Note 12 - Stockholders' Equity

12 Months Ended

Dec. 31, 2012

Stockholders' Equity Note Disclosure [Text Block]

12. 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 stockholders 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 71% of the Company’s outstanding Common Stock at June 22, 2011. There were 52,267,576 shares of Common Stock outstanding prior to this transaction.

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 at June 30, 2012). For further discussion of the transaction, refer to Note 5 —Acquisition of Solar Green Technology.

Issuance of warrants to purchase common stock

In October 2010, in conjunction with a consulting agreement, the Company 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 is exercisable over a five-year period and vests based on certain performance criteria. This warrant was fair-valued at $0.23 per share using the Black-Scholes model. The warrant was to expire on October 1, 2015. 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. Since the warrant was performance based and none of the performance requirements were considered probable of being met, no expense was recorded for the fiscal year ended December 31, 2011 through the date of cancellation.

There were no warrants issued during the year ended December 31, 2011.

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 original aggregate principal amount of $9.0 million. The fair value of $0.29 per share was determined using the Black-Scholes-Merton model. Assumptions used in calculating fair value were as follows: a risk free interest rate of .38%, expected volatility of 103%, zero expected dividend yield, and an expected term of 3 years. 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 year ended December 31, 2012, $87,000 was amortized to interest expense.

The following table summarizes the Company’s warrant activity:

	Shares			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term
Outstanding as of January 1, 2011 (1)		-		$	-		-
Acquired in a transfer of an entity under common control (1)		2,866,302			2.42		2.11
Exercised		-			-		-
Cancelled/expired		(800,000	)		1.15		-
Outstanding December 31, 2011		2,066,302			2.91		0.91
Issued		300,000			0.75		3.00
Exercised		-			-		-
Cancelled/expired		(2,066,302	)		2.91		-
Outstanding December 31, 2012		300,000			0.75		2.10
Exercisable December 31, 2012		300,000		$	0.75		2.10

(1) As adjusted to reflect the balances of Solar Power, Inc. beginning March 31, 2011, at the carrying value of LDK as required under the accounting guidelines for a transfer of an entity under common control (refer to Note 5 —Acquisition of Solar Green Technology).