Change to Pacific Green's Accounting Policy

Rhea-AI Summary

Pacific Green Technologies (OTCQB: PGTK) has announced significant changes to its accounting policies, which will be applied retrospectively from December 2023. The key changes involve the recognition of the $76 million consideration from the sale of Sheaf Energy to Sosteneo Energy Transition Fund as a gain on disposal rather than revenue. Additionally, the company has modified its policy for capitalized project development assets, reclassifying them from current inventory to non-current assets.

These accounting adjustments, made following consultation with the SEC's Office of Chief Accountant and Grant Thornton UK LLP, will not impact Pacific Green's reported net income, cash balance, or net assets. The changes reflect a more appropriate alignment with US GAAP standards and will be implemented in future 10-K and 10-Q filings.

Positive

• No impact on reported net income, cash balance, or net assets
• $76 million consideration received from Sheaf Energy sale
• Total project value of $258 million for the battery energy storage systems

Negative

• Requirement to revise accounting policies retrospectively
• Change in revenue recognition policy affecting financial statement presentation

DOVER, DE, Dec. 13, 2024 (GLOBE NEWSWIRE) --  Pacific Green Technologies, Inc. ("Pacific Green"), (OTCQB: PGTK) announces that it has amended some material accounting policies following extensive engagement with its auditors. These updates will be reflected retrospectively in the filings from December 2023. These adjustments have no impact on Pacific Green’s reported net income, cash balance or net assets.

The updates reflect a change in recognition of the consideration for the sale of Sheaf Energy Limited in December 2023, a grid-scale battery energy storage systems of total project value of $258 million, to Sosteneo Energy Transition Fund, managed by Generali, with the conclusion that the $76 million consideration received from the sale, less costs of sale, is recognized as a gain on disposal, rather than revenue.

Consistent with a change in revenue recognition policy, Pacific Green has also changed its accounting policy for capitalized project under development assets, from being recorded as inventory in current assets, to being classified as long-life assets in non-current assets, and only recognized as current assets when it is anticipated that the project sale will occur within 12 months.

These corrections underscore Pacific Green’s commitment to financial transparency. The revisions follow consultations with the Securities and Exchange Commission Office of the Chief Accountant (“OCA”) over the previous accounting policy, given the unprecedented nature of the transaction and considering the complex nature of Pacific Green’s battery energy storage system developments.

Following the determination by the OCA about the previous policy, Pacific Green has determined that the revised policy is more appropriate under US GAAP. This policy change has been discussed and agreed with the Company’s independent auditors, Grant Thornton UK LLP, and will be reflected in future 10-K and 10-Q filings.

About Pacific Green Technologies, Inc.:

Pacific Green is focused on addressing the world’s need for cleaner and more sustainable energy. It offers grid-scale battery energy storage systems, renewable and environmental technologies.

For more information, visit Pacific Green’s website:
www.pacificgreen.com

Notice Regarding Forward-Looking Statements:

This news release contains “forward-looking statements,” as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this news release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things,  any potential business developments and future interest in Pacific Green’s battery, solar and environmental technologies.

Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the continuation of the development of Sheaf Energy Park, and general economic and political conditions. These forward-looking statements are made as of the date of this news release, and Pacific Green assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although Pacific Green believes that the beliefs, plans, expectations and intentions contained in this news release are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all the information set forth herein and should also refer to the risk factors disclosure outlined in Pacific Green’s annual report on Form 10-K for the most recent fiscal year, Pacific Green’s quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.

FAQ

How will PGTK's accounting policy changes affect its financial statements?

The changes will not impact PGTK's reported net income, cash balance, or net assets, but will affect how the $76 million sale consideration is classified and how project development assets are reported in the financial statements.

What is the value of PGTK's Sheaf Energy sale to Sosteneo Energy Transition Fund?

The sale consideration was $76 million, with the total project value being $258 million.

When will PGTK's new accounting policies take effect?

The changes will be applied retrospectively to filings from December 2023.

How will PGTK's project development assets be classified under the new policy?

Project development assets will now be classified as long-life assets in non-current assets, only moving to current assets when project sale is expected within 12 months.