Solar Integrated Roofing Corp., based in Henderson, Nev., announced on October 9 that it had entered into a settlement agreement with a substantial stakeholder to resolve claims filed against the company, which had undergone a financial molting earlier this year.
Under the terms of the settlement agreement, SIRC has agreed to issue a $2.1 million convertible promissory note to the shareholder, Jacob Newby, to formalize liabilities carried on its balance sheet since 2021. Those liabilities included a $2 million related party balance owed to Newby concerning the acquisition of Kinetic Investments, Inc., doing business as Future Home Power, in June 2021.
The note is convertible into shares of SIRC common stock at a conversion price equal to 80% of the closing price of the company’s common stock on the date of issuance of the note. Additionally, SIRC issued Newby 150,000,000 shares of common stock in satisfaction with unpaid sales commissions of over $6,000,000. In return, Newby agreed to cancel all of his shares of the company’s ‘Class D Preferred’ stock.
Solar Integrated Roofing Corp. also agreed to offer “certain former sales representatives of FHP” convertible promissory notes in satisfaction of claims by the representatives for unpaid sales commissions.
Each party agreed to release the other from all claims, and the lawsuit between the parties would be dismissed “with prejudice,” meaning, in effect, no claimant could try and again seek redress from the action.
“We are happy to put this chapter behind us,” Brad Rinehart, Solar Integrated Roofing’s CEO, said in a statement. “To his credit, Mr. Newby insisted that his settlement … require [us] to offer convertible notes to the former FHP sales force to attempt to settle their claims for unpaid commissions and over-rides as well.”
Rinehart added the company intends to offer those notes to the sales force shortly and expressed relief that “…by amicably resolving this dispute, we hope that Mr. Newby can put this uncomfortable episode behind him, and we wish him nothing but success in his future endeavors.”
The gyrations Solar Integrated Roofing has experienced this year have been fodder in the solar space, with the company embarking on an acquisition spree in 2022 that led to a significant debt restructuring in April 2023. In May, following the debt restructuring, then-CEO David Massey resigned from his position, citing a "medical leave of absence."
Later that month, the company executed a binding letter of commitment with Tribeca Energy, essentially saving SIRC from dissolution; Tribeca acquired full ownership of SIRC in the deal.