan Myers. I actually have a spec for how to run this TV show. I'm a little bit unhappy in the way this one's being run, but that'll get fixed. Dan Myers, I met him. I liked him. I invited him to -- I was going to Oshkosh for a jazz festival, my hometown. And I took him there and wined and dined in Oshkosh and recruited him. So he came out of Blue Raven. He is one of the executives in Blue Raven that was really good. And I recruited him to stay in the company. And then, when the new homes opened up, I asked him to take that job. He was a little bit reluctant to begin with, but now he's getting to run his own business and he's understanding that's really cool. And he's really good at it. His technical background of supply chain. You know that thing Joe Biden kept complaining about, which is really complex, that's what he does. And the new homes business is a supply chain business. He asked what percent of our cost because of the bankruptcy.

Can you hear me okay, T.J.? Can you hear me?

Yes.

Excellent. So your estimate of 20% is where we're at right now. We're continually scrubbing that. We've had some builders who've moved some communities away and have come back to us, because they have been thrilled with what they've seen with the competition. I expect we're going to land a little bit higher than 20%, maybe in the 30% range, kind of our trough, and we'll continue to rebuild that throughout 2025 as we regain builders' trust and show them we can execute successfully in Q4.

And the builders are on our side. Somehow, my phone number got -- my home phone number, my cell phone number got out. I remember when SunPower first announced bankruptcy, I got a call from our second biggest builder, guy with a British accent, kind of reams me out 10 o'clock at night. And then, I tell him we're going to work on it. Then we talked to him and we talked to him again. Then, we talked to him and his boss. And finally, he said, can you guys do anything in Washington state? Of course, we can't. We don't have people there, new SunPower. And the Blue Raven guy says, sure, we got Washington state. He says, I got a deal I want to talk to you about. So their attitude is, as long as you care and are truly doing something, we want to work with you. We don't want our vendor base to be limited, not you have you in it. So we can do that. Next question.

The next question is for Dan Foley. Dan, can you talk about the full diluted share count expected exiting 2024, including the expected raise from the Chinese investors? And there's a second part to this, maybe I'd ask that first.

Yes. That's inclusive of the raise that we're going to do here from the additional funds from the Chinese investor. Fully diluted shares outstanding at the end of the quarter will be approximately a 143 million.

And the second part of that question was how much cash do you expect to have on the balance sheet exiting the year?

Approximately $20 million to $25,000,000.

Thank you. Last question here from Derek Soderberg. T.J., you mentioned the company can break even in a few quarters. What is the revenue run rate you need to achieve that?

$80 million. So it's simple. We -- in the last week, after we scrubbed our backlog and started looking at the validity in the solar business, it's common to have backlog and have 30% of evaporate while it's on the books. A guy calls up and says, yeah, you know that solar thing, but I've changed my mind, and that kind of stuff. And you say you've signed a contract. What does that mean? You're going to go force a guy to put solar in his house in Denver, Colorado? Isn’t going to happen. So the answer is when you get $80 million Noah's Ark, we built a company to survive and the revenue we can make and we will do that. So the answer is, it's going to be a breakeven in time and that will be at $80 million. And by the time we get there a couple of quarters, then we will have, I hope, higher revenue. We got one weak quarter that the one of the problems is we're heading into winter. Q1 of the year is a winter quarter. You can't get on roofs or safety standards and all that kind of stuff. So we're looking at second quarter of next year. But we're going to cut now again more so we can live under that $80 million umbrella. I want to make a comment about the 143 million shares. If you go and look at any of the stock tables right now and you divide the market cap they report by the share price, you'll come up with a number like 72 million shares in that realm. And we've gone to 143 million. Now that includes all of our funding, some shares that haven't been issued yet, some shares that are in a pool for employees that haven't been given to employees yet, et cetera. One of the things we're doing is, I gave a lecture, about Silicon Valley, and I was in a room with Blue Raven people who had their company get bought by SunPower for $160 million. And I said to them, well, how many of you made some money on the Blue Raven? And not a hand went up. And I said, okay, so that's not Silicon Valley. The way Silicon Valley works is you get 20% of the stock. And then, if the company gets sold or you just want to trade it, because it's a public stock, you're going to make money. And that's how Silicon Valley companies get the extra performance. I showed them a graph of the top 10. What's that? What's the picture I'm looking at? Something's going weird here.

He'll see you just fine, T.J..

So this guy I'm looking at isn't being broadcast?

We can see your face.

I didn't ask if you could see my face. I asked if the guy I'm looking at can be broadcast or not.

No. He's not broadcasting.

Alright. So that must be my machine here. So we have given out, part of our offers were we didn't increase money because we couldn't afford it. So we gave out stock and we gave out a meaningful amount of stock to every employee we hired. And that is Silicon Valley meaningful. It's non-trivial. It's not an option that kind of is interesting to have. And that ended up being 28 million shares. So of the 143 million shares, we will give out, over the next five years, the options vest over five years, 28 million shares to employees. And the idea is they do what they got to do to make the company run right, and we get fix our customer issues, and we move forward and don't gripe about the fact that you don't have that the company has been cut back and you make some meaningful money. It's new car money, new house money, kid goes to expensive school money kind of level for everybody. I pointed out to them, if the Blue Raven acquisition of SunPower, if they had owned 20% of the stock in their company and look at the number of people they had at that time, every employee in that company would have gotten $64,000 worth of stock. And those for the highest level employees, that's what we're talking about with us. So we would all like to thank you for your support of employees in Silicon Valley model in Utah. We're expecting to have that be a competitive weapon that we can use there. So the asterisk on that one, so don't gripe about 143,000,000 shares. We got money in the bank, and we're not expecting to have to raise more money right now.

Thank you, TJ. I did want to highlight we're at the top of the hour, but we do have more questions.

Keep going. Like, people can leave if they want.

We have a question about, C&I, commercial & industrial. There seems to be a lot of opportunities in that segment for growth. What are your thoughts about that for Complete Solar?

We will -- we have actually commercial & industrial now. They were opportunistic things that one of the companies did. For example, Starbucks decided to show green. And what they did was they put an awning, a solar awning, big one, over, like, the front parking area on posts, and they used the -- there's a type of panel that's got glass on glass. So you can see right through it. You can see themselves, and they're pretty. And so Starbucks got this really good. And these are real systems. They're 50,000 watts. They're not play systems. So we've upgraded 57 Starbucks Restaurants. So we have already gotten into commercial industrial, and we're suited for that, because they're a little bit more formal. They won't pay a premium over market, but the market price in that area is pretty good. So, yes, we're going to go into that. And I'm not going to launch a division or anything like that. We will serve them with our current division, and we'll take business opportunistically. And we already are.

Thank you. We've actually gotten a couple of these, various forms of the same question. Looking for your thoughts on the impact of the IRA repeal and President Trump impact on the industry and Complete Colar.

Sioban, do you have your comparative stock price graphs?

I do. I don't know that I'd be able to pull them up right now.

If you try real hard, you can. I'll talk while you're working on it. The largest drop in Complete Solar price since I took over as CEO, happened when Donald Trump got elected because Donald Trump gripes about solar energy and how he's not going to support it. Right now, I think the solar energy subsidy is safe, because it's an income tax credit. So you do it, you spend the money, you stimulate the economy. And then the next April, you can knock some money off your income taxes. I don't think that's going to go away, but I'm not an insider in politics. And significant number of investors felt that, and it's already in the share price.

Thanks, T.J. I am in the process of pulling that up. In the interim, can you speak to future cost reductions? How much more do you expect?

Sure. I can't see the picture we're broadcasting anymore. Is my picture still there? Now you know why I insist we go in the boardroom and have one guy who's one arm's length choking distance away from me to run these shows.

Are you looking for your slides, T.J.?

I'm looking for T.J. My question was, is my picture being broadcast?

Yes.

Okay. Then in my case, I brought up the complete solar slide, and I can talk to a blank screen. No sweat. I'm getting old. Remind me again in the question. Hello?

Cost reduction efforts. What further cost do we anticipate going forward?

So we've cut from 2,800 to 1,200 employees. We will lose another couple of hundred who are redundant. For example, in our finance group. We started out with 67 employees from basically all the finance people from all the companies, so that we could get our first quarter, Q3 and our first official quarter, Q4, done exactly right, and we didn't have any tribal knowledge. But then we were skinny on down that group. As a matter of fact, I showed you some dramatic cuts in the various groups, legal, et cetera. That's actually our target. Right now, we've got some employees who are leaving at the end of this quarter and the end of next quarter. Those cost targets are there. We have Lehigh is sort of like the Palo Alto of Salt Lake, and we're in an expensive building. We're out of there. We moved out last week. SunPower had, as I remember, 98 leases all over the United States, including multiple leases in Austin, Texas. We're moving into one building. I don't know which building that is yet. Linda DeGiulio, our Chief Administrative Officer is going to work with the people in Texas and pick it. I like colocation, but I don't need five buildings in Austin, Texas, et cetera. And all of that's just -- that's going to roll it over the year because you don't get out of a lease right away. You typically have to sublease and then you go a couple of years and then then you get rid of it. So we got, okay, we're working with a group called Ayna, A-Y-N-A. They are a spin out of Mackenzie. They are a spin out of the famous Mackenzie Group that operated out of Palo Alto that worked with the solar industry, excuse me, silicon industry. I've had them do two jobs, one on my own company, Cypress, where I told people it was crap that Cypress wasn't tightly run because I ran it. They proceeded to come in and fine me $30 million a year that I could save. And most things had my fingerprint on it. We were paying too much for wafers in a silicon company, because the spec was developed by a technology group that I was part of. And our spec was special and we didn't follow the industry standard. And then, we're getting 30% premium because of that after three years. So they specialize in doing stuff like that. Because they were successful with me, I brought them into Enphase. The Enphase story is well known, that how that thing turned around. So we've got five or six of them working full time on every little corner. Are you paying too much? Do you have competitive bids? No, we didn't. Have you looked at, for example, kitting yourself and buying things cheaply in car retainers versus using distribution to kit and deliver kit to the job? No, we hadn't. And we actually had both systems in our company. They've analyzed that. So we're really embryonic. I mean, this company is like less we never reported our first quarter yet. And we have a lot of plans to cut costs that are done with the help of professional group.

T.J., we have the slide ready for you now.

Okay. I need to see it. How do I do that? I'm trapped in my own pitch, and I need to see what they're brought there. I got it. I got it. Nope. That's T.J.'s pitch. I like this one. I need to go back and see their picture. She's going to show something, and I'm going to talk about it. Okay. There it is. Good. So, this is a graph. We're in the dark line, and it's approximately from the time I joined. Is my arrow visible here? Is my arrow visible here? Do you see?

I don't think so.

Okay. Thank you. So there's press releases there, and you see term sheet Carlisle debt. So you can see a big pop is a doubling of stock when we signed the term sheet. You can see Trump over on the side, so that was negative, et cetera. So right now, we're relative to the solar industry, we're doing well. People believe we're doing the right stuff to succeed. We are. And I have to argue all the time. I'm not really a mean guy. We have to do this for investors. I give the lecture about investors own us. We have fiduciary responsibility to make money for them. And I sound like Anne Smith when I'm giving the lectures, but it's taken root. Is that the only slide you've got? Sioban?

Apologies.

Is that the only slide you have?

Yes.

Okay. So I want to point out right below the word change is look at what happened today, two days after we won the SunPower, won the stocking horse thing, Judge ruled for us. So you can see they're coupled in. As long as we bring out good news periodically, which we will, at least I'll intend to, we'll do okay. And cost cutting is part of that. Okay. We can go back to questions.

Thank you. I have one final question for you, T.J. It appears you are close to creating another $1 billion company. Do you see Complete Solar doing over a $1 billion in annual revenue, and how soon could you achieve this?

This is, would you please commit suicide on film and make a promise you can't keep, meanwhile, my lawyers have got their tape recorders turned on. I have a slide I showed shareholders. You can go on our website and look because I don't want to go through the rigmarole of finding a slide right now. But, if we grow only at the rate that the solar market is expected to grow, we don't take share. And if we do revenue of $622 million then two years later in 2028, we will have revenue of $900 million. Now next sentence is based on the $100 million going to $80 , 00,000 that I told you today, that $622 million is more likely $480 million, and you have the same compound growth rate. I think that takes you up to $700 million and change. So I see revenue, if we grow at the average rate without taking share, don't acquire anybody, that kind of stuff, getting up $700 million. Right now, if we're going to do that, and I already showed you. It's a bunch of companies that are going to be on the market. They're going to be buyable. I would like stock, real stocks, stocks traded on the stock exchange. And we'll give you and your people an option. And then I'll give you, Mr. Founder, some money for what you did, and then, you can come out and be one of our managers and VPs and run this thing. So we have plans to grow like that. Can I? Okay, let me talk about $700 million in 2028. And you realize, it's not an ass pull because I took what we're really going to do this quarter, took a reduced version of 2025 and then applied the average solar growth rate to it? So it's not that way, but let's say a $700 million. At that point, if we get a multiple, which the top solar companies get of 2x sales, I've got $1.4 billion. And then you've got the $143 million that you heard earlier, divide $1.4 billion by $143 million shares is $10. So that's very doable. And I will have a new CEO. When that happens, there will be an all-star CEO that we will get, who will work for me directly until he or she understands how to run the place because I've learned a huge amount in the last couple of years. I didn't walk in as knowing everything. I've really learned a huge amount. From what I feel that person has learned each amount, I'll walk. That's a variable I won't walk. I'll go on the Board. I'm 76. I'll go back to hassling other CEOs. And so, that's my vision of the thing. It's going to grow. I didn't interrupt my life. I worked all but six Sundays for the last year. Saturday is a given, that's goner. I go to -- I've gone to like only four movies in the last year. So I'll go back to having my life back, and I'll bring in a president whose real. That's my plan. By the way, my plan then is to take my stock, which is a chunk of stock, and I'm going to donate it to charity because I'm giving away my money right now in big chunks to charities I really like. And then when I do that, I'll do it at a high point in the stock, I'll donate it to charity. And then, I'll get tax credit on that and I'll never pay another penny in taxes in my life. That's if you want to know my plan, you got my plan right there.

Thank you, T.J. That wraps up all the questions we have for today. Did you wish to make any final comments?

Nope. Thank you.