Stockholders' Equity

9 Months Ended

Sep. 30, 2012

Stockholders' Equity

10. Stockholders’ Equity

Issuance of common stock

On March 31, 2011, Solar Power, Inc. and LDK consummated the transactions contemplated by the second closing of the Stock Purchase Agreement whereby Solar Power, Inc. issued 20,000,000 shares of Series A Preferred Stock for an aggregate purchase price of $22.2 million. On June 22, 2011, the shareholders of the Company approved an amendment to the Company’s Articles of Incorporation increasing the authorized shares and enabling the automatic conversion of the 20,000,000 Series A Preferred stock to 88,910,400 shares of Common Stock of Solar Power, Inc. The 20,000,000 shares of Series A Preferred Stock were cancelled pursuant to the conversion. In combination with the issuance of 42,835,947 shares of Common Stock of Solar Power, Inc., under the first closing of the Stock Purchase Agreement in January 2011 in exchange for $10.7 million, the total shares owned by LDK represented 70% of the Company’s outstanding Common Stock at June 22, 2011.

On July 22, 2011, the Company issued 400,000 shares of restricted Common Stock under the Company’s 2006 Equity Incentive Plan (defined below) as compensation to its non-employee directors. The fair value of the shares was $0.48 per share, the closing price of the Company’s Common Stock on July 22, 2011, the date of the grant. The shares vested on the date of grant. On June 8, 2012, the Company issued 400,000 shares of restricted Common Stock pursuant to the Company’s 2006 Equity Incentive Plan (defined below) as compensation to its non-employee directors. The fair value of the shares was $0.265 per share, the closing price of the Company’s Common Stock on June 12, 2012, the date of the grant. The shares vested on the date of grant.

In July 2012, the Company issued 9,771,223 shares of its Common Stock to LDK Europe, a wholly-owned subsidiary of LDK, and 1,814,655 of its Common Stock to each of the two founders of SGT pursuant to the SGT Acquisition and Stock Purchase Agreement as part of an aggregate purchase price of 5.0 million Euros (approximately $6.3 million in U.S. Dollars). For further discussion of the transaction, refer to Note 4—Acquisition of Solar Green Technology.

Issuance of warrants to purchase common stock

On February 15, 2012, the Company’s Board of Directors approved the issuance of a warrant agreement for Cathay General Bancorp to purchase 300,000 shares of the Company’s Common Stock at $0.75 per share related to the credit facility entered into with Cathay Bank for an aggregate principle amount of $9.0 million. The fair value of $0.44 per share was determined using the Black-Scholes-Merton model. The warrant expires on February 15, 2015 and is exercisable anytime within that period for an exercise price of $0.75 per share. The value of the warrant will be amortized over the remaining term of the associated credit facility through December 31, 2012. For the three and nine month period ended September 30, 2012, $38,000 and $0.1 million, respectively, was amortized to interest expense.

In October 2010, in conjunction with a consulting agreement, Solar Power, Inc. issued a warrant to purchase 500,000 shares of its Common Stock to a consultant at an exercise price of $0.25 per share. The warrant was exercisable over a five-year period and vested based on certain performance criteria. This warrant was fair-valued at $0.23 per share using the Black-Scholes-Merton model. The warrant expires on October 1, 2015. Since the warrant was performance-based and none of the performance requirements were considered probable of being met as of September 30, 2012 or 2011, no expense was recorded for the three or nine month periods ended September 30, 2012 and 2011, respectively. The consultation agreement dated October 2010 was terminated by mutual agreement in June 2012, therefore also cancelling the related warrant to purchase 500,000 shares.