Item 3.02.Unregistered Sales of Equity Securities.
On December 28, 2022, Solar Integrated Roofing Corp. (the "Company") granted to
Stefan Abbruzzese, the Company's President, a non-qualified stock option to
purchase up to 15,000,000 shares of the Company's common stock (the "Abbruzzese
Option"), which Abbruzzese Option has a term of 10 years, an exercise price of
$0.099 per share, and vests and becomes exercisable 50% on the date of grant,
25% on the first anniversary of the date of grant, and 25% on the second
anniversary of the date of grant so long as Mr. Abbruzzese provides continuous
service to the Company through the applicable vesting date.
In addition, the Company agreed to grant to Mr. Abbruzzese, as soon as
practicable following the date (the "Determination Date") that is 6 months
following the date the Company's common stock is first listed for trading on The
Nasdaq Stock Market, Inc., of an additional non-qualified stock option (the
"Top-Up Option"), if any, to purchase up to a number of shares of common stock
equal to the positive difference between (i) four percent (4%) of the Company's
authorized shares of Common Stock as of the Determination Date and (ii)
40,000,000 shares of Common Stock (as adjusted for stock splits, reverse stock
splits and similar transactions), which Top-Up Option will have a term of 10
years and an exercise price equal to the closing price of the Company's common
stock on the date of grant, and shall vest and become exercisable 50% on the
date of grant, 25% on December 28, 2023, and 25% on December 28, 2023 so long as
Mr. Abbruzzese provides continuous service to the Company through the applicable
vesting date.
The Abbruzzese Option was offered and sold exclusively to Mr. Abbruzzese, an
accredited investor, in a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act"), as a transaction not
involving a public offering, pursuant to Section 4(a)(2) of the Securities Act
and Rule 506 of Regulation D promulgated thereunder. Mr. Abbruzzese represented
his intentions to acquire the securities for investment only and not with a view
to or for sale in connection with any distribution thereof in violation of the
Securities Act, and the shares of common stock acquired upon exercise of the
Abbruzzese Option will bear appropriate legends if applicable. The offer and
sale of the Option to Mr. Abbruzzese were made without any general solicitation
or advertising.
Item 5.02.Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As described in Item 3.02 of this Current Report on Form 8-K, which disclosure
is incorporated into this Item 5.02 by reference, the Company granted to Mr.
Abbruzzese the Abbruzzese Option and has agreed to grant Mr. Abbruzzese the
Top-Up Option as compensation for services rendered by him to the Company.
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