TerraForm Power, Inc. (Nasdaq:TERP), an owner and operator of clean
energy power plants, announced that it is delaying the filing of
its Annual Report on Form 10-K for the year ended December 31,
2015.
On February 29, 2016, TerraForm Power filed a Form 12b-25,
Notification of Late Filing, with the Securities and Exchange
Commission (the “SEC”) regarding our delayed Form 10-K principally
due to the need to complete all steps and tasks necessary to
finalize our annual financial statements and other disclosures.
At that time, we expected that we would be able to file our
Form 10-K within the 15-day extension period provided by Form
12b-25.
On February 29, 2016, SunEdison, Inc. (“SunEdison”), a Delaware
corporation and our controlling shareholder, also filed a Form
12b-25, Notification of Late Filing, regarding the delayed filing
of SunEdison’s Annual Report on Form 10-K for the year ended
December 31, 2015. SunEdison announced that its delay in
filing its Form 10-K was principally due to (1) the need to
complete all tasks and steps necessary to finalize the annual
financial statements and the other disclosures required to be
included in that filing, and (2) ongoing inquiries and
investigations by the Audit Committee of its Board of Directors and
its advisors relating to allegations concerning the accuracy of
SunEdison’s anticipated financial position based on certain issues
raised by former executives and current and former employees of
SunEdison (the “SUNE-Related Matters”).
On March 16, 2016, SunEdison announced a further delay in filing
its Form 10-K. This delay is principally due to the
additional scope of work required from the identification by
SunEdison’s management of material weaknesses in its internal
controls over financial reporting, primarily due to deficient
information technology controls in connection with newly
implemented systems (the “SUNE-Internal Control Matters”).
Because of these material weaknesses, additional procedures are
necessary for SunEdison’s management to complete SunEdison’s annual
financial statements and related disclosures, and in order for
SunEdison’s independent registered accounting firm to finalize its
audits of SunEdison’s annual financial statements and the
effectiveness of internal controls over financial reporting as of
December 31, 2015. SunEdison also announced that they have
not completed the SUNE-Related Matters, including the investigation
described above.
Due to our management services arrangement with SunEdison under
the Management Services Agreement, our financial reporting and
control processes rely to a significant extent on SunEdison systems
and personnel. As a result, if there are control deficiencies
at SunEdison, including with respect to the systems we utilize, it
is necessary for us to assess whether those deficiencies could
affect our financial reporting and, if so, address them to the
extent necessary and appropriate prior to filing our Form 10-K.
SunEdison has informed us that they are continuing to work
through the SUNE-Related Matters and SUNE-Internal Control Matters
and we have been assessing whether the SUNE-Related Matters and
SUNE-Internal Control Matters could affect our financial
statements. To date, we have not identified any material
misstatements or restatements of our audited or unaudited financial
statements or disclosures for any period previously reported.
Additionally, we have not yet completed all steps and tasks
necessary to finalize our financial statements and other required
disclosures. We currently have identified material weaknesses
in internal controls over financial reporting primarily due to
ineffective controls in relation to our Enterprise Resource
Planning (ERP) systems and processes for validating revenue
recognition. We are working to remediate these issues as
promptly as practicable.
As anticipated, because the filing of our Form 10-K will be
delayed beyond the 15-day extension period of Form 12b-25, on March
15, 2016 we received a notification letter from a Director of
NASDAQ Listing Qualifications. The notification letter stated
that because we have not yet filed our Form 10-K for the year ended
December 31, 2015, TerraForm Power is no longer in compliance with
NASDAQ Marketplace Rule 5250(c)(1), which requires timely filing of
periodic reports with the SEC.
Under the NASDAQ Listing Rules, TerraForm Power has until May
16, 2016, to submit a plan to NASDAQ as to how it plans to regain
compliance with NASDAQ’s continued listing requirements. If
we are still unable to file our Form 10-K by May 16, 2016, then we
intend to submit a compliance plan on or prior to that date.
If NASDAQ accepts our plan, NASDAQ can grant an exception of up to
180 calendar days from the filing’s due date, or until September
12, 2016, to regain compliance. TerraForm Power may regain
compliance at any time during this 180-day period upon filing with
the SEC its Form 10-K, as well as all subsequent required periodic
financial reports that are due within that period. If NASDAQ
does not accept our plan, we will have the opportunity to appeal
that decision to a NASDAQ Hearings Panel. The NASDAQ
notification letter has no immediate effect on the listing of our
common stock on the NASDAQ Global Select Market.
Cautionary Note Regarding Forward-Looking Statements
This communication contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements can be identified by the fact that they do not relate
strictly to historical or current facts. These statements involve
estimates, expectations, projections, goals, assumptions, known and
unknown risks, and uncertainties and typically include words or
variations of words such as “expect,” “anticipate,” “believe,”
“intend,” “plan,” “seek,” “estimate,” “predict,” “project,” “goal,”
“guidance,” “outlook,” “objective,” “forecast,” “target,”
“potential,” “continue,” “would,” “will,” “should,” “could,” or
“may” or other comparable terms and phrases.
They include, without limitation, statements relating to
TerraForm Power’s plans for regaining and submitting a plan of
compliance with NASDAQ’s continued listing requirements within the
prescribed period; whether or not NASDAQ will accept the plan of
compliance; the extension time, if any, granted by NASDAQ for the
filing of the Form 10-K; the ongoing audit and the scope, outcome
and timing of such audit; and our efforts to remediate any issues
identified in the audit. These forward-looking statements are based
on current expectations as of the date of this filing and are
subject to known and unknown risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied by such statements, including but not limited to: TerraForm
Power’s ability to regain compliance with NASDAQ’s continued
listing requirements; whether NASDAQ will accept TerraForm Power’s
plan of compliance and grant an extension; the impact of the delay
in TerraForm Power’s completion of its financial statements and the
filing of its Annual Report on Form 10-K; the impact of the ongoing
audit; and our ability to remediate any issues identified in the
audit; and other factors described in our Form 10-K for the fiscal
year ended December 31, 2014, as well as additional factors we have
described in other filings with the Securities and Exchange
Commission.
The risks included above are not exhaustive. Other factors that
could adversely affect our business and prospects are described in
the filings made by us with the SEC.
TerraForm Power undertakes no obligation to publicly update or
revise any forward-looking statement as a result of new
information, future events or otherwise, except as otherwise
required by law.
About TerraForm Power
TerraForm Power is a renewable energy leader that is changing
how energy is generated, distributed and owned. TerraForm Power
creates value for its investors by owning and operating clean
energy power plants. For more information about TerraForm Power,
please visit: www.terraformpower.com.
Investor/Media Contact:
Brett Prior
TerraForm Power
bprior@terraform.com
Phone: +1 (650) 889 8628
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