Item 1.01 |
Entry into a Material Definitive Agreement.
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On December 6, 2022, Shoals Technologies Group, Inc. (the
“Company”) entered into an
amendment (the “LLCA
Amendment”) to the Third Amended and Restated Limited
Liability Company Agreement, dated as of January 29, 2021 (as
amended or otherwise modified from time to time, the “LLC Agreement”) of Shoals Parent LLC, a
subsidiary of the Company (“Shoals
Parent”), by and among Shoals Parent, the Company and the
other members party thereto, including Dean Solon and certain of
his affiliates (the “Solon
Group”), pursuant to which the parties agreed to, among
other things, make certain changes to the LLC Agreement upon the
Solon Group’s beneficial ownership of common stock falling below
10% of the total voting power for a specified period of time,
including by providing that, upon the occurrence of such ownership
event, the distribution tax rate used to determine the amount of
tax distributions to be made to members of Shoals Parents will be
based on the highest effective income marginal tax rate applicable
to a corporation organized under the laws of the State of Delaware
instead of the highest effective marginal income tax rate
applicable to corporate or individual taxpayers (whichever is
higher) that may potentially apply to any member of Shoals Parent.
The foregoing description of the LLCA Amendment does not purport to
be complete and is subject to, and qualified in its entirety by,
the full text of the LLCA Amendment, a copy of which is filed as
Exhibit 10.1 hereto, and is incorporated by reference herein.
Item 1.02 |
Termination of a Material Definitive Agreement.
|
As previously announced, on November 29, 2022, the Company
entered into an amendment (the “TRA
Amendment”) to its Tax Receivable Agreement, dated as of
January 29, 2021 (as amended or otherwise modified from time
to time, the “Tax Receivable
Agreement”), pursuant to which the parties thereto agreed to
grant the Company a right to terminate the Tax Receivable Agreement
until December 31, 2022 (the “TRA Termination Right”) in exchange for a
termination consideration of $58.1 million payable in cash
(the “TRA Termination
Consideration”). On November 29, 2022, the Company
exercised its TRA Termination Right, and the Tax Receivable
Agreement was terminated on December 6, 2022.
On December 1, 2022, the Company entered into an Underwriting
Agreement (the “Underwriting
Agreement”), by and among the Company, Shoals Parent, the
Solon Group, as selling stockholders (the “Selling Stockholders”), and J.P. Morgan
Securities LLC and Guggenheim Securities, LLC, as representatives
of the several underwriters (the “Underwriters”), relating to the public
offering of 2,000,000 shares of Class A common stock by the
Company and 24,000,000 shares of Class A common stock by the
Selling Stockholders (collectively, the “Offering”). The Underwriting Agreement
contains customary representations, warranties, covenants and
indemnification obligations of the Company and the Underwriters, as
well as termination and other customary provisions. Pursuant to the
Underwriting Agreement, the Selling Stockholders have granted the
Underwriters an overallotment option (the “Overallotment Option”) to purchase up to
an additional 3,900,000 shares of Class A common stock. On
December 2, 2022, the Underwriters exercised in full their
Overallotment Option.
The Offering was made pursuant to the Company’s automatic shelf
registration statement on Form S-3
(File No. 333-268610) that became effective under
the Securities Act of 1933, as amended (the “Securities Act”) when filed with the SEC
on November 30, 2022, and a related prospectus supplement
dated December 1, 2022.
The Offering closed on December 6, 2022. The Company intends
to use the net proceeds from the Offering to fund a portion of the
TRA Termination Consideration, with the remainder to be paid with
cash on hand. The Company will not receive any of the proceeds from
the sale of Class A common stock by the Selling
Stockholders.
The foregoing summary of the Underwriting Agreement does not
purport to be complete and is subject to, and qualified in its
entirety by, the full text of such agreement, a copy of which is
attached as Exhibit 1.1 hereto, and is incorporated by reference
herein.
Kirkland and Ellis LLP has issued an opinion, dated
December 6, 2022, regarding certain legal matters with respect
to the Offering, a copy of which is filed as Exhibit 5.1
hereto.
This Current Report on Form 8-K does not constitute
an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of any securities in any
state or jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction. Any offers,
solicitations or offers to buy, or any sales of securities will be
made in accordance with the registration requirements of the
Securities Act.
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