LDK Solar Co., Ltd. - Asia Europe Clean Energy (Solar) Advisory Co ...

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LDK SOLAR CO., LTD. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2006 AND 2007 (Amounts in US$ thousands, except share and per share data) (9) NET (LOSS) INCOME PER SHARE The computation of basic and diluted net (loss) income per share is as follows: Three-month Periods Ended March 31, March 31, 2006 2007 Numerator used in computing basic net (loss) income per share, net (loss) income available to ordinary shareholders ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (440) 21,592 Accretion of Series A redeemable convertible preferred shares to redemption value ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Accretion of Series B redeemable convertible preferred shares to Ì 512 redemption value ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Accretion of Series C redeemable convertible preferred shares to Ì 1,625 redemption value ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 805 Numerator used in computing diluted net (loss) income per share ÏÏÏ (440) 24,534 Shares (denominator): Weighted average number of ordinary shares outstanding used in computing basic net (loss) income per shareÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 75,000,000 75,000,000 Plus weighted average Series A redeemable convertible preferred shares outstanding ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Plus weighted average Series B redeemable convertible preferred Ì 4,580,000 shares outstanding ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Plus weighted average Series C redeemable convertible preferred Ì 8,000,000 shares outstanding ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Weighted average number of ordinary shares outstanding used in Ì 3,000,000 computing diluted net (loss) income per share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 75,000,000 90,580,000 Net (loss) income per share Ì basic ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (0.01) 0.29 Net (loss) income per share Ì dilutedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (0.01) 0.27 During the three-month period ended March 31, 2007, the Group's dilutive potential ordinary shares outstanding, in addition to the Series A, B and C redeemable convertible preferred shares included in the above computation, consist of share options and warrants issued in connection with the Series A Shares. In computing diluted income per share for the three-month period ended March 31, 2007, there was no dilutive effect of outstanding share options of 8,159,800 by applying the treasury stock method because the ordinary shares assumed to be issued upon the exercise of the share options was less than the number of shares assumed to be purchased at the average estimated fair value during the period. The proceeds used for the assumed purchase include the sum of the exercise price of the share options and the average unrecognized compensation cost. There was no dilutive effect of outstanding warrants because the condition to trigger the exercising of the warrants was not satisfied as of March 31, 2007, and was assumed to remain unchanged until the end of the contingency period. F-54
LDK SOLAR CO., LTD. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2006 AND 2007 (Amounts in US$ thousands, except share and per share data) (10) RELATED PARTY TRANSACTIONS The Group has entered into a number of transactions with related parties. Amounts outstanding and the amounts of transactions with these related parties for the three-month period ended March 31, 2007 are as follows: (i) Companies controlled by Mr. Peng have provided guarantees or collateral to JXLDK's bankers to secure the JXLDK's bank loans (refer to note 4) (ii) JXLDK leased an office in Harbour Ring Plaza from SZ Liouxin free of charge. SZ Liouxin signed the lease contract with a monthly rental charge of US$5. The period of the contract is from December 2005 to December 2007. (11) SEGMENT INFORMATION Segment information is set out below: Three-month Periods Ended March 31, March 31, 2006 2007 Segment and consolidated revenue ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 73,400 Segment income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 25,645 Reconciling items (note(a)) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (494) (1,111) Consolidated (loss) income before income tax benefitÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (494) 24,534 Segment assets (note(b)) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 93,315 339,497 (a) Reconciliation of segment income to consolidated (loss) income before tax benefit Three-month Periods Ended March 31, March 31, 2006 2007 Total segment incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ PRC GAAP to US GAAP differences: Ì 25,645 Pre-operating expenses ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (494) Ì Share-based compensation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (1,106) Decrease in fair value of warrants ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (2) Others ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (3) Consolidated (loss) income before income tax benefitÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (494) 24,534 F-55
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PROSPECTUS 17,384,000 American Depo
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We were incorporated in the Cayman
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percentage of light energy from the
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Listing ÏÏÏÏÏÏÏÏÏÏÏÏÏ
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(1) Gross profit for the year ended
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RISK FACTORS Investment in our ADSs
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Reduction or elimination of governm
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capacity or to increase our manufac
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delivery or failure to meet deliver
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specifications or product defects.
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Compliance with environmental regul
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operations or the price of our ADSs
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tax rates and other measures. Forei
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company in connection with any incr
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of approximately $22.05 in the net
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outside the United States. As a res
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The forward-looking statements cont
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CAPITALIZATION The following table
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DILUTION If you invest in our ADSs,
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DIVIDEND POLICY We have never decla
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SELECTED CONSOLIDATED FINANCIAL AND
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MANAGEMENT'S DISCUSSION AND ANALYSI
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polysilicon prices will decline in
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listed public company in the United
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increase. See ""Risk Factors Ì Ris
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subjective. The assumptions used in
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2006 and February 6, 2007. During t
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value of the our business. Under th
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Year Ended December 31, 2006 (in th
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""Exchange Rate Information'' in th
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ended September 30, 2006, net incom
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For additional information relating
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The non-cancelable purchase obligat
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previously deemed material, but are
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module production will increase fro
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The following diagram illustrates t
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Because we are a pure-play solar wa
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Wafering. After passing inspection,
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our revenue and customer base to ta
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‚ Our agreement with E'mei Semi-c
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photovoltaic cell or modules, and w
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A breakdown of our employees by are
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tax treatments to foreign-invested
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On September 21, 2006, the CSRC pub
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Gang Wang is a non-executive direct
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directors on our audit committee wi
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monies of or belonging to us may be
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(10) Vests on July 31, 2007. Brilli
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Securities (USA) LLC, which is a re
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interest-bearing loans directly to
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person, by its duly authorized repr
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History of Securities Issuances The
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persuasive authority in the Cayman
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making any sale by public or privat
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Reports and Other Communications Wi
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Amendment and Termination How may t
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‚ deliver distributions on any AD
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SHARES ELIGIBLE FOR FUTURE SALE Upo
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TAXATION The following summary of m
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individual, up to $3,000 of capital
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person and on sales of ordinary sha
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The estimated offering expenses pay
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Pricing of the Offering Prior to th
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ADS with a view to selling it to th
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EXPENSES RELATING TO THIS OFFERING
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‚ no new admissible evidence rele
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WHERE YOU CAN FIND ADDITIONAL INFOR
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REPORT OF INDEPENDENT REGISTERED PU
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