Sacramento-based photovoltaic module manufacturer SPI Energy Co. Ltd. plans to spin off its SolarJuice Co. Ltd. subsidiary in a $54 million stock offering on the Nasdaq Stock Market.
SolarJuice is an Australian subsidiary based in Sydney that is 80% owned by SPI (Nasdaq: SPI), which is based at McClellan Park in Sacramento.
The SolarJuice offering is for 9 million common shares with the tentative price of up to $6 per share, according to a prospectus filed Nov. 27 with the Securities and Exchange Commission.
The company would be based in Sydney, but it would be traded on the Nasdaq under the ticker symbol SJA. The offering is being led by New York investment banks Maxim Group LLC and Freedom Capital Markets.
SolarJuice would control the U.S. solar-panel manufacturing plants owned and operated by SPI, which include an existing plant at McClellan Park and a new solar panel factory being developed by SPI and SolarJuice in South Carolina.
The company, in its filing with the SEC, said the “estimated cost for launching our proposed expansion in 2024 is approximately $50 million,” and it plans to use proceeds of the offering to begin its expansions in South Carolina and at McClellan.
The company in its filing anticipates benefitting from the federal Inflation Reduction Act of 2022 both from getting credits for domestic production of clean energy equipment and also by a federal tax credit for residential customers who install solar through 2032. Those people can subtract 30% of solar equipment and installation costs off their federal taxes.
The offering prospectus also includes “going concern” language, which the company has included in its financial statements since the end of last year and which “raise substantial doubt about the company's ability to continue as a going concern.”
The company didn't return calls for comment about the IPO.
SPI had net income of $2.9 million in the six months ended June 30, but the company has an accumulated deficit as of the same date of $35.6 million and the working capital deficit of $11 million, sparking the going concern language in the prospectus.
SolarJuice would own the photovoltaic panel manufacturing operation that SPI Energy currently owns at McClellan Park.
SPI anticipates it will produce an annual capacity of 1.3 gigawatts of solar panels annually at McClellan starting next year. The company is also working to turn an existing 273,000-square-foot building in Sumter, South Carolina, into a solar panel manufacturing factory with 1.2 gigawatts of annual capacity.
SPI and SolarJuice produce solar panels under the brand Solar4America. The Sacramento facility produces 410-watt residential solar panels and 550-watt commercial solar panels. The annual capacity figures offered by the company are the cumulative watt production of all panels produced in a year.
In September 2022, SPI first announced that it would spin off SolarJuice in a stock offering. Then in February this year, SPI filed with the SEC that its SolarJuice subsidiary stock offering could raise about $19 million.
The new filing with the SEC at the end of November raised that amount to the estimated range of $45 million to $54 million.
