T1 Energy Inc 8-K/A, filed Mar 10, 2025
T1 Energy Inc. (TE)
About this 8-K/A
T1 Energy Inc filed this 8-K/A on March 10, 2025.
Items reported
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
EXPLANATORY NOTE
This Amendment No. 1 (the “Amendment”) is being filed to amend and supplement Item 9.01 of the Initial 8-K to include (i) the audited financial statements of the Target as of and for the year ended December 31, 2023 and December 31, 2022, (ii) the unaudited interim financial statements of the Target as of and for the nine months ended September 30, 2023 and September 30, 2024 and (iii) the unaudited pro forma condensed combined balance sheet of the Company as of September 30, 2024, the unaudited pro forma condensed combined statements of operations of the Company for the nine months ended September 30, 2024 and the unaudited pro forma combined statements of operations of the Company for the year ended December 31, 2023, giving effect to transactions pursuant to the Transaction Agreement. This amendment does not otherwise update, modify, or amend the Initial 8-K and should be read in conjunction with the Initial 8-K.
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Item 9.01. Financial Statements and Exhibits.
| (a) | Financial statements of businesses or funds acquired. |
The audited financial statements of the Target as of and for the year ended December 31, 2023 and December 31, 2022 are filed as Exhibit 99.1 to this Amendment and are incorporated herein by reference.
The unaudited interim financial statements of Target as of and for the nine months ended September 30, 2024 and 2023 are filed as Exhibit 99.2 to this Amendment and are incorporated herein by reference.
| (b) | Pro forma financial information. |
The unaudited pro forma condensed combined balance sheet of the Company as of September 30, 2024, the unaudited pro forma condensed combined statements of operations of the Company for the nine months ended September 30, 2024 and the unaudited pro forma combined statements of operations of the Company for the year ended December 31, 2023, giving effect to the transactions pursuant to the Transaction Agreement, are filed as Exhibit 99.3 to this Amendment and are incorporated herein by reference.
| (d) | Exhibits. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| T1 Energy Inc. | |||
| By: | /s/ Joseph Evan Calio | ||
| Name: | Joseph Evan Calio | ||
| Title: | Chief Financial Officer | ||
Dated: March 10, 2025
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Exhibit 23.1
Consent of Independent Auditor
We consent to the incorporation by reference in the Registration Statements No. 333-274434 on Form S-3 and Nos. 333-273862-1, 333-261725-1 and 333-281418 on Form S-8 of T1 Energy, Inc. of our report dated March 10, 2025, relating to Audited financial statements of the Target (combined carve-out financial statements of Trina Solar (U.S.) Holding Inc.) as of and for the year ended December 31, 2023 and 2022, appearing in this Form 8-K/A.
/S/ RSM China CPA LLP
Beijing, China
March 10, 2025
Exhibit 99.1
TRINA SOLAR (U.S.) HOLDING INC.
Combined Carve-Out Financial Statements
Year Ended
December 31, 2023
Contents
i
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors of T1 Energy, Inc. (formerly known as FREYR Battery, Inc.)
Opinion
We have audited the combined financial statements of Trina Solar (U.S.) Holding Inc. (the “Company”) and its subsidiaries, which comprise the combined balance sheets as of December 31, 2023 and 2022, and the related combined statements of operations, changes in parent net investment, and cash flows for the years ended December 31, 2023 and 2022, and the related notes to the combined financial statements (collectively, referred to as the “financial statements”).
In our opinion, the accompanying combined financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years ended December 31, 2023 and 2022 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in Auditor’s Responsibilities for the Audit of the Combined Financial Statements. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Combined Financial Statements
Management is responsible for the preparation and fair presentation of the combined financial statements in conformity with accounting principles generally accepted in the United States of America and for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free of material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the financial statements are available to be issued.
Auditor’s Responsibilities for the Audit of the Combined Financial Statements
Our objectives are to obtain reasonable assurance about whether the combined financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the combined financial statements.
In performing an audit in accordance with GAAS, we:
| ● | Exercise professional judgment and maintain professional skepticism throughout the audit. |
| ● | Identify and assess the risks of material misstatement of the combined financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the combined financial statements. |
| ● | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed. |
| ● | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the combined financial statements. |
| ● | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time. |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
/s/ RSM China CPA LLP
RSM China CPA LLP
Beijing, China
March 10, 2025
1
TRINA SOLAR (U.S.) HOLDING INC.
COMBINED BALANCE SHEETS
(In Thousands)
| As of December 31, | ||||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 7,134 | $ | 1 | ||||
| Prepaid assets | 12,577 | - | ||||||
| Other current assets | 259 | 9 | ||||||
| Total current assets | 19,970 | 10 | ||||||
| Property and equipment | 29,297 | - | ||||||
| Prepaid supply agreements | 70,500 | - | ||||||
| Total assets | $ | 119,767 | $ | 10 | ||||
| LIABILITIES AND PARENT NET INVESTMENT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,132 | $ | - | ||||
| Accrued liabilities and other | 717 | 10 | ||||||
| Total current liabilities | 2,849 | 10 | ||||||
| Other long-term liabilities | 20,000 | $ | - | |||||
| Total liabilities | 22,849 | 10 | ||||||
| Parent net investment | 96,918 | - | ||||||
| Total liabilities and parent net investment | $ | 119,767 | $ | 10 | ||||
See accompanying notes to combined financial statements.
2
TRINA SOLAR (U.S.) HOLDING INC.
COMBINED STATEMENTS OF OPERATIONS
(In Thousands)
| Year ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Operating expenses: | ||||||||
| General and administrative | $ | 3,313 | $ | - | ||||
| Total operating expenses | 3,313 | - | ||||||
| Other income (expense): | ||||||||
| Interest income, net | 231 | - | ||||||
| Loss before income taxes | (3,082 | ) | - | |||||
| Income tax expense | - | - | ||||||
| Net loss | $ | (3,082 | ) | $ | - | |||
| Other comprehensive income (loss) | - | - | ||||||
| Total comprehensive loss | $ | (3,082 | ) | $ | - | |||
See accompanying notes to combined financial statements.
3
TRINA SOLAR (U.S.) HOLDING INC.
COMBINED STATEMENT OF CHANGES IN PARENT NET INVESTMENT
(In Thousands)
| Parent Net | ||||
| Investment | ||||
| Balance at December 31, 2021 | $ | - | ||
| Net loss | - | |||
| Balance at December 31, 2022 | $ | - | ||
| Net loss | (3,082 | ) | ||
| Contributions from other Trina Solar entities | 100,000 | |||
| Balance at December 31, 2023 | $ | 96,918 | ||
See accompanying notes to combined financial statements.
4
TRINA SOLAR (U.S.) HOLDING INC.
COMBINED STATEMENTS OF CASH FLOWS
(In Thousands)
| For the years ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | (3,082 | ) | - | |||||
| Changes in assets and liabilities: | ||||||||
| Prepaid expenses and other assets | (12,827 | ) | - | |||||
| Prepaid supply agreements | (70,500 | ) | - | |||||
| Accounts payable, accrued liabilities and other | 20,707 | - | ||||||
| Net cash used in operating activities | (65,702 | ) | - | |||||
| Cash flows from investing activities: | ||||||||
| Additions in construction in progress | (27,165 | ) | - | |||||
| Net cash provided by investing activities | (27,165 | ) | - | |||||
| Cash flows from financing activities: | ||||||||
| Contributions from other Trina Solar entities | 100,000 | - | ||||||
| Net increase in cash and cash equivalents | 7,133 | - | ||||||
| Cash and cash equivalents at beginning of period | 1 | 1 | ||||||
| Cash and cash equivalents at end of period | 7,134 | 1 | ||||||
| Reconciliation to combined balance sheets: | ||||||||
| Cash and cash equivalents | 7,134 | 1 | ||||||
| Supplementary disclosures for non-cash activities: | ||||||||
| Additions in construction in progress included in accounts payable | 2,132 | - | ||||||
See accompanying notes to combined financial statements.
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NOTES TO THE COMBINED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Trina Solar (U.S.) Holding Inc. (the “Company”, TUH) is a wholly owned subsidiary of Trina Solar Co., Ltd. (“Trina Solar”), a global leader in photovoltaic (“PV”) modules, smart energy solutions, and energy storage. The Company is incorporated in the United States and operates primarily as the regional holding entity for Trina Solar’s North American investments, manufacturing and distribution operations.
On November 6, 2024, T1 Energy, Inc. (“T1 Energy”, formerly known as FREYR Battery, Inc.) entered into a definitive purchase agreement (the “Purchase Agreement”) with Trina Solar (Switzerland) AG (“TSW”), the parent company of TUH, to acquire the manufacturing business of TUH through the purchase of 100% of the outstanding equity interests of TUH. In response to this transaction, on 19 December 2024, TUH completed a series of reorganisations to spin off the non-manufacturing businesses of TUH by transferring relevant companies to other subsidiaries of Trina Solar Co., Ltd. The divested non-manufacturing businesses (“Spin-off companies”) are as follows:
Spin-off companies
Trina Solar (U.S.), Inc. (“TUS”)
Trina Tracker Solutions, Inc. (“TTSI”)
Trina Solar US Development LLC (“TUP”), which 100% owns Pennsville Landfill Solar, LLC, Trina Solar US SBU LLC (US) and Woods Road, LLC
Trina Solar LATAM Services Inc. (“TLS”)
Trina Solar US Equity Holding, LLC (“TUEH”), which 100% owns both Lone Star Solar Holdco 1 LLC and Lone Star Solar Holdco 2 LLC
After the reorganisations, TUH, together with its 4 wholly-owned subsidiaries, is classified as the manufacturing business to be sold to T1 Energy. Combined carve-out financial statements are prepared to reflect the financial position and results of operations of these five companies. Details of these wholly-owned subsidiaries are as follows:
| Jurisdiction | Company | Equity Owner | ||
| Delaware | Trina Solar US Manufacturing Holding, Inc. (“TUMH”) | TUH | ||
| Texas | Trina Solar US Manufacturing Module Associated Entity 1, LLC (“TUMA”) | TUMH | ||
| Texas | Trina Solar US Manufacturing Module 1, LLC (“TUM1”) | TUMH and TUMA | ||
| Oklahoma | Trina Solar US Manufacturing Cell 1, LLC (“TUM2”) | TUMH |
TUM1 has commenced construction of a 5GW solar module manufacturing facility in Wilmer, Texas as part of its strategic expansion into the US market. This investment underlines the Company’s commitment to strengthen its presence in the North American renewable energy sector. Meanwhile, the Company remains actively engaged in the US market through ongoing investments and strategic alliances. We have not yet generated any revenue from our principal business activities as at December 31, 2023.
Basis of Presentation
The accompanying combined carve-out financial statements have been prepared in conformity with the accounting principles generally accepted in the U.S. (“U.S. GAAP”). These financial statements have been prepared on a “carve out” basis and reflect the historical results of operations, cash flows, assets and liabilities related to us.
Carve-Out Methodology
Accounts are maintained separately for each combined entity. Transactions and balances between the Company and these above-mentioned spin-off companies are not eliminated and have been included in these combined carve-out financial statements.
In addition, to better reflect the financial position and net assets of the manufacturing business of TUH, we do not present the Company’s long-term equity investments in these above-mentioned spin-off companies in the combined carve-out financial statements, and we deduct the same amount from the “Parent net investment” equity account. Dividends received from these above-mentioned spin-off companies are presented as “Contribution from other Trina Solar entities” in the combined statement of changes of parent net investment.
Use of Estimates
The preparation of the combined carve-out financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the combined financial statements and accompanying notes. We base these estimates on historical experiences and on various other assumptions that we believe are reasonable under the circumstances, however, actual results may differ materially from these estimates.
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Cash and Cash Equivalents
Cash and cash equivalents consist of cash on deposit with banks and highly liquid investments with maturities of 90 days or less from the date of purchase.
Property and Equipment
Construction in progress is primarily comprised of total expenditures incurred before they are ready for their intended use, including construction costs, original price of machinery equipment, other necessary expenses incurred to bring the construction in progress to get ready for its intended use. Construction in progress is not depreciated.
Income Taxes
Income tax expense is based on relevant tax rates in effect in the countries in which we operate and earn income. Current income tax expense reflects an estimate of our income tax liability for the current year, including changes in prior year tax estimates as returns are filed, and tax audit adjustments, if any.
Deferred income tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, tax effected by applying the relevant tax rate, applicable to the periods in which the reversal of such differences is expected to affect taxable income. Changes in deferred income tax assets and liabilities are included as a component of income tax expense, unless they are associated with components of other comprehensive income, which are instead reflected as a change in other comprehensive income. The effect of changes in enacted tax rates on deferred income tax assets and liabilities are reflected in income tax expense in the period of enactment. A valuation allowance is provided when it is deemed more likely than not that some portion or all of a deferred tax asset will not be realized, after consideration of both positive and negative evidence about realization. Changes in the valuation allowances occurring in subsequent periods are included in the combined statements of operations and comprehensive loss.
Assets and liabilities are established for uncertain tax positions taken, or expected to be taken, in income tax returns when such positions, in our judgment, do not meet a more-likely-than-not threshold based on their technical merits. Estimated interest and penalties related to uncertain tax positions are included as a component of income tax expense.
Concentrations of Credit Risk
Financial instruments that are potentially subjected to credit risk consist of cash and cash equivalents. Our cash and cash equivalents are placed with major financial institutions. We have not experienced any credit loss related to our cash and cash equivalents.
Recently Issued Accounting Pronouncements
The Company has reviewed all the other recent accounting pronouncements issued to date of the issuance of these financial statements, and does not believe any of these pronouncements will have a material impact on the Company.
2. PREPAID ASSETS
Prepaid assets consisted of the following (in thousands):
| As of December 31, | ||||||||
| 2023 | 2022 | |||||||
| Prepaid supply agreements | $ | 11,750 | $ | - | ||||
| Prepaid rent | 745 | - | ||||||
| Prepaid other expenses | 82 | - | ||||||
| Total | $ | 12,577 | $ | - | ||||
3. OTHER CURRENT ASSETS
Other current assets consisted of the following (in thousands):
| As of December 31, | ||||||||
| 2023 | 2022 | |||||||
| Deposits | $ | 3 | $ | - | ||||
| Other current assets | 256 | 9 | ||||||
| Total | $ | 259 | $ | 9 | ||||
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4. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following (in thousands):
| As of December 31, | ||||||||
| 2023 | 2022 | |||||||
| Construction in progress | $ | 29,297 | $ | - | ||||
Construction in progress represents assets that are not yet available for their intended use as of the balance sheet date. The 5 GW module manufacturing project, which commenced in September 2023, is expected to be completed by the end of 2024.
5. ACCRUED LIABILITIES AND OTHER
Accrued liabilities consisted of the following (in thousands):
| As of December 31, | ||||||||
| 2023 | 2022 | |||||||
| Accrued payroll and payroll related expenses | $ | - | $ | - | ||||
| Other current liabilities | 717 | 10 | ||||||
| Total | $ | 717 | $ | 10 | ||||
6. OTHER LONG-TERM LIABILITIES
Other long-term liabilities consisted of the following (in thousands):
| As of December 31, | ||||||||
| 2023 | 2022 | |||||||
| Other long-term liabilities (1) | $ | 20,000 | $ | - | ||||
| (1) | Other long-term liabilities represent fees received from TUS in consideration of TUH’s reservation of production and supply slots. Along with the sales of solar photovoltaic energy generating modules to TUS, these liabilities will be repaid to TUS or deducted from the purchase price that TUS is obligated to pay. |
7. INCOME TAXES
A reconciliation of our income tax expense to the amount obtained by applying the statutory tax rate in the Company’s country of incorporation as of December 31, 2023 and 2022 is as follows (in thousands, except percentages):
| Year ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Pretax net loss | $ | (3,082 | ) | $ | - | |||
| Statutory tax rate | 21 | % | 21 | % | ||||
| Income taxes calculated at statutory tax rate | (647 | ) | - | |||||
| Other permanent tax items, net | 647 | |||||||
| Income tax expense | $ | - | $ | - | ||||
| Effective tax rate | 0 | % | 0 | % | ||||
As of December 31, 2023, pretax net loss of $3.08 million incurred by TUMH and TUM1 was fully offset against taxable income from TUS in the federal income tax filing. No deferred tax assets were recognized, and the impact is reflected in other permanent tax items.
We are required to pay income taxes and are subject to potential examination in U.S. states. Our tax years remain open for examination by all tax authorities since inception. We have not identified any uncertain tax positions or recorded any liabilities, or any associated interest or penalties for the year ended December 31, 2023 and 2022.
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8. RELATED PARTY TRANSACTIONS
During the year ended December 31, 2023, the Company has received $20 million from TUS in consideration of TUH’s reservation of production and supply slots.
9. SUBSEQUENT EVENTS
Management evaluates events occurring subsequent to the date of the combined carve-out financial statements in determining the accounting for and disclosure of transactions and events that affect the combined carve-out financial statements. Subsequent events have been evaluated through March 10, 2025, which is the date the combined carve-out financial statements were available to be issued.
Pursuant to the Purchase Agreement entered between Trina Solar (Schweiz) AG and T1 Energy, the total consideration consisted of $100 million in cash, repayment of $50 million in intercompany loans, 15,437,847 shares of T1 Energy’s common stock (par value $0.01 per share), $150 million of 1% senior unsecured notes due in five years, and $80 million of 7% unsecured convertible notes due in five years.
9
Exhibit 99.2
TRINA SOLAR (U.S.) HOLDING INC.
Combined Carve-Out Financial Statements
Nine Months Ended September
30, 2024
Contents
i
TRINA SOLAR (U.S.) HOLDING INC.
UNAUDITED COMBINED BALANCE SHEETS
(In Thousands)
| As of September 30, | As of December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 14,092 | $ | 7,134 | ||||
| Accounts receivable, net | 12,792 | - | ||||||
| Inventories | 153,436 | - | ||||||
| Prepaid assets | 85,022 | 12,577 | ||||||
| Other current assets | 60 | 259 | ||||||
| Total current assets | 265,402 | 19,970 | ||||||
| Property and equipment | 194,618 | 29,297 | ||||||
| Prepaid supply agreements | 176,250 | 70,500 | ||||||
| Right-of-use asset under operating leases | 102,484 | - | ||||||
| Intangible assets, net | 428 | - | ||||||
| Deferred income tax assets | 6,057 | - | ||||||
| Total assets | $ | 745,239 | $ | 119,767 | ||||
| LIABILITIES AND PARENT NET INVESTMENT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 49,181 | $ | 2,132 | ||||
| Accrued liabilities and other | 90,763 | 717 | ||||||
| Accrued liabilities and other - related party | - | - | ||||||
| Total current liabilities | 139,944 | 2,849 | ||||||
| Long-term debt | 205,206 | - | ||||||
| Operating lease liability | 109,957 | - | ||||||
| Other long-term liabilities | 216,000 | 20,000 | ||||||
| Total liabilities | 671,107 | 22,849 | ||||||
| Parent net investment | 74,132 | 96,918 | ||||||
| Total liabilities and parent net investment | $ | 745,239 | $ | 119,767 | ||||
See accompanying notes to unaudited combined financial statements.
1
TRINA SOLAR (U.S.) HOLDING INC.
UNAUDITED COMBINED STATEMENTS OF OPERATIONS
(In Thousands)
| For the Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Revenue | $ | 17 | $ | - | ||||
| Gross profit | 17 | - | ||||||
| Operating expenses: | ||||||||
| Sales and marketing | 228 | - | ||||||
| General and administrative | 21,126 | 1,469 | ||||||
| Total operating expenses | 21,354 | 1,469 | ||||||
| Other expenses: | ||||||||
| Interest expense, net | (7,504 | ) | (0.08 | ) | ||||
| Other expense, net | (2 | ) | - | |||||
| Total other expenses | (7,506 | ) | (0.08 | ) | ||||
| Loss before income taxes | (28,843 | ) | (1,469 | ) | ||||
| Income tax expense | (6,057 | ) | - | |||||
| Net loss | $ | (22,786 | ) | $ | (1,469 | ) | ||
| Total comprehensive loss | $ | (22,786 | ) | $ | (1,469 | ) | ||
See accompanying notes to unaudited combined financial statements.
2
TRINA SOLAR (U.S.) HOLDING INC.
UNAUDITED COMBINED STATEMENT OF CHANGES IN PARENT NET INVESTMENT
(In Thousands)
| Parent Net | ||||
| Investment | ||||
| Balance at December 31, 2022 | $ | - | ||
| Net loss | (3,082 | ) | ||
| Contributions from other Trina Solar entities | 100,000 | |||
| Balance at December 31, 2023 | $ | 96,918 | ||
| Net loss | (22,786 | ) | ||
| Balance at September 30, 2024 | $ | 74,132 | ||
See accompanying notes to unaudited combined financial statements.
3
TRINA SOLAR (U.S.) HOLDING INC.
UNAUDITED COMBINED STATEMENTS OF CASH FLOWS
(In Thousands)
| For the Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | (22,786 | ) | (1,469 | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Amortization | 34 | - | ||||||
| Reduction in the carrying amount of right-of-use assets | 5,093 | - | ||||||
| Deferred income taxes | (6,057 | ) | - | |||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable, net | 12,792 | - | ||||||
| Inventories | (153,436 | ) | - | |||||
| Prepaid expenses and other assets | (102,210 | ) | (44,420 | ) | ||||
| Prepaid supply agreements | (105,750 | ) | - | |||||
| Accrued and other current liabilities | 74,561 | 2,024 | ||||||
| Other long-term liabilities | 196,000 | - | ||||||
| Net cash used in operating activities | (101,759 | ) | (43,865 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Additions in property and equipment | (126,709 | ) | (564 | ) | ||||
| Purchase of intangible assets | (462 | ) | ||||||
| Net cash used in investing activities | (127,171 | ) | (564 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Contributions from other Trina Solar entities | - | 84,000 | ||||||
| Proceeds from long-term debt, net of discount | 235,000 | - | ||||||
| Net cash provided by financing activities | 235,000 | 84,000 | ||||||
| Effect of changes in foreign exchange rates on cash and cash equivalents | 888 | - | ||||||
| Net increase in cash and cash equivalents | 6,070 | 39,571 | ||||||
| Cash and cash equivalents at beginning of period | 7,134 | 1 | ||||||
| Cash and cash equivalents at end of period | 14,092 | 39,572 | ||||||
| Reconciliation to combined balance sheets: | ||||||||
| Cash and cash equivalents | 14,092 | 39,572 | ||||||
| Supplementary disclosures of cash flow information: | ||||||||
| Cash paid for interest | 106 | - | ||||||
| Supplementary disclosures for non-cash activities: | ||||||||
| Additions in construction in progress included in accounts payable | 38,875 | 3,295 | ||||||
| Right-of-use (ROU) assets acquired through operating lease | 107,577 | - | ||||||
See accompanying notes to unaudited combined financial statements.
4
NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Trina Solar (U.S.) Holding Inc. (the “Company”, TUH) is a wholly owned subsidiary of Trina Solar Co., Ltd. (“Trina Solar”), a global leader in photovoltaic (“PV”) modules, smart energy solutions, and energy storage. The Company is incorporated in the United States and operates primarily as the regional holding entity for Trina Solar’s North American investments, manufacturing and distribution operations.
On November 6, 2024, T1 Energy, Inc. (“T1 Energy”, formerly known as FREYR Battery, Inc.) entered into a definitive purchase agreement (the “Purchase Agreement”) with Trina Solar (Switzerland) AG (“TSW”), the parent company of TUH, to acquire the manufacturing business of TUH through the purchase of 100% of the outstanding equity interests of TUH. In response to this transaction, on 19 December 2024, TUH completed a series of reorganisations to spin off the non-manufacturing businesses of TUH by transferring relevant companies to other subsidiaries of Trina Solar Co., Ltd. The divested non-manufacturing businesses (“Spin-off companies”) are as follows:
| Spin-off companies |
| Trina Solar (U.S.), Inc. (“TUS”) |
| Trina Tracker Solutions, Inc. (“TTSI”) |
| Trina Solar US Development LLC (“TUP”), which 100% owns Pennsville Landfill Solar, LLC, Trina Solar US SBU LLC (US) and Woods Road, LLC Trina Solar LATAM Services Inc. (“TLS”) |
| Trina Solar US Equity Holding, LLC (“TUEH”), which 100% owns both Lone Star Solar Holdco 1 LLC and Lone Star Solar Holdco 2 LLC |
After the reorganisations, TUH, together with its 4 wholly-owned subsidiaries, is classified as the manufacturing business to be sold to T1 Energy. Combined carve-out financial statements are prepared to reflect the financial position and results of operations of these five companies. Details of these wholly-owned subsidiaries are as follows:
| Jurisdiction | Company | Equity Owner | ||
| Delaware | Trina Solar US Manufacturing Holding, Inc. (“TUMH”) | TUH | ||
| Texas | Trina Solar US Manufacturing Module Associated Entity 1, LLC (“TUMA”) | TUMH | ||
| Texas | Trina Solar US Manufacturing Module 1, LLC (“TUM1”) | TUMH and TUMA | ||
| Oklahoma | Trina Solar US Manufacturing Cell 1, LLC (“TUM2”) | TUMH |
TUM1 has commenced construction of a 5GW solar module manufacturing facility in Wilmer, Texas as part of its strategic expansion into the US market. This investment underlines the Company’s commitment to strengthen its presence in the North American renewable energy sector. Meanwhile, the Company remains actively engaged in the US market through ongoing investments and strategic alliances. We have not yet generated any revenue from our principal business activities as at September 30, 2024.
Basis of Presentation
The accompanying combined carve-out financial statements have been prepared in conformity with the accounting principles generally accepted in the U.S. (“U.S. GAAP”). These financial statements have been prepared on a “carve out” basis and reflect the historical results of operations, cash flows, assets and liabilities related to the Company.
Carve-Out Methodology
Accounts are maintained separately for each combined entity. Transactions and balances between the Company and these above-mentioned spin-off companies are not eliminated and have been included in these combined carve-out financial statements.
In addition, to better reflect the financial position and net assets of the manufacturing business of TUH, we do not present the Company’s long-term equity investments in these above-mentioned spin-off companies in the combined carve-out financial statements, and we deduct the same amount from the “Parent net investment” equity account. Dividends received from these above-mentioned spin-off companies are presented as “Contribution from other Trina Solar entities” in the combined statement of changes of parent net investment.
Use of Estimates
The preparation of the combined carve-out financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the combined financial statements and accompanying notes. We base these estimates on historical experiences and on various other assumptions that we believe are reasonable under the circumstances, however, actual results may differ materially from these estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on deposit with banks and highly liquid investments with maturities of 90 days or less from the date of purchase.
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Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined on the weighted average basis. Net realizable value is based on estimated selling prices less any estimated costs to be incurred to completion and disposal. The Company periodically evaluates its inventory and records an inventory reserve for certain inventories that may not be saleable or whose cost exceeds net realizable value.
Property and Equipment
Depreciation begins when an asset is placed into service or is substantially complete and ready for its intended use. Depreciation is computed using the straight-line method, over the estimated useful lives of the related asset.
The estimated useful lives of our property and equipment are as follows:
| Asset Class | Useful Life | |
| Leasehold improvements | Lesser of estimated useful life or remaining lease term |
The useful lives of our property and equipment are determined by management when those assets are initially recognized and are routinely reviewed for reasonableness. Useful lives are estimates based on current facts and circumstances, and actual useful lives may differ from these estimates. When a change is made to the estimated useful life of an asset, the remaining carrying value of the asset is prospectively depreciated or amortized over the remaining estimated useful life. Historically, changes in useful lives have not resulted in material changes to our depreciation and amortization expense.
Construction in progress is primarily comprised of total expenditures incurred before they are ready for their intended use, including construction costs, original price of machinery equipment, other necessary expenses incurred to bring the construction in progress to get ready for its intended use. Construction in progress is not depreciated.
Intangible Assets
Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives, usually determined by the remaining legal or contractual life of the asset.
Revenues
We derive our revenue from solar photovoltaic products (photovoltaic modules and related products). Revenue is recognized when the Company satisfies the performance obligation in a contract by transferring control over relevant goods to the customers.
Other income
Dividend income is recognised when the right to receive payment has been established, it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.
Leases
A lease is a contract, or part of a contract, that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease classification as a short-term lease, operating lease, or finance lease is made at the lease inception. We consider all relevant contractual provisions, including renewal and termination options, to determine the term of the lease. Renewal or termination options that are reasonably certain of exercise by the lessee and those controlled by the lessor are included in determining the lease term. We have made an accounting policy election to present the lease and associated non-lease operations as a single component based on the predominant component.
We recognize lease liabilities and right-of-use assets for all operating and finance leases, for which we are a lessee, at the lease commencement date. Lease liabilities are initially recognized at the present value of the future lease payments during the expected lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate, based on the information available at the lease commencement date, in determining the present value of lease payments. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The right-of-use asset is initially recognized at the amount of the initial measurement of the lease liability, plus any lease payments made at or before the commencement date, less any lease incentives received, and any initial direct costs incurred by the Company. Subsequent to initial recognition, the right-of-use asset is reflected net of amortization. Costs to get a leased asset to the condition and location necessary for its intended use are capitalized as leasehold improvements.
We remeasure our lease liabilities with a corresponding adjustment to the right-of-use asset due to an applicable change in lease payments such as those due to a lease modification not accounted for as a separate contract, certain changes in the expected term of the lease, and certain changes in assessments and contingencies. Subsequent to initial recognition, the operating lease liability is increased for the interest component of the lease liability and reduced by the lease payments made. Operating lease expenses are recognized as a single lease cost in the combined statements of operations on a straight-line basis over the lease term, which includes the interest component of the measurement of the lease liability and amortization of the right-of-use asset.
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Income Taxes
Income tax expense is based on relevant tax rates in effect in the countries in which we operate and earn income. Current income tax expense reflects an estimate of our income tax liability for the current year, including changes in prior year tax estimates as returns are filed, and tax audit adjustments, if any.
Deferred income tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, tax effected by applying the relevant tax rate, applicable to the periods in which the reversal of such differences is expected to affect taxable income. Changes in deferred income tax assets and liabilities are included as a component of income tax expense, unless they are associated with components of other comprehensive income, which are instead reflected as a change in other comprehensive income. The effect of changes in enacted tax rates on deferred income tax assets and liabilities are reflected in income tax expense in the period of enactment. A valuation allowance is provided when it is deemed more likely than not that some portion or all of a deferred tax asset will not be realized, after consideration of both positive and negative evidence about realization. Changes in the valuation allowances occurring in subsequent periods are included in the combined statements of operations.
Assets and liabilities are established for uncertain tax positions taken, or expected to be taken, in income tax returns when such positions, in our judgment, do not meet a more-likely-than-not threshold based on their technical merits.
Estimated interest and penalties related to uncertain tax positions are included as a component of income tax expense.
Concentrations of Credit Risk
Financial instruments that are potentially subjected to credit risk consist of cash and cash equivalents. Our cash and cash equivalents are placed with major financial institutions. We have not experienced any credit loss related to our cash and cash equivalents.
Recently Issued Accounting Pronouncements
The Company has reviewed all the other recent accounting pronouncements issued to date of the issuance of these financial statements, and does not believe any of these pronouncements will have a material impact on the Company.
2. INVENTORIES
Inventories consisted of the following (in thousands):
| As of September 30, | As of December 31, | |||||||
| 2024 | 2023 | |||||||
| Raw materials | $ | 153,436 | $ | - | ||||
3. PREPAID ASSETS
Prepaid assets consisted of the following (in thousands):
| As of September 30, | As of December 31, | |||||||
| 2024 | 2023 | |||||||
| Prepaid supply agreements | $ | 83,732 | $ | 11,750 | ||||
| Prepaid rent | 952 | 745 | ||||||
| Prepaid other expenses | 338 | 82 | ||||||
| Total | $ | 85,022 | $ | 12,577 | ||||
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4. OTHER CURRENT ASSETS
Other current assets consisted of the following (in thousands):
| As of September 30, | As of December 31, | |||||||
| 2024 | 2023 | |||||||
| Deposits | $ | - | $ | 3 | ||||
| Other current assets | 60 | 256 | ||||||
| Total | $ | 60 | $ | 259 | ||||
5. PROPERTY AND EQUIPMENT AND INTANGIBLES, NET
Property and Equipment
Property and equipment consisted of the following (in thousands):
| As of September 30, | As of December 31, | |||||||
| 2024 | 2023 | |||||||
| Leasehold improvements | $ | 105,006 | $ | - | ||||
| Construction in progress | 89,612 | 29,297 | ||||||
| Total | $ | 194,618 | $ | 29,297 | ||||
Construction in progress represents assets that are not yet available for their intended use as of the balance sheet date. The 5 GW module manufacturing project, which commenced in September 2023, is expected to be completed by the end of 2024.
Intangibles, net
Intangible assets, net consisted of the following (in thousands):
| As of September 30, 2024 | As of December 31, 2023 | |||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
| Software | $ | 462 | $ | 34 | $ | 428 | $ | - | $ | - | $ | - | ||||||||||||
Intangible assets consist of office software, warehouse management systems and accounting systems. These software applications were newly acquired in 2024 and have a useful life of 3 years.As of September 30, 2024, the amortization expense amounted to $34 thousand.
6. ACCRUED LIABILITIES AND OTHER
Accrued liabilities consisted of the following (in thousands):
| As of September 30, | As of December 31, | |||||||
| 2024 | 2023 | |||||||
| Current portion of other long-term liabilities (1) | $ | 44,000 | $ | - | ||||
| Current portion of long-term debt | 29,794 | - | ||||||
| Accrued payroll and payroll related expenses | 3,562 | 0.41 | ||||||
| Operating lease liabilities (Note 9) | 1,396 | - | ||||||
| Other current liabilities | 12,011 | 717 | ||||||
| Total | $ | 90,763 | $ | 717 | ||||
(1) Current portion of other long-term liabilities represent fees received from TUS in consideration of TUH’s reservation of production and supply slots. Along with the sales of solar photovoltaic energy generating modules to TUS, these liabilities will be repaid to TUS or deducted from the purchase price that TUS is obligated to pay within one year.
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7. OTHER LONG-TERM LIABILITIES
Other long-term liabilities consisted of the following (in thousands):
| As of September 30, | As of December 31, | |||||||
| 2024 | 2023 | |||||||
| Other long-term liabilities (2) | $ | 216,000 | $ | 20,000 | ||||
(2) Other long-term liabilities represent fees received from customers in consideration of TUH’s reservation of production and supply slots. Among these amounts, US$176 milliion is due to TUS.
8. DEBT
Credit Facilities
As of September 30, 2024, TUM1, as borrower, had a $235 million senior secured credit facility with the lenders (the current lenders, including Standard Chartered Bank, Société Générale, and HSBC Bank USA, N.A. as initial lenders). HSBC Bank USA, N.A. serves as both administrative agent and collateral agent, Standard Chartered Bank, Société Générale and HSBC Bank USA, N.A.. as joint lead arrangers, Standard Chartered Bank, as green loan coordinator, with the maturity date of December 31, 2029. The interest rate is at daily compounded SOFR plus margin of 2.50%.
At September 30, 2024, annual maturities of long-term debt during the next five years and thereafter are as follows (in thousands):
| Nine months ending September 30, | ||||
| 2025 | $ | 29,794 | ||
| 2026 | 46,096 | |||
| 2027 | 51,698 | |||
| 2028 | 50,889 | |||
| 2029 | 51,244 | |||
| Thereafter | 5,279 | |||
| Total | 235,000 | |||
TUM1 and TUH, as the grantors, hereby grant to the collateral agent, HSBC BANK USA, N.A., a security interest in substantially all of their assets, including equity interests, wherever located, whether now owned or hereafter acquired, as collateral security for the prompt and complete payment and performance of the obligations when due.
9. LEASES
We currently lease our factory buildings from TRADEPOINT 45 WEST OWNER, LLC. Our leases have remaining lease terms of up to 15 years. As of September 30, 2024, all of our leases are operating leases.
Operating lease assets and liabilities consisted of the following (in thousands):
| As of September 30, | As of December 31, | |||||||
| 2024 | 2023 | |||||||
| Accrued liabilities and other (Note 6) | $ | 1,396 | $ | - | ||||
| Operating lease liability | 109,957 | - | ||||||
| Total | $ | 111,353 | $ | - | ||||
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The remaining minimum lease payments due on our long-term leases are as follows (in thousands):
| As of September 30, | ||||
| 2024 | ||||
| 2024 | $ | 2,196 | ||
| 2025 | 9,572 | |||
| 2026 | 10,357 | |||
| 2027 | 10,745 | |||
| 2028 | 11,148 | |||
| Thereafter | 144,084 | |||
| Total undiscounted lease payments | 188,102 | |||
| Less: imputed interest | (76,749 | ) | ||
| Present value of lease liabilities | $ | 111,353 | ||
Weighted average remaining lease term and discount rate are as follows:
| As of September 30, | As of December 31, | |||||||
| 2024 | 2023 | |||||||
| Weighted-average remaining lease term (in years) | $ | 15 | $ | - | ||||
| Weighted-average discount rate | 7.30 | % | - | |||||
| Supplemental cash flow information related to leases was as follows (in thousands): | ||||||||
| For the Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash paid for amounts included in the measurement of lease liabilities | ||||||||
| Operating cash flows | $ | 1,465 | $ | - | ||||
| Lease liabilities arising from obtaining right-of-use assets | $ | 107,577 | $ | - | ||||
10. INCOME TAXES
Income tax expense for each of the years ended September 30, 2024 and 2023 was as follows (in thousands):
| For the Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Federal | $ | (6,057 | ) | $ | - | |||
| State | - | - | ||||||
| $ | (6,057 | ) | $ | - | ||||
| Current | $ | - | $ | - | ||||
| Deferred | (6,057 | ) | - | |||||
| $ | (6,057 | ) | $ | - | ||||
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A reconciliation of our income tax expense to the amount obtained by applying the statutory tax rate in the Company’s country of incorporation as of September 30, 2024 and 2023 is as follows (in thousands, except percentages):
| For the Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Pretax net loss | $ | (28,843 | ) | $ | (1,469 | ) | ||
| Statutory tax rate | 21 | % | 21 | % | ||||
| Income taxes calculated at statutory tax rate | (6,057 | ) | (308 | ) | ||||
| Other permanent tax items, net | - | 309 | ||||||
| Income tax expense | $ | (6,057 | ) | $ | 1.00 | |||
| Effective tax rate | 21 | % | 0 | % | ||||
Deferred income tax assets and liabilities are as follows (in thousands):
| As of September 30, | As of December 31, | |||||||
| 2024 | 2023 | |||||||
| Deferred income tax assets | ||||||||
| Tax losses carryforwards | $ | 4,194 | $ | - | ||||
| Operating lease liabilities | 23,384 | - | ||||||
| Total deferred income tax assets before valuation allowance | 27,578 | - | ||||||
| Valuation allowance | 0.20 | - | ||||||
| Total deferred income tax assets | 27,578 | - | ||||||
| Deferred income tax liabilities | ||||||||
| Operating lease assets | 21,522 | - | ||||||
| Total deferred income tax liabilities | 21,522 | - | ||||||
| Net deferred income tax assets | $ | 6,057 | $ | - | ||||
As of September 30, 2024, we had net operating loss carryforwards of $28.84 million primarily incurred by TUM1. The operating losses can be carried forward to the next financial year.
We are required to pay income taxes and are subject to potential examination in U.S. states. Our tax years remain open for examination by all tax authorities since inception. We have not identified any uncertain tax positions or recorded any liabilities, or any associated interest or penalties for the period ended September 30, 2024 and December 31, 2023.
11. RELATED PARTY TRANSACTIONS
For the period ended September 30, 2024 and for the year ended December 31, 2023, the Company has received $220 million and $20 million from TUS in consideration of TUH’s reservation of production and supply slots, respectively.
During the nine months ended September 30, 2024, revenue generated from a related party Trina Solar (Vietnam) Wafer Company Limited totaling $17 thousand. Accounts receivable are with Trina Solar (Vietnam) Wafer Company Limited.
As of September 30, 2024, the Company had accounts payable of $13 million to TUS and $3 million to Trina Solar (Changzhou) Photoelectric Equipment Co., Ltd. Additionally, the Company had prepayments of $49 million under supply agreements with Trina Solar Energy Development Pte Ltd.
12. SUBSEQUENT EVENTS
Management evaluates events occurring subsequent to the date of the combined carve-out financial statements in determining the accounting for and disclosure of transactions and events that affect the combined carve-out financial statements. Subsequent events have been evaluated through March 10, 2025, which is the date the combined carve-out financial statements were available to be issued.
Pursuant to the Purchase Agreement entered between Trina Solar (Schweiz) AG and T1 Energy, the total consideration consisted of $100 million in cash, repayment of $50 million in intercompany loans, 15,437,847 shares of T1 Energy’s common stock (par value $0.01 per share), $150 million of 1% senior unsecured notes due in five years, and $80 million of 7% unsecured convertible notes due in five years.
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Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Overview
On December 23, 2024, T1 Energy Inc., a Delaware corporation (f/k/a FREYR Battery, Inc.) (“T1” or the “Company”), completed the transactions contemplated under a transaction agreement (the “Transaction Agreement”) entered into with Trina Solar (Schweiz) AG, an entity organized under the laws of Switzerland (the “Seller”), on November 6, 2024 for the acquisition of all legal and beneficial ownership in the shares of capital stock of Trina Solar US Holding Inc., a Delaware corporation (“Trina Solar US Holding” or “TUH”), which owns, directly or indirectly, all legal and beneficial ownership in the shares of capital stock of, or other ownership, membership or equity interest in (a) Trina Solar US Manufacturing Holding Inc., a Delaware corporation (“TUMH”), (b) Trina Solar US Manufacturing Module Associated Entity 1, LLC, a Texas limited liability company (“TUMA”), (c) Trina Solar US Manufacturing Module 1, LLC, a Texas limited liability company (“TUM 1”), and (d) Trina Solar US Manufacturing Cell 1, LLC, an Oklahoma limited liability company (“TUM 2”, and together with Trina Solar US Holding, TUMH, TUMA and TUM 1, the “Acquired Companies”) (and such acquisition, the “Trina Business Combination”).
On December 23, 2024 (the “Closing Date”), in consideration for the Trina Business Combination, T1 (i) paid to the Seller $100.0 million cash consideration and (ii) issued to the Seller: (a) a $50.0 million repayment of an intercompany loan (together with accrued and unpaid interest); (b) 15,437,847 shares of common stock, par value $0.01 per share, of T1 (the “Common Stock”) (and such issuance, the “Share Consideration”); (c) a $150.0 million 1% per annum senior unsecured note due in five years (the “Note Instrument”); and (d) an $80.0 million 7% unsecured convertible note due in five years (the “Convertible Note Instrument”), which, subject to approval from the Committee on Foreign Investment in the United States (“CFIUS”), is convertible in up to two conversions into 30.4 million shares of Common Stock, in aggregate (the “Conversion Shares”). The Second Conversion is also subject to the Requisite Stockholder Approval.
With respect to the development, operation and services of the solar module manufacturing facility located in Wilmer, Texas with an output capacity of 5 GW, owned by TUM 1, and currently under construction (the “Solar Module Manufacturing Facility”), on the Closing Date, the Company and (A) certain parties affiliated to the Seller, entered into that certain (i) Module Operational Support Agreement, (ii) IP License Agreement and (B) TUM 1 entered into that certain IP Sublicense Agreement; and TUM 1 and certain affiliated parties to Seller entered into that certain (i) Sales Agency and Aftermarket Services Agreement, (ii) Amended and Restated Sales Agreement (Solar Cells), (iii) Amended and Restated Sales Agreement (Polysilicon), (iv) Amended and Restated Supply Contract, (v) Amendment No. 1 to Intellectual Property License Agreement, and (vi) Amended and Restated Trademark License Agreement.
With respect to the existing project finance of TUM 1 in connection with the construction of the Solar Module Manufacturing Facility, on the Closing Date, TUM 1 entered into that certain Consent, Waiver and Amendment No. 1 to that certain $235.0 million senior secured credit facility by and among TUM 1, as borrower, the lenders from time to time party thereto, HSBC Bank USA, N.A., as administrative and collateral agent, Standard Chartered Bank, Société Générale and HSBC Bank USA, N.A., as joint lead arrangers, Standard Chartered Bank, as green loan coordinator, dated July 16, 2024 (the “Credit Agreement Amendment” and such credit facility, the “Senior Secured Credit Facility”), and the Company entered into that certain (i) Equity Contribution Agreement, (ii) Loan Commitment Agreement, and (iii) Direct Agreement – Operational Support Agreement.
On the Closing Date, the Company and Seller entered into that certain (i) Cooperation Agreement and (ii) a Registration Rights Agreement.
In connection with the Company’s efforts to finance in part the construction, commissioning and ramp-up related to the solar cell manufacturing facility to be developed by TUM 2, including general corporate purposes related to the assets to be acquired by the Company pursuant to the Trina Business Combination, T1 and certain funds and accounts managed by Encompass Capital Advisors LLC entered into a Preferred Stock Purchase Agreement, dated November 6, 2024 (the “Preferred Stock Purchase Agreement”), pursuant to which such funds purchased non-voting preferred stock of T1 (the “Preferred Stock”) in exchange for $100.0 million (such transaction, the “Preferred Stock Issuance”), to be funded across two tranches of $50.0 million each, upon closing of the Trina Business Combination and thereafter upon T1’s sole discretion upon proceeding to a final investment decision on TUM 2.
Following the Closing Date, and in the event that any of the Preferred Stock issued under the Preferred Stock Purchase Agreement is converted into T1 Common Stock, the Seller shall have the right to acquire from T1 such number of shares of Common Stock so that the Seller’s proportionate ownership of Common Stock following the conversion of the Preferred Stock will be the same as before the conversion at a price equal to $2.50 per share of Common Stock or such other price as is used in the conversion of the Preferred Stock (the “Seller Option”).
Unaudited Pro Forma Condensed Combined Financial Information
The unaudited pro forma condensed combined financial statements (the “pro forma financial statements”) have been prepared in accordance with Article 11 of Regulation S-X, Pro Forma Financial Information, using assumptions set forth in the notes to the unaudited pro forma financial statements. The pro forma financial statements have been prepared from the respective historical consolidated financial statements of T1 and TUH, adjusted to give effect to (i) the Trina Business Combination and related transactions, including the Credit Agreement Amendment, (ii) the Preferred Stock Issuance, and (iii) the issuance of the Seller Option. Further, under the terms of the Transaction Agreement, T1 agreed to use reasonable efforts to dispose, divest, transfer or otherwise sell the assets and operations that constitute its European business within six months of the Closing Date. As of the Closing Date, T1 determined that its European businesses and its Coweta County, Georgia business met the criteria for classification as held for sale. Additionally, T1 concluded that the ultimate disposals (the “Divestitures” and together with the Trina Business Combination and related transactions, the Preferred Stock Issuance, and the issuance of the Seller Option, the “Pro Forma Transactions”) will represent a strategic shift that will have a major effect on its operations and financial results. As such, T1’s historical financial results of the European businesses and Coweta County, Georgia have been reclassified to discontinued operations in the pro forma financial statements.
The unaudited pro forma condensed combined balance sheet (the “pro forma balance sheet”) gives effect to the Pro Forma Transactions as if each had occurred on September 30, 2024. The unaudited pro forma condensed combined statements of operations (the “pro forma statements of operations”) give effect to the Pro Forma Transactions as if each had occurred on January 1, 2023. T1 is the accounting acquirer, and the Trina Business Combination has been accounted for in accordance with the business combination guidance in Accounting Standards Codification (“ASC”) 805, Business Combinations. The pro forma information presented reflects events directly attributable to the Trina Business Combination and certain assumptions the Company believes are reasonable. The pro forma financial statements contain certain reclassification adjustments to conform TUH’s historical financial statement presentation with T1’s historical financial statement presentation.
The following pro forma financial statements, and the related notes thereto, are based on, and should be read in conjunction with:
| ● | the historical audited consolidated financial statements of T1 for the year ended December 31, 2023, and the related notes thereto, included in T1’s Annual Report on Form 10-K filed on February 29, 2024; |
| ● | the historical unaudited consolidated financial statements of T1 as of and for the nine months ended September 30, 2024, and the related notes thereto, included in T1’s Quarterly Report on Form 10-Q filed on November 12, 2024; |
| ● | the historical audited consolidated financial statements of Trina Solar US Holding for the years ended December 31, 2023 and 2022, and the related notes thereto, included as Exhibit 99.1 elsewhere within this Current Report on Form 8-K/A; |
| ● | the unaudited condensed consolidated financial statements of Trina Solar US Holding as of and for the nine months ended September 30, 2024 and 2023, and the related notes thereto, included as Exhibit 99.2 elsewhere within this Current Report on Form 8-K/A; and |
| ● | the “Management’s discussion and analysis of financial condition and results of operations” included in T1’s Annual Report on Form 10-K filed on February 29, 2024 and Quarterly Report on Form 10-Q filed on November 12, 2024. |
The pro forma financial statements were derived by making certain transaction accounting adjustments to the historical financial statements noted above. The adjustments are based on currently available information and certain estimates and assumptions. Therefore, the actual impact of the Pro Forma Transactions may differ from the adjustments made to the pro forma financial statements. However, management believes that the assumptions provide a reasonable basis for presenting the significant effects for the periods presented as if the Pro Forma Transactions had been consummated earlier, and that all adjustments necessary to fairly present the pro forma financial statements have been made.
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As of the date of this Current Report on Form 8-K/A, T1 has not completed the detailed valuation study necessary to arrive at the required final estimates of the fair value of the assets to be acquired and the liabilities to be assumed and the related allocations of purchase price. A final determination of the fair value of the assets and liabilities of the Acquired Companies based on the actual assets and liabilities of the Acquired Companies that existed as of the Closing Date will be finalized during the measurement period not to exceed twelve months from the Closing Date. As a result of the foregoing, the pro forma adjustments are preliminary and are subject to change as additional information becomes available and as additional analysis is performed.
The preliminary pro forma adjustments have been made solely for the purpose of providing the pro forma financial statements presented below. T1 estimated the fair value of the assets and liabilities of the Acquired Companies based on discussions with management of the Seller, preliminary valuation studies, due diligence, and information presented in the financial statements of Trina Solar US Holding. Any increases or decreases in the fair value of assets acquired and liabilities assumed upon completion of the final valuations will result in adjustments to the pro forma financial statements. The final purchase price allocation may be materially different than that reflected in the preliminary pro forma purchase price allocation presented herein.
The pro forma financial statements and related notes are presented for illustrative purposes only and should not be relied upon as an indication of the operating results that T1 would have achieved if the Transaction Agreement had been entered into and the Pro Forma Transactions had taken place on the assumed dates. The pro forma financial statements do not reflect future events that may occur after the consummation of the Trina Business Combination and related transactions, including, but not limited to, the anticipated realization of ongoing savings from potential operating efficiencies, asset dispositions, cost savings, or economies of scale that T1 may achieve with respect to the combined operations. As a result, future results may vary significantly from the results reflected in the pro forma financial statements and should not be relied on as an indication of the future results of T1.
3
Unaudited Pro Forma Condensed Combined Balance Sheet
As of September 30, 2024
(In thousands, except per share amounts)
| Historical | Transaction Accounting Adjustments | |||||||||||||||||||
| T1 As Adjusted (See Note 3) | TUH As Adjusted (See Note 4) | Trina Business Combination (Pro Forma) | Other Adjustments (Pro Forma) | Pro Forma Combined | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Current assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 204,351 | $ | 14,092 | $ | (150,609 | )(a) | $ | 50,000 | (e) | $ | 101,018 | ||||||||
| (16,816 | )(d) | |||||||||||||||||||
| Restricted cash | 2,202 | — | — | — | 2,202 | |||||||||||||||
| Accounts receivable, net | — | 12,792 | — | — | 12,792 | |||||||||||||||
| Inventory | — | 153,436 | — | — | 153,436 | |||||||||||||||
| Prepaid assets | 2,331 | 83,732 | — | — | 86,063 | |||||||||||||||
| Other current assets | 263 | 1,350 | (952 | )(b) | — | 661 | ||||||||||||||
| Total current assets | 209,147 | 265,402 | (168,377 | ) | 50,000 | 356,172 | ||||||||||||||
| Property and equipment, net | 8 | 195,046 | (428 | )(b) | — | 194,626 | ||||||||||||||
| Goodwill | — | — | 90,737 | (b) | — | 90,737 | ||||||||||||||
| Intangible assets, net | — | — | 306,000 | (b) | — | 306,000 | ||||||||||||||
| Prepaid supply agreements | — | 176,250 | (44,006 | )(b) | — | 132,244 | ||||||||||||||
| Right-of-use asset under operating leases | — | 102,484 | 8,869 | (b) | — | 111,353 | ||||||||||||||
| Other long-term assets | — | 6,057 | (6,057 | )(b) | — | — | ||||||||||||||
| Total assets | $ | 209,155 | $ | 745,239 | $ | 186,738 | $ | 50,000 | $ | 1,191,132 | ||||||||||
| LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY | ||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||
| Accounts payable | $ | 2,526 | $ | 49,181 | $ | — | $ | — | $ | 51,707 | ||||||||||
| Accrued liabilities and other | 1,707 | 16,969 | — | — | 18,676 | |||||||||||||||
| Share-based compensation liability | 19 | — | — | — | 19 | |||||||||||||||
| Current portion of long-term debt | — | 29,794 | — | — | 29,794 | |||||||||||||||
| Current portion of long-term liability - related party | — | 44,000 | — | — | 44,000 | |||||||||||||||
| Total current liabilities | 4,252 | 139,944 | — | — | 144,196 | |||||||||||||||
| Warrant liability | 721 | — | — | — | 721 | |||||||||||||||
| Convertible note - related party | — | — | 80,561 | (a) | — | 80,561 | ||||||||||||||
| Operating lease liability | — | 109,957 | — | — | 109,957 | |||||||||||||||
| Long-term debt | — | 205,206 | (4,176 | )(b) | — | 201,030 | ||||||||||||||
| Long-term liability - related party | — | 176,000 | 117,655 | (a) | — | 246,055 | ||||||||||||||
| (47,600 | )(b) | |||||||||||||||||||
| Deferred tax liability | — | — | 73,271 | (b) | — | 73,271 | ||||||||||||||
| Other long-term liabilities | 446 | 40,000 | 18,454 | (a) | — | 58,900 | ||||||||||||||
| Total liabilities | 5,419 | 671,107 | 238,165 | — | 914,691 | |||||||||||||||
| Redeemable preferred stock | ||||||||||||||||||||
| Convertible series A preferred stock | — | — | — | 48,287 | (e) | 48,287 | ||||||||||||||
| Equity: | ||||||||||||||||||||
| Common stock | 1,405 | — | 154 | (a) | — | 1,559 | ||||||||||||||
| Additional paid-in capital | 929,324 | — | 39,367 | (a) | 1,713 | (e) | 970,404 | |||||||||||||
| Parent net investment | — | 74,132 | (74,132 | )(c) | — | — | ||||||||||||||
| Accumulated other comprehensive loss | (34,035 | ) | — | — | — | (34,035 | ) | |||||||||||||
| Accumulated deficit | (692,958 | ) | — | (16,816 | )(d) | — | (709,774 | ) | ||||||||||||
| Total equity | 203,736 | 74,132 | (51,427 | ) | 1,713 | 228,154 | ||||||||||||||
| Total liabilities, redeemable preferred stock and equity | $ | 209,155 | $ | 745,239 | $ | 186,738 | $ | 50,000 | $ | 1,191,132 | ||||||||||
The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.
4
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Nine Months Ended September 30, 2024
(In thousands, except per share amounts)
| Transaction Accounting Adjustments | ||||||||||||||||||||
| T1 As Adjusted (See Note 3) | TUH (Historical) | Trina Business Combination (Pro Forma) | Other Adjustments (Pro Forma) | Pro Forma Combined | ||||||||||||||||
| Net sales | $ | — | $ | 17 | $ | — | $ | — | $ | 17 | ||||||||||
| Cost of sales | — | — | — | — | — | |||||||||||||||
| Gross profit | — | 17 | — | — | 17 | |||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| General and administrative | 42,857 | 21,126 | — | (a) | — | 100,777 | ||||||||||||||
| 36,566 | (b) | |||||||||||||||||||
| 228 | (l) | |||||||||||||||||||
| Sales and marketing | — | 228 | (228 | )(l) | — | — | ||||||||||||||
| Total operating expenses | 42,857 | 21,354 | 36,566 | — | 100,777 | |||||||||||||||
| Loss from continuing operations | (42,857 | ) | (21,337 | ) | (36,566 | ) | — | (100,760 | ) | |||||||||||
| Other income (expense): | ||||||||||||||||||||
| Warrant liability fair value adjustment | 1,294 | — | — | — | 1,294 | |||||||||||||||
| Interest income (expense), net | 3,627 | (7,504 | ) | (5,977 | )(c) | — | (22,589 | ) | ||||||||||||
| (10,470 | )(d) | |||||||||||||||||||
| (7,140 | )(e) | |||||||||||||||||||
| 5,501 | (f) | |||||||||||||||||||
| (626 | )(g) | |||||||||||||||||||
| Foreign currency transaction gain | 556 | — | — | — | 556 | |||||||||||||||
| Other income (expense), net | 4,788 | (2 | ) | — | — | 4,786 | ||||||||||||||
| Total other income (expense) | 10,265 | (7,506 | ) | (18,712 | ) | — | (15,953 | ) | ||||||||||||
| Loss from continuing operations before income taxes | (32,592 | ) | (28,843 | ) | (55,278 | ) | — | (116,713 | ) | |||||||||||
| Income tax benefit | — | 6,057 | 12,570 | (h) | — | 18,627 | ||||||||||||||
| Net loss from continuing operations | (32,592 | ) | (22,786 | ) | (42,708 | ) | — | (98,086 | ) | |||||||||||
| Preferred dividends and accretion | — | — | — | (2,678 | )(i) | (2,678 | ) | |||||||||||||
| Net loss from continuing operations attributable to stockholders | $ | (32,592 | ) | $ | (22,786 | ) | $ | (42,708 | ) | $ | (2,678 | ) | $ | (100,764 | ) | |||||
| Weighted average shares of common stock outstanding - basic and diluted | 140,102 | 15,438 | (j) | 155,540 | ||||||||||||||||
| — | (k) | |||||||||||||||||||
| Net loss per share from continuing operations - basic and diluted | $ | (0.23 | ) | $ | (0.65 | ) | ||||||||||||||
The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.
5
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended December 31, 2023
(In thousands, except per share amounts)
| Transaction Accounting Adjustments | ||||||||||||||||||||
| T1 As Adjusted (See Note 3) | TUH (Historical) | Trina Business Combination (Pro Forma) | Other Adjustments (Pro Forma) | Pro Forma Combined | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| General and administrative | $ | 65,527 | $ | 3,313 | $ | — | (a) | $ | — | $ | 134,456 | |||||||||
| 48,800 | (b) | — | ||||||||||||||||||
| 16,816 | (m) | — | ||||||||||||||||||
| Total operating expenses | 65,527 | 3,313 | 65,616 | — | 134,456 | |||||||||||||||
| Loss from continuing operations | (65,527 | ) | (3,313 | ) | (65,616 | ) | — | (134,456 | ) | |||||||||||
| Other income (expense): | ||||||||||||||||||||
| Warrant liability fair value adjustment | 31,763 | — | — | — | 31,763 | |||||||||||||||
| Interest income (expense), net | 9,949 | 231 | (7,969 | )(c) | — | (8,757 | ) | |||||||||||||
| (7,948 | )(d) | |||||||||||||||||||
| (9,520 | )(e) | |||||||||||||||||||
| 7,335 | (f) | |||||||||||||||||||
| (835 | )(g) | |||||||||||||||||||
| Foreign currency transaction loss | (306 | ) | — | — | — | (306 | ) | |||||||||||||
| Other income, net | 5,916 | — | — | — | 5,916 | |||||||||||||||
| Total other income (expense) | 47,322 | 231 | (18,937 | ) | — | 28,616 | ||||||||||||||
| Loss from continuing operations before income taxes | (18,205 | ) | (3,082 | ) | (84,553 | ) | — | (105,840 | ) | |||||||||||
| Income tax benefit (expense) | (443 | ) | — | 19,227 | (h) | — | 18,784 | |||||||||||||
| Net loss from continuing operations | (18,648 | ) | (3,082 | ) | (65,326 | ) | — | (87,056 | ) | |||||||||||
| Preferred dividends and accretion | — | — | — | (3,571 | )(i) | (3,571 | ) | |||||||||||||
| Net loss from continuing operations attributable to stockholders | $ | (18,648 | ) | $ | (3,082 | ) | $ | (65,326 | ) | $ | (3,571 | ) | $ | (90,627 | ) | |||||
| Weighted average shares of common stock outstanding - basic and diluted | 139,705 | 15,438 | (j) | 155,143 | ||||||||||||||||
| — | (k) | |||||||||||||||||||
| Net loss per share from continuing operations - basic and diluted | $ | (0.13 | ) | $ | (0.58 | ) | ||||||||||||||
The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.
6
Notes to unaudited pro forma condensed combined financial statements
NOTE 1 – Basis of pro forma presentation
The pro forma financial statements have been derived from the historical financial statements of T1 and Trina Solar US Holding. The pro forma balance sheet as of September 30, 2024 gives effect to the Pro Forma Transactions as if each had occurred on September 30, 2024. The pro forma statements of operations for the nine months ended September 30, 2024 and for the year ended December 31, 2023 give effect to the Pro Forma Transactions as if each had occurred on January 1, 2023.
The pro forma financial statements reflect pro forma adjustments that are based on available information and certain assumptions that management believes are reasonable. However, actual results may differ from those reflected in these pro forma financial statements. In management’s opinion, all adjustments known to date that are necessary to fairly present the pro forma information have been made. The pro forma financial statements do not purport to represent what the combined entity’s results of operations would have been if the Pro Forma Transactions had actually occurred on the dates indicated above, nor are they indicative of T1’s future results of operations.
These pro forma financial statements should be read in conjunction with the historical financial statements, and related notes thereto, of T1 and Trina Solar US Holding for the periods presented.
NOTE 2 – Pro forma acquisition accounting
The Trina Business Combination was accounted for using the acquisition method of accounting for business combinations in accordance with ASC 805 with T1 considered to be the accounting acquirer. The allocation of the preliminary estimated purchase price for Trina Solar US Holding is based upon management’s estimates of and assumptions related to the fair value of assets acquired and liabilities assumed as of the Closing Date using currently available information. Because the pro forma financial statements have been prepared based on these preliminary estimates, the final purchase price allocation and the resulting effect on T1’s financial position and results of operations may differ significantly from the pro forma amounts included in this Current Report on Form 8-K/A. T1 expects to finalize its allocation of the purchase price as soon as practicable but no later than twelve months after the Closing Date. The cash paid pursuant to the Transaction Agreement was funded through cash on hand.
The preliminary purchase price allocation is subject to change as a result of several factors, including but not limited to:
| ● | the final determination of consideration transferred; |
| ● | changes in the estimated fair value of TUH’s assets acquired and liabilities assumed as of the Closing Date; and |
| ● | the tax basis of TUH’s assets and liabilities as of the Closing Date. |
7
Notes to unaudited pro forma condensed combined financial statements
The following table represents the preliminary purchase price allocation for Trina Solar US Holding (in thousands):
| Purchase price allocation: | ||||
| Cash consideration | $ | 150,609 | ||
| Fair value of equity consideration (Share Consideration) | 39,521 | |||
| Trina Solar AG note (Note Instrument) | 117,655 | |||
| Convertible note (Convertible Note Instrument) | 80,561 | |||
| Fair value of anti-dilution right (Seller Option) | 18,454 | |||
| Total consideration transferred | $ | 406,800 | ||
| Identifiable assets acquired and liabilities assumed: | ||||
| Cash and cash equivalents | $ | 14,092 | ||
| Accounts receivable, net | 12,792 | |||
| Prepaid supply agreements - current | 83,732 | |||
| Inventory | 153,436 | |||
| Other current assets | 398 | |||
| Property and equipment, net | 194,618 | |||
| Intangible assets, net | 306,000 | |||
| Prepaid supply agreements - non-current | 132,244 | |||
| Right-of-use asset under operating leases | 111,353 | |||
| Accounts payable | (49,181 | ) | ||
| Accrued liabilities and other | (16,969 | ) | ||
| Current portion of long-term debt | (29,794 | ) | ||
| Current portion of long-term liability - related party | (44,000 | ) | ||
| Operating lease liability | (109,957 | ) | ||
| Long-term debt | (201,030 | ) | ||
| Long-term liability - related party | (128,400 | ) | ||
| Other long-term liabilities | (40,000 | ) | ||
| Deferred tax liability | (73,271 | ) | ||
| Total identifiable net assets | $ | 316,063 | ||
| Goodwill | $ | 90,737 | ||
NOTE 3 – Adjustments to T1’s historical financial statements
Under the terms of the Transaction Agreement, T1 agreed to use reasonable efforts to dispose, divest, transfer or otherwise sell the assets and operations that constitute its European business within six months of the Closing Date. As of the Closing Date, T1 determined that its European businesses and its Coweta County, Georgia business met the criteria for classification as held for sale. Additionally, T1 concluded that the Divestitures represent a strategic shift that will have a major effect on its operations and financial results. While the reclassification of the European businesses and Coweta County, Georgia business to discontinued operations do not trigger pro forma reporting requirements, the historical financial results of T1’s European businesses and Coweta County, Georgia business have been reclassified to discontinued operations in the pro forma financial statements to better illustrate the continuing operations of the combined company for conditions that existed as of the Closing Date.
8
Notes to unaudited pro forma condensed combined financial statements
Pro forma balance sheet adjustments as of September 30, 2024
Certain pro forma adjustments have been made to T1’s historical balance sheet to give effect to the reclassification of assets and liabilities held for sale to discontinued operations related to the Divestitures. The pro forma adjustments include a write down of the European businesses classified within discontinued operations to the fair value of the disposal groups less costs to sell as shown in (b) below. The remaining assets and liabilities of the European businesses have been excluded from the pro forma balance sheet as of September 30, 2024 with no pro forma adjustment for potential proceeds as shown in (c) below. T1 has not entered into a definitive agreement to sell its European businesses as of the date of this Current Report on Form 8-K/A. Upon the sale of its European businesses, T1 expects to record adjustments to reflect consideration received and a corresponding adjustment to accumulated deficit for the difference between net proceeds received and the carrying value of the assets and liabilities of the European businesses at the time of sale. In December 2024, T1 signed a letter of intent to sell land located in Coweta County, Georgia, for $50.0 million. The sale was completed on February 15, 2025 as shown in (a) below. In connection with the sale, T1 repaid local and state government grants, resulting in net proceeds of $22.5 million which are reflected on a pro forma basis as of September 30, 2024. A reconciliation of amounts derived and presented as “T1 As Adjusted” within the pro forma balance sheet as of September 30, 2024 is as follows (in thousands):
| T1 (Historical) | Discontinued Operations (Pro Forma) | T1 As Adjusted | ||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 181,851 | $ | 22,500 | (a) | $ | 204,351 | |||||
| Restricted cash | 2,202 | — | 2,202 | |||||||||
| Prepaid assets | 2,838 | (507 | ) | 2,331 | ||||||||
| Other current assets | 12,583 | (12,320 | ) | 263 | ||||||||
| Current assets of discontinued operations | — | 428,330 | — | |||||||||
| (44,941 | )(a) | |||||||||||
| (327,651 | )(b) | |||||||||||
| (55,738 | )(c) | |||||||||||
| Total current assets | 199,474 | 9,673 | 209,147 | |||||||||
| Property and equipment, net | 368,342 | (368,334 | ) | 8 | ||||||||
| Intangible assets, net | 2,700 | (2,700 | ) | — | ||||||||
| Long-term investments | 21,819 | (21,819 | ) | — | ||||||||
| Right-of-use asset under operating leases | 22,640 | (22,640 | ) | — | ||||||||
| Other long-term assets | 10 | (10 | ) | — | ||||||||
| Total assets | $ | 614,985 | $ | (405,830 | ) | $ | 209,155 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 10,080 | $ | (7,554 | ) | $ | 2,526 | |||||
| Accrued liabilities and other | 21,254 | (19,547 | ) | 1,707 | ||||||||
| Share-based compensation liability | 19 | — | 19 | |||||||||
| Current liabilities of discontinued operations | — | 70,876 | — | |||||||||
| (27,957 | )(a) | |||||||||||
| (42,919 | )(c) | |||||||||||
| Total current liabilities | 31,353 | (27,101 | ) | 4,252 | ||||||||
| Warrant liability | 721 | — | 721 | |||||||||
| Operating lease liability | 16,775 | (16,775 | ) | — | ||||||||
| Other long-term liabilities | 27,446 | (27,000 | ) | 446 | ||||||||
| Total liabilities | 76,295 | (70,876 | ) | 5,419 | ||||||||
| Stockholders’ equity: | ||||||||||||
| Common stock | 1,405 | — | 1,405 | |||||||||
| Additional paid-in capital | 929,324 | — | 929,324 | |||||||||
| Accumulated other comprehensive loss | (34,035 | ) | — | (34,035 | ) | |||||||
| Accumulated deficit | (358,004 | ) | 5,516 | (a) | (692,958 | ) | ||||||
| (327,651 | )(b) | |||||||||||
| (12,819 | )(c) | |||||||||||
| Total equity | 538,690 | (334,954 | ) | 203,736 | ||||||||
| Total liabilities and equity | $ | 614,985 | $ | (405,830 | ) | $ | 209,155 | |||||
9
Notes to unaudited pro forma condensed combined financial statements
Pro forma statement of operations adjustments for the nine months ended September 30, 2024
Certain pro forma adjustments were made to T1’s historical statements of operations to give effect to the reclassification to discontinued operations. A reconciliation of amounts derived and presented as “T1 As Adjusted” within the pro forma statement of operations for the nine months ended September 30, 2024 is as follows (in thousands):
| T1 (Historical) | Discontinued Operations (Pro Forma) | T1 As Adjusted | ||||||||||
| Operating expenses: | ||||||||||||
| General and administrative | $ | 61,386 | $ | (18,529 | ) | $ | 42,857 | |||||
| Research and development | 30,854 | (30,854 | ) | — | ||||||||
| Restructuring charge | 4,644 | (4,644 | ) | — | ||||||||
| Share of net loss of equity method investee | 484 | (484 | ) | — | ||||||||
| Total operating expenses | 97,368 | (54,511 | ) | 42,857 | ||||||||
| Loss from continuing operations | (97,368 | ) | 54,511 | (42,857 | ) | |||||||
| Other income (expense): | ||||||||||||
| Warrant liability fair value adjustment | 1,294 | — | 1,294 | |||||||||
| Interest income (expense), net | 3,627 | — | 3,627 | |||||||||
| Foreign currency transaction gain | 1,245 | (689 | ) | 556 | ||||||||
| Other income, net | 7,806 | (3,018 | ) | 4,788 | ||||||||
| Total other income (expense) | 13,972 | (3,707 | ) | 10,265 | ||||||||
| Loss from continuing operations before income taxes | (83,396 | ) | 50,804 | (32,592 | ) | |||||||
| Income tax expense | (11 | ) | 11 | — | ||||||||
| Net loss from continuing operations | (83,407 | ) | 50,815 | (32,592 | ) | |||||||
| Net loss attributable to non-controlling interests | 402 | (402 | ) | — | ||||||||
| Net loss from continuing operations attributable to stockholders | $ | (83,005 | ) | $ | 50,413 | $ | (32,592 | ) | ||||
| Weighted average shares of common stock outstanding - basic and diluted | 140,102 | — | 140,102 | |||||||||
| Net loss per share from continuing operations - basic and diluted | $ | (0.59 | ) | $ | 0.36 | $ | (0.23 | ) | ||||
10
Notes to unaudited pro forma condensed combined financial statements
Pro forma statement of operations adjustments for the year ended December 31, 2023
Certain pro forma adjustments were made to T1’s historical statements of operations to give effect to the reclassification to discontinued operations. A reconciliation of amounts derived and presented as “T1 As Adjusted” within the pro forma statement of operations for the year ended December 31, 2023 is as follows (in thousands):
| T1 (Historical) | Discontinued Operations (Pro Forma) | T1 As Adjusted | ||||||||||
| Operating expenses: | ||||||||||||
| General and administrative | $ | 108,133 | $ | (42,606 | ) | $ | 65,527 | |||||
| Research and development | 28,457 | (28,457 | ) | — | ||||||||
| Restructuring charge | 6,016 | (6,016 | ) | — | ||||||||
| Share of net loss of equity method investee | 379 | (379 | ) | — | ||||||||
| Total operating expenses | 142,985 | (77,458 | ) | 65,527 | ||||||||
| Loss from continuing operations | (142,985 | ) | 77,458 | (65,527 | ) | |||||||
| Other income (expense): | ||||||||||||
| Warrant liability fair value adjustment | 31,763 | — | 31,763 | |||||||||
| Convertible note fair value adjustment | 1,074 | (1,074 | ) | — | ||||||||
| Interest income (expense), net | 9,949 | — | 9,949 | |||||||||
| Foreign currency transaction gain (loss) | 20,855 | (21,161 | ) | (306 | ) | |||||||
| Other income, net | 6,918 | (1,002 | ) | 5,916 | ||||||||
| Total other income (expense) | 70,559 | (23,237 | ) | 47,322 | ||||||||
| Loss from continuing operations before income taxes | (72,426 | ) | 54,221 | (18,205 | ) | |||||||
| Income tax expense | (670 | ) | 227 | (443 | ) | |||||||
| Net loss from continuing operations | (73,096 | ) | 54,448 | (18,648 | ) | |||||||
| Net loss attributable to non-controlling interests | 1,151 | (1,151 | ) | — | ||||||||
| Net loss from continuing operations attributable to stockholders | $ | (71,945 | ) | $ | 53,297 | $ | (18,648 | ) | ||||
| Weighted average shares of common stock outstanding - basic and diluted | 139,705 | — | 139,705 | |||||||||
| Net loss per share from continuing operations - basic and diluted | $ | (0.51 | ) | $ | 0.38 | $ | (0.13 | ) | ||||
11
Notes to unaudited pro forma condensed combined financial statements
NOTE 4 – Adjustments to TUH’s historical financial statements
Pro forma balance sheet reclassification adjustments as of September 30, 2024
Certain reclassification adjustments were made to TUH’s historical balance sheet in order to conform with T1’s financial statement presentation. A reconciliation of amounts derived and presented as “TUH As Adjusted” within the pro forma balance sheet as of September 30, 2024 is as follows (in thousands):
TUH (Historical) | Reclassifications | TUH As Adjusted | ||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 14,092 | $ | — | $ | 14,092 | ||||||
| Accounts receivable, net | 12,792 | — | 12,792 | |||||||||
| Inventories | 153,436 | — | 153,436 | |||||||||
| Prepaid assets | 85,022 | (1,290 | ) | 83,732 | ||||||||
| Other current assets | 60 | 1,290 | 1,350 | |||||||||
| Total current assets | 265,402 | — | 265,402 | |||||||||
| Property and equipment | 194,618 | 428 | 195,046 | |||||||||
| Prepaid supply agreements | 176,250 | — | 176,250 | |||||||||
| Right-of-use asset under operating leases | 102,484 | — | 102,484 | |||||||||
| Intangible assets, net | 428 | (428 | ) | — | ||||||||
| Deferred income tax assets | 6,057 | (6,057 | ) | — | ||||||||
| Other long-term assets | — | 6,057 | 6,057 | |||||||||
| Total assets | $ | 745,239 | $ | — | $ | 745,239 | ||||||
| LIABILITIES AND PARENT NET INVESTMENT | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 49,181 | $ | — | $ | 49,181 | ||||||
| Accrued liabilities and other | 90,763 | (73,794 | ) | 16,969 | ||||||||
| Current portion of long-term debt | — | 29,794 | 29,794 | |||||||||
| Current portion of long-term liability - related party | — | 44,000 | 44,000 | |||||||||
| Total current liabilities | 139,944 | — | 139,944 | |||||||||
| Long-term debt | 205,206 | — | 205,206 | |||||||||
| Operating lease liability | 109,957 | — | 109,957 | |||||||||
| Other long-term liabilities | 216,000 | (176,000 | ) | 40,000 | ||||||||
| Long-term liability - related party | — | 176,000 | 176,000 | |||||||||
| Total liabilities | 671,107 | — | 671,107 | |||||||||
| Parent net investment | 74,132 | — | 74,132 | |||||||||
| Total liabilities and parent net investment | $ | 745,239 | $ | — | $ | 745,239 | ||||||
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Notes to unaudited pro forma condensed combined financial statements
NOTE 5 – Adjustments to the pro forma financial statements
The pro forma financial statements have been prepared to illustrate the effects of the Pro Forma Transactions and have been prepared for informational purposes only.
The preceding pro forma financial statements have been prepared in accordance with Article 11 of Regulation S-X which requires the presentation of adjustments to account for the pro forma transactions (“Transaction Accounting Adjustments”) and allows for supplemental disclosure of the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management Adjustments”). Management has elected not to present Management Adjustments.
Pro forma balance sheet adjustments as of September 30, 2024
The adjustments included in the pro forma balance sheet as of September 30, 2024 are as follows:
| (a) | Reflects pro forma adjustments to record the purchase consideration transferred from T1 to the Seller as part of the Trina Business Combination. Refer to Note 2 above for a summary of purchase consideration, including (i) cash paid of $150.6 million, (ii) Share Consideration of $39.5 million, (iii) the Note Instrument of $117.7 million, (iv) the Convertible Note Instrument of $80.6 million, and (v) the Seller Option of $18.5 million. |
| (b) | Reflects preliminary purchase price allocation adjustments for the assets acquired and liabilities assumed in the Trina Business Combination. Refer to Note 2 for additional details related to the preliminary purchase price allocation. |
| (c) | Reflects the elimination of the historical parent net investment of TUH on a pro forma basis as a result of acquisition accounting. |
| (d) | Reflects pro forma adjustments for the payment of one-time, nonrecurring transaction costs of $16.8 million for the Trina Business Combination. These incremental costs are not yet reflected in the historical consolidated balance sheet of T1 as of September 30, 2024. The estimated transaction costs are reflected in the pro forma balance sheet as a decrease to cash and increase to accumulated deficit as these costs will be expensed by T1 as incurred. |
| (e) | Reflects pro forma adjustments to cash, redeemable preferred stock, and additional paid-in capital for the $50.0 million Preferred Stock Issuance upon closing of the Trina Business Combination. |
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Notes to unaudited pro forma condensed combined financial statements
Pro forma statements of operations adjustments for the nine months ended September 30, 2024 and for the year ended December 31, 2023
The adjustments included in the pro forma statements of operations for the nine months ended September 30, 2024 and for the year ended December 31, 2023 are as follows:
| (a) | The Transaction Agreement requires T1 to use its reasonable efforts to dispose, divest, transfer or otherwise sell the assets and operations that constitute its European business (the “Divestiture”). In case the consideration received is less than $45.0 million, T1 shall pay to the Seller an amount equal to 19.9% of the shortfall between such consideration and $50.0 million. If such Divestiture is not completed within six months from the Closing Date (the “Divestiture Date”), unless waived by the Seller, T1 shall pay to the Seller a fee of $2.0 million for each calendar month from the Divestiture Date until completion of the Divestiture. While the Divestiture has not been completed as of the date of this Current Report on Form 8-K/A, T1 does not believe it is probable it will incur these costs and, as such, no pro forma adjustment has been recorded. However, if T1 ultimately incurs these costs, the resulting impact will increase general and administrative expense, net loss from continuing operations attributable to stockholders, and net loss per share from continuing operations - basic and diluted. |
| (b) | T1 acquired certain customer contract intangible assets with five-year estimated useful lives. The pro forma statements of operations for the nine months ended September 30, 2024 and for the year ended December 31, 2023 only reflect pro forma amortization of the certain customer contract that commenced on the Closing Date. The initial term for a second customer contract has not commenced and will not commence until the first day of the calendar month following the commencement date of TUM 1, which has not commenced operations and whose assets are classified as construction in progress as of September 30, 2024. |
| (c) | Reflects pro forma interest expense related to the issuance of the Note Instrument as part of the consideration transferred for the Trina Business Combination. The Note Instrument matures in five years, bears interest at 1% per annum, and was issued at a discount of $32.3 million to its $150.0 million principal amount. |
| (d) | Reflects pro forma interest expense related to the issuance of the Convertible Note Instrument as part of the consideration transferred for the Trina Business Combination. The Convertible Note Instrument matures in five years, bears interest at an initial rate of 7% per annum with a 3% per annum increase six months after the Closing Date and on the first day of each subsequent 60-day period until the Second Conversion Date or repayment date, and was issued at a premium of $0.6 million to its $80.0 million principal amount as part of acquisition accounting. The First Conversion Date is contingent upon obtaining CFIUS approval, and the Second Conversion Date requires Requisite Stockholder Approval. The required approvals for the First Conversion Date and the Second Conversion Date have not been obtained as of the date of this Current Report on Form 8-K. |
| (e) | Reflects pro forma interest expense related to the Production Reserve Fee. The Production Reserve Fee represents fees paid by TUS for the reservation of production and supply slots, and is payable in five equal annual installments, which do not bear interest unless a payment is missed, and were recorded at a discount of $47.6 million to its $220.0 million principal amount of the long-term liability - related party as part of acquisition accounting. |
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Notes to unaudited pro forma condensed combined financial statements
| (f) | Reflects pro forma interest income related to the financing component of the acquired long-term prepaid supply contract. The prepaid supply contract was recorded at a discount of $44.0 million as part of acquisition accounting and relates to a six-year supply of polysilicon. |
| (g) | Reflects adjustments to pro forma interest expense related to the amortization of the $4.2 million discount for the Senior Secured Credit Facility. This acquired debt was recorded at fair value as part of acquisition accounting and all unamortized deferred finance charges were eliminated. T1 entered into a Credit Agreement Amendment on the Closing Date to which the parties of the Senior Secured Credit Facility consented to waive the change of control that would have otherwise been triggered by the Trina Business Combination, along with certain other amendments. |
| (h) | Reflects adjustments to pro forma income tax benefit (expense) by applying a blended U.S federal and state statutory tax rate of 22.74% to the pro forma adjustments for the periods presented. |
| (i) | Reflects adjustments to preferred stock dividends related to the Preferred Stock Issuance. Note that the impact of the Preferred Stock, which are redeemable and convertible, would be anti-dilutive to the computation of diluted net loss attributable to common stockholders per share on a pro forma basis. |
| (j) | Reflects adjustments to T1’s weighted-average shares of common stock outstanding - basic and diluted for the Share Consideration issued as part of consideration transferred for the Trina Business Combination. |
| (k) | The Seller Option would be anti-dilutive to the computation of diluted net loss attributable to common stockholders per share on a pro forma basis. As such, no pro forma adjustment has been recorded within the pro forma statements of operations for the nine months ended September 30, 2024 and for the year ended December 31, 2023. |
| (l) | Reflects a pro forma adjustment to reclassify sales and marketing expense to general and administrative expense in order to conform TUH’s historical statement of operations for the nine months ended September 30, 2024 with T1’s financial statement presentation. |
| (m) | Reflects an adjustment to pro forma general and administrative expense for one-time, nonrecurring transaction costs of $16.8 million for the Trina Business Combination. |
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