What changed in this filing

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Item 1. Business

2023-02-28 compared with 2022-03-11 · 113 added, 81 removed, 157 unchanged (55% of the section changed)

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and, unless otherwise stated, all of its subsidiaries, including Shoals Parent LLC (“Shoals Parent”).

Unless the context otherwise requires, references to “Founder” refer to Dean Solon, our founder, references to “Oaktree” refer to Oaktree Power Opportunities Fund IV (Delaware) Holdings, L.P., a Delaware limited partnership, and its affiliates, and references to “Continuing Equity Owners” refer collectively to direct or indirect holders of LLC Interests (as defined below) and/or our Class B common stock, including our Founder and certain executive officers, employees and their respective permitted transferees who may, exchange at each of their respective options, in whole or in part from time to time, their LLC Interests (along with an equal number of shares of Class B common stock (and such shares shall be immediately cancelled)) for cash or newly issued shares of our Class A common stock.

Unless the context otherwise requires, references to “Founder” refer to Dean Solon, our founder, and references to “Continuing Equity Owners” refer collectively to direct or indirect holders of LLC Interests (as defined below) and/or our Class B common stock, including our Founder and certain current and former executive officers, employees and their respective permitted transferees who may, exchange at each of their respective options, in whole or in part from time to time, their LLC Interests (along with an equal number of shares of Class B common stock (and such shares shall be immediately cancelled)) for cash or newly issued shares of our Class A common stock.

Initial Public Offering and Organizational Transactions

On January 29, 2021, the Company closed an initial public offering (“IPO”) of 11,550,000 shares of our Class A common stock at a public offering price of $25.00 per share, including shares issued pursuant to the underwriters' exercise of their over-allotment option.

We received $278.8 million in proceeds, net of underwriting discounts and commissions, which was used to purchase 6,315,790 newly-issued membership interests in Shoals Parent and 5,234,210 LLC Interests from the Founder and Class B unit holder in Shoals Parent at a price per interest equal to the initial public offering price of our Class A common stock, less the underwriting discounts and commissions.

In addition, Oaktree, as selling stockholder, sold 77,000,000 shares of our Class A common stock in the IPO at a public offering price of $25.00 per share, including shares sold pursuant to the underwriters' exercise of their over-allotment option.

On January 29, 2021, the Company completed an initial public offering (“IPO”) of 11,550,000 shares of Class A common stock at a public offering price of $25.00 per share, including shares issued pursuant to the underwriters’ over-allotment option.

The Company received $278.8 million in proceeds, net of underwriting discounts and commissions of $9.9 million, which was used to purchase 6,315,790 newly-issued membership interests (“LLC Interests”) from Shoals Parent and 5,234,210 LLC Interests from the Founder and Class B unit holder in Shoals Parent at a price per interest equal to the IPO price of $25.00 per share.

Organizational Transactions

In connection with the IPO, the Company and Shoals Parent completed a series of transactions (the “Organizational Transactions”) including the following:

• the limited liability company agreement of Shoals Parent was amended and restated to, among other things, (i) provide for a new single class of common membership interests or the LLC Interests in Shoals Parent, (ii) exchange all of the then existing membership interests of the holders of Shoals Parent membership interests for LLC Interests and (iii) appoint the Company as the sole managing member of Shoals Parent;

• the limited liability company agreement (the “LLC Agreement”) of Shoals Parent was amended and restated to, among other things, (i) provide for a new single class of LLC Interests in Shoals Parent, (ii) exchange all of the then existing membership interests of the holders of Shoals Parent membership interests for LLC Interests and (iii) appoint the Company as the sole managing member of Shoals Parent;

• the Company’s certificate of incorporation was amended and restated to, among other things, (i) provide for Class A common stock with voting and economic rights (ii) provide for Class B common stock with voting rights but no economic rights and (iii) issue 78,300,817 shares of Class B common stock to the former Class B and Class C members of Shoals Parent (the “Continuing Equity Owners”) on a one-to-one basis with the number of LLC Interests they own;

• the acquisition, by merger, of Shoals Investment CTB or the former Class A member of Shoals Parent (the “Class A Shoals Equity Owners”), for which the Company issued 81,977,751 shares Class A common stock as merger consideration (the “Merger”).

Follow On Offering

On July 16, 2021, the Company completed a follow-on offering consisting of 4,989,692 shares of Class A common stock offered by the selling shareholders and 10,402,086 shares of Class A common stock offered

by the Company.

Following the closing of the follow-on offering, Oaktree no longer beneficially owned any shares of our common stock.

The Company used the proceeds of the sale of Class A common stock to purchase an equal number of LLC Interests and Class B common stock from our Founder and management.

Acquisition of ConnectPV

On August 26, 2021, we acquired 100% of the stock of ConnectPV, for $13.8 million in cash (net of $0.8 million cash acquired) and 209,437 shares of Class A Common stock valued at $6.5 million.

The acquisition was accounted for as a business combination and following the acquisition we immediately converted ConnectPV to a limited liability company and contributed the entity to Shoals Parent, LLC through a series of transactions.

Exchange of LLC Interests in Shoals Parent

On December 7, 2021, the Company issued 7,870,042 shares of Class A common stock to our founder, executive management and certain employees in exchange for 7,870,042 LLC Interests in Shoals Parent and an equal number of Class B common stock of the Company.

Shoals Technologies Group, Inc Ownership in Shoals Parent

Shoals Technologies Group, Inc.

Ownership in Shoals Parent

As of December 31, 2022, the Company owned 81.44% of Shoals Parent.

The Continuing Equity Owners own the remaining 18.56% of Shoals Parent.

Shoals is a leading provider of electrical balance of system or “EBOS” solutions for solar energy projects in the United States.

Shoals is a leading provider of electrical balance of system (“EBOS”) solutions and components for solar, battery storage and electric vehicle (“EV”) charging applications, selling to customers primarily in the

United States (“U.S.”) as well as internationally.

EBOS encompasses all of the components that are necessary to carry the electric current produced by solar panels to an inverter and ultimately to the power grid.

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As a result, we believe customers prioritize reliability and safety over price when selecting EBOS solutions.

We also recently began selling “EV Charging” solutions for public and fleet electric vehicle charging stations in the United States.

EBOS components that we produce include cable assemblies, inline fuses, combiners, disconnects, recombiners, wireless monitoring systems, junction boxes, transition enclosures, splice boxes, wire management solutions and IV curve benchmarking devices.

EV Charging solutions that we produce include the following offerings which fulfill nearly all commercial EV charging needs:

the EV BLA, raceways which protect the EV BLAs and other power cables, pedestal bases for Level 2 chargers and quick connect bases for Level 3 and high-power chargers, and the power center on a Shoals quick connect base.

We derive the majority of our revenue from selling “system solutions” which are complete EBOS systems that include several of our products, many of which are customized for the customer’s project.

EBOS components that we produce include cable assemblies, inline fuses, combiners, disconnects, recombiners, wireless monitoring systems, junction boxes, transition enclosures and splice boxes.

We derive the majority of our revenue from selling “system solutions” which are complete EBOS systems that include several of our components, many of which are customized for the customer’s project.

We believe our system solutions are unique in our industry because they integrate design and engineering support, proprietary components and innovative installation methods into a single offering that would otherwise be challenging for a customer to obtain from a single provider or at all.

We sell our products principally to engineering, procurement and construction firms ("EPCs”) that build solar energy projects and install electric vehicle charging stations.

We sell our solar products principally to engineering, procurement and construction firms (“EPCs”) that build solar energy projects.

However, given the mission critical nature of EBOS, the decision to use our products typically involves input from both the EPC and the owner of the solar energy project.

The custom nature of our system solutions and the long development cycle for solar energy

projects typically gives us 12 months or more of lead time to quote, engineer, produce and ship each order we receive, and we do not stock large amounts of finished goods.

The custom nature of our system solutions and the long development cycle for solar energy projects typically gives us 12 months or more of lead time to quote, engineer, produce and ship each order we receive, and we do not stock large amounts of finished goods.

Throughout fiscal year 2022, we have maintained focus on our growth strategy, including converting customers to our combine-as-you-go system and developing products for the rapidly growing EV charging infrastructure market.

We believe that as of December 31, 2022, 14 of the top 15 solar EPCs as reported by Solar Power World Magazine use our combine-as-you-go system on their projects.

As of the date of this report, we are in the process of transitioning an additional 14 EPCs and developers to our system.

Additionally, in the fourth quarter of 2021, we introduced four new product families for the EV charging market and began taking orders and shipping some component products in the first quarter of 2022.

Order flow and deliveries of our EV system solution continued through the fourth quarter of 2022 with scaled production underway.

All products launched in 2022 are certified to UL standards as of December 31, 2022.

We derived approximately 77.8% of our revenue from the sale of system solutions for year ended December 31, 2022.

For the same period, we derived substantially all of our revenue from customers in the U.S.

We had $299.0 million of backlog and awarded orders, backlog of $119.3 million represents signed purchase orders or contractual minimum purchase commitments with take-or-pay provisions and awarded orders of $179.7 million are orders we are in the process of documenting a contract but for which a contract has not yet been signed, as of December 31, 2021, representing a 94% and 10% increase relative to the same date last year and September 30, 2021, respectively.

Throughout fiscal year 2021, we focused on our growth strategy, including developments in converting customers to our combine-as-you-go system and developing products for the rapidly growing electric vehicle charging infrastructure market.

Additionally, we are currently launching four new product families for the EV charging market.

The first is the power center which combines equipment needed to protect the charging equipment and transform voltage levels from the electric utility to those needed on the respective site.

The power center provides an efficient, cost effective and aesthetically focused option versus traditional methods.

The second offering focuses on quick connect solutions for chargers made by any manufacturer and any power level to connect to the Shoals system.

The quick connect bases dramatically reduce the time required on site for a deployment and reduce the amount of labor required in the field.

The third offering uses our Big Lead Assembly (“BLA”) technology in the EV space to connect multiple chargers to a single power center.

This solution eliminates the need for homeruns from each dispenser and is above ground rated which allows wire to be run above ground rather than in underground conduit.

The fourth offering is a raceway system that protects the above ground EV BLAs in walk over and drive over applications.

The raceway system coupled with the EV BLA deploys much more rapidly and cost effectively than traditional methods of deployment.

We introduced these first four offerings in the fourth quarter of 2021 and received our first orders for deployments.

Testing and certification of the offerings and overall solution are underway and progressing.

The major components of a ground-mounted solar energy project are solar panels, inverters, the mounting system and EBOS.

EBOS encompasses all of the components that are necessary to carry the electric current produced by solar panels to an inverter and ultimately to the power grid.

Major EBOS components include cable and wire, combiner boxes, wire management solutions and monitoring systems.

We believe our current product offerings address approximately 36% of the total spending on EBOS based on a typical project constructed in 2020.

EBOS components represent only 6% of the total cost of a solar energy project based on a typical project constructed in 2020, but the cost of the labor to install them can be equal to, or even greater than, the cost of the components themselves.

As a result of the high ratio of installation costs to product costs, many EPCs prefer EBOS products that can be installed faster using general labor over products that are time consuming to install and require licensed electricians to install them even when they are more expensive.

Demand for EBOS is driven primarily by installations of new ground-mounted solar energy projects.

Historically, we have derived the majority of our revenue from the sale of EBOS products used in U.S.

solar energy projects.

As of December 31, 2022, we had $428.6 million of backlog and awarded orders.

Backlog of $168.9 million represents signed purchase orders or contractual minimum purchase commitments with take-or-pay provisions and awarded orders of $259.7 million are orders we are in the process of documenting a contract but for which a contract has not yet been signed.

As of December 31, 2022, backlog and awarded orders increased by 43% relative to December 31, 2021 and decreased by 9% relative to September 30, 2022.

Our Proprietary EBOS System

Most solar energy projects use a wiring architecture known as “homerun.” Conventional homerun EBOS systems have two distinguishing characteristics:

every string of solar panels in the project is connected

to a combiner box with individual positive and negative “wire runs,” and connections between wires are made using a process called “crimping.” The combiner box functions as a central point to “combine” the individual wire runs into a single feeder cable and contains fuses to protect each circuit.

Historically, most solar energy projects used a wiring architecture known as “homerun”.

Conventional homerun EBOS systems have two distinguishing characteristics:

every string of solar panels in the project is connected to a combiner box with individual positive and negative “wire runs,” and connections between wires are made using a process called “crimping”.

The combiner box functions as a central point to “combine” the individual wire runs into a single feeder cable and contains fuses to protect each circuit.

Making each wire run from the strings to the combiner boxes is a laborious process.

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the bare end must be inserted the correct depth into a terminal;

and special tools must be used to deform metal sleeves and torque lock nuts to ensure an environmental seal.

and special tools must be used to deform metal sleeves

and torque lock nuts to ensure an environmental seal.

The entire installation must be performed by licensed electricians with special training and any mistake in the process can result in a catastrophic system failure.

We invented an alternative to homerun architecture which we refer to as “combine-as-you-go.” Rather than making individual wire runs from each string to combiner boxes, combine-as-you-go architecture connects multiple strings within each row using specialized wire harnesses with integrated fuses that we refer to as “interconnect harnesses.” The interconnect harnesses are then connected to a proprietary above ground feeder cable that we refer to as the BLA.

We invented an alternative to homerun architecture which we refer to as “combine-as-you-go”.

Rather than making individual wire runs from each string to combiner boxes, combine-as-you-go architecture connects multiple strings within each row using specialized wire harnesses with integrated fuses that we refer to as “interconnect harnesses”.

The interconnect harnesses are then connected to a proprietary above ground feeder cable that we refer to as the Big Lead Assembly (“BLA”).

The BLA is our core combine-as-you-go product.

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• Requiring fewer connections.

We believe using our interconnect harness and BLA reduces the number of connection points in a typical utility-scale solar energy project by more than 80% when

compared to a conventional homerun system.

We believe using our interconnect harness and BLA reduces the number of connection points in a typical utility-scale solar energy project by more than 80% when compared to a conventional homerun system.

Requiring fewer connections reduces the number of labor hours required to install the system as well as the number of potential failure points.

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System Solutions

We refer to complete EBOS systems that use multiple components produced by us as “system solutions.” When we sell a system solution, we work with our customers to design, specify and customize their EBOS system to maximize reliability and energy production while minimizing cost.

We refer to complete EBOS systems that use multiple components produced by us as “system solutions”.

When we sell a system solution, we work with our customers to design, specify and customize their EBOS system to maximize reliability and energy production while minimizing cost.

We also provide technical support during installation and the transition to operations and maintenance.

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Homerun EBOS:

We have developed a proprietary EBOS solution for homerun architectures that we refer to as an “interconnect harness.” Rather than the traditional approach of running a separate wire from each string to a combiner box, our interconnect harness connects multiple strings together at each row using a single wire and simple push connector, rather than a wire crimp.

We have developed a proprietary EBOS solution for homerun architectures that we refer to as an “interconnect harness”.

Rather than the traditional approach of running a separate wire from each string to a combiner box, our interconnect harness connects multiple strings together at each row using a single wire and simple push connector, rather than a wire crimp.

Combining multiple strings together at each row reduces the number of wire runs that have to be made to combiner boxes as well as the number of connections that have to be made in each combiner box which reduces either the total number of combiner boxes or the size of combiner boxes required for the system.

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A combine-as-you-go architecture using BLA has significant advantages over traditional homerun architectures, including using less material, requiring fewer man hours to install and having greater reliability and ease of maintenance.

Our combine-as-you-go EBOS

system solutions typically include our interconnect harness, BLA and disconnects and, in some projects, transition enclosures and splice boxes.

Our combine-as-you-go EBOS system solutions typically include our interconnect harness, BLA and disconnects and, in some projects, transition enclosures and splice boxes.

eMobility solutions:

In the fourth quarter of 2021, we introduced four new product families for the EV charging market and began taking orders and shipping some component products in the first quarter of 2022.

Order flow and deliveries of our EV system solution continued through the fourth quarter of 2022 with scaled production underway.

The first new offering within the eMobility product family is the power center which combines equipment needed to protect the charging equipment and transform voltage levels from the electric utility to those needed on the respective site.

The power center provides an efficient, cost effective and aesthetically focused option versus traditional methods.

The second offering focuses on quick connect solutions for chargers made by any manufacturer and any power level to connect to the Shoals system.

The quick connect bases dramatically reduce the time required on site for a deployment and reduce the amount of labor required in the field.

The third offering uses our BLA technology in the EV space to connect multiple chargers to a single power center.

This solution eliminates the need for homeruns from each dispenser and is above ground rated which allows wire to be run above ground rather than in underground conduit.

offering is a raceway system that protects the above ground EV BLAs in walk over and drive over applications.

The raceway system coupled with the EV BLA deploys much more rapidly and cost effectively than traditional methods of deployment.

We derived approximately 77.8% of our revenue for the year ended December 31, 2022 from the sale of system solutions.

We design, manufacture and sell a variety of individual EBOS and other components used by the solar industry, including:

We design, manufacture and sell a variety of individual EBOS and other components used by the solar, battery storage, or EV charging applications and industries, including:

Enclosures that interconnect wire runs from multiple solar panel strings together so that their current can be fed into a single large cable.

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Wire management:

A system to secure PV wiring for safety and aesthetic purposes.

A system to secure photovoltaic (“PV”) wiring for safety and aesthetic purposes.

EV power cabinets :

enclosures that provide power conversion and protection for EV power systems.

We derived approximately 22.2% of our revenue for the year ended December 31, 2022, from the sale of components.

Sales and Marketing Strategy

Our sales and marketing strategy is to educate all participants involved in building, owning and maintaining a solar energy project on the merits of our products including their lower installation costs, greater reliability and lower maintenance costs compared with competing products.

We educate customers and influencers through a combination of direct marketing, independent third-party studies, training seminars, and participating in industry conferences and events, with the objective of making our innovative EBOS solutions the preferred system globally.

Our sales and marketing strategy is to build product awareness and foster long-term relationships with all key stakeholders that are involved in the lifecycle of a PV, battery energy store system, or eMobility project.

We educate these stakeholders on the value proposition of our solutions which lower installation costs, provide greater reliability, and lower maintenance costs through a variety of marketing strategies which include direct marketing campaigns, white papers, independent third-party studies, training seminars, and participating in industry conferences and events.

We sell components and system solutions both on a project-to-project basis or through master supply agreements that support a portfolio of projects.

Our sales process is a highly consultative approach that involves working with developers, engineers, EPC’s, subcontractors, and operations and maintenance firms.

We work collaboratively to understand the complexities and goals of each project with all stakeholders involved to ensure continuity throughout the decision-making process.

This involves us collaborating on site design, product selection, value engineering and optimization.

Our project management team supports the process after a sale is completed with providing the customer submittals for approval, real-time shipping information, and assist with any additional items that may be needed to complete the installation and commissioning.

Our customer care team engages once a site is fully commissioned for any further technical support that may be required for the life of the project.

We believe that our consultative top-down and bottoms-up approach fosters brand loyalty with all stakeholders and results in retention of our customers.

We have three manufacturing facilities located in Tennessee, one in Alabama, and one in California.

We have national sales leaders in the United States that are supported with engineering staff in Tennessee and California.

From an international standpoint, we have sales personnel located in Spain and Australia.

Our team in Spain services Europe, Latin-America, and Africa regions while our personnel in Australia supports Asia-Pacific.

These sales representatives are supported with our engineering team in the United States to ensure that we are in compliance with local codes and regulations.

Our Customers

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EPCs typically construct multiple projects for several different owners.

For the year ended December 31, 2021, our three largest customers represented approximately 40% of our revenue and were the only customers constituting 10% or greater of total revenue.

For the year ended December 31, 2022, our largest customer and five largest customers constituted approximately 8.4% and 35.8% of total revenue, respectively.

None of our customers had revenue exceeding 10% of total revenue for the year ended December 31, 2022.

Our EBOS system solutions and components are highly specialized products that are specific to the solar industry.

The unique expertise required to design EBOS systems and components as well as customers’ reluctance to try unproven products has confined the number of firms that produce such EBOS products to a relatively small number.

Our principal competitors include SolarBOS Inc.

and Bentek Corporation.

Our principal competitors include SolarBOS Inc., Bentek Corporation, Voltage, LLC and Hikam America, Inc.

We compete on the basis of product performance and features, installation cost, reliability and duration of product warranty, sales and distribution capabilities, and training and customer support, as well as the ability to provide system solutions rather than individual components.

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We have developed a proprietary manufacturing process for our EBOS products that we believe is unique in our industry.

Our process uses specialized manufacturing equipment that we have developed and involves joining wire together using resistance welds and then sealing the joint with two separate layers of insulating material, which we refer to as “undermold/overmold.” Resistance welding produces significantly stronger bonds than competing techniques used by our competitors.

Specifying complementary materials for the undermold and overmold significantly reduces the risk of moisture infiltrating the connection and enables us to provide superior UV protection, strain relief, impact resistance, and thermal stability over a wide range of environmental conditions.

Resistance welding produces significantly stronger bonds than competing techniques used by our competitors.

Specifying complementary materials for the undermold and overmold significantly reduces the risk of moisture infiltrating the connection and enables us to provide superior ultraviolet (“UV”) protection, strain relief, impact resistance, and thermal stability over a wide range of environmental conditions.

Together, we believe these techniques substantially reduce the risk that our cable develops a fault over its lifetime.

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Research and Development

We continually devote resources to R&D, with the objective of developing innovative new products that reduce the cost and improve the reliability and safety of renewable energy.

We continually devote resources to research and development (“R&D”), with the objective of developing innovative new products that reduce the cost and improve the reliability and safety of renewable energy.

We believe that we have developed and commercialized most of the new EBOS products and installation methods adopted by the U.S.

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We measure the effectiveness of our R&D using a number of metrics, beginning with a market requirements definition, which includes a program budget, financial payback, resource requirements, and time required to launch the new product, system, or service into the market.

We employ a stringent

engineering phase gate review process that ensures all R&D programs are meeting their stated objectives from inception to deployment.

We employ a stringent engineering phase gate review process that ensures all R&D programs are meeting their stated objectives from inception to deployment.

We have a strong R&D team with significant experience in solar energy as well as expertise in electrical engineering, systems/control engineering and power electronics.

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We rely primarily on patent, trademark, copyright and trade secret laws in the U.S., confidentiality agreements and procedures and other contractual arrangements to protect our technology.

As of January 31, 2022, we had 25 U.S.

As of December 31, 2022, we had 26 U.S.

trademark registrations, 5 pending U.S.

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issued patents are scheduled to expire between 2031 and 2037.

As of January 31, 2022, our issued U.S.

As of December 31, 2022, our issued U.S.

patents had an average remaining life of approximately 12.0 years.

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We also require our customers and business partners to enter into confidentiality agreements before we disclose any sensitive aspects of our technology or business plans.

Our Human Capital Management

Our Human Capital

As of December 31, 2022, we had approximately 835 full-time and temporary employees.

None of our employees are represented by a labor union.

We have not experienced any employment-related work stoppages, and we consider relations with our employees to be good.

The vast majority of our employees are located in the United States.

We have a team-oriented culture and encourage candor from our employees, which we believe helps us to succeed and drive operational excellence.

We also seek to, and have a history of, promoting from within our organization as well as hiring top talent from outside of our company to expand our capabilities.

We seek to promote within our organization as well as hire top talent from outside the company to expand our capabilities.

We aim to hire individuals who share our passion, commitment, and entrepreneurial spirit.

We are also committed to diversity and inclusion because we believe that diversity leads to better outcomes for our business and enables us to better meet the needs of our customers.

We recognize the importance of diversity in leadership roles within our company.

We encourage our employees to operate by a common set of values, which includes:

We also encourage our employees to operate by a common set of values, which includes:

• making quality foremost in all we do, make, and sell;

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We believe that operating with purpose, passion and creativity benefits our customers, stockholders, employees, and suppliers as well as the communities where we operate and the environment.

None of our employees are represented by a labor union.

We have not experienced any employment-related work stoppages, and we consider relations with our employees to be good.

Diversity and Inclusion

We are committed to diversity and inclusion because we believe it leads to better outcomes for our business and enables us to better meet the needs of our customers.

We believe that diversity is the range of our human differences, including but not limited to race, ethnicity, gender, gender identity, sexual orientation, age, economic status, physical and mental ability, religious or ethical values system, national origin, and political beliefs.

We strive to create a workplace where everyone is welcomed, valued, treated fairly, and respected.

We continue to increase our outreach, recruitment, hiring, and retention of diverse groups at all levels of our workforce, including leadership roles.

We also focus on listening, learning, and responding to our employees’ concerns to help ensure that we can provide a diverse, equitable, and inclusive workplace today and into the future.

Based on our Equal Employment Opportunity data from mid-October 2022, our full-time employee population, which was composed of 477 individuals, had the following diversity metrics:

• 45% of our full-time employee population self-identified as ethnically diverse;

• 39% of our full-time employee population self-identified as female;

• Women made up 28% of our manager population, which consisted of 40 individuals with management responsibility.

As of December 31, 2022, of the 10 members of our executive management team, which includes the Chief Executive Officer and direct reports, Chief Revenue Officer, Chief Product Officer, Chief Technology Officer, and Senior VP of Business Development, one self-identifies as ethnically diverse and two as female.

As of December 31, 2022, of the seven independent members of our board of directors one self-identifies as ethnically diverse and two as female.

Employee Training and Development

We recognize the benefits that training can have on building and growing our workforce.

We encourage our employees to participate in continuing education and to pursue professional certifications.

We encourage our leaders to provide continuous guidance and feedback to our employees.

We believe it is the responsibility of every person in leadership – be it a Team Lead, Supervisor, or Manager – to serve as a resource and support for each of our team members.

Compensation and Benefits

We strive to provide a comprehensive suite of rewards and benefits.

Our benefits program is designed to provide coverage for our employees’ overall health and wellbeing.

Our program includes medical and dental coverage, life, and disability insurance.

We also offer retirement saving plans through our 401(k) plan, which is available to all full-time employees.

In 2021, we expanded the benefit with the inclusion of a company matching contribution.

Health and Safety

The safety and wellbeing of our employees is at the forefront of everything we do.

We strive to have a zero accident culture and our safety management system is built upon the principle.

Our occupational health and safety program is designed to drive a proactive safety culture beginning with our management setting the tone for our safety culture and ensuring that everyone feels a sense of ownership for each other’s safety and well-being.

We strive to have an interdependent safety culture where all employees feel responsible for each other’s safety.

This begins with our leadership setting the tone through effective communication of shared ownership, proactive approach to accident prevention and instilling a continuous improvement philosophy.

The key to preventing injuries begins with establishing the risk profile in our facilities through effective risk assessment and incident reporting and analysis processes.

This process enables the organization to implement proactive safety measures, including ergonomic improvements, behavioral and unsafe condition audits, near miss reporting and assessments, as leading indicators towards our journey to zero accidents.

Available Information

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Any document Shoals files may be inspected, without charge, at the SEC’s website at http://www.sec.gov.

Information related to the operation of the SEC's public reference room may be obtained by calling the SEC at 1-800-SEC-0330.

In addition, through our corporate website at www.shoals.com, Shoals provides a hyperlink to a third-party SEC filing website which posts these filings as soon as reasonably practicable, where they can be reviewed without charge.

The information found on our website is not a part of this Annual Report on Form 10-K or any other report we file with or furnish to the SEC.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business