Note 3 - Business Combinations

12 Months Ended

Dec. 31, 2014

Disclosure Text Block Supplement [Abstract]

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

3. Business Combinations

(a) Acquisition of Sinsin

On September 5, 2014, the Company and its wholly-owned indirect subsidiary, SPI China (HK) Limited entered into a Share Sale & Purchase Agreement (“Purchase Agreement”) with Sinsin Europe Solar Asset Limited Partnership (“Sinsin Europe”) and Sinsin Solar Capital Limited Partnership (“Sinsin Solar Capital”) to purchase all of the outstanding capital stock of Sinsin Renewable Investment Limited, a limited liability company registered in Malta (“Sinsin”). Sinsin Europe owns 99,999 Ordinary “A” shares and Sinsin Solar Capital owns 1 Ordinary “B” share of Sinsin representing all of outstanding capital stock of Sinsin. The acquisition was completed on December 1, 2014.

Sinsin is engaged in the development, acquisition, management, and/or operation of energy solutions, projects, plants, factories, warehouses, stores, and facilities dedicated to the production of alternative energy sources and the facilitation of the distribution, supply and sale of such alternative energy power, through eight photovoltaic plants with a total capacity of 26.6MW in Greece. Sinsin conducts its business through four subsidiaries registered in Greece.

The purchase consideration of Sinsin consists of cash Euro 3,370 ($4,209) (“Cash Consideration”) and 38,225,846 shares of the Company’s common stock (“Stock Consideration”). In addition to the purchase considerations, the Company is also required to settle the accounts payable in the amount of Euro 45,929 ($57,365) due to Sinsin Europe on behalf of Sinsin (“Payable Settlement”). The total of Cash Consideration and Payable Settlement amounting to Euro 49,299 ($61,574) was scheduled to be settled in several installments through 2016. The Stock Consideration was settled on October 3, 2014 by the Company, and the common stock was subject to a three-month lockup period as agreed in the Purchase Agreement. The acquisition was consummated on December 1, 2014 upon completion of all closing conditions. As of December 31, 2014, $29,850 and $25,531 were recorded in Other liabilities and Other liabilities-noncurrent, respectively, for the outstanding cash settlement in the consolidated financial statements.

The fair value of the Stock Consideration was determined to be $78,955, which was based on the closing market price of the Company’s common stock on the acquisition date of December 1, 2014, with adjustments for the lockup period and other factors.

The acquisition has been accounted for under ASC 805 Business Combinations. The Company made estimates and judgments in determining the fair value of acquired assets and liabilities, based on management’s experiences with similar assets and liabilities with the assistance from an independent valuation firm. The allocation of the purchase price is as follows:

	USD
Identifiable assets acquired and liabilities assumed
Cash and cash equivalents		958
Accounts receivable		5,793
Other receivable		2,398
Property, plant and equipment		71,098
Long term receivables		14
Deferred tax assets		1,719
Accounts payable		(1,944	)
Income tax payable		(381	)
Other accrued liabilities		(222	)
Other long-term liability		(4	)
Deferred tax liabilities		(4,859	)
Identifiable net assets acquired (a)		74,570
Consideration
Cash Consideration		4,209
Payable Settlement		57,365
Stock Consideration		78,955
Total consideration (b)		140,529
Goodwill (b - a)		65,959

During the period from the acquisition date to December 31, 2014, the acquired subsidiary contributed revenue of $346 and earnings of $55 to the Company’s consolidated results.

Goodwill primarily represents the expected synergies from combining operations of the Company and Sinsin, which are complementary to each other, and any other intangible benefits that would accrue to the Company that do not qualify for separate recognition. The excess of purchase price over the identifiable net tangible and intangible assets acquired was recorded as goodwill.

(b) Acquisition of Xinte

On November 6, 2014, a PRC wholly owned subsidiary of the Company, SPI Solar Power (Suzhou) Co., Ltd.(“SPI Meitai Suzhou”), entered into an equity interest purchase agreement (the “Equity Interest Purchase Agreement”) with TBEA Xinjiang Sunoasis Co., Ltd. (“TBEA Sunoasis”) and a wholly owned subsidiary of TBEA Sunoasis, for the acquisition (the “Acquisition”) of the 100% equity interest in Gonghe County Xinte Photovoltaic Co., Ltd. (“Xinte”), a company incorporated under the laws of the PRC. The principal activities of Xinte are the development, investment and operation of a photovoltaic plant located in PRC. As of December 31, 2014, Xinte owned a 20MW photovoltaic plant.

The purchase consideration of Xinte was RMB 43,000 ($6,919) to be settled in cash (“Xinte Cash Consideration”). In addition to the purchase consideration, the Company is also required to settle the accounts payable arising from EPC service in the amount of RMB147,077 ($23,705) due to TBEA Sunoasis on behalf of Xinte (“Xinte Payable Settlement”). The total of Xinte Cash Consideration and Xinte Payable Settlement amounting to RMB190,077 ($30,624) was scheduled to settle in several installments through 2015. Among which RMB144,200 ($23,333) carried interests at an annual rate of 3.88%. The acquisition was consummated on December 31, 2014 upon completion of all closing conditions. As of December 31, 2014, $3,701 and $23,705 were recorded in Other liabilities and Accounts payables, respectively, for the outstanding cash settlement in the consolidated financial statements.

Concurrent with entry into the Equity Interest Purchase Agreement, SPI Meitai Suzhou separately entered into a share pledge agreement, as amended (the “Share Pledge Agreement”) and a mortgage agreement (the “Mortgage Agreement”) with TBEA Sunoasis and Xinte. SPI Meitai Suzhou agreed to pledge 85% of the equity interest in Xinte held by SPI Meitai Suzhou to TBEA Sunoasis pursuant to the Share Pledge Agreement, and to mortgage all assets of the 20MW photovoltaic power station owned by Xinte to TBEA Sunoasis pursuant to the Mortgage Agreement.

The acquisition had been accounted for under ASC 805 Business Combinations. The Company made estimates and judgments in determining the fair value of acquired assets and liabilities, based on management’s experiences with similar assets and liabilities with the assistance from an independent valuation firm. The allocation of the purchase price is as follows:

	USD
Identifiable assets acquired and liabilities assumed
Cash and cash equivalents		16
Accounts receivable		2,168
Other receivable		3,292
Prepaid expenses and other current assets		7
Property, plant and equipment		26,402
Land use rights		402
Deferred tax assets		358
Income tax payable		(325	)
Others		(1,782	)
Identifiable net assets acquired (a)		30,538
Cash consideration and Xinte Payable Settlement (b)		30,624
Goodwill (b - a)		86

The following unaudited pro forma summary presents consolidated information of the Company as if these two business combinations had occurred on January 1, 2013. In determining these amounts, management has assumed that the fair value adjustments that arose on the acquisition date would remain the same even if the acquisition had occurred on January 1, 2013. However, as Sinsin and Xinte were incorporated on May 8, 2013 and April 28, 2013, respectively, the combination result for the year ended December 31, 2013 represents the result after the dates of incorporation of Sinsin and Xinte.

	Pro forma year ended December 31, 2014 (Unaudited)			Pro forma year ended December 31, 2013 (Unaudited)
Net revenue	$	105,314		$	43,551
Net loss	$	(3,152	)	$	(40,103	)