Solar Power, Inc. - FORM 8-K/A - EX-99.3

Attached files

file	filename
8-K/A - FORM 8-K/A - Solar Power, Inc.	d40888d8ka.htm
EX-99.1 - EX-99.1 - Solar Power, Inc.	d40888dex991.htm
EX-99.2 - EX-99.2 - Solar Power, Inc.	d40888dex992.htm

Exhibit 99.3

Pro Forma Condensed Combined Financial Statements

(Unaudited)

(in thousands, unless otherwise noted)

The following unaudited pro forma condensed combined financial statements give effect to the acquisition by Solar Power, Inc., of Solar Juice Pty Ltd. (“Solar Juice”). On March 31, 2015, SPI China (HK) Limited, entered into a share purchase agreement with Andrew Burgess, a citizen of Australia as trustee on the terms of the Burgess Absolutely Entitled Trust, Rami Fedda, a citizen of Australia as trustee on the terms of the Fedda Absolutely Entitled Trust, and Allied Energy Holding Pte Ltd, a company incorporated in Singapore and associated with Simon Tan, a citizen of Singapore (collectively, the “Solar Juice Sellers”) for the acquisition of the 80% equity interest in Solar Juice. The acquisition was completed on May 28, 2015.

The historical financial information of Solar Juice included elsewhere in this Form 8-K/A has been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”) and presented in Australian dollars (“AUD”). IFRSs include International Accounting Standards (“IAS”) and related interpretations. The unaudited pro forma financial statements presented herein include adjustments to convert the basis of the financial statements of Solar Juice from IFRSs to U.S. generally accepted accounting principles (“U.S. GAAP”) and to translate the AUD amounts into U.S. dollars (“USD”).

The pro forma condensed combined balance sheet as of March 31, 2015, and the pro forma condensed combined statement of operations for the year ended December 31, 2014, and the pro forma condensed combined statement of operations for the three-month period ended March 31, 2015, and the notes thereto are included herein.

The unaudited pro forma condensed combined statement of operations is based on the individual historical consolidated statement of operations of Solar Power, Inc. and Solar Juice for the year ended December 31, 2014 and three-month period ended March 31, 2015 giving effect to the acquisition of Solar Juice as if it had occurred on January 1, 2014. The pro forma statement of operations reflects only pro forma adjustments expected to have a continuing impact on the combined results. The unaudited pro forma condensed combined balance sheet is based on the individual historical consolidated balance sheet of Solar Power, Inc. and Solar Juice as at March 31, 2015 giving effect to the acquisition of Solar Juice as if it had occurred on March 31, 2015. The unaudited pro forma condensed combined financial statements reflects adjustments to give effect to pro forma events that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) expected to have a continuing impact on the combined results. The unaudited pro forma condensed combined financial information should be read in conjunction with the accompanying notes to the unaudited pro forma condensed combined financial statements. In addition, the unaudited pro forma condensed combined financial statements and notes thereto should be read in conjunction with (1) Solar Power, Inc.’s annual report on Form 10-K, for the year ended December 31, 2014, including the audited consolidated financial statements and the notes relating thereto, for the year ended December 31, 2014, (2) Solar Juice’s audited financial statements for the period from July 1, 2013 to June 30, 2014, and the notes relating thereto, (3) the Solar Power, Inc. Form 10-Q for the first quarter ended March 31, 2015, including the unaudited interim condensed consolidated financial statements for the three-months ended March 31, 2015, and (4) Solar Juice unaudited interim condensed financial statements for the period from July 1, 2014 to December 31, 2014.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

Year ended December 31, 2014

(In thousands, except for share data)


	Solar Power, Inc.			Solar Juice (U.S. GAAP)		Pro Forma Adjustments (3)			Pro Forma Combined
Net sales:
Net sales	$	91,642		$	79,396	$	—		$	171,038

Total net sales		91,642			79,396		—			171,038
Cost of goods sold:
Cost of goods sold		77,430			74,120		—			151,550
Provision for losses on contracts		2,055			—		—			2,055


Total cost of goods sold		79,485			74,120		—			153,605


Gross profit		12,157			5,276		—			17,433

Operating expenses:
General and administrative		6,243			2,962		—			9,205
Sales, marketing and customer service		1,401			241		458			2,100

Total operating expenses		7,644			3,203		458			11,305

Operating income/(loss)		4,513			2,073		(458	)		6,128
Other income (expense):
Interest expense		(2,259	)		—		—			(2,259	)
Interest income		1,212			118		—			1,330
Loss on extinguishment of convertible bonds		(8,907	)		—		—			(8,907	)
Fair value change of derivative liability		972			—		—			972
Others		2,313			411		—			2,724


Total other (expense) income, net		(6,669	)		529		—			(6,140	)

(Loss)/profit before income taxes		(2,156	)		2,602		(458	)		(12	)
Provision for income taxes		3,040			784		(137	)		3,687


Net (loss)/profit	$	(5,196	)	$	1,818	$	(321	)	$	(3,699	)
Net loss attributable to noncontrolling interests		—			364		(64	)		300

Net (loss)/profit attributable to stockholders of the Company		(5,196	)		1,454		(257	)		(3,999	)

Net loss per common share
Basic and diluted		(0.02	)							(0.01	)

Weighted average number of common shares used in computing per share amounts
Basic and diluted		307,005,057								307,005,057

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

Three-month period ended March 31, 2015

(In thousands, except for share data)


	Solar Power, Inc.			Solar Juice (U.S. GAAP)			Pro Forma Adjustments (3)			Pro Forma Combined
Net sales:
Net sales	$	16,200		$	15,554		$	—		$	31,754

Total net sales		16,200			15,554			—			31,754
Cost of goods sold:
Cost of goods sold		10,989			14,849			—			25,838


Total cost of goods sold		10,989			14,849			—			25,838


Gross profit		5,211			705			—			5,916

Operating expenses:
General and administrative		39,137			782			—			39,919
Sales, marketing and customer service		5,722			84			114			5,920

Total operating expenses		44,859			866			114			45,839

Operating (loss)/income		(39,648	)		(161	)		(114	)		(39,923	)
Other income (expense):
Interest expense		(1,397	)		(15	)		—			(1,412	)
Interest income		396			2			—			398
Others		3,901			(176	)		—			3,725


Total other (expense) income, net		2,900			(189	)		—			2,711

Loss before income taxes		(36,748	)		(350	)		(114	)		(37,212	)
Provision for income taxes		707			(105	)		(34	)		568


Net loss	$	(37,455	)	$	(245	)	$	(80	)	$	(37,780	)
Net loss attributable to noncontrolling interests		(3	)		(49	)		(16	)		(68	)

Net loss attributable to stockholders of the Company		(37,452	)		(196	)		(64	)		(37,712	)

Net loss per common share
Basic and diluted		(0.06	)								(0.06	)

Weighted average number of common shares used in computing per share amounts
Basic and diluted		584,519,396									584,519,396

See accompanying notes to the pro-forma condensed combined financial statements.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

As of March 31, 2015

(In thousands, except for share data)


	Solar Power, Inc.			Solar Juice (U.S. GAAP)		Pro Forma Adjustments			Pro Forma Combined
						(3)

ASSETS
Current assets:
Cash and cash equivalents	$	96,307		$	1,006		—		$	97,313
Restricted cash		30,999			—		—			30,999
Bank deposits with maturity over three months		5,323			—		—			5,323
Short-term investments		27,424			—		—			27,424
Accounts receivable, net of allowance for doubtful accounts		23,089			6,896		—			29,985
Costs and estimated earnings in excess of billings on uncompleted contracts		85,075			—		—			85,075
Inventories, net		8,206			11,307		736			20,249
Project assets		107,354			—		—			107,354
Prepaid expenses and other current assets		38,527			1,473		—			40,000
Other receivable, related parties		4,723			—		—			4,723
Finance lease receivable		2,052			—		—			2,052
Other financial assets		—			450		373			823

Total current assets		429,079			21,132		1,109			451,320


Intangible asset		517			—		4,579			5,096
Goodwill		67,462			—		8,238			75,700
Accounts receivable, noncurrent		3,667			—		—			3,667
Notes receivable, noncurrent		6,611			—		—			6,611
Property, plant and equipment at cost, net		108,892			269		—			109,161
Project assets, noncurrent		32,014			—		—			32,014
Deferred tax assets, net		1,123			348		—			1,471
Financing receivable, noncurrent		107			—		—			107

Total assets	$	649,472		$	21,749	$	13,926		$	685,147

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	90,789		$	8,952		—		$	99,741
Accounts payable, related parties		30,667			—		—			30,667
Notes payable		46,814			—		—			46,814
Accrued liabilities		22,681			297		—			22,978
Income taxes payable		5,378			—		—			5,378
Advance from customers		18,951			—		—			18,951
Short term borrowings		61,637			5,723		(230	)		67,130
Other current liabilities		29,512			926		—			30,438
Other current liabilities, related parties		934			—		—			934

Total current liabilities		307,363			15,898		(230	)		323,031
Financing and capital lease obligations		9,956			—		—			9,956
Convertible bonds		32,987			—		—			32,987
Deferred tax liability, net		3,233			13		1,775			5,021
Other noncurrent liabilities		25,914			—		—			25,914

Total liabilities		379,453			15,911		1,545			396,909


Commitments and contingencies		—			—		—			—

Stockholders’ equity
Common stock		60			—		1			61
Additional paid in capital		380,739			—		15,509			396,248
Accumulated other comprehensive loss		(13,291	)		—		—			(13,291	)
Accumulated (deficit)/profit		(98,722	)		5,838		(5,838	)		(98,722	)

Total stockholders’ equity		268,786			5,838		9,672			284,296

Noncontrolling interests		1,233			—		2,709			3,942
Total liabilities and stockholders’ equity	$	649,472		$	21,749	$	13,926		$	685,147

See accompanying notes to the pro-forma condensed combined financial statements.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(in thousands, unless otherwise noted)

Note 1 — Basis of Presentation

On March 31, 2015, SPI China (HK) Limited entered into a share purchase agreement (Purchase Agreement) with Solar Juice Sellers for the acquisition of the 80% equity interest in Solar Juice. Under the Purchase Agreement, SPI China (HK) Limited acquired the 80% equity interest from Solar Juice in exchange for 14,073,354 shares of Solar Power Inc.’s shares of common stock.

The acquisition was completed on May 28, 2015.

In accordance with guidance for pro forma financial statements, we are presenting the as-if-combined balance sheet of Solar Power, Inc. and Solar Juice as if they were combined on March 31, 2015.

Note 2 — IFRS to U.S. GAAP Adjustments and Foreign Currency Translation

There is no adjustment made to the Solar Juice statement of operations for the year ended December 31, 2014 and three-month period ended March 31, 2015 to convert from IFRS to U.S. GAAP. In addition, the AUD based income statement for Solar Juice for the year ended December 31, 2014 and three-month period ended March 31, 2015 converted to U.S. GAAP has been translated to U.S. dollars using a historic exchange rate. The average historic spot rate for the year ended December 31, 2014 and three-month period ended March, 2015 was $0.8986 and $0.7732 per AUD respectively, and the historic spot rate as of March 31, 2015 was $0.7625 per AUD. A reader of this pro forma financial information should not construe this translation as representations by the Company that the real amounts actually represent these U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated.

Unaudited pro forma condensed combined statement of operations

Year ended December 31, 2014


	Solar Juice (IFRS) (AUD)		U.S. GAAP Adjustments (AUD)		Solar Juice (U.S. GAAP) (AUD)		Translation Adjustment (AUD x 0.8986)			Solar Juice (U.S. GAAP) (U.S. Dollars)

Net sales:
Net sales		88,355		—		88,355		(8,959	)		79,396

Total net sales		88,355		—		88,355		(8,959	)		79,396
Cost of goods sold:
Cost of goods sold		82,484		—		82,484		(8,364	)		74,120


Total cost of goods sold		82,484		—		82,484		(8,364	)		74,120


Gross profit		5,871		—		5,871		(595	)		5,276

Operating expenses:
General and administrative		3,296		—		3,296		(334	)		2,962
Sales, marketing and customer service		268		—		268		(27	)		241

Total operating expenses		3,564		—		3,564		(361	)		3,203

Operating income		2,307		—		2,307		(234	)		2,073
Other income (expense):
Interest income		131		—		131		(13	)		118
Others		457		—		457		(46	)		411


Total other (expense) income, net		588		—		588		(59	)		529

Profit before income taxes		2,895		—		2,895		(293	)		2,602
Provision for income taxes		872		—		872		(88	)		784


Net profit	$	2,023		—		2,023		(205	)	$	1,818

Unaudited pro forma condensed combined statement of operations

Three-month period ended March 31, 2015


	Solar Juice (IFRS) (AUD)			U.S. GAAP Adjustments (AUD)		Solar Juice (U.S. GAAP) (AUD)			Translation Adjustment (AUD x 0.7732)			Solar Juice (U.S. GAAP) (U.S. Dollars)

Net sales:
Net sales		20,116			—		20,116			(4,562	)		15,554

Total net sales		20,116			—		20,116			(4,562	)		15,554
Cost of goods sold:
Cost of goods sold		19,205			—		19,205			(4,356	)		14,849


Total cost of goods sold		19,205			—		19,205			(4,356	)		14,849


Gross profit		911			—		911			(206	)		705

Operating expenses:
General and administrative		1,011			—		1,011			(229	)		782
Sales, marketing and customer service		108			—		108			(24	)		84

Total operating expenses		1,119			—		1,119			(253	)		866

Operating income/(loss)		(208	)		—		(208	)		47			(161	)
Other income (expense):
Interest expense		(19	)		—		(19	)		4			(15	)
Interest income		2			—		2			—			2
Others		(228	)		—		(228	)		52			(176	)


Total other (expense) income, net		(245	)		—		(245	)		56			(189	)

Loss before income taxes		(453	)		—		(453	)		103			(350	)
Provision for income taxes		(136	)		—		(136	)		31			(105	)


Net loss	$	(317	)	$	—	$	(317	)	$	72		$	(245	)

Unaudited pro forma condensed combined balance sheet

As of March 31, 2015


	Solar Juice (IFRS) (AUD)		U.S. GAAP Adjustments (AUD)		Solar Juice (U.S. GAAP) (AUD)		Translation Adjustment (AUD x 0.7625)			Solar Juice (U.S. GAAP) (U.S. Dollars)
ASSETS:
Property, plant and equipment		353		—		353		(84	)		269
Deferred tax assets, net		457		—		457		(109	)		348

TOTAL NON-CURRENT ASSETS		810		—		810		(193	)		617


CURRENT ASSETS:
Prepaid expenses and other current assets		1,932		—		1,932		(459	)		1,473
Inventories, net		14,829		—		14,829		(3,522	)		11,307
Other financial assets		590		—		590		(140	)		450
Accounts receivable, net of allowance for doubtful accounts		9,044		—		9,044		(2,148	)		6,896
Cash and cash equivalents		1,319		—		1,319		(313	)		1,006

TOTAL CURRENT ASSETS		27,714		—		27,714		(6,582	)		21,132


TOTAL ASSETS		28,524		—		28,524		(6,775	)		21,749


LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Other current liabilities		1,214		—		1,214		(288	)		926
Accrued liabilities		390		—		390		(93	)		297
Short term borrowings		7,505		—		7,505		(1,782	)		5,723
Income tax payables		—		—		—		—			—
Accounts payable		11,741		—		11,741		(2,789	)		8,952

TOTAL CURRENT LIABILITIES		20,850		—		20,850		(4,952	)		15,898


Deferred tax liability, net		17		—		17		(4	)		13

TOTAL LIABILITIES		20,867		—		20,867		(4,956	)		15,911


EQUITY:
Paid-in Capital		—		—		—		—			—
Retained earnings		7,657		—		7,657		(1,819	)		5,838

TOTAL EQUITY		7,657		—		7,657		(1,819	)		5,838


TOTAL LIABILITIES AND EQUITY		28,524		—		28,524		(6,775	)		21,749

Note 3 — Pro Forma Adjustment (3)

It represented the effect of fair value adjustment, intangible assets – customer relationship adjustment and noncontrolling interests adjustment made on May 28, 2015 as a result of Solar Power, Inc.’s acquisition over the Solar Juice as if the acquisition had been consummated on January 1, 2014.

The aggregate purchase price of US$15,578,000 represented fair value of ordinary shares of 14,073,354. The fair value of the ordinary shares issued for purchase price allocation purposes was estimated using the closing market price for a reasonable period before and after the date of the announcement of the acquisition. The valuation was based on a valuation report provided by a third party valuation firm. The valuation report utilizes and considers generally accepted valuation methodologies such as the income, market, cost and actual transaction of shares approach. We have incorporated certain assumptions which include projected cash flows and replacement costs.

Solar Power, Inc. - FORM 8-K/A - EX-99.3 - August 11, 2015

Attached files

Solar Power, Inc. Reports