SCHEDULE 1-RENESOLA LTD CONDENSED FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2016

SCHEDULE 1-RENESOLA LTD CONDENSED FINANCIAL STATEMENTS [Abstract]

SCHEDULE 1-RENESOLA LTD CONDENSED FINANCIAL STATEMENTS

SCHEDULE 1-RENESOLA LTD CONDENSED FINANCIAL STATEMENTS

(Amounts expressed in U.S. dollars)

RENESOLA LTD

BALANCE SHEETS

	As of December 31,
	2015		2016
ASSETS
Current assets:
Cash and cash equivalents	$	10,181,328	$	22,143
Prepaid expenses and other current assets		257,933		357,822
Deferred convertible notes issue costs-current		34,660		-
Total current assets		10,473,921		379,965
Investment in subsidiaries		213,430,832		170,945,179
Total assets	$	223,904,753	$	171,325,144
LIABILITIES AND EQUITY
Current liabilities:
Amount due to subsidiaries	$	84,821,631	$	105,028,653
Other current liabilities		333,237		57,238
Warrant liabilities		577,500		-
Convertible notes payable-current		26,145,000		-
Total current liabilities		111,877,368		105,085,891
Income tax payable		93,473		93,473
Total liabilities		111,970,841		105,179,364
Equity:
Common shares (500,000,000 shares; no par value shares authorized at December 31, 2015 and 2016; 203,331,288shares issued and 203,205,688 shares outstanding at December 31, 2015; 202,478,702 shares issued and  200,538,902 shares outstanding at December 31, 2016)		477,964,702		477,171,487
Treasury stock		-		(513,137)
Additional paid-in capital		7,669,350		8,229,330
Accumulated loss		(435,276,897)		(469,975,148)
Accumulated other comprehensive income		61,576,757		51,233,248
Total equity		111,933,912		66,145,780
Total Liabilities and Equity	$	223,904,753	$	171,325,144

SCHEDULE 1-RENESOLA LTD CONDENSED FINANCIAL STATEMENTS

(Amounts expressed in U.S. dollars except number of shares and per share data)

RENESOLA LTD

STATEMENTS OF INCOME

	Year ended December 31,
	2014		2015		2016
Operating expenses(income):
Sales and marketing		71,669		40,469		11,005
General and administrative		4,180,518		2,745,035		2,063,865
Research and development		9,189		-		-
Other operating income		(2,582,694)		-		-
Total operating expenses		1,678,682		2,785,504		2,074,870
Loss from operations		(1,678,682)		(2,785,504)		(2,074,870)
Non-operating income(expense):
Interest income		228		194		140
Interest expense		(5,631,282)		(3,361,077)		(1,285,370)
Foreign exchange gains (losses)		(26,628)		(76,586)		14,437
Gains on derivative, net		7,202,205		7,784,352		-
Gains on repurchase of convertible notes		7,048,188		13,693,269		212,056
Fair value change of warrant liability		7,455,000		1,312,500		577,500
Income(loss) before income taxes and equity in earnings of subsidiaries		14,295,000		16,505,835		(2,556,107)
Income tax benefit		-		-		-
Equity in losses of subsidiaries		(47,999,050)		(21,642,270)		(32,142,144)
Net loss	$	(33,630,021)	$	(5,075,122)	$	(34,698,251)

STATEMENTS OF COMPREHENSIVE LOSS

(Amounts expressed in U.S. dollars)

	Year ended December 31,
	2014		2015		2016
Net loss	$	(33,630,021)	$	(5,075,122)	$	(34,698,251)
Other comprehensive loss:
Foreign currency translation adjustment		(2,533,628)		(19,503,275)		(10,343,509)
Other comprehensive loss		(2,533,628)		(19,503,275)		(10,343,509)
Comprehensive loss	$	(36,163,649)	$	(24,578,397)	$	(45,041,760)

SCHEDULE 1-RENESOLA LTD CONDENSED FINANCIAL STATEMENTS

(Amounts expressed in U.S. dollars)

RENESOLA LTD

STATEMENTS OF CASH FLOWS

	Year ended December 31,
	2014		2015		2016
Net loss	$	(33,630,021)	$	(5,075,122)	$	(34,698,251)
Equity in losses of subsidiaries		47,999,050		21,642,270		32,142,144
Adjustments to reconcile net income to net cash used in operating activities:
Amortization of deferred convertible notes issue costs and premium		933,152		764,527		32,935
Gains from repurchase of convertible bond		(7,048,188)		(13,693,269)		(212,056)
Share-based compensation		2,166,097		1,466,181		746,980
Gains on derivatives		(7,202,205)		(7,784,352)		-
Fair value change of warrant liability		(7,455,000)		(1,312,500)		(577,500)
Changes in assets and liabilities :
Other long-term assets		(158,952)		-		-
Prepaid expenses and other current assets		313,310		(257,933)		(99,889)
Other current liabilities		(536,417)		(1,067,521)		(275,999)
Other long-term liabilities		(2,582,694)		-		-
Net cash used in operating activities		(7,201,868)		(5,317,719)		(2,941,636)
Investing activities:
Investment in subsidiaries		(15,623)		(33,783)		-
Net cash received from settlement of derivatives		4,960,574		9,078,226		-
Net cash provided by (used in) investing activities		4,944,951		9,044,443		-
Financing activities:
Proceeds from exercise of share option		362,801		640,680		-
Cash paid for repurchase of convertible notes		(9,809,860)		(54,376,600)		(25,931,219)
Cash paid for ADS repurchase		-		(812,184)		(1,493,352)
Receipt of loan from subsidiaries		11,999,596		59,675,011		20,207,022
Net cash provided by (used in)financing activities		2,552,537		5,126,907		(7,217,549)
Net (decrease) increase in cash and cash equivalents		295,620		8,853,631		(10,159,185)
Cash and cash equivalents, beginning of year	$	1,032,077	$	1,327,697	$	10,181,328
Cash and cash equivalents, end of year	$	1,327,697	$	10,181,328	$	22,143

SCHEDULE 1-RENESOLA LTD CONDENSED FINANCIAL STATEMENTS

(Amounts expressed in U.S. dollars, unless otherwise stated)

Note to Schedule 1

Schedule I has been provided pursuant to the requirements of Rule 12-04(a) and 5-04(c) of Regulation S-X, which require condensed financial information as to the financial position, changes in financial position and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The condensed financial information has been prepared using the same accounting policies as set out in the accompanying consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The footnote disclosure certain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the accompanying Consolidated Financial Statements.