Tecnoglass Inc. Annual Report 2015

FY2015 Annual Report · Tecnoglass Inc.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

(Mark One)





ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2015

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________to ______________

Commission File Number 001-35436

TECNOGLASS INC.
(Exact Name of Registrant as Specified in Its Charter)

Cayman Islands
(State or Other Jurisdiction of Incorporation or
Organization)

Avenida Circunvalar a 100 mts de la Via 40
Barrio Las Flores, Barranquilla
Colombia
(Address of Principal Executive Offices)

98-1271120
(I.R.S. Employer Identification Number)

(Zip Code)

(57)(5)3734000
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registered

Ordinary Shares, par value $0.0001 per share

The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.

Yes No 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirement for the past 90 days.

Yes No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232 405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).

Yes No 

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.



Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.
See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer 
Non-accelerated filer 
(Do not check if a smaller reporting company)

Accelerated filer 
Smaller reporting company 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

As of June 30, 2015 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the ordinary
shares held by non-affiliates of the registrant was approximately $53,475,319 based on its last reported sales price of $12.63 on the NASDAQ Capital
Market.

Yes No 

As of March 28, 2016, there were 26,914,764 ordinary shares, $0.0001 par value per share, outstanding.

Documents Incorporated by Reference: None.

TECNOGLASS INC.
FORM 10-K
TABLE OF CONTENTS

Business. .......................................................................................................................................................

PART I
Item 1.
4
Item 1A. Risk Factors. ................................................................................................................................................. 11
Item 1B. Unresolved Staff Comments. ........................................................................................................................ 11
Item 2.
Properties. ..................................................................................................................................................... 12
Item 3.
Legal Proceedings. ....................................................................................................................................... 12
Item 4.
Mine Safety Disclosures. .............................................................................................................................. 12

PART II
Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities. ..................................................................................................................................................... 13
Item 6.
Selected Financial Data. ............................................................................................................................... 14
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
14
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. ..................................................................... 19
Item 8.
Financial Statements and Supplementary Data. ........................................................................................... 19
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.
19
Item 9A. Controls and Procedures. .............................................................................................................................. 19
Item 9B. Other Information. ........................................................................................................................................ 22

PART III
Item 10. Directors, Executive Officers and Corporate Governance. .......................................................................... 23
Item 11.
Executive Compensation. ............................................................................................................................. 26
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. .... 27
Item 13. Certain Relationships and Related Transactions, and Director Independence. ............................................ 29
Item 14.
Principal Accounting Fees and Services. ..................................................................................................... 31

PART IV
Item 15.

Exhibits, Financial Statement Schedules. ..................................................................................................... 32

FORWARD LOOKING STATEMENTS AND INTRODUCTION

All statements other than statements of historical fact included in this Annual Report on Form 10-K (this
“Form 10-K”) including, without limitation, statements under “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of
management for future operations, are forward looking statements. When used in this Form 10-K, words such as
“anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our management,
identify forward looking statements. Such forward looking statements are based on the beliefs of management, as well as
assumptions made by, and information currently available to, our management. Actual results could differ materially
from those contemplated by the forward looking statements as a result of certain factors detailed in our filings with the
Securities and Exchange Commission. All subsequent written or oral forward looking statements attributable to us or
persons acting on our behalf are qualified in their entirety by this paragraph.

Unless the context otherwise requires:









references to the “Company” , “TGI” and to “we,” “us” or “our” are to Tecnoglass Inc., a Cayman Islands exempted
company, and its subsidiaries;
references to “Tecnoglass Holding” are to Tecno Corporation;
references to “Tecnoglass” and “TG” are to Tecnoglass S.A.;
references to “ES” are to C.I. Energía Solar S.A. E.S. Windows;
references to “Tecno LLC” are to Tecnoglass LLC; and
references to “Tecno RE” are to Tecno RE LLC.

EXPLANATORY NOTE

This Annual Report on Form 10-K for the year ended December 31, 2015 includes consolidated financial statements for
the years ended December 31, 2015 and 2014. The consolidated financial statements for the year ended December 31,
2014 are restated.

On April 11, 2016, the Audit Committee of the Board of Directors of Tecnoglass Inc. (the “Company”) and management,
after a discussion with PricewaterhouseCoopers Ltda., the Company’s independent registered public accounting firm
(“PWC”), determined that the Company’s previously-filed audited financial statements for the fiscal years ended
December 31, 2014 and 2013 (the “Prior Audited Financial Statements”) and its previously-filed quarterly reports on
Form 10-Q for the quarters ended March 31, 2015, June 30, 2015 and September 30, 2015 (collectively the “Quarterly
Financial Statements”) should no longer be relied upon (PWC was the independent registered public accounting firm for
all of the aforementioned periods except for the fiscal year ended December 31, 2013 which was audited by Marcum
LLP). The Company will file a separate Annual Report on Form 10-K for 2013 in order to address the restatement
associated with that period.

In preparing the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, the Company
identified six non-cash errors: (1) in the way the Company had accounted for the fair value and classification of its
“earnout shares”, (2) in the classification and presentation of deferred tax assets and liabilities on the consolidated
balance sheets, (3) in the classification of its shipping and handling costs in the statement of operations, (4) in the
presentation of related party revenue on consolidated statements of operations and comprehensive income, (5) in the
classification of purchases and sales of investments in the consolidated statements of cash flows, and (6) in the
calculation of diluted earnings per share.

In accordance with accounting guidance presented in ASC 250-10 and SEC Staff Accounting Bulletin No. 99,
Materiality, the Company’s management assessed the materiality of the errors on a consolidated basis and concluded
they were material to the financial statements for the year ended December 31, 2014 and the quarterly periods within
both 2015 and 2014. With respect to the financial statements for the year ended December 31, 2014, the errors have been
corrected in the Company’s 2015 10-K by form of a restatement, which is further described in Note 2, Restatement, to
the Notes to our consolidated financial statements under the caption Item 15, “Exhibits, Financial Statement Schedules”.
The Company will amend its Forms 10-Q for the quarterly periods after the issuance of this Form 10-K.

Based on the above restatement, the Audit Committee and management have concluded that there were material
weaknesses in our internal control over financial reporting that contributed to the material misstatements in the 2014
consolidated financial statements. For further information regarding management’s assessment of internal control over
financial reporting, please see Item 9A, “Controls and Procedures,” in this Annual Report on Form 10-K.

Item 1. Business.

Overview

PART I

We were originally formed under the name “Andina Acquisition Corporation” for the purpose of effecting a
merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business
combination with one or more businesses or entities. On March 22, 2012, we consummated our initial public offering
(the “IPO”), and on December 20, 2013, we consummated our initial business combination (the “Merger”), whereby our
wholly-owned subsidiary merged with and into Tecnoglass Holding. As a result of the Merger, Tecnoglass Holding and
its indirect, wholly-owned subsidiaries, Tecnoglass and ES, became our direct and indirect subsidiaries. Accordingly, the
business of Tecnoglass Holding and its subsidiaries became our business. We are now a holding company operating
through our direct and indirect subsidiaries.

The Merger was accounted for as a reverse acquisition with Tecnoglass Holding being considered the accounting
acquirer in the Merger. For accounting and financial purposes, we were treated as the acquired company, and Tecnoglass
Holding was treated as the acquiring company. Accordingly, historical information, including historical financial
information and the historical description of our business, for periods and dates prior to December 20, 2013, include
information for Tecnoglass Holding and its subsidiaries.

Our Business

General

We are a leading manufacturer of hi-spec architectural glass and windows for the western hemisphere residential

and commercial construction industries, operating through our direct and indirect subsidiaries. Headquartered in
Barranquilla, Colombia, we operate out of a 2.8 million square foot vertically-integrated, state-of-the-art manufacturing
complex that provides easy access to the Americas, the Caribbean, and the Pacific.

We sell our products to more than 900 customers in North, Central and South America. The United States
accounted for approximately 59% and 51% of our combined revenues in 2015 and 2014, while Colombia accounted for
approximately 34% and 41%, and Panama for approximately 3% and 6% of our combined revenues in those years.
Our tailored, high-end products are found on some of the world’s most distinctive properties, including the El Dorado
Airport (Bogota), 50 UN Plaza (New York), Fordham University Law School (New York), Trump Tower (Panama),
Brickell City Centre (Miami), and The Woodlands (Houston).

Tecnoglass. Tecnoglass is a leading manufacturer of a variety of glass products installed primarily in commercial

and residential buildings, including tempered safety, double thermo-acoustic and laminated glass. Tecnoglass products
are installed in hotels, residential buildings, commercial and corporate centers, universities, airports and hospitals in a
variety of applications such as floating facades, curtain walls, windows, doors, handrails, interior and bathroom spatial
dividers. Approximately 57% of Tecnoglass products are supplied to ES for installation in various products that ES
manufactures, with the balance of Tecnoglass products being sold to customers throughout North, Central and South
America. In 2015 Tecnoglass established its Solartec plant, to produce low emissivity glass with high thermal insulation
specifications using soft coat technology.

Tecnoglass also produces aluminum products such as profiles, rods, bars, plates and other hardware used in the
manufacture of windows. In 2007, Tecnoglass established its Alutions plant in Barranquilla, Colombia for extrusion,
smelting, painting and anodizing processes, and for exporting, importing and marketing aluminum products. The
Alutions plant contributes more than 90% of the raw materials needed for production of Tecnoglass aluminum products.

Glass Magazine ranked Tecnoglass as the second largest glass fabricator serving the U.S. market in 2013. We

believe that it is the leading glass transformation company in Colombia, capturing 40% of the market share in the
country.

ES. ES is a leader in the production of high-end windows, with more than 29 years of experience in the glass and
aluminum structure assembly market in Colombia. ES designs, manufactures, markets and installs architectural systems
for high, medium and low rise construction, glass and aluminum windows and doors, office dividers and interiors,
floating facades and commercial display windows.

ES has expanded its U.S. sales outside of the Florida market for windows, into the high-tech market for curtain

walls, a product that is in high demand and represents a new trend in architecture, and floating facades. Due to the
sophistication of these new products, ES believes that sales of curtain walls will generate higher margins as compared to
traditional window frames from walls or floor to ceiling windows. Curtain walls produced by ES are composed of “high
performance” materials that are produced by Alutions, the aluminum smelting plant, and Tecnoglass with state of the art
technology.

Since 2004, we have a strategic commercial relationship with ES Windows LLC (“ESW LLC”), a Florida-based

company partially owned by Christian T. Daes and José M. Daes, who are also our executive officers and directors. ESW
LLC is a member of the American Architectural Manufacturers Association, a technical information center for the
architecture industry with highest standards. ESW LLC sends project specifications and orders from its clients to ES, and
in turn, receives pricing quotes from ES which are conveyed to the client.

In 2014, we established two entities in South Florida, Tecno LLC and Tecno RE, to acquire manufacturing and

warehousing facilities, customer lists and exclusive design permits in order to support sales growth in the United States.
We will continue to manufacture our products at our facilities in Barranquilla, Colombia while performing select
manufacturing and light assembly in the U.S. to enhance client service and create certain cost efficiencies.

In Panama, ES sells products primarily to companies participating in large construction projects in the most

exclusive areas of Panama City. For example, ES products were supplied in the construction of the tallest building in
Central and South America, The Point, as well as in the construction of other modern hotels in the region such as
Megapolis and The Trump. Based on ES’s knowledge of the construction market in Central America, we believe that it
has also entered into one of the highest value window supply contracts in the hotel industry in Central America for the
Soho Plaza.

Competitive Strengths

Vertical Integration

We believe we are unique in vertically integrating the purchase of raw materials, the manufacture of glass and

aluminum products and the subsequent production of customized glass and windows for architectural and industrial
settings. By vertically integrating these functions, we are able to price our products competitively while maintaining strict
quality control measures to guarantee the high quality of our products. Additionally, we benefit from significant
advantages in efficiency and time-to-market for new or customized products. This vertically integrated model provides
attractive margins with significant operating leverage.

Innovation

We have made significant investments in machinery and equipment in order to utilize the latest technology on our
production lines, including a recently completed approximately $80.2 million capital investment in land, warehouses and
state-of-the-art glass making equipment thereby expanding our manufacturing capacity. In August 2014, we entered into
a contract to purchase equipment from Magnetron Sputter Vacuum Deposition to produce soft coated low emissivity
glass as part of our improvements plan, which started production in the last quarter of 2015. The investment for this
project is estimated at $45 million for the equipment and facilities.

Additionally, we purchased two glass laminating and tempering furnaces that use new technologies to produce
tempered glass with no distortion using air cushion technology and to produce curved glass in a broad range of easily
modifiable curvatures.

For certain of our products, we offer DuPont Sentryglass® laminated glass interlayers which are recognized as

industry-leading laminated glass solutions with five times the resistance strength of other materials available on the
market. We also use a laminator and jumbo tempering oven capable of producing extra-large slabs of laminated glass
which are sought after in the high-end window market. These investments in machinery and equipment, together with our
highly trained labor force, allow us to offer state-of-the-art custom designed products quickly modified to meet customer
demands. We also have a staff of specialists dedicated to product design in order to meet customer specifications.

Superior Customer Service

In addition to manufacturing high quality products, our value proposition to our customers is based on industry-

leading lead times, on-time delivery and superior after-sale support. Through the coordinated efforts of our sales teams,
product specialists, and field service teams, we deliver high quality service to our customers, from the time the initial
order is placed through the delivery and installation of our products. By providing an efficient flow of product from order
through delivery, our manufacturing processes allow us to deliver made-to-order products consistently on time, which we
believe is an important competitive strength.

Management Experience

José Daes, our chief executive officer, and Christian Daes, our chief operating officer, have more than 30 and 20
years of industry experience, respectively. In addition, our executive management teams have worked together for many
years at our operating subsidiaries. This long tenure in the industry, and as a team, has enabled our management to build
significant relationships with both clients and field level management. We believe that these relationships, coupled with
management’s strong technical expertise, create a significant competitive advantage.

Location

Our headquarters and principal manufacturing facilities are located in Barranquilla, Colombia, which is

strategically located near three major ports in Barranquilla, Cartagena and Santa Marta. These ports, which are only two
hours’ drive from each other, provide us with sea access to all major markets globally.

High Barriers to Entry

Entry into many of the markets that we serve is limited due to the technical certifications required on high
specification building projects. Our success is due in large part to the breadth of our product offering and our reputation
for delivering high quality, made-to-order architectural glass on time. These factors are required to compete successfully
for multimillion dollar projects typical of our business. Given the vertically-integrated nature of our operations, including
the aluminum extrusion products provided by Tecnoglass, there is a more limited set of competitors and entry into these
markets. In addition, the equipment needed to operate in the glass and window industry is expensive, requiring a
significant upfront capital investment.

Competitive pricing

We offer our customers highly competitive prices due to efficiencies realized from vertical integration and low
labor costs. These competitive advantages allow us great flexibility in pricing their components to be competitive in a
variety of markets.

Strategy

We have identified the following items that we believe are important in advancing our business:

Continued investments in machinery and equipment with state-of-the-art technology

We have made investments of approximately $142.6 million since 2014, including $80.2 million in 2015 in state-

of-the-art glass making equipment, the installation of new laminating lines, high-volume insulating equipment, a new
aluminum extrusion press with the capacity for an additional one thousand tons per month, a new paint line with the
capacity to treat one million pounds of aluminum per month, and a new aluminum foundry.

Development of additional high value products

We have a demonstrated track record of developing new products and will continue to focus on capitalizing on
new product opportunities in the future. We constantly identify shifting global trends and growing marketplace needs,
and design proposals to meet those needs. A feasibility and tuning program, including testing at specialized laboratories
in the U.S., is carried out before marketing a new product. In 2014 we started producing architectural systems that
integrate LED lighting allowing the façade of the building to display different colors and patterns.

Additionally, we are in the process of implementing new technologies to produce tempered glass that offers
notably more transparency with significantly less distortion than industry standard using air cushion technology, as well
as new technology used to produce curved glass in a broad range of easily modifiable curvatures.

Manufacture the highest quality products in the market through a rigorous quality assurance program

Our plants are organized internally by processes, each of which is independently and continually supervised by the

Quality Assurance department. The Quality Assurance department maintains rigorous oversight over energy, water,
recyclable waste and process optimization indicators, in order to produce high quality sustainable products.
Approximately 30% of all our waste is recycled.

Continued vertical integration provides margin enhancement

We benefit from operating together under a combined facility, providing advantages in meeting customer and
market needs and managing costs. By continuing to expand our degree of vertical integration, we can further enhance
productivity, create cost efficiencies and increase operating margins.

Leverage strength in Colombia market to further penetrate Latin America

With a strong base in Colombia, we have already successfully expanded into nearby geographies. Our glass

products are featured in major construction projects in Argentina, Aruba, Costa Rica, Panama and Puerto Rico. As the
construction market throughout Latin America grows, we are positioned to capture new growth in the markets we have
currently penetrated, as well as in new high growth countries.

Leverage strength in Florida market to further penetrate U.S.

We believe we have an established and leading presence in the Florida construction market as providers of high

value, impact-resistant glass products. ES’s hurricane-proof products are certified in compliance with the stringent
requirements of hurricane-proof windows in accordance with applicable U.S. regulations. With a quality of product
proven by our success and compliance in the impact-resistant market, we have successfully entered the U.S. remodeling
and replacement parts market. In addition, we have the opportunity to grow geographically in the U.S., particularly into
other coastal markets on the East Coast which are affected by hurricanes, significant temperature fluctuations and other
extreme weather.

Maintain fast and reliable delivery to customers due to strategic location

From the Port of Barranquilla, products can be transported to Panama by air in one hour and to Houston and

Miami within two hours, within two days by sea to Panama and within four days by sea to Houston and Miami.

Penetrate additional markets

With a strong base in Colombia and Florida, we will seek to expand into further geographies, such as Asia and

Europe. We believe the centralized location of the Port of Barranquilla will aid in our expanding into such new markets.

Products

TG manufactures and sells the following products:

Soft Coat Glass – manufactured by depositing metal particles on the surface of the glass inside a vacuum chamber.

This product offers excellent thermal insulation designed to improve energy efficiency of buildings.

Laminated/Thermo-Laminated Glass - produced by bonding two glass sheets with an intermediate film in-

between. As a safety feature, this product fractures into small pieces if it breaks.

Thermo-Acoustic Glass - manufactured with two or more glass sheets separated by an aluminum or micro-

perforated steel profile. This product has a double-seal system that ensures the unit’s tightness, buffering noise and
improving thermal control. This product serves as an excellent noise barrier, which is used especially in zones close to
airports, traffic or wherever there are unpleasant sounds.

Tempered Glass - glass subject to a tempering process through elevated temperatures resulting in greater

superficial elasticity and resistance than conventional glass.

Silk-Screened Glass - special paint is applied to glass using automatic machinery and numerical control which

ensures paint homogeneity and an excellent finish.

Curved Glass - produced by bending a flat glass sheet over a mold, using an automated heat process, which

maintains the glass’ physical properties.

Digital Print Glass - digital printing allows any kind of appearance required by the client, offering versatility to

projects.

TG’s aluminum products sold through its Alutions brand include bars, plates, profiles, rods and tubes used

primarily in the manufacture of architectural glass settings including windows, doors, spatial separators and similar
products.

ES manufactures and sells the following products:

Floating facades - act as a window screen hanging outside a building and are available in many technical

specifications and profiles to define colors, thickness, glass types and finishes, and types of ventilation and design
complements.

Windows and Doors - line of window and door products defined by the different types of glass finish, such as

normal, impact resistant, hurricane-proof, safety, soundproof and thermal. Additionally, they are available in numerous
structures, including fixed body, sliding windows, projecting windows, guillotine windows, sliding doors and swinging
doors.

Commercial display windows - commercial and interior display windows with a broad range of profiles, colors

and crystal finishes. Products combine functionality, aesthetics and elegance and are available in a broad range of
structures and materials.

Hurricane-proof windows - combine heavy-duty aluminum or vinyl frames with special laminated glass to provide
protection from hurricane-force winds up to 180 mph and wind-borne debris by maintaining their structural integrity and
preventing penetration by impacting objects.

Automatic doors - exclusive representative in Colombia of Horton Automatics, a manufacturer of automatic doors

including glass window systems.

Bathroom dividers - bathroom cubicle division systems, formed by combining glass panels, frames and doors.

Other - photovoltaic structures and other components of architectural systems.

Brands and Trademarks

Our brands include Tecnoglass, ES Windows and Alutions. Our registered trademarks include “Alutions by
Tecnoglass” with the accompanying logo and “Alutions”. Tecnoglass and ES Windows are not registered as trademarks
by us.

Sales, Marketing and Customer Service

Sales and marketing

Our sales strategy primarily focuses on attracting and retaining customers by consistently providing exceptional

customer service, leading product quality, and competitive pricing. Our customers also value their shorter lead times,
knowledge of building code requirements and technical expertise, which collectively generate significant customer
loyalty. Our products are marketed using a combination of their internal sales representatives and independent sales
representatives and directly to distributors. Our internal sales representatives receive performance-based compensation
based on sales and profitability metrics. We primarily market our products based on product quality, outstanding service,
shorter lead times and on-time delivery.

Customer Service

We believe that our ability to provide customers outstanding service quality serves as a strong competitive
differentiator. Our customer relationships are established and maintained through the coordinated efforts of our sales and
production teams. We employ a team of highly seasoned professionals devoted to addressing customer support with the
goal of resolving any issue in a timely manner. In order to promote customer loyalty and employee development, we
developed ES Windows University with the primary objectives of training employees to be aware of client and supplier
needs and familiarizing them with our strategic goals in order to improve the competitiveness, productivity and quality of
all products offered.

Working Capital Requirements

Trade accounts receivable is the largest component of working capital, including receivables relating to

contractual retention amounts that can be outstanding throughout the project duration for large-scale architectural
projects. Our inventory requirements are not significant since our products are made-to-order rather than build-to-stock.
As a result, inventory levels follow customer demand for products produced.

Customers

Our customers include architects, building owners, general contractors and glazing subcontractors in the

commercial construction market. We have over 900 customers. Of our 100 most representative customers, which
represent over 92% of our sales, about 33% are located in North America, 10% in Central America and the Caribbean,
and 57% in South America. Excluding revenue from related parties, only one customer accounted for more than 10% or
more of our net sales during 2015or 2014 with 14% of sales during both 2015 and 2014.

Backlog

We had combined outstanding orders of $375 million as of December 31, 2015 as compared to $280 million as of

December 31, 2014. We do not believe that backlog is indicative of our future results of operations or prospects.
Although we seek commitments from customers well in advance of shipment dates, actual confirmed orders are typically
not received until close to the required shipment dates.

Materials and Suppliers

Our primary manufacturing materials include glass, ionoplast, polyvinyl butyral, and aluminum and vinyl

extrusions. Although in some instances we have agreements with our suppliers, these agreements are generally
terminable by us or the supplier counterparties on limited notice. Typically, all of our materials are readily available from
a number of sources, and no supplier delays or shortages are anticipated.

We source raw materials and glass necessary to manufacture our products from a variety of domestic and foreign
suppliers. For the year ended December 31, 2015, no single supplier accounted for more than 10% of total raw material
purchases.

Warranties

We offer product warranties which we believe are competitive for the markets in which our products are sold. The

nature and extent of these warranties depend upon the product. Our standard warranties are generally from five to ten
years for architectural glass, curtain wall, laminated and tempered glass, window and door products. Warranties are not
priced or sold separately and do not provide the customer with services or coverages in addition to the assurance that the
product complies with original agreed-upon specifications. In the event of a claim against a product for which we have
received a warranty from the supplier, we transfer the claim back to the supplier. The Company evaluated historical
information regarding claims for replacements under warranties and concluded that the costs that the Company have
incurred in relation to these warranties have not been material.

Certifications

Among our many designations and certifications, Tecnoglass has earned the Miami-Dade County Notice of

Acceptance (“NOA”), one of the most demanding certificates in the industry and a requirement to market hurricane-
resistant glass in Florida. Tecnoglass’ products comply with Miami-Dade county’s safety code standards as its laminated
anti-hurricane glass resists impact, pressure, water and wind. Tecnoglass is also the only company in Latin America
authorized by PPG Industries and Guardian Industries to manufacture floating glass facades.

Our subsidiaries have received a number of other certifications from other national and international standard-

setting bodies.

Tecnoglass Certifications include:

 NTC-1578
 ASTM E774 1997
 ISO 9001: 2008 Certificate of Quality Assurance
 ISO 14001: 2004 Certificate of Environmental Management
 Safety Glazing Certification Council (SGCC) for tempered and laminated glass: ANZI
 Z97 1-2004
 International Glass Certification Council (IGCC) for insulated glass: ASTM E774 - 97
 Pittsburgh Plate Glass (PPG) certified supplier
 Member of ACOLVISE (Colombia Association of Safety Glass Transformers)

ES Certifications include:

 NTC-ISO 9001: 2008 Certificate of Quality Assurance
 NTC-ISO 14001: 2004 Certificate of Environmental Management
 Member of the American Architectural Manufacturers Association (AAMA)
 Complies with Miami-Dade County’s stringent safety code regulations for hurricane-proof windows

Competitors

We have local competitors in Colombia as well as competitors in the markets internationally, in each of the glass,

aluminum and finished products sectors. Glass Tecnologia en Vidrios y Ventanas S.A., Arquicentro S.A., Aluminum
Estructural S.A. and Ventanar Ltda, compete with us in the finished products market in Colombia. Apogee Enterprises,
Inc., PGT, Inc. and WinDoor Inc. compete with us in the U.S. finished products market. Golden Glass Security, Vid-plex
Universal S.A., Aluace Ltda and Laminados y Blindados compete with us locally in the glass and aluminum markets.
Oldcastle, Inc., Trulite Inc., and PRL Glass Systems are among others that compete with us in the U.S. glass and
aluminum products markets.

The key factors on which we and our competitors compete for business include: quality, price and reputation,
breadth of products and service offerings, and production speed. We face intense competition from both smaller and
larger market players who compete against us in our various markets including glass, window and aluminum
manufacturing.

The principal methods of competition in the window and door industry are the development of long-term
relationships with window and door distributors and dealers, and the retention of customers by delivering a full range of
high-quality customized products on demand with short turnaround times while offering competitive pricing. The vertical
integration of our operations, our geographic scope, low labor costs and economies of scale have helped our subsidiaries
consolidate their leading position in Colombia and bolstered their expansion in the U.S. and other foreign markets.

Sales and Marketing

We employ a limited number of in-house sales employees. Most of our sales and marketing efforts are handled by

area sales representatives who work on a commission basis.

We do not rely on significant traditional advertising expenditures to drive net sales. We have established and
maintain credibility primarily through the strength of our products, our customer service and quality assurance, the speed
at which we deliver finished products and the attractiveness of our pricing. Our advertising expenditures consist
primarily of maintaining our subsidiaries’ websites.

Government Regulations

We are subject to extensive and varied federal, state and local government regulation in the jurisdictions in which
we operate, including laws and regulations relating to our relationships with our employees, public health and safety and
fire codes. Additionally, certain of the jurisdictions in which we operate require that installation of doors and windows be
approved by competent authorities that grant distribution licenses.

Although our business and facilities are subject to federal, state and local environmental regulation, environmental

regulation does not have a material impact on our operations.

Research and Development

During the years ended December 31, 2015 and December 31, 2014, we spent approximately $2.0 and $1.3

million, respectively, in research and development.

Our commercial ally and related party in the United States, ES Windows LLC, bears significant costs related to

the development of new products, since they pay for the external tests that need to be performed on our products in order
to comply with strict building codes. ES Windows LLC is fully permitted to commercialize hurricane windows in the
Miami-Dade County, Florida, which has one of the most demanding certifications in the world of window frames.

Employees

As of December 31, 2015, we had a total of 5,380 employees, with 3,251 employed by ES and 2,129 employed by
Tecnoglass, none of whom is represented by a union. Most of our employees are hired through seven temporary staffing
companies and are employed under one-year fixed-term employment contracts. Management believes it has good
relations with our employees. We provide ongoing training programs to our employees through the self-established E.S.
Windows University.

Company History

We were formed under the name “Andina Acquisition Corporation” as an exempted company incorporated in the

Cayman Islands on September 21, 2011 in order to effect a merger, share exchange, asset acquisition, share purchase,
recapitalization, reorganization or other similar business combination with one or more businesses or entities.

In March, 2012, we closed our IPO of 4,200,000 units, with each unit consisting of one ordinary share and one
warrant to purchase one ordinary share at an exercise price of $8.00 per share, at an offering price of $10.00 per unit,
generating total gross proceeds of $42,000,000. Simultaneously with the consummation of the IPO, we consummated a
private placement of 4,800,000 warrants (“private warrants”) at a price of $0.50 per warrant and, to the underwriters,
options to purchase an aggregate of 900,000 units at a price of $500,100, generating total proceeds of $2,900,100. After
deducting the underwriting discounts and commissions and the offering expenses, the total net proceeds to us were
$43,163,000 of which $42,740,000 was deposited into a trust account. The remaining proceeds of $423,000 became
available to be used as working capital to provide for business, legal and accounting due diligence on prospective
business combinations and continuing general and administrative expenses. The IPO was conducted pursuant to a
registration statement on Form S-1 (Reg. No. 333-178061), that became effective on March 16, 2012.

From the consummation of our IPO until August 17, 2013, we were searching for a suitable target business to

acquire. On August 17, 2013, we entered into an agreement and plan of reorganization, pursuant to which agreement, as
amended, we acquired Tecnoglass Holding, Tecnoglass and ES as direct and indirect subsidiaries. On December 20,
2013, we held an extraordinary general meeting of our shareholders, at which our shareholders approved the Merger and
other related proposals. On the same date, we closed the Merger and Tecnoglass Holding and its indirect, wholly-owned
subsidiaries, Tecnoglass and ES, became our direct and indirect subsidiaries.

Tecnoglass Holding is a corporation formed under the laws of the Cayman Islands that was founded in 2014 in

connection with the Merger. Tecnoglass is a corporation formed under the laws of Colombia that was founded in 1994 by
Jose M. Daes, our Chief Executive Officer, and Christian T. Daes, our Chief Operating Officer. ES is a corporation
formed under the laws of Colombia that was founded in 1984 by Jose M. Daes and Christian T. Daes.

At the closing of the Merger, 2,251,853 of the 4,200,000 public shares sold in our IPO were converted to cash at a
conversion price of approximately $10.18 per share, or an aggregate of approximately $22.9 million of the approximately
$42.7 million held in the trust account. As consideration for the Merger, we issued Energy Holding Corp., a holding
company and sole shareholder of Tecnoglass Holding, of which former shareholders of Tecnoglass and ES are the sole
shareholders, an aggregate of 20,567,141 ordinary shares, or approximately 87% of the outstanding ordinary shares.
Pursuant to the agreement and plan of reorganization, we also issued to Energy Holding Corp. an additional 500,000
ordinary shares upon the achievement of specified EBITDA targets in the fiscal year ended December 31, 2014 and we
will issue 1,000,000 ordinary shares upon achievement of specified EBITDA target in the fiscal year ended December
31, 2015. Additionally, Energy Holding Corp. also has the contractual right to receive an additional 1,500,000 ordinary
shares, to be released upon the attainment of specified share price targets or targets based on our EBITDA in the fiscal
year ending December 31, 2016.

In connection with the Merger, we changed our name to “Tecnoglass Inc.” We also changed our fiscal year end

from February 28 to December 31 in order to coincide with the fiscal year end of Tecnoglass Holding and its
subsidiaries.

In 2014, we established two entities in South Florida, Tecno LLC and Tecno RE, to acquire manufacturing and

sales-related assets to support sales and customer service in the United States.

Additional Information About the Company

We maintain websites for our subsidiaries, TG and ES, which can be found at www.tecnoglass.com and
www.energiasolarsa.com, respectively. Although we do not have a website dedicated to Tecnoglass Inc., the corporate
filings of Tecnoglass Inc., including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our
Current Reports on Form 8-K, our proxy statements and reports filed by our executive officers and directors under
Section 16(a) of the Securities Exchange Act, and any amendments to those filings, are available free of charge on the
Investor Relations page of each of the subsidiary websites, which are updated as soon as reasonably practicable after we
electronically file (or furnish in certain cases) such material with the Securities and Exchange Commission, and can also
be found at the SEC’s website at http://sec.gov. We do not intend for information contained in either subsidiary website,
including the Investor Relations pages, to be a part of this Form 10-K. Also, the public may read and copy any materials
the Company files with the SEC at the SEC’ public reference room at 100 F St NE, Washington D.C, 20549 or by calling
1-800-SEC-0330.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (or JOBS Act),

and are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not emerging growth companies. However, we have irrevocably opted not to take advantage of
one such exemption which would have allowed us an extended transition period for complying with new or revised
accounting standards. We are, and will continue to be, subject to the same new or revised accounting standards as other
public companies that are not emerging growth companies.

We could remain an emerging growth company until the last day of our fiscal year following March 22, 2017 (the
fifth anniversary of the consummation of our initial public offering). However, if our non-convertible debt issued within
a three-year period or our total revenues exceed $1 billion or the market value of our ordinary shares that are held by
non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease
to be an emerging growth company as of the following fiscal year.

Item 1A. Risk Factors.

Not Applicable.

Item 1B. Unresolved Staff Comments.

Not Applicable.

Item 2. Properties.

We own and operate a 2.8 million square foot manufacturing complex located in Barranquilla, Colombia. This
manufacturing campus houses a glass production plant, aluminum plant and window and facade assembly plant. The
glass plant has four lamination machines with independent assembly rooms, six specialized tempering furnaces and glass
molding furnaces, a computer numerical-controlled profile bending machine, as well as five silk-screening machines. The
Alutions plant has an effective installed capacity of 1,000 tons per month and can create a variety of shapes and forms for
windows, doors and related products. We also own three natural gas power generation plants with a capacity of 1,750
kilowatts each which supply the electricity requirements of the entire manufacturing complex and are supported by three
emergency generators.

In December 2014, we acquired a 160,000 square foot manufacturing and warehousing facility in Miami-Dade

County, Florida, United States. The facility houses manufacturing and assembly equipment, warehouse space, and
administrative and sales offices.

We believe that our existing properties are adequate for the current operating requirements of our business and

that additional space will be available as needed.

Item 3. Legal Proceedings.

TG is a named defendant in the matter of Diplomat Properties, Limited Partnership as assignee of Shower
Concepts, Inc. versus Tecnoglass Colombia, S.A. et al., Case No. CACE 11-02811(09), 17th Judicial Circuit in and for
Broward County, Florida. Plaintiff Diplomat Properties, Limited (“Diplomat”) has asserted a claim for indemnification
against TG and Tecnoglass USA, a related party. The claim arises from the supplying of glass shower doors to a
hotel/spa in Broward County, Florida. Specifically, in 2006, Diplomat commenced arbitration against Shower Concepts,
Inc. seeking damages for breach of contract due to fractures in the installed glass shower doors. The claim was based
upon a contract between Diplomat and Shower Concepts for the sale and installation of glass shower and bath doors to be
used by Diplomat in hotel that it owned. Shower Concepts chose not to defend against the breach of contract claim and in
2007, the arbitrator rendered an award in the amount of approximately $2 million in favor of Diplomat and against
Shower Concepts. The award was confirmed by the Circuit Court and, on July 23, 2008, a final judgment for breach of
contract was entered against Shower Concepts. No appeal of the decision was made. On August 11, 2009, Shower
Concepts assigned its rights under the contract to Diplomat. On November 9, 2011, Diplomat initiated the underlying
action against the Tecnoglass entities and co-defendant, Guardian Industries Corp. The complaint asserted various claims
which were dismissed with prejudice. The only remaining claim against the Tecnoglass entities is common law
indemnification. TG denies liability and asserts that Shower Concepts was at fault and that as a joint tortfeasor, it cannot
sue for indemnity. The claim was settled in December 2015 at no cost to the Company.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

PART II

Securities.

Market Information

Currently, our ordinary shares are listed on the NASDAQ Capital Market under the symbol TGLS, and our
warrants are quoted on the OTC Pink marketplace under the symbol TGLSW. Effective January 6, 2016, the Company’s
shares also commenced trading on the Bolsa de Valores de Colombia (“BVC”), the principal stock exchange of
Colombia, under the symbol TGLSC. The listing of the Company’s shares on the BVC is secondary to the primary listing
on the NASDAQ Market. No new shares were issued in connection with the admission to trading on the BVC.

Until January 2014, our warrants were listed on the NASDAQ Capital Market. Prior to the Merger, the trading

symbols of our ordinary shares and warrants were ANDA and ANDAW, respectively. From March 2012 through
November 2013, our units, sold in our IPO and described elsewhere in this Form 10-K, were traded on the NASDAQ
Capital Market under the symbol ANDAU. However, as a condition to the Merger, we separated the units into their
component securities (one ordinary share and one warrant) on a mandatory basis and the units ceased public trading.

The following table sets forth the high and low sales prices for our ordinary shares and warrants for the periods

indicated since our ordinary shares and warrants commenced trading on May 10, 2012.

Period

Fiscal 2016:

Ordinary
Shares

Warrants

High

Low

High

Low

First Quarter* ............................................. $

14.30 $

9.82 $

5.60 $

3.01

Fiscal 2015:

Fourth Quarter ............................................ $
Third Quarter .............................................. $
Second Quarter ........................................... $
First Quarter ............................................... $

15.59 $
15.95 $
13.74 $
10.73 $

13.05 $
12.39 $
8.50 $
9.16 $

Fiscal 2014:

12.00 $
12.29 $
15.00 $
11.15 $

9.80 $
10.70 $
10.20 $
8.50 $

9.00 $
5.96 $
5.00 $
2.75 $

3.44 $
4.15 $
4.85 $
2.95 $

5.02
4.27
2.05
2.20

2.10
3.06
2.20
1.08

* Through March 30, 2016.

Holders

As of December 31, 2015, there were 318 holders of record of our ordinary shares and 14 holders of record of our

warrants.

Dividends

We have not paid any dividends on our ordinary shares to date. On April 14, 2015, the Company’s Board of

Directors authorized the payment of regular quarterly dividends to holders of its ordinary shares at a quarterly rate of
$0.125 per share (or $0.50 per share on an annual basis). As of December 31, 2015 no dividends have been declared. The
Board of Directors subsequently approved an Exchange Offer as amended to exchange all of the Company’s outstanding
warrants in exchange for ordinary shares of the Company at conversion ratio of 2.3 warrants in exchange for one
ordinary share (subsequently amended to 2.5 warrants for one ordinary share). The Exchange Offer will remain open for
a period of at least 30 business days once exchange documentation is sent to warrant holders and the first quarterly
dividend payment will be made to shareholders of record 15 days after the end of the Exchange Offer. As of April 1,
2016, the SEC had not yet declared effective the Exchange Offer.

Purchases of Equity Securities by Issuer and Affiliates

No purchases of our equity securities have been made by us or affiliated purchasers within the fourth quarter of

the fiscal year ended December 31, 2015.

Item 6. Selected Financial Data.

Not Applicable.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of the Company’s financial condition and results of operations should be read in
conjunction with the Company’s consolidated financial statements and notes to those statements included in this Form
10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Please see the section
entitled “Forward-Looking Statements and Introduction” in this Form 10-K.

Overview

We are a holding company operating through our wholly-owned subsidiaries: TG, which manufactures,
transforms, markets and exports a variety of glass products since 1994 and established the Alutions plant in 2007 for
aluminum products, and ES, a leader in the production of high-end windows and architectural glass systems. We have
more than 30 years’ experience in the glass and aluminum structure assembly market in Colombia.

We manufacture hi-specification architectural glass and windows for the global residential and commercial

construction industries. Currently we offer design, production, marketing, and installation of architectural systems for
buildings of high, medium and low elevation size. Products include windows and doors in glass and aluminum, floating
façades, office partitions and interior divisions, and commercial window showcases.

In recent years, we have expanded our US sales outside of the Florida market, entering into high-tech markets for
curtain walls, obtaining a niche market access since this product is in high demand and marks a new trend in architecture.
This product is a very sophisticated product and therefore garners high margins for us. These products involve high
performance materials that are produced by Alutions and TG with state of the art technology.

In Panama, ES sells products primarily to companies participating in large construction projects in the most
exclusive areas of the city. For example, ES products were supplied in the construction of the tallest building in Central
and South America, The Point, as well as in the construction of the most modern hotels in the region such as Megapolis
and The Trump. Based on ES’s knowledge of the construction market in Central America, ES has entered into one of the
highest value window supply contracts in the hotel industry in Central America for the Soho Plaza.

How We Generate Revenue

TG manufactures both glass and aluminum products. Its glass products include tempered glass, laminated glass,

thermo-acoustic glass, curved glass, silk-screened glass, and digital print glass as well as mill finished, anodized, painted
aluminum profiles and produces rods, tubes, bars and plates.

Window production lines are defined depending on the different types of windows: normal, impact resistant,

hurricane-proof, safety, soundproof and thermal. ES produces fixed body, sliding windows, projecting windows,
guillotine windows, sliding doors and swinging doors. ES produces façade products which include: floating facades,
automatic doors, bathroom dividers and commercial display windows.

TG sells to over 400 customers using several sales teams based out of Colombia to specifically target regional
markets in South, Central and North America. TG has sales representatives in the United States to address that market
specifically. In addition, TG has approximately 10 free-lance sales representatives in North America.

ES sells its products through four main offices/sales teams based out of Colombia, Panama and the US. The
Colombia sales team is our largest sales group, which has deep contacts throughout the construction industry. The
Colombia sales team markets both ES’s products as well as installation services. The Peruvian office is responsible for
South American sales, excluding Colombia. Sales forces in Panama and in the US are not via subsidiaries but under
agreements with sales representatives. ES has two types of sales operations: Contract sales, which are the high-dollar,
specifically-tailored customer projects; and Standard Form Sales.

Liquidity and Cash Flow

During the years ended December 31, 2015 and 2014, $0.8 million and $4.8 million, respectively, were generated

and used in operations, respectively. Principal uses of cash were accounts receivable and inventories. While the trade
accounts receivable cycle improved from 82 days in 2014 to 80 days in 2015, due to the increase in revenues, trade
accounts receivable resulted in a use of $22.9 million. $27.8 million were used in inventories as the Company’s inventory
levels have risen due to strategic purchases of aluminum in order to protect prices and secure the raw materials necessary
to fulfill the Company’s backlog.

During the years ended December 31, 2015 and 2014, $10.4 million and $9.2 million were generated from debt,

respectively (excluding other financing activities). Principal use of debt proceeds has been used in the acquisition of
property and equipment. However, most of the company’s acquisitions of property and equipment have been financed
with capital leases and debt.

As of December 31, 2015 and December 31, 2014, we had cash and cash equivalents of approximately $18.5

million and $15.9 million, respectively. We expect that cash flow from operations, proceeds from borrowings under our
lines of credit, including the refinancing discussed below, and the proceeds from the 2013 Merger will be our primary
sources of liquidity and will be sufficient to fund our cash requirements for the next twelve months.

As a subsequent event, on January 7, 2016, we entered into a $109.5 million, seven-year senior secured credit

facility. Proceeds from the new facility were used to refinance $83.5 million of existing debt, with the remaining $26.0
million available to the Company for capital expenditures and working capital needs. Approximately $51.6 million of the
new facility were used to refinance current borrowings into long term debt. The Company’s consolidated balance sheets
as of December 31, 2015 reflects the effect of this refinance of the Company’s current portion of long term debt and
other current borrowings into long term debt based on the Company’s intent as of that date. The new facility features two
tranches, including one tranche denominated in USD representing 71% of the facility and another tranche denominated in
Colombian Pesos (COP) representing the remaining 29%. Borrowings under the facility will bear interest at a weighted
average interest rate of 7% for the first year, and thereafter at a rate of LIBOR plus 5.25% and DTF (Colombian index)
plus 5.00% for the respective USD and COP denominated tranches.

Additionally, until the redemption of certain warrants and unit purchase options or their expiration in December
2016, we could receive up to $56.0 million from the exercise of warrants and unit purchase options comprised of: up to
$33.5 million upon the exercise of all of the insider warrants and working capital warrants, up to $1.0 million upon the
exercise of the unit purchase options, up to $0.8 million upon the exercise of the warrants underlying such unit purchase
options and up to $20.7 million upon the exercise of the warrants issued in our IPO. As of December 31, 2014, 102,570
warrants have been exercised for proceeds of $0.8 million. During the year ended December 31, 2015 there were no
warrants exercised for cash.

Capital Resources

We transform glass and aluminum into high specification architectural glass which requires significant
investments in state of the art technology. During the years ended December 31, 2015 and 2014, we made investments
primarily in building and construction, and machinery and equipment in the amount of $80.2 million and $56.6 million,
respectively.

In August 2014, we entered into a contract to purchase equipment from Magnetron Sputter Vacuum Deposition to

produce soft coated low emissivity glass as part of our improvements plan that entered production in the last quarter of
2015. The investment for this project is estimated at $45 million for the equipment and facilities, financed primarily with
a credit facility with an export credit guarantee by the German Federal Government.

Restatement

The accompanying Management’s Discussion and Analysis of Financial Condition and Results of Operations
gives effect to the restatement adjustments made to the previously reported Consolidated Financial Statements for the
year ended December 31, 2014. For additional information and a detailed discussion of the restatement, see Note 2,
“Restatement” to the Notes to our consolidated financial statements included in this Annual Report under the caption
Item 15, “Exhibits, Financial Statement Schedules”.

Results of Operations (Amounts in thousands)

For the Years ended
December 31,

Net operating revenue ....................................................................................................... $
Cost of sales ......................................................................................................................
Gross Profit .......................................................................................................................
Operating expenses ...........................................................................................................
Operating income ............................................................................................................
Change in fair value of warrant liability ...........................................................................
Change in fair value of earnout share liability ..................................................................
Non-operating income, net ...............................................................................................
Interest expense ................................................................................................................
Income tax provision ........................................................................................................
Net (loss) income ............................................................................................................. $

2015

2014
(Restated)*
197,452
131.156
66,296
39,064
27,232
(1,711)
(10,807)
12,235
(8,900)
(8,538)
9,511

238,833 $
153,252
85,581
46,499
39,082
(24,901)
(10,858)
13,877
(9,274)
(20,691)
(12,765) $

(*) The data presented represents financial data on a restated basis. For more information on the restatement, see Note 2,
“Restatement” to the Notes to our consolidated financial statements included in this Annual Report under the caption
Item 15, “Exhibits, Financial Statement Schedules”.

Comparison of years ended December 31, 2015 and December 31, 2014

Revenue

Our operating revenue increased from $197.5 million in 2014 to $238.8 million in 2015, or 21%. The increase

mostly was driven by planning strategies designed to increase participation in the U.S. market.

The increase is partially due to high quality, reliability, and competitive prices which allowed us to further

penetrate our existing markets and sell a larger volume of Company products. Sales in the U.S. market accounted for a
$40.2 million increase, which represents 39.6% as compared to 2014. The increase is also partially due to a
diversification of markets within the country since our sales in the U.S. have historically been in the South Florida region
where sales continue to increase significantly, but have also expanded to other regions of the United States. Sales to the
US markets include, in average, more sophisticated products than the other markets in which the Company participates
which also makes them higher priced products. Sales in Colombia, priced in Colombian pesos, increased by $1.2 million,
or approximately 2%, however, in terms of local currency represented a 39% increase, offset by unfavorable exchange
rates. Sales in Panama decreased by $4.0 million, or 35%, and sales to other territories increased by $4.0 million, which
represents a 90% increase.

Cost of sales and gross profit margins

Cost of sales increased $22.1 million or 17% from $131.2 million during the year ended December 31, 2014 to

$153.3 million during the year ended December 31, 2015, below the growth in the Company’s operating revenue. Sales
margins calculated by dividing the gross profit by operating revenue increased from 34% to 36% between the years
ended December 31, 2014 and 2015, respectively. We believe this is the result of a combination of favorable exchange
rates for fixed costs in Colombian pesos, as well as a higher degree of vertical integration in which more Company
products are used as raw materials to manufacture other finished goods. The amount of Company products used to
manufacture other products increased from 27% of total consolidated sales during the year ended December 31, 2014 to
29% during the year ended December 31, 2015.

Operating Expenses

Selling, general and administrative expenses increased 19%, or $7.4 million, from the year ended December 31,

2014 to December 31, 2015. The principal factors of this increase were an increase of $2.1 million in shipping expense as
sales to more distant markets increase, $1.4 million in sales commissions as part of our efforts to increase sales in the
United States, $1.3 million bad debt write-offs and a Capital Tax levied on the Colombian subsidiaries in the Colombian
tax reform of December 2014 that amounted to $0.9 million in 2015. Additionally, there were smaller increases of $0.8
million in higher depreciation and amortization, primarily for assets acquired during 2014 from RC Aluminum and
Glasswall LLC, an increase in consulting fees of approximately $0.6 million as well as $0.5 million higher publicity
related expenses and other small increases partially offset with decreases of Colombian Peso denominated expenses, such
as personnel which decreased approximately $0.3 million due to favorable exchange rates, in spite of there being 255
more employees hired.

Change in Fair Value of Warrant Liability

We incurred a non-cash, non-operating loss of $24.9 million in the year ended December 31, 2015 due to the

increase in the fair value of warrants relative to their last reported fair value at December 31, 2014. The fair value of the
warrants changes in response to market factors not controlled by us such as the market price of our shares and the
volatility index of comparable companies. There are no income tax effects of this warrant liability due to our company
being registered in the Cayman Islands. Management does not consider the effects of the change in the fair value of the
warrants to be indicative of our ongoing operating performance.

Change in Fair Value of Earnout share liability

We incurred a non-cash, non-operating loss of $10.9 million in the year ended December 31, 2015 due to the

increase in the fair value of earnout share liability relative to their last reported fair value at December 31, 2014. The fair
value of the earnout shares changes in response to market factors such as the market price of our shares and the volatility
index of comparable companies and the Company’s forecasted EBITDA. There are no income tax effects of this earnout
liability due to our company being registered in the Cayman Islands. Management does not consider the effects of the
change in the fair value of the earnout shares to be indicative of our ongoing operating performance.

Interest Expense

Between the years ended December 31, 2015 and 2014, interest expense increased by $0.4 million, or

approximately 4%, from $8.9 million to $9.3 million as our debt increased from $94.2 million as of December 31, 2014
to $138.4 million in December 31, 2015.

Non-Operating Income

Non-operating income increased $1.7 million, from $12.2 million in the year ended December 31, 2014 to $13.9

million in the year ended December 31, 2015, primarily as a result of an increase in financial revenues of $1.1 million
comprised of interest income on receivable, as well as recoveries of scrap materials of $0.5 million. Non-Operating
Income is comprised mostly of foreign currency transaction gains which amounted to $10.1 million and $10.8 million
during the year ended December 31, 2015 and 2014, respectively, related to the Company’s Colombian subsidiaries ES
and TG which have the Colombian Peso as functional currency, yet have important US Dollar denominated transactions.

Off-Balance Sheet Arrangements

We did not have any material off-balance sheet arrangements as of December 31, 2015.

Contractual Obligations

Future contractual obligations represent an impact to future cash flows as shown in the table for the period ended

December 31, 2015:

Contractual Obligations
Long Term Debt Obligations ..................... $
Interest Obligations ....................................
Capital Lease Obligations ..........................
Total ................................................ $

TOTAL

112,332 $
32,972
26,082
171,386 $

20,961 $
6,370
2,851
30,182 $

15,736 $
12,209
4,985
32,930 $

25,740 $
9,860
7,887
43,487 $

49,895
4,533
10,359
64,787

Payments Due by Period (In thousands)
1-3
Less than
years
1 year

3-5
years

More than
5 years

Future interest obligations are estimated assuming constant reference rates for obligations with variable interest

rates. The average interest rate is approximately 7.3% and 10.4% per annum for long term debt and capital lease
obligations respectively, and can vary up or down in accordance with money market rates in Colombia.

Critical Accounting Policies

The preparation of financial statements in conformity with U.S. GAAP requires that management make significant

estimates and assumptions that affect the assets, liabilities, revenues and expenses, and other related amounts during the
periods covered by the financial statements. Management routinely makes judgments and estimates about the effect of
matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the
uncertainties increases, these judgments become more subjective and complex. We have identified the following
accounting policies as the most important to the portrayal of our current financial condition and results of operations.

Revenue Recognition

Our principal sources of revenue are derived from product sales of manufactured glass and aluminum products.

Delivery to the customer is deemed to have occurred when the title is passed to the customer. Generally, the title passes
to the customer upon shipment, but could occur when the customer receives the product based on the terms of the
agreement with the customer. The selling prices of all goods that the Company sells are fixed, and agreed to with the
customer, prior to shipment. Selling prices are generally based on established list prices.

The Company recognizes revenue for standard form sales. Standard form sales are customer sales comprising low

value installations that are of short duration. A standard form agreement is executed between the Company and its
customer. Services are performed by the Company during the installation process. The price quote is determined by the
Company, based on the requested installation, and approved by the customer before the Company proceeds with the
installation. The customer’s credit worthiness and payment capacity is evaluated before the Company will proceed with
the initial order process.

Revenues from fixed price contracts, which represent approximately 22% of the Company’s sales for the year
ended December 31, 2015 are recognized using the percentage-of-completion method, measured by the percentage of
costs incurred to date to total estimated costs for each contract. These contracts typically have a duration ranging between
one and three years. Revenues recognized in advance of amounts billable pursuant to contracts terms are recorded as
unbilled receivables on uncompleted contracts based on work performed and costs to date. Unbilled receivables on
uncompleted contracts are billable upon various events, including the attainment of performance milestones, delivery and
installation of product, or completion of the contract. Revisions to cost estimates as contracts progress have the effect of
increasing or decreasing expected profits each period. Changes in contract estimates occur for a variety of reasons,
including changes in contract scope, estimated revenue and cost estimates. Change in contract estimates have not had a
material effect on our financial statements.

Related party transactions

The Company has related party transactions such as sales, purchases, leases, guarantees, and other payments. We

perform a related party analysis to identify transactions to disclose quarterly. Depending on the transactions, we
aggregate some related party information by type. When necessary we also disclose the name of a related party, if doing
so is required to understand the relationship.

Estimation of Fair Value of warrant liability

The best evidence of fair value is current prices in an active market for similar financial instruments. We
determine the fair value of warrant liability by the Company using the Binomial Lattice pricing model. This model is
dependent upon several variables such as the instrument’s expected term, expected strike price, expected risk-free interest
rate over the expected instrument term, the expected dividend yield rate over the expected instrument term and the
expected volatility of the Company’s stock price over the expected term. The expected term represents the period of time
that the instruments granted are expected to be outstanding. The expected strike price is based upon a weighted average
probability analysis of the strike price changes expected during the term as a result of the down round protection. The
risk-free rates are based on U.S. Treasury securities with similar maturities as the expected terms of the options at the
date of valuation. Expected dividend yield is based on historical trends. The Company measures volatility using a
blended weighted average of the volatility rates for a number of similar publicly-traded companies. The inputs to the
model were stock price, dividend yield, risk-free rate, expected term and volatility.

In general, the inputs used are unobservable; therefore unless indicated otherwise, warrant liability is classified as

level 3 under guidance for fair value measurements hierarchy.

Estimation of Fair Value of Earnout share liability

The best evidence of fair value is current prices in an active market for similar financial instruments. We
determine the fair value of earnout share liability by the Company using Monte Carlo simulation, which models future
EBITDA and stock prices during the earn-out period using the Geometric Brownian Motion. This model is dependent
upon several variables such as the instrument’s expected term, expected risk-free interest rate over the expected
instrument term, the equity volatility of the Company’s stock price over the expected term, the asset volatility, and the
Company’s forecasted EBITDA. The expected term represents the period of time that the instruments granted are
expected to be outstanding. The risk-free rates are based on U.S. Treasury securities with similar maturities as the
expected terms of the options at the date of valuation. The Company measures volatility using a blended weighted
average of the volatility rates for a number of similar publicly-traded companies. The inputs to the model were stock
price, risk-free rate, expected term and volatility.

In general, the inputs used are unobservable; therefore unless indicated otherwise, earnout share liability is

classified as level 3 under guidance for fair value measurements hierarchy.

Derivative Financial Instruments

We conduct interest rate swap (IRS) transaction with key non-related financial entities to reduce the effect of
interest rate fluctuations as economic hedges against interest rate risk. We have designated these derivatives at fair value
and the accounting for changes is recorded in the statement of operations. The inputs used are similar to the prices for
similar assets and liabilities in active markets directly or indirectly through market corroboration; therefore unless
indicated otherwise, derivatives are classified as level 2 under guidance for fair value measurements hierarchy.

Foreign currency transactions

The functional currency of most of the Company’s foreign subsidiaries and branches is the applicable local

currency. Assets and liabilities are translated into U.S. dollars using the current exchange rates in effect at the balance
sheet date, while revenues and expenses are translated at the average exchange rates during the period. The resulting
translation adjustments are recorded as a component of accumulated other comprehensive earnings within stockholders’
equity. The Company also recognizes gains and losses associated with transactions that are denominated in foreign
currencies within non-operating income in the Company’s consolidated statement of operations.

Income taxes

The Company is subject to income taxes in some jurisdictions. Significant judgment is required in determining the

worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax
determination is uncertain. The Company recognizes liabilities for anticipated tax audit issues based on estimates of
whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that
were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the
period in which such determination is made.

Business combinations

We allocate the total purchase price of the acquired tangible and intangible assets acquired and liabilities assumed

based on their estimated fair values as of the business combination date, with the excess purchase price recorded as
goodwill. The purchase price allocation process required us to use significant estimates and assumptions, including fair
value estimates, as of the business combination date. Although we believe the assumptions and estimates we have made
are reasonable and appropriate, they are based in part on historical experience and information obtained from
management of the acquired company, in part based on valuation models that incorporate projections of expected future
cash flows and operating plans and are inherently uncertain. Valuations are performed by management or third party
valuation specialists under management’s supervision. In determining the fair value of assets acquired and liabilities
assumed in business combinations, as appropriate, we may use one of the following recognized valuation methods: the
income approach (including the cost saving method and the discounted cash flows from relief from royalty), the market
approach and/or the replacement cost approach.

Examples of significant estimates used to value certain intangible assets acquired include but are not limited to:



sales volume, pricing and future cash flows of the business overall

future expected cash flows from customer relationships, and other identifiable intangible assets, including future
price levels, rates of increase in revenue and appropriate attrition rate

the acquired company’s brand and competitive position, royalty rate, as well as assumptions about the period of
time the acquired brand will continue to benefit to the combined company’s product portfolio

cost of capital, risk-adjusted discount rates and income tax rates

However, different assumptions regarding projected performance and other factors associated with the acquired

assets may affect the amount recorded under each type of assets and liabilities, mainly between property plant and
equipment, intangibles assets, goodwill and deferred income tax liabilities and subsequent assessment could result in
future impairment charges. The purchase price allocation process also entails us to refine these estimates over a
measurement period not to exceed one year to reflect new information obtained surrounding facts and circumstances
existing at acquisition date.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable.

Item 8. Financial Statements and Supplementary Data.

This information appears following Item 15 of this Report and is included herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation required by Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, as
amended, under the supervision and with the participation of our management, including our principal executive officer
and principal financial officer, of the effectiveness of the design and operation of Tecnoglass, Inc.´s “disclosure controls
and procedures” as of the end of the period covered by this Annual Report. Based on this evaluation, our principal
executive officer and principal financial officer concluded that, because of the material weaknesses in our internal control
over financial reporting described below, our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-
15(e) under the Securities Exchange Act of 1934, as amended, were not effective as of December 31, 2015.
Notwithstanding the material weaknesses in our internal control over financial reporting as of December 31, 2015
described below, we believe the consolidated financial statements are fairly stated in all material respects in accordance
with generally accepted accounting principles in the United States of America for each of the periods presented herein.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as
amended.

A company’s internal control over financial reporting includes policies and procedures that: (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles in the United States, and that receipts
and expenditures of the company are being made only in accordance with authorizations of management and directors of
the company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the company’s assets that could have a material effect on the financial statements.

Our management, with the participation of our principal executive officer and principal financial officer, conducted an
evaluation of the effectiveness of our internal control over financial reporting, as of December 31, 2015, based on criteria
set forth in the “Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO)”.

Based on this evaluation, our management concluded that, because of the material weaknesses described below, our
internal control over financial reporting as of December 31, 2015, was not effective.

A “material weakness” is a deficiency or combination of deficiencies, in internal control over financial reporting, such
that there is a reasonable possibility that a material misstatement of the company´s annual or interim financial statements
will not be prevented or detected on a timely basis.

We have identified, as of December 31, 2015, the following material weaknesses in our internal control over financial
reporting:

 Entity-Level Controls - The Company has not finished the process of establishing the proper design of the Entity
Level Controls which support the effectiveness of the internal control over financial reporting, therefore, certain
deficiencies in these controls may not assure the proper control environment for risk and fraud management.
Regarding the Information Technology General Controls (ITGC´s), we determined the designed controls did not
operate effectively in order to prevent, detect and correct errors or prevent frauds within the Information
Technology environment.

 Financial Closing and Reporting Process - We have not implemented controls over the identification, accounting
treatment classification and nature of non-routine, unusual transactions, inclusive of significant related party
transactions and for policies related to management evaluation of certain accounting estimates. Specifically we
determined several controls deficiencies that resulted in audit adjustments to the company´s consolidated
financial statements regarding warrant liabilities, earnout shares, shipping costs, netting of deferred
taxes,revenue from related parties, earnings per share calculations, cash flow statement preparation, sale
leaseback transactions and the classification of debt instruments. The aforementioned transactions’ accounting
treatment affected financial statements assertions such as completeness, accuracy, rights and obligations, cutoff
and presentation and disclosure related to assets, liabilities, equity, revenues, operating and non-operating
income and expense accounts. Regarding the basis for calculating diluted earnings per share, we did not
adequately take into account the effect of dilutive earnout shares.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding
internal control over financial reporting. Management’s report was not subject to attestation by our independent
registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company
to provide only management’s report in this Annual Report.

Remediation regarding the Revenue Recognition Material Weakness identified for the Fiscal Year Ended
December 31, 2014

As stated in our annual report on Form 10K, for the fiscal year ended December 31, 2014, management

identified some material weakness in our processes regarding Revenue Recognition.

In September of 2015, the Company implemented the required controls and additional procedures in order to

improve the processes related to the Percentage of Completion Method, which allowed for a more accurate and reliable
information. The Company’s remediation actions included:

 Assurance of the Percentage of Completion Method completeness by validating the information source (i.e.

contract price, initial estimated cost, period actual invoicing, accumulated invoicing, actual cost) contained in
our Enterprise Resourse Planning (“ERP”). In addition, validation of changes in contract prices and costs.

 Review of the projects advance with Project Managers and reconciling the costs recorded in our ERP.
 Monthly comparison between actual costs and amounts recorded in our ERP and information oversight (i.e.

accounts receivable, engineering, invoicing and finance) for performing the projects closing process in our ERP.

 Once the Percentage of Completion Method is automatically calculated in our ERP, several manual controls

were established for validating accuracy, completeness and cutoff.

 Disclosures regarding revenue recognition are documented in a checklist approved by the Disclosure

Committee.

The controls implemented through the remediation plan were validated by our Internal Control staff, as follows:

 Comparison between the SAP Percentage of Completion calculation and the spreadsheet results.
 Review of project advancement with Project Managers.
 Validation of the journal entries approval by our CFO.
 New projects´ accounting treatment review related to the Percentage of Completion Method.
 Project closing review in our ERP.
 Monitoring significant changes regarding the Percentage of Completion Method.

Remediation regarding the Entity Level Controls and ITGC´s Material Weakness identified for the Fiscal Year
Ended December 31, 2015 and 2014

 Created an internal control department with five experienced members who are now leading the SOX

Compliance project and the internal audit procedures. Developed the internal audit plan for strengthening our
control activities and therefore our Entity Level Controls.

 Contracted a co-sourcing with Deloitte for identifying risks and implementing internal controls over financial
reporting in order to become SOX compliant. As of December 31, 2015, a total of 256 SOX control were
designed. Plan to start performing quarterly SOX control tests beginning in May 2016 in order to ensure that
such controls are appropriately designed and effectively operating.

 Created a Financial Reporting unit in the United States responsible for the SEC reporting process and

implementing SOX controls related to financial reporting.

 Trained our international finance and accounting personnel considering relevant topics under USGAAP based
on the company´s transactions (i.e. revenue recognition, inventories, long-lived assets, financial instruments,
deferred taxes, etc.).
Increased management oversight by creating a Disclosure Committee comprised of senior managers with
responsibility for responding to issues raised during the financial reporting process and assessing disclosure
completeness.



 Performed the ERP users roles analysis, segregation of duties and the internal audit of the IT issues. In addition,

key account processes such as Percentage of Completion (POC), Financial Instruments Management,
depreciation and amortization and foreign exchange calculations were automated. Plan to acquire and
implement a software for optimizing the Information Systems Access Management in April 2016. Regarding
the Information Technology General Controls (ITGC´s), control operating effectiveness testing is planned to be
performed quarterly beginning in May, 2016, in order to prevent, detect and correct errors or prevent frauds
within the Information Technology environment.
Implemented a reporting channel (i.e. Web Case Management and Hotline) with NAVEX Global for reporting
violations to our Code of Ethics. Established an ethics training for our personnel to begin in March 2016;
furthermore, we will create a public reporting channel in case of ethical dilemmas so that our Corporate
Governance may strengthen.



Financial Closing and Reporting: We performed additional manual procedures and analysis such as validation of
sources of information that impact our financial statements, the translation process into US GAAP and other post-closing
procedures in order to prepare the consolidated financial statements and disclosures included in this Annual Report. In
addition, during the fourth quarter of 2015, implemented 34 SOX controls in order to comply with the aforementioned
procedures, as follows:

 Established formal procedures for appropriately performing the closing related activities, journal entries and



accruals.
Implemented reconciliation processes for validating intercompany and related party transactions and key
balance sheet accounts such as accounts receivable, inventories, property, plant and equipment, payroll,
payables and debt.

 Designed a formal review process for unusual transactions in order to determine the proper accounting treatment
and developed procedures that improved the interim and annual financial statements review. Review and update
the accounting policies that address the appropriate procedures for significant, non-routine, unusual, or complex
events or transactions. Strengthen the process for reconciling and determining the appropriate recording for
related party transactions.

Changes in Internal Control Over Financial Reporting

As discussed in the sections “Remediation of Material Weaknesses in Internal Control over Financial
Reporting” and “Managements Actions to Remediate Material Weaknesses”, there were changes in our internal control
over financial reporting during the fourth quarter of 2015.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Directors and Executive Officers

Our current directors and executive officers are as follows:

Name
José M. Daes

Christian T. Daes

Joaquin Fernandez

A. Lorne Weil

Samuel R. Azout

Age
55

Position
Chief Executive Officer and Director

Chief Operating Officer and Director

Chief Financial Officer

Non-Executive Chairman of the Board

Independent Director

Juan Carlos Vilariño

Independent Director

Martha (Stormy) L. Byorum

Independent Director

Julio A. Torres

Independent Director

José M. Daes has served as our chief executive officer and a director since December 2013. Mr. Daes has over

30 years’ experience starting and operating various businesses in Colombia and the U.S. Mr. Daes has served as chief
executive officer of ES since its inception in 1984, responsible for all aspects of ES’s operations. Mr. Daes began his
career in textiles, importing textiles from Japan to Colombia and later owned and operated an upscale clothing store with
multiple locations in Miami. Mr. Daes is the older brother of Christian T. Daes, our chief operating officer and director.

We believe Mr. Daes is well-qualified to serve as a member of our board of directors due to his operational

experience with ES and TG and his knowledge of the industry within which they operate.

Christian T. Daes has served as our chief operating officer and a director since December 2013. Mr. Daes has

served as the chief executive officer of Tecnoglass since its inception in 1994, responsible for all aspects of Tecnoglass’s
operations. Mr. Daes’s philanthropic activities include founding the Tecnoglass-ES Windows Foundation, which
promotes local development, health and social programs in Barranquilla, Colombia. Mr. Daes is the younger brother of
José M. Daes, our chief executive officer and director.

We believe Mr. Daes is well-qualified to serve as a member of our board of directors due to his operational

experience with ES and TG and his knowledge of the industry within which they operate.

Joaquín F. Fernández has served as our chief financial officer since December 2013 and the chief financial

officer for TG and ES since 2007. He has also served as a director of ES since January 2002. Mr. Fernández oversees the
gathering, reporting, presentation and interpretation of the historical financial information for us and our subsidiaries, as
well as implementation of financial strategy for us. Prior to joining TG and ES, Mr. Fernández worked at fuel
distribution, outsourcing, and public utility companies.

A. Lorne Weil has served as a member of our board of directors and non-executive chairman of the board since

our inception. He has also served as a director of Sportech Plc, one of the largest suppliers and operators of pools/tote
(often also referred to as pari-mutuel) betting in the world, since October 2010. From October 1991 to November 2013,
Mr. Weil served as chairman of the board of Scientific Games Corporation, a supplier of technology-based products,
systems and services to gaming markets worldwide, and served as its chief executive officer from April 1992 until
November 2013. Mr. Weil also served as president of Scientific Games from August 1997 to June 2005. From 1979 to
November 1992, Mr. Weil was president of Lorne Weil, Inc., a firm providing strategic planning and corporate
development services to high technology industries. Previously, Mr. Weil was vice president of corporate development at
General Instrument Corporation, working with wagering and cable systems.

We believe Mr. Weil is well-qualified to serve as a member of our board of directors due to his extensive

business experience in strategic planning and corporate development, his contacts he has fostered throughout his career,
as well as his operational experience.

Samuel R. Azout has served on our board of directors since December 2013 and on the board of TG since
February 2009. Since March 2013, Mr. Azout has served as an investment manager for Abacus Real Estate. From
January 2012 to March 2013, Mr. Azout served as the chief executive officer of the National Agency for Overcoming
Extreme Poverty in Colombia, an organization formed by the government of Colombia to assist families in poverty.
From September 2008 to January 2012, Mr. Azout was the senior presidential advisor for Social Prosperity, employed by
the administration of the President of Colombia. Prior to this, Mr. Azout served as chief executive officer of Carulla
Vivero S.A., the second largest retailer in Colombia, for 10 years, until he led its sale to Grupo Exito in 2006.

We believe Mr. Azout is well-qualified to serve as a member of our board of directors due to his contacts and

business relationships in Colombia.

Juan Carlos Vilariño has served on our board of directors since December 2013, on the board of TG since

November 1995 and on the board of ES since March 1997. Mr. Vilariño has worked as the general manager of various
business highway concession consortiums in Colombia including the Malla Vial del Atlántico Highway Concession
Consortium since 1993 and the Barranquilla-Ciénaga Highway Concession consortium since 1999. Mr. Vilariño began
his career as the assistant vice president in the general consulting department of Finance Corporation of the North, S.A.
We believe Mr. Vilariño is well-qualified to serve as a member of our board of directors due to his contacts and business
relationships in Colombia.

Martha (Stormy) L. Byorum has served as a member of our board of directors since November 2011. Ms.
Byorum is founder and chief executive officer of Cori Investment Advisors, LLC (Cori Capital), a financial services
entity that was most recently (January 2005 through August 2013) a division of Stephens Inc., a private investment
banking firm founded in 1933. Ms. Byorum was also an executive vice president of Stephens Inc. from January 2005
until August 2013. From March 2003 to December 2004, Ms. Byorum served as chief executive officer of Cori
Investment Advisors, LLC, which was spun off from VB&P in 2003. Ms. Byorum co-founded VB&P in 1996 and served
as a Partner until February 2003. Prior to co-founding VB&P in 1996, Ms. Byorum had a 24-year career at Citibank,
where, among other things, she served as chief of staff and chief financial officer for Citibank’s Latin American Banking
Group from 1986 to 1990, overseeing $15 billion of loans and coordinating activities in 22 countries. She was later
appointed the head of Citibank’s U.S. Corporate Banking Business and a member of the bank’s Operating Committee
and a Customer Group Executive with global responsibilities.

Ms. Byorum is a Life Trustee of Amherst College and a chairman of the finance committee of the board of

directors of Northwest Natural Gas, a large distributor of natural gas services in the Pacific Northwest.

We believe Ms. Byorum is well-qualified to serve as a member of the board of directors due to her operational
experience with Cori Capital Advisors, VB&P and Citibank and her financial background, which includes having served
on the audit committees of four publicly-traded companies.

Julio A. Torres has served on our board of directors since October 2011. He previously served as our co-chief

executive officer from October 2011 through January 2013. Since March 2008, Mr. Torres has served as managing
director of Nexus Capital Partners, a private equity firm. From April 2006 to February 2008, Mr. Torres served with the
Colombian Ministry of Finance acting as general director of public credit and the treasury. From June 2002 to April
2006, Mr. Torres served as managing director of Diligo Advisory Group, an investment banking firm. From September
1994 to June 2002, Mr. Torres served as vice president with JPMorgan Chase Bank.

We believe Mr. Torres is well-qualified to serve as a member of our board of directors due to his operational

experience with Nexus Capital Partners, his work with the Colombian government and his extensive contacts he has
fostered while working at Nexus Capital Partners, JPMorgan Chase Bank and in the Colombian government.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our officers, directors and persons who own more

than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with
the Securities and Exchange Commission. Officers, directors and ten percent shareholders are required by regulation to
furnish us with copies of all Section 16(a) reports they file. Based solely on a review of such reports received by us and
written representations from certain reporting persons that no Form 5s were required for those persons, we believe that,
during the fiscal year ended December 31, 2015, all reports required to be filed by our officers, directors and persons who
own more than ten percent of a registered class of our equity securities were filed on a timely basis.

Code of Ethics

In March 2012, we adopted a code of ethics that applies to all of our executive officers, directors and

employees. The code of ethics codifies the business and ethical principles that govern all aspects of our business. We will
provide, without charge, upon request, copies of our code of ethics. Requests for copies of our code of ethics should be
sent in writing to Tecnoglass Inc., Avenida Circunvalar a 100 mts de la Via 40, Barrio Las Flores, Barranquilla,
Colombia, Attn: Corporate Secretary.

Corporate Governance

Audit Committee

We have a standing audit committee of the board of directors, which consists of Martha L. Byorum, Samuel R.

Azout and Julio Torres, with Martha L. Byorum serving as chairman. Each of the members of the audit committee is
independent under the applicable NASDAQ listing standards.

The audit committee has a written charter, a copy of which was filed with our Definitive Proxy Statement on

Schedule 14A filed with the SEC on December 4, 2013. The purpose of the audit committee is to appoint, retain, set
compensation of, and supervise our independent accountants, review the results and scope of the audit and other
accounting related services and review our accounting practices and systems of internal accounting and disclosure
controls. The audit committee’s duties, which are specified in the audit committee charter, include, but are not limited to:












reviewing and discussing with management and the independent auditor the annual audited financial statements,
and recommending to the board whether the audited financial statements should be included in our Form 10-K;
discussing with management and the independent auditor significant financial reporting issues and judgments made
in connection with the preparation of our financial statements;
discussing with management major risk assessment and risk management policies;
monitoring the independence of the independent auditor;
verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the
audit partner responsible for reviewing the audit as required by law;
reviewing and approving all related-party transactions;
inquiring and discussing with management our compliance with applicable laws and regulations;
pre-approving all audit services and permitted non-audit services to be performed by our independent auditor,
including the fees and terms of the services to be performed;
appointing or replacing the independent auditor;
determining the compensation and oversight of the work of the independent auditor (including resolution of
disagreements between management and the independent auditor regarding financial reporting) for the purpose of
preparing or issuing an audit report or related work; and
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting,
internal accounting controls or reports which raise material issues regarding its financial statements or accounting
policies

The audit committee has discussed with the independent auditors the matters required by the Public Company
Accounting Oversight Board (“PCAOB”) auditing standard No. 16 – Communication with Audit Committees, including
independent accountant’s independence.

Financial Experts on Audit Committee

The audit committee will at all times be composed exclusively of “independent directors,” as defined for audit
committee members under the NASDAQ listing standards and the rules and regulations of the Securities and Exchange
Commission, who are “financially literate,” as defined under NASDAQ’s listing standards. NASDAQ’s listing standards
define “financially literate” as being able to read and understand fundamental financial statements, including a
company’s balance sheet, statement of operations and cash flow statement. The board of directors has determined that
Martha Byorum satisfies NASDAQ’s definition of financial sophistication and also qualifies as an “audit committee
financial expert” as defined under rules and regulations of the Securities and Exchange Commission.

Nominating Committee

We have a standing nominating committee, which consists of A. Lorne Weil, Martha L. Byorum, Samuel R.

Azout and Juan Carlos Vilariño, with A. Lorne Weil serving as chairperson. Each member of the nominating committee
is an “independent director” as defined under NASDAQ listing standards. Pursuant to its written charter, a copy of which
was filed with our Definitive Proxy Statement on Schedule 14A filed with the SEC on December 4, 2013, our
nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of
directors.

Guidelines for Selecting Director Nominees

The nominating committee considers persons identified by its members, management, shareholders, investment

bankers and others. Currently, the guidelines for selecting nominees, which are specified in the nominating committee
charter, generally provide that persons to be nominated:






should have demonstrated notable or significant achievements in business, education or public service;
should possess the requisite intelligence, education and experience to make a significant contribution to the board
of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and
should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the
interests of the shareholders.

The nominating committee will consider a number of qualifications relating to management and leadership
experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the
board of directors. The nominating committee may require certain skills or attributes, such as financial or accounting
experience, to meet specific board needs that arise from time to time and will also consider the overall experience and
makeup of its members to obtain a broad and diverse mix of board members. The nominating committee does not
distinguish among nominees recommended by shareholders and other persons.

There have been no material changes to the procedures by which shareholders may recommend nominees to the

nominating committee.

Compensation Committee

We have a standing compensation committee consisting of Julio Torres, Samuel R. Azout and Juan Carlos

Vilariño, with Julio Torres serving as chairperson. Pursuant to the compensation committee charter, a copy of which was
filed with our Definitive Proxy Statement on Schedule 14A filed with the SEC on December 4, 2013, the compensation
committee oversees our compensation and employee benefit plans and practices, including our executive, director and
other incentive and equity-based compensation plans. The specific responsibilities of the compensation committee
include making recommendations to the board regarding executive compensation of our executive officers and non-
employee directors, administering our 2013 Long-Term Incentive Equity Plan, and preparing and reviewing
compensation-related disclosure, including a compensation discussion and analysis and compensation committee report
(if required), for our filings with the Securities and Exchange Commission.

Item 11. Executive Compensation.

Overview

Our policies with respect to the compensation of our executive officers are administered by our board in
consultation with our compensation committee. Our compensation policies are intended to provide for compensation that
is sufficient to attract, motivate and retain executives of outstanding ability and potential and to establish an appropriate
relationship between executive compensation and the creation of shareholder value. To meet these goals, the
compensation committee is charged with recommending executive compensation packages to our board.

Prior to consummation of the Merger in December 2013, none of our executive officers or directors received

compensation for services rendered to the Company. No compensation or fees of any kind, including finders, consulting
or other similar fees, were paid to any of our initial shareholders, including our officers and directors, or any of their
respective affiliates, prior to, or for any services they rendered in order to effectuate, the consummation of the initial
business combination.

Summary Compensation Table

The following table summarizes the total compensation for the years ended December 31, 2015 and 2014 of

each of our named executive officers.

Name and principal position
Jose M. Daes (1) .................................................................
Chief Executive Officer .......................................................
Christian T. Daes (2) ...........................................................
Chief Operating Officer ......................................................
Joaquin Fernández (3) .........................................................
Chief Financial Officer .......................................................

Year

Salary

Bonus

Total

2015 $
2014 $
2015 $
2014 $
2015 $
2014 $

720,000 $
683,000 $
438,000 $
430,000 $
142,200 $
180,000 $

132,000 $
$
$
$
12,000 $
34,000 $

852,000
683,000
438,000
430,000
154,200
214,000

(1) Mr. Daes was appointed chief executive officer in December 2013 in connection with the Merger. Mr. Daes also

serves as chief executive officer of ES.

(2) Mr. Daes was appointed chief operating officer in December 2013 in connection with the Merger. Mr. Daes also

serves as chief executive officer of Tecnoglass.

(3) Mr. Fernández was appointed chief financial officer in December 2013 in connection the Merger. Mr. Fernandez also

serves as chief financial officer of TG and ES.

Compensation Arrangements with Named Executive Officers

At present, we do not have employment agreements in place for our current executive officers. We have

determined to continue the compensation arrangements that were in place for each Messrs. Daes and Daes with ES and
Tecnoglass, respectively, providing for an annual base salary of $720,000, and to provide an annual base salary to Mr.
Fernandez equal to approximately $180,000 going forward. Our compensation committee may determine to award a
discretionary cash bonus to such executive officers as has been awarded in the past by Tecnoglass and ES, and may also
determine to award to such executive officers share options, share appreciation rights or other awards under our 2013
Long-Term Equity Incentive Plan. We anticipate continuing these compensation arrangements until we enter into
employment agreements with our executive officers. Upon entry into employment agreements with our executive
officers, we will file a Current Report on Form 8-K to disclose the material terms of such agreements.

Equity Awards at Fiscal Year End

As of December 31, 2015, we had not granted any share options, share appreciation rights or any other awards

under long-term incentive plans to any of our executive officers.
Director Compensation

For the year ended December 31, 2015, we did not compensate any of our directors for their service on the

board. However, we did reimburse our directors for out-of-pocket expenses incurred by them in connection with
activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business
combinations. Additionally, in October 2015, the Company authorized to grant each non-employee director $50,000
worth of ordinary shares of the Company payable annually, commencing in October 2016.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth information as of December 31, 2015 regarding the beneficial ownership of our

ordinary shares by:





Each person known to be the beneficial owner of more than 5% of our outstanding ordinary shares;
Each director and each named executive officer; and
All current executive officers and directors as a group.

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with
respect to all ordinary shares beneficially owned by them. This table is prepared solely based on information supplied to
us by the listed beneficial owners, any Schedules 13D or 13G and other public documents filed with the SEC. The
percentage of beneficial ownership is calculated based on 26,895,636 ordinary shares outstanding as of December 31,
2015. Shares which an individual or group has a right to acquire within 60 days pursuant to the exercise or conversion of
options, warrants or other similar convertible or derivative securities are deemed to be outstanding for the purpose of
computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person shown in the table.

Name and Address of Beneficial Owner(1)
Directors and Named Executive Officers

Nature

Amount and Approximate
Percentage of
of Beneficial Beneficial
Ownership Ownership

0(2)

Jose M. Daes ...................................................................................................................
Chief Executive Officer and Director
Christian T. Daes ............................................................................................................
Chief Operating Officer and Director
Samuel R. Azout .............................................................................................................
Director
Juan Carlos Vilariño .......................................................................................................
Director
Joaquin F. Fernandez ...................................................................................................... 21,856,223(3)
Chief Financial Officer
A. Lorne Weil .................................................................................................................
Chairman of the Board
Julio A. Torres ................................................................................................................
Director
Martha L. Byorum ..........................................................................................................
Director
All directors and executive officers as a group (8 persons) ............................................. 22,246,752

190,000(5)

95,693(4)

104,836

Five Percent Holders:

Energy Holding Corporation ............................................................................................ 21,856,223(3)
Red Oak Partners, LLC
304 Park Avenue South, 11th Floor, New York NY 10010 ........................................... 1,969,021(6)

78.9%

80.5%

78.9%

7.3%

* Less than 1%

(1) Unless otherwise indicated, the business address of each of the individuals is Avenida Circunvalar a 100 mts

de la Via 40, Barrio Las Flores, Barranquilla, Colombia.

(2) Does not include shares held by Energy Holding Corporation, in which this person has an indirect ownership

interest.

(3) Represents all ordinary shares held by Energy Holding Corporation, of which Messrs. Joaquin Fernandez
and Alberto Velilla Becerra are directors and may be deemed to share voting and dispositive power over such shares.
Includes 789,082 ordinary shares issuable upon the exercise of 789,082 private warrants held by Energy Holding
Corporation, which became exercisable upon the consummation of our initial business combination. Does not include the
shares that may be issued to Energy Holding Corporation upon achievement of certain share price and earnings targets
for the fiscal years ending December 31, 2015 and 2016.

(4) Does not include 253,000 ordinary shares held by Child’s Trust f/b/o Francesca Weil u/a dated March 4,
2010 and 253,000 ordinary shares held by Child’s Trust f/b/o Alexander Weil u/a dated March 4, 2010, irrevocable trusts
established for the benefit of Mr. Weil’s children.

(5) Includes 110,000 ordinary shares issuable upon the exercise of 125,000 private warrants held by such

reporting person, which became exercisable upon consummation of our initial business combination.

(6) Red Oak Partners may be deemed to beneficially own 1,969,021 ordinary shares which includes: (i) 667,641

ordinary shares beneficially owned by Red Oak Fund including 155,977 ordinary shares, 484,330 ordinary shares
issuable upon exercise of warrants held by Red Oak Fund, and 27,334 ordinary shares issuable upon exercise of 13,667
unit purchase options held by Red Oak Fund; (ii) 307,607 ordinary shares beneficially owned by Red Oak Long Fund
including 68,561 ordinary shares, 225,962 ordinary shares issuable upon exercise of warrants held by Red Oak Long
Fund, and 13,084 ordinary shares issuable upon exercise of 6,542 unit purchase options held by Red Oak Long Fund; (iii)
883,268 ordinary shares beneficially owned by Pinnacle Partners, LLC and Pinnacle Opportunities Fund, LP (‘‘Pinnacle
Funds’’) including 208,981 ordinary shares, 637,282 ordinary shares issuable upon exercise of warrants held by Pinnacle
Funds, and 37,004 ordinary shares issuable upon exercise of 18,502 unit purchase options; and (iv) 13,700 ordinary
shares beneficially owned by Wolverine Trading LLC (‘‘Wolverine’’) including 8,900 ordinary shares and 4,800
ordinary shares issuable upon exercise of warrants held by Wolverine. Red Oak Partners has discretionary authority over
shares and warrants held by Wolverine. Information was derived from a Schedule 13D filed on February 16, 2016.

Equity Compensation Plans

Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights

Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in first
column

Weighted-average
exercise price of
outstanding options,
warrants and rights

1,593,917

Category
Equity compensation plans approved by security
holders .................................................................

Equity compensation plans not approved by
security holders ....................................................

Total .............................................................

On December 20, 2013, our shareholders approved our 2013 Long-Term Equity Incentive Plan (“2013 Plan”).
Under the 2013 Plan, 1,593,917 ordinary shares are reserved for issuance in accordance with the plan’s terms to eligible
employees, officers, directors and consultants. As of December 31, 2015, no awards had been made under the 2013 Plan.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Related Transactions

E.S. Windows, LLC

The majority of shares of ESW LLC, a Florida limited liability company, are owned by Jose Daes, Christian
Daes and Evelyn Daes. ESW LLC acts as one of ES’s importers and distributors in the U.S. ESW LLC sends project
specifications and orders from its clients to ES, and in turn, receiving pricing quotes from ES which are conveyed to the
client. ESW LLC does not install any of our products. The Company’s CEO and COO, other family members, and other
related parties own 100% of the equity in ESW LLC. Sales to ESW LLC amounted to $48.8 and $37.1 million during the
years ended December 31, 2015 and December 31, 2014, respectively.

Ventanas Solar S.A.

Ventanas Solar S.A. (“VS”), a Panama sociedad anonima, is an importer and installer of the Company’s
products in Panama. Family members of the Company’s CEO and COO and other related parties own 100% of the equity
in US. The Company’s sales to US for the year ended December 31, 2015 and 2014 were $5.4 million and $0.2 million,
respectively. Outstanding receivables from VS at December 31, 2015 and 2014 were $9.4 million and $12.2 million,
respectively, including a long term payment agreement for trade receivables of $9.2 million as of December 31, 2015
related to two collection agreements, pursuant to which VS collects the Company’s receivables from customers in
Panama.

Merger Consideration

Energy Holding Corporation, the sole shareholder of Tecnoglass Holding whose shareholders are all of the

former shareholders of Tecnoglass and ES, received 20,567,141 ordinary shares in consideration of all of the outstanding
and issued ordinary shares of Tecnoglass Holding.

Pursuant to the agreement and plan of reorganization, we issued to Energy Holding Corp. an aggregate of

500,000 ordinary shares based on its achievement of specified EBITDA targets set forth in such agreement for the fiscal
year ended December 31, 2014 and we will issue 1,000,000 ordinary shares upon achievement of specified EBITDA
target in the fiscal year ended December 31, 2015.

Energy Holding Corp. also has the contractual right to receive an additional 1,500,000 ordinary shares, to be
released upon theattainment of specified share price targets or targets based on our EBITDA in the fiscal year ending
December 31, 2016. The following table sets forth the targets and the number of earnout shares issuable to Tecnoglass
Holding shareholders upon the achievement of such targets:

Minimum Maximum Minimum Maximum
Fiscal year ending 12/31/16 ............... $15.00 per share $ 40,000,000 $ 45,000,000 1,333,333 1,500,000

Price Target

Ordinary
Share

EBITDA Target

Number of Earnout
Shares

If either the ordinary share target or the maximum EBITDA target is met in any fiscal year, Energy Holding

Corp. receives the maximum number of earnout shares indicated for the year. In the event the ordinary share target is not
met but the combined company’s EBITDA falls within the minimum and maximum EBITDA target for a specified year,
the number of earnout shares to be issued will be interpolated between such targets. In the event neither the ordinary
share target nor the minimum EBITDA target is met in a particular year, but a subsequent year’s share price or EBITDA
target is met, Energy Holding Corp. will earn the earnout shares for the previous year as if the prior year’s target had
been met.

Joaquin Fernandez and Alberto Velilla Becerra are directors of Energy Holding Corporation. Jose Daes and

Christian Daes are shareholders of Energy Holding Corporation.

Registration Rights

Our initial shareholders, Energy Holding Corporation, holders of the private warrants and warrants issued upon

conversion of the promissory note (described above) (and all underlying securities), are entitled to registration rights
pursuant to an agreement entered into on December 20, 2013. The holders of a majority of these securities are entitled to
make up to two demands that we register such securities, and have certain “piggy-back” registration rights with respect to
registration statements filed subsequent to our consummation of the Merger. Pursuant to the agreement, we will bear the
expenses incurred in connection with the filing of any such registration statements. All such securities were included on
our Registration Statement on Form S-3 filed on February 11, 2014 and later amended on Form S-1, declared effective
on June 16, 2014.

Transfer Agreements in connection with Merger

On December 19, 2013, we entered into an agreement with an affiliate of A. Lorne Weil, our non-executive

chairman of the board, and a third party shareholder pursuant to which the third party shareholder agreed to use
commercially reasonable efforts to purchase up to 1,000,000 ordinary shares in the open market and agreed that it would
not seek conversion or redemption of any such purchased shares in connection with the Merger. This third party
shareholder and its affiliates purchased an aggregate of 985,896 ordinary shares pursuant to this agreement. Pursuant to
the agreement, Mr. Weil’s affiliate transferred to the third party shareholder and its affiliates an aggregate of 2,167,867
private warrants. Additionally, EarlyBirdCapital, Inc., our financial advisor, transferred to the third party shareholder and
its affiliates certain unit purchase options, each to purchase one ordinary share and one warrant to purchase one ordinary
share. We agreed to file a registration statement with the Securities and Exchange Commission covering the resale of the
warrants and shares underlying the warrants, as well as the unit purchase options and underlying securities, transferred to
the shareholder and its affiliates, which such registration statement was filed on February 11, 2014 and declared effective
on June 16, 2014.

Also on December 19, 2013, we entered into subscription agreements with two investors pursuant to which such
investors agreed to purchase an aggregate of 649,382 ordinary shares at $10.18 per Share, or an aggregate of $6,610,709.
In connection with this purchase, the affiliate of Mr. Weil transferred an aggregate of 608,796 private warrants to such
investors. We agreed to file a registration statement with the Securities and Exchange Commission covering the resale of
the warrants and shares underlying the warrants, transferred to these investors, which such registration statement was
filed on February 11, 2014, and agreed to use our best efforts to have such registration statement declared effective by the
Securities and Exchange Commission as soon as possible. Such registration statement was declared effective on June 16,
2014.

Indemnification Agreements

Effective March 5, 2014, we entered into indemnification agreements with each of our executive officers and

members of our board of directors. The indemnification agreements supplement our Third Amended and Restated
Memorandum and Articles of Association and Cayman Islands law in providing certain indemnification rights to these
individuals. The indemnification agreements provide, among other things, that we will indemnify these individuals to the
fullest extent permitted by Cayman Islands law and to any greater extent that Cayman Islands law may in the future
permit, including the advancement of attorneys’ fees and other expenses incurred by such individuals in connection with
any threatened, pending or completed action, suit or other proceeding, whether of a civil, criminal, administrative,
regulatory, legislative or investigative nature, relating to any occurrence or event before or after the date of the
indemnification agreements, by reason of the fact that such individuals is or were our directors or executive officers,
subject to certain exclusions and procedures set forth in the indemnification agreements, including the absence of fraud
or willful default on the part of the indemnitee and, with respect to any criminal proceeding, that the indemnitee had no
reasonable cause to believe his conduct was unlawful.

Private Placement with Affiliate of A. Lorne Weil

On March 5, 2014, we entered into a subscription agreement with an affiliate of A. Lorne Weil, our Non-

Executive Chairman of the Board, pursuant to which such affiliate agreed to purchase an aggregate of 95,693 ordinary
shares at an aggregate price of $1,000,000, or approximately $10.45 per share, representing a slight premium to the
closing price of our ordinary shares immediately prior to the execution of the subscription agreement. The closing of the
purchase took place on March 14, 2014. A registration statement covering the resale of these shares was declared
effective on June 16, 2014.

Related Person Policy

Our Code of Ethics requires us to avoid, wherever possible, all related party transactions that could result in

actual or potential conflicts of interests, except under guidelines approved by the board of directors (or the audit
committee). Related-party transactions are defined as transactions in which (1) the aggregate amount involved will or
may be expected to exceed $120,000 in any calendar year, (2) we or any of our subsidiaries are a participant, and (3) any
(a) executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner of our ordinary
shares, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct or
indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another
entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to
perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or
her family, receives improper personal benefits as a result of his or her position.

Our audit committee, pursuant to its written charter, is responsible for reviewing and approving related-party
transactions to the extent we enter into such transactions. The audit committee will consider all relevant factors when
determining whether to approve a related party transaction, including whether the related party transaction is on terms no
less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and
the extent of the related party’s interest in the transaction. No director may participate in the approval of any transaction
in which he is a related party, but that director is required to provide the audit committee with all material information
concerning the transaction. Additionally, we require each of our directors and executive officers to complete an annual
directors’ and officers’ questionnaire that elicits information about related party transactions.

These procedures are intended to determine whether any such related party transaction impairs the independence

of a director or presents a conflict of interest on the part of a director, employee or officer.

Director Independence

We adhere to the NASDAQ listing standards in determining whether a director is independent. Our board of

directors consults with its counsel to ensure that the board’s determinations are consistent with those rules and all
relevant securities and other laws and regulations regarding the independence of directors.

The NASDAQ listing standards define an “independent director” as a person, other than an executive officer of

a company or any other individual having a relationship which, in the opinion of the issuer’s board of directors, would
interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Consistent with
these considerations, we have affirmatively determined that Messrs. Weil, Azout, Vilariño, Torres and Ms. Byorum
qualify as independent directors. Our independent directors have regularly scheduled meetings at which only independent
directors are present.

Item 14. Principal Accounting Fees and Services.

Effective December 30, 2014, the firm of PricewaterhouseCoopers Ltda. acts as our independent registered

public accounting firm. Prior to December 30, 2014, the firm of Marcum LLP acted as our independent registered public
accounting firm.

During 2015, the Company paid $0.6 million to PWC and $0.1 million to Marcum for audit and audit related
fees. During 2014, the Company paid $0.1 million to PwC and $1.2 million to Marcum for audit and audit related fees.

Audit Committee Approval

Our audit committee pre-approved all the services performed by PricewaterhouseCoopers Ltda. and Marcum

LLP. In accordance with Section 10A(i) of the Securities Exchange Act of 1934, before we engage our independent
accountant to render audit or non-audit services on a going-forward basis, the engagement will be approved by our audit
committee.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a) The following documents are filed as part of this Form 10-K:

(1) Consolidated Financial Statements:

Report of Independent Registered Public Accounting Firm .............................................
Balance Sheets ..................................................................................................................
Statements of Operations ..................................................................................................
Statements of Changes in Shareholders’ Equity ...............................................................
Statements of Cash Flows .................................................................................................
Notes to Financial Statements ...........................................................................................

Page
F-2
F-3
F-4
F-5
F-6
F-7

(2) Financial Statement Schedules:

None.

(3) The following exhibits are filed as part of this Form 10-K

Exhibit
No.
2.1

3.1

4.1
4.2
4.3

4.4

4.5

10.1

10.2

10.3

10.4

10.5
10.6
10.7
21
24

Description
Agreement and Plan of Reorganization dated as of
August 17, 2013 and as amended November 6,
2013, by and among the Company, Andina Merger
Sub, Inc., Tecnoglass S.A., C.I. Energia Solar S.A.
E.S. Windows and Tecno Corporation
Third Amended and Restated Memorandum and
Articles of Association.
Specimen Ordinary Share Certificate.
Specimen Warrant Certificate.
Warrant Agreement between Continental Stock
Transfer & Trust Company and the Company.
Form of First Unit Purchase Option issued to
EarlyBirdCapital, Inc.
Form of Second Unit Purchase Option issued to
EarlyBirdCapital, Inc.
Amended and Restated Registration Rights
Agreement among the Company, the Initial
Shareholders and Energy Holding Corporation.
Indemnity Escrow Agreement dated as of December
20, 2013, by and among the Company,
Representative, Committee and Continental Stock
Transfer and Trust Company.
Additional Shares Escrow Agreement dated as of
December 20, 2013, by and among the Company,
Representative, Committee and Continental Stock
Transfer and Trust Company.
Form of Lock-Up Agreement between the Company
and Energy Holding Corporation
2013 Long-Term Incentive Equity Plan
Form of Subscription Agreement
Form of Indemnification Agreement
List of subsidiaries.
Power of Attorney (included on signature page of
this Form 10-K).

Included

Form

Filing Date

By Reference Schedule 14A December 4, 2013

By Reference S-1/A
By Reference S-1/A
By Reference 8-K

By Reference S-1/A

By Reference 8-K

January 23, 2012
December 28, 2011
March 22, 2012

March 12, 2012

March 7, 2012

December 27, 2013

August 22, 2013

By Reference Schedule 14A December 4, 2013
December 19, 2013
By Reference 8-K
By Reference 8-K
March 6, 2014
Herewith
Herewith

Exhibit
No.
31.1

31.2

Description
Certification of Principal Executive Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Principal Financial and Accounting
Officer pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002

Included
Herewith

Herewith

Form

Filing Date

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema

Herewith

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Herewith

101.DEF

XBRL Taxonomy Extension Definition Linkbase

Herewith

101.LAB

XBRL Taxonomy Extension Label Linkbase

Herewith

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Herewith

Tecnoglass will furnish a copy of the Exhibits to this Annual Report upon the written request of a
person requesting copies thereof and stating that he is a beneficial holder of Tecnoglass’s ordinary
shares at a charge of $0.35 per page, paid in advance. Tecnoglass will indicate the number of pages to
be charged for upon such person’s inquiry. Requests for copies and inquiries should be addressed to:
Tecnoglass Inc., Avenida Circunvalar a 100 mts de la Via 40, Barrio Las Flores, Barranquilla,
Colombia, Attention: Corporate Secretary.

Pursuant to the requirements of the Section 13 or 15 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 31st
day of May, 2016.

SIGNATURES

TECNOGLASS INC.

/s/ Joaquin Fernandez

By:
Name: Joaquin Fernandez
Title: Chief Financial Officer (Principal
Financial and Accounting Officer)

POWER OF ATTORNEY

The undersigned directors and officers of Tecnoglass Inc. hereby constitute and appoint Jose Daes and Joaquin
Fernandez with full power to act as our true and lawful attorney-in-fact with full power to execute in our name and behalf
in the capacities indicated below, this annual report on Form 10-K and any and all amendments thereto and to file the
same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange
Commission, and hereby ratify and confirm all that such attorneys-in-fact, or any of them, or their substitutes shall
lawfully do or cause to be done by virtue hereof.

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.

Name

/s/ Jose M. Daes
Jose M. Daes

/s/ Christian T. Daes
Christian T. Daes

/s/ Joaquin Fernandez
Joaquin Fernandez

/s/ A. Lorne Weil
A. Lorne Weil

/s/ Samuel R. Azout
Samuel R. Azout

/s/ Juan Carlos Vilariño
Juan Carlos Vilariño

/s/ Martha Byorum
Martha Byorum

/s/ Julio A. Torres
Julio A. Torres

Title

Chief Executive Officer (Principal
Executive Officer)

Date

May 31, 2016

Chief Operating Officer

May 31, 2016

Chief Financial Officer (Principal
Financial and Accounting Officer)

May 31, 2016

Director (Non-Executive Chairman)

May 31, 2016

Director

May 31, 2016

Tecnoglass Inc.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Audited Financial Statements:

Page

Report of Independent Registered Public Accounting Firm ................................................................................

F-2

Consolidated Balance Sheets at December 31, 2015 and 2014 ...........................................................................

F-3

Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2015
and 2014 ..............................................................................................................................................................

Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2015 and
2014 .....................................................................................................................................................................

F-4

F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2015 and 2014 .............................

F-6

Notes to Consolidated Financial Statements ........................................................................................................

F-7

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders
of Tecnoglass Inc. and Subsidiaries

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations and
comprehensive income, of shareholders’ equity and of cash flows present fairly, in all material respects, the financial
position of Tecnoglass Inc. and its subsidiaries at December 31, 2015 and 2014, and the results of their operations and
their cash flows for each of the two years in the period ended December 31, 2015 in conformity with accounting
principles generally accepted in the United States of America. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits of these statements in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 2 to the consolidated financial statements, the 2014 financial statements have been restated to
correct for misstatements.

/s/ PricewaterhouseCoopers Ltda.

PricewaterhouseCoopers Ltda.
Barranquilla, Colombia
May 31, 2016

F-2

Tecnoglass Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share data)

December 31, December 31,

2015

2014
(Restated)

ASSETS
Current assets:
Cash ................................................................................................................................ $
Investments .....................................................................................................................
Trade accounts receivable, net ........................................................................................
Unbilled receivables on uncompleted contracts ..............................................................
Due from related parties .................................................................................................
Other assets .....................................................................................................................
Inventories ......................................................................................................................
Prepaid expenses .............................................................................................................
Total current assets ...................................................................................................

Long term assets:
Property, plant and equipment, net .................................................................................
Long term receivables from related parties .....................................................................
Goodwill and Intangible assets .......................................................................................
Deferred income taxes ....................................................................................................
Other long term assets ....................................................................................................
Total long term assets ...............................................................................................
Total assets ................................................................................................................. $

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities and shareholders’ equity
Current liabilities
Short-term debt and current portion of long-term debt ................................................... $
Note payable to shareholder ...........................................................................................
Trade accounts payable ...................................................................................................
Due to related parties ......................................................................................................
Taxes payable .................................................................................................................
Deferred income taxes ....................................................................................................
Labor liabilities ...............................................................................................................
Warrant liability ..............................................................................................................
Earnout share liability .....................................................................................................
Current portion of customer advances on uncompleted contracts ..................................
Total current liabilities .............................................................................................

Warrant liability ..............................................................................................................
Earnout share liability .....................................................................................................
Customer advances on uncompleted contracts ...............................................................
Long-term debt ...............................................................................................................
Total long term liabilities ..........................................................................................
Total liabilities ........................................................................................................... $

Commitments and contingencies

Shareholders’ equity
Preferred shares, $0.0001 par value, 1,000,000 shares authorized, 0 shares issued and
outstanding at December 31, 2015 and 2014 .................................................................. $
Ordinary shares, $0.0001 par value, 100,000,000 shares authorized, 26,895,636 and
24,801,132 shares issued and outstanding at December 31, 2015 and 2014,
respectively .....................................................................................................................
Legal reserves .................................................................................................................
Additional paid capital ....................................................................................................
Retained earnings ............................................................................................................
Accumulated other comprehensive income (loss) ..........................................................
Total shareholders’ equity ...........................................................................................
Total liabilities and shareholders’ equity.................................................................... $

18,496 $
1,470
52,515
9,868
28,073
7,794
46,011
3,152
167,379

135,974
2,536
3,250
640
6,420
148,820
316,199 $

16,921 $
79
39,142
1,283
18,228
3,384
918
31,213
13,740
11,841
136,749

-
20,414
4,404
121,493
146,311
283,060 $

- $

3
1,367
45,584
17,354
(31,169)
33,139
316,199 $

15,930
1,209
44,718
9,931
28,564
5,508
28,965
1,298
136,123

103,980
4,220
1,474
5
4,721
114,400
250,523

54,925
80
32,950
1,999
7,930
3,048
954
-
5,075
5,782
112,743

19,991
23,986
8,333
39,273
91,583
204,326

2
1,367
26,140
30,119
(11,431)
46,197
250,523

The accompanying notes are an integral part of these consolidated financial statements.

F-3

Tecnoglass Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income
(In thousands, except share and per share data)

Years ended December 31,

2015

2014
(Restated)

Operating revenue:
Customers .............................................................................................................. $
Related Parties .......................................................................................................
Total Operating Revenue ..........................................................................................

180,633 $
58,200
238,833

Cost of sales ..............................................................................................................
Gross profit ...............................................................................................................

153,252
85,581

Operating expenses:
Selling .......................................................................................................................
General and administration .......................................................................................
Operating expenses ...................................................................................................

27,579
18,920
46,499

149,822
47,630
197,452

131,156
66,296

22,737
16,327
39,064

Operating income ......................................................................................................

39,082

27,232

Change in fair value of warrant liability ...................................................................
Change in fair value of earnout shares liability ........................................................
Non-operating income, net .......................................................................................
Interest expense ........................................................................................................

(24,901)
(10,858)
13,877
(9,274)

(1,711)
(10,807)
12,235
(8,900)

Income before taxes ..................................................................................................

7,926

18,049

Income tax provision ................................................................................................
Net (loss) income ...................................................................................................... $

20,691
(12,765) $

8,538
9,511

Comprehensive income:
Net (loss) income ...................................................................................................... $
Foreign currency translation adjustments .................................................................
Total comprehensive (loss) income ........................................................................ $

(12,765) $
(19,738)
(32,503) $

9,511
(16,001)
(6,490)

Basic income per share ............................................................................................. $

(0.50) $

Diluted income per share .......................................................................................... $

(0.50) $

0.39

0.34

Basic weighted average common shares outstanding ...............................................

25,447,564

24,347,620

Diluted weighted average common shares outstanding ............................................

28,949,642

28,237,679

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Tecnoglass, Inc. and Subsidiaries
Consolidated Statements of Shareholders’ Equity
For the Years Ended December 31, 2015 and 2014
(In thousands, except share data)

Ordinary Shares, $0.0001
Par Value

Additional
Paid in

Legal Retained
Amount Capital Reserve Earnings
20,608

20,319 1,367

Balance at January 1, 2014 (Restated) .......................... 24,214,670

Issuance of common stock ............................................

483,892

Exercise of warrants ......................................................

102,570

Foreign currency translation .........................................

Net income.....................................................................

5,000

821

Accumulated
Other
Comprehensive
Loss

Total
Shareholders’
Equity

4,570

46,866

5,000

821

(16,001)

9,511

Balance at December 31, 2014 (Restated) ................. 24,801,132

26,140 1,367

30,119

(11,431)

46,197

Issuance of common stock ............................................

500,000

5,765

Exercise of warrants ...................................................... 1,001,848

13,679

Exercise of Unit Purchase Options ...............................

592,656

Foreign currency translation .........................................

Net loss ..........................................................................

5,765

13,680

(19,738)

(12,765)

Balance at December 31, 2015 .................................... 26,895,636

45,584 1,367

17,354

(31,169)

33,139

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Tecnoglass Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)

Years Ended December 31,

2015

2014
(Restated)

(12,765) $

9,511

CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income .................................................................................................................. $
Adjustments to reconcile net income to net cash provided by (used in) operating
activities:
Provision for bad debts .........................................................................................................
Provision for obsolete inventory ...........................................................................................
Change in fair value of investments held for trading ............................................................
Depreciation and amortization ..............................................................................................
Loss on disposition of assets .................................................................................................
Change in value of derivative liability ..................................................................................
Change in fair value of earnout share liability ......................................................................
Change in fair value of warrant liability ...............................................................................
Deferred income taxes ..........................................................................................................
Changes in operating assets and liabilities, net of effects from acquisitions:
Trade Accounts Receivable ..................................................................................................
Deferred income taxes ..........................................................................................................
Inventories ............................................................................................................................
Prepaid expenses ...................................................................................................................
Other assets ...........................................................................................................................
Trade accounts payable .........................................................................................................
Taxes payable .......................................................................................................................
Labor liabilities .....................................................................................................................
Related parties ......................................................................................................................
Advances from customers .....................................................................................................
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES ......................................

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investments ........................................................................................
Proceeds from sale of property and equipment .....................................................................
Purchase of investments........................................................................................................
Acquisition of property and equipment ................................................................................
Restricted cash ......................................................................................................................
CASH USED IN INVESTING ACTIVITIES ......................................................................

1,286
(255)
10
11,869
232
(69)
10,858
24,901
(119)

(22,376)
-
(27,820)
(1,392)
(11,644)
15,734
14,006
221
(8,226)
6,341
792

1,913
4,470
(877)
(14,901)
-
(9,395)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt ...............................................................................................................
Proceeds from the sale of common stock..............................................................................
Proceeds from the exercise of warrants ................................................................................
Repayments of debt and capital leases ..................................................................................
Merger proceeds held in trust ...............................................................................................
CASH PROVIDED BY FINANCING ACTIVITIES ..........................................................

112,805
-
-
(102,356)
-
10,449

20
(1,036)
168
8,542
1,300
(25)
10,807
1,711
(915)
-
(5,002)
466
(10,696)
(761)
1,852
11,846
4,465
530
(19,132)
(18,461)
(4,810)

2,343
3,609
(1,118)
(24,848)
3,633
(16,381)

87,109
1,000
821
(77,924)
22,519
33,525

Effect of exchange rate changes on cash and cash equivalents .............................................

720

730

NET INCREASE IN CASH .................................................................................................
CASH - Beginning of year ....................................................................................................
CASH - End of year .............................................................................................................. $

2,566
15,930
18,496 $

13,064
2,866
15,930

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest .................................................................................................................................. $
Taxes ..................................................................................................................................... $

6,916 $
13,212 $

7,451
3,101

NON-CASH INVESTING AND FINANCING ACTIVITES:
Assets acquired under capital lease and financial obligations .............................................. $
Assets acquired with issuance of common stock .................................................................. $

65,319 $
- $

27,778
4,000

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Tecnoglass Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Amounts in thousands, except share and per share data)

Note 1.

General

Business Description

Tecnoglass Inc. (“TGI,” the “Company,” “we,” “us” or “our”) was incorporated in the Cayman Islands on

September 21, 2011 under the name “Andina Acquisition Corporation” (“Andina”) as a blank check company. Andina’s
registration statement for its initial public offering (the “Public Offering”) was declared effective on March 16, 2012.
Andina consummated the Public Offering, the private placement of warrants (“Private Placement”) and the sale of
options to the Underwriters on March 22, 2012, receiving proceeds, net of transaction costs, of $43,163, of which
$42,740 was placed in a trust account.

Andina’s objective was to acquire, through a merger, share exchange, asset acquisition, share purchase
recapitalization, reorganization or other similar business combination, one or more operating businesses. On December
20, 2013, Andina consummated a merger transaction (the “Merger”) with Tecno Corporation (“Tecnoglass Holding”) as
ultimate parent of Tecnoglass S.A. (“TG”) and C.I. Energía Solar S.A. ES. Windows (“ES”). The surviving entity was
renamed Tecnoglass Inc. The Merger transaction was accounted for as a reverse merger and recapitalization where
Tecnoglass Holding was the acquirer and TGI was the acquired company.

The Company manufactures hi-specification, architectural glass and windows for the global residential and
commercial construction industries. Currently the Company offers design, production, marketing, and installation of
architectural systems for buildings of high, medium and low elevation size. Products include windows and doors in glass
and aluminum, office partitions and interior divisions, floating façades and commercial window showcases. The
Company sells to customers in North, Central and South America, and exports about half of its production to foreign
countries.

TG manufactures both glass and aluminum products. Its glass products include tempered glass, laminated glass,
thermo-acoustic glass, curved glass, silk-screened glass, acoustic glass and digital print glass. Its Alutions plant produces
mill finished, anodized, painted aluminum profiles and rods, tubes, bars and plates. Alutions’ operations include
extrusion, smelting, painting and anodizing processes, and exporting, importing and marketing aluminum products.

ES designs, manufactures, markets and installs architectural systems for high, medium and low rise
construction, glass and aluminum windows and doors, office dividers and interiors, floating facades and commercial
display windows.

In 2014, the Company established two Florida limited liability companies, Tecnoglass LLC (“Tecno LLC”) and

Tecnoglass RE LLC (“Tecno RE”) to acquire manufacturing facilities, manufacturing machinery and equipment,
customer lists and exclusive design permits.

Basis of Presentation and Management’s Estimates

The accompanying consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America (“US GAAP”) and pursuant to the accounting and
disclosure rules and regulations of the Securities and Exchange Commission (“SEC”).

The preparation of the accompanying consolidated financial statements requires the Company to make estimates

and judgements that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures
of contingent assets and liabilities at the date of the Company’s financial statements. Actual results may differ from these
estimates under different assumptions and conditions. Estimates inherent in the preparation of these consolidated
financial statements relate to the collectability of account receivables, the valuation of inventories, estimated earnings on
uncompleted contracts, useful lives and potential impairment of long-lived assets, and valuation of warrants and other
derivative financial instruments.

Note 2.

Restatements

Restatement

This Note 2 to the consolidated financial statements discloses the nature of the restatements and adjustments and

shows the impact of the restatements on revenues, expenses, income, assets, liabilities, equity, and cash flows from
operating activities, investing activities, and financing activities, and the cumulative effects of these adjustments on the
consolidated statement of operations, balance sheet, and cash flows for 2014. In addition, this Note shows the effects of
the adjustment to opening retained earnings as of January 1, 2014, which adjustment reflects the impact of the
restatement on periods prior to 2014.

F-7

The annual impact on 2014 was a reduction in pre-tax income and net income of $10,807 million.

Description of Restatement Matters and Restatement Adjustment

In preparing the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, the

Company identified six non-cash errors: (1) in the way the Company had accounted for the fair value and classification
of its “earnout shares”, (2) in the classification and presentation of deferred tax assets and liabilities, (3) in the
classification of its shipping and handling costs, (4) in the presentation of related party revenue on consolidated
statements of operations and comprehensive income, (5) in the classification of purchases and sales of investments in the
consolidated statements of cash flows, and (6) earnings per share.

A description of each of the restatement adjustments is provided below:

(a) The Company entered into an Agreement and Plan of Reorganization (the “Merger Agreement”) as of August 17,
2013. Pursuant to the Merger Agreement, on the closing date of December 20, 2013, the Company issued 3,000,000
Ordinary Shares (“Earnout Shares”) to be held in escrow and to be released after the closing based on the Company’s
achievement of specified share price targets or targets based on Tecnoglass Holding’s net earnings before interest income
or expense, income taxes, depreciation, amortization and any expenses arising solely from the merger charged to income
(“EBITDA”) in the fiscal years ending December 31, 2014, 2015 or 2016. The following table sets forth the targets and
the number of Earnout Shares issuable upon the achievement of such targets:

Fiscal year ending 12/31/14 ......... $12.00 per share $
Fiscal year ending 12/31/15 .......... $13.00 per share $
Fiscal year ending 12/31/16 .......... $15.00 per share $

Ordinary Share
Price Target

EBITDA Target

Number of Earnout Shares
Minimum Maximum Minimum Maximum
500,000
416,667
875,000 1,000,000
1,333,333 1,500,000

30,000 $
35,000 $
40,000 $

36,000
40,000
45,000

Prior to December 31, 2015, the earnout shares were accounted for within equity at par value. In accordance with ASC
815 – Derivatives and hedging, the earnout shares are not considered indexed to the Company’s own stock and therefore
should have been accounted for as a liability with fair value changes being recorded in the consolidated statements of
operations and comprehensive income.

(b) Deferred tax assets and liabilities – The Company was presenting deferred tax assets and liabilities gross on the
balance sheet as at December 31, 2014. Per ASC 740 – Income Taxes, for a particular tax-paying component of an entity
and within a particular tax jurisdiction, all current deferred tax liabilities and assets shall be offset and presented as a
single amount and all noncurrent deferred tax liabilities and assets shall be offset and presented as a single amount. The
deferred tax assets and liabilities have been reclassified on the consolidated balance sheet as at December 31, 2014.

(c) Shipping and handling costs – For the year ended December 31, 2015, the Company records and presents shipping
and handling costs in selling expenses whereas in prior financial statements these expenses had been partially reported in
cost of sales. The amounts of shipping and handling costs have been reclassified in the consolidated statements of
operations and comprehensive income for the year ended December 31, 2014.

(d) Related party revenue – In accordance with Rule 4-08 (k) of Regulation S-X related party revenue should be
presented in the statements of operations and other comprehensive income. These amounts were included as part of total
Operating Revenues in 2014. Related party revenue has now been separately presented in the consolidated statements of
operations and comprehensive income.

(e) Cash flow from investing activities – Cash flows from the sale and purchase of investments were being netted within
cash flow from investing activites amounting to $1,518. The Company is now presenting the sales and purchases of
investments on a gross basis within cash flow from investing activites. This did not result in a change in total cash flow
from investing activities in 2014.

(f) Earnings per share – For the year ended December 31, 2014, the company presented a diluted weighted average
number of common shares outstanding for the calculation of diluted earnings per share that did not include the dilutive
effect of earnout shares contingently issuable upon achievement of certain specified EBITDA targets or market share
price. This resulted in the inclusion of 500,000 additional dilutive shares included in the calculation of diluted earnings
per share.

F-8

The following analysis includes the financial statements as originally reported and as adjusted and takes into account the
following adjustments:

Consolidated Balance Sheets

December 31, 2014

As reported Adjustment As Restated Reference

ASSETS
Current assets:
Cash ......................................................................................... $
Investments ..............................................................................
Trade accounts receivable, net .................................................
Unbilled receivables on uncompleted contracts .......................
Due from related parties ..........................................................
Other assets ..............................................................................
Deferred income taxes .............................................................
Inventories ...............................................................................
Prepaid expenses ......................................................................
Total current assets ............................................................

Long term assets:
Property, plant and equipment, net ..........................................
Long term receivables from related parties ..............................
Goodwill and Intangible assets ................................................
Deferred income taxes .............................................................
Other long term assets .............................................................
Total long term assets ........................................................
Total assets .......................................................................... $

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities and shareholders’ equity
Current liabilities
Short-term debt and current portion of long-term debt ............ $
Note payable to shareholder ....................................................
Trade accounts payable ............................................................
Due to related parties ...............................................................
Taxes payable ..........................................................................
Deferred inome taxes ...............................................................
Labor liabilities ........................................................................
Earnout share liability ..............................................................
Current portion of customer advances on uncompleted
contracts ...................................................................................
Total current liabilities ......................................................
Warrant liability .......................................................................
Earnout share liability ..............................................................
Customer advances on uncompleted contracts ........................
Long-term debt ........................................................................
Total long term liabilities ...................................................
Total liabilities .................................................................... $

Commitments and contingencies

Shareholders’ equity
Preferred shares, $0.0001 par value, 1,000,000 shares
authorized, 0 shares issued and outstanding at December 31,
2015 and 2014 ......................................................................... $
Ordinary shares, $0.0001 par value, 100,000,000 shares
authorized, 26,895,636 and 24,801,132 shares issued and
outstanding at December 31, 2015 and 2014, respectively ......
Legal reserves ..........................................................................
Additional paid capital .............................................................
Retained earnings .....................................................................
Accumulated other comprehensive income .............................
Total shareholders’ equity ....................................................
Total liabilities and shareholders’ equity............................. $

F-9

15,930
1,209
44,955
9,931
28,327
5,508
5,373
28,965
1,298
141,496

103,980
4,220
1,474
0
4,721
114,395
255,891

54,925
80
33,493
1,456
7,930
8,416
954
-

5,782
113,036
19,991
-
8,333
39,273
67,597
180,633
-

- $
-
(237)
-
237
-
(5,373)
-
-
(5,373)

-
-
-
5
-
5
(5,368) $

- $
-

(543)
543
-
(5,368)
-
5,075

-
(293)
-
23,986
-
-
23,986
23,693 $

15,930
1,209
44,718
9,931
28,564
5,508
0
28,965
1,298
136,123

103,980
4,220
1,474
5
4,721
114,400
250,523

54,925
80
32,950
1,999
7,930
3,048
954
5,075

5,782
112,743
19,991
23,986
8,333
39,273
91,583
204,326
-

b
b

a, b
a, b

2
1,367
46,514
38,806
-11,431
75,258
255,891

-
-
(20,374)
(8,687)
-
(29,061)
(5,368) $

2
1,367
26,140
30,119
-11,431
46,197
250,523

a
a

a
a, b

Consolidated Statement of Operations

Years ended December 31, 2014

As reported Adjustment As Restated Reference

Operating revenue:
Customers ................................................................................. $
Related Parties ..........................................................................
Total Operating Revenue .............................................................

197,452
-
197,452

(47,630)
47,630
-

149,822
47,630
197,452

Cost of sales .................................................................................
Gross profit ..................................................................................

136,021
61,431

(4,865)
4,865

131,156
66,296

Operating expenses:
Selling ..........................................................................................
General and administration ..........................................................
Operating expenses ......................................................................

17,872
16,327
34,199

4,865
-
4,865

22,737
16,327
39,064

Operating income .........................................................................

27,232

Change in fair value of warrant liability ......................................
Change in fair value of earnout shares liability ...........................
Non-operating income, net ..........................................................
Interest expense ...........................................................................

(1,711)
-
12,235
(8,900)

-
(10,807)
-
-

(1,711)
(10,807)
12,235
(8,900)

d
d

Income before taxes .....................................................................

28,856

(10,807)

18,049

Income tax provision ...................................................................
Net (loss) income ......................................................................... $

8,538
20,318

-
(10,807) $

8,538
9,511

Comprehensive income:
Net (loss) income ......................................................................... $
Foreign currency translation adjustments ....................................
Total comprehensive (loss) income ........................................... $

20,318
(16,001)
4,317

(10,807) $
-
(10,807) $

9,511
(16,001)
(6,490)

Basic income per share ................................................................ $

0.83

(0.44) $

0.39

Diluted income per share ............................................................. $

0.73

(0.39) $

0.34

Basic weighted average common shares outstanding .................. 24,347,620

- 24,347,620

Diluted weighted average common shares outstanding ............... 27,737,679

500,000 28,237,679

F-10

Consolidated Statement of Cash Flows

Years ended December 31, 2014

As reported Adjustment As Restated Reference

CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income .....................................................................
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Provision for bad debts ............................................................
Provision for obsolete inventory ..............................................
Change in fair value of investments held for trading ...............
Depreciation and amortization .................................................
Loss on disposition of assets ....................................................
Change in value of derivative liability .....................................
Change in value of Earnout Shares liability .............................
Change in fair value of warrant liability ..................................
Deferred income taxes .............................................................
Changes in operating assets and liabilities, net of effects
from acquisitions:
Trade Accounts Receivable .....................................................
Deferred income taxes .............................................................
Inventories ...............................................................................
Prepaid expenses ......................................................................
Other assets ..............................................................................
Trade accounts payable ............................................................
Taxes payable ..........................................................................
Labor liabilities ........................................................................
Related parties .........................................................................
Advances from customers ........................................................
CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES ...........................................................................

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investments ...........................................
Proceeds from sale of property and equipment ........................
Purchase of investments...........................................................
Acquisition of property and equipment ...................................
Restricted cash .........................................................................
CASH USED IN INVESTING ACTIVITIES .........................

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt ..................................................................
Proceeds from the sale of common stock.................................
Proceeds from the exercise of warrants ...................................
Repayments of debt and capital leases .....................................
Merger proceeds held in trust ..................................................
CASH PROVIDED BY FINANCING ACTIVITIES .............

20,318

(10,807)

9,511

20
(1,036)
168
8,542
1,300
(25)
-
1,711
(915)

(5,002)
466
(10,696)
(761)
1,852
11,846
4,465
530
(19,132)
(18,461)

-
-
-
-
-
-
-
10,807
-
-

-
-
-
-
-
-
-
-
-
-

20
(1,036)
168
8,542
1,300
(25)
10,807
1,711
(915)

(5,002)
466
(10,696)
(761)
1,852
11,846
4,465
530
(19,132)
(18,461)

(4,810)

825
3,609
400
(24,848)
3,633
(16,381)

87,109
1,000
821
(77,924)
22,519
33,525

1,518
-
(1,518)
-
-
-

-
-
-
-
-
-

-
-
-
-
- $

2,343
3,609
(1,118)
(24,848)
3,633
(16,381)

87,109
1,000
821
(77,924)
22,519
33,525

730

13,064
2,866
15,930

Effect of exchange rate changes on cash and cash equivalents

730

NET INCREASE IN CASH ....................................................
CASH - Beginning of year .......................................................
CASH - End of year ................................................................. $

13,064
2,866
15,930

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid during the year for:
Interest ..................................................................................... $
Taxes ........................................................................................ $

7,451
3,101

- $
- $

7,451
3,101

NON-CASH INVESTING AND FINANCING ACTIVITES:
Assets acquired under capital lease and financial obligations . $
Assets acquired with issuance of common stock ..................... $

27,778
4,000

- $
- $

27,778
4,000

F-11

Note 3.

Summary of significant accounting policies

Principles of Consolidation

These financial statements consolidate TGI, its indirect wholly-owned subsidiaries TG and ES, and its direct
subsidiaries Tecno LLC and Tecno RE, which are entities in which we have a controlling financial interest because we
hold a majority voting interest. To determine if we hold a controlling financial interest in an entity, we first evaluate if we
are required to apply the variable interest entity (“VIE”) model to the entity, otherwise the entity is evaluated under the
voting interest model. All significant intercompany accounts and transactions are eliminated in consolidation, including
unrealized intercompany profits and losses.

Foreign Currency Translation and Transactions

The consolidated financial statements are presented in U.S. Dollars, the reporting currency. Our foreign
subsidiaries’ local currency is the Colombian Peso, which is also their functional currency as determined by the analysis
markets, costs and expenses, assets, liabilities, financing and cash flow indicators. As such, our subsidiaries’ assets and
liabilities are translated at the exchange rate in effect at the balance sheet date, with equity being translated at the
historical rates. Revenues and expenses of our foreign subsidiaries are translated at the average exchange rates for the
period. The resulting cumulative foreign currency translation adjustments from this process are included as a component
of accumulated other comprehensive income (loss). Therefore, the U.S. Dollar value of these items in our financial
statements fluctuates from period to period.

Also, exchange gains and losses arising from transactions denominated in a currency other than the functional

currency are included in the consolidated statement of operations as foreign exchange gains and losses within non-
operating income, net.

Cash and Cash Equivalents

Cash and cash equivalents include investments with original maturities of three months or less. As of December

31, 2015, cash and cash equivalents were primarily comprised of deposits held in operating accounts in Colombia,
Panama and United States. As of December 31, 2015 and 2014 the Company had no restricted cash.

Investments

The Company’s investments are comprised of marketable securities, short term deposits and income producing

real estate.

Investments which are held for trading are recorded at fair value and fluctuations in value are recorded as a non-

operating income or expense. In addition, we have investments in long-term marketable equity securities which are
classified as available-for-sale securities and are recorded at fair value.

Short- term deposits and other financial instruments with maturities greater than 90 days and shares in other

companies that do not meet the requirements for equity method treatment are recorded for at cost.

We also have investments in income-producing real estate. This real estate is recorded at cost and is depreciated
using the straight-line method over its estimated useful life. The depreciation and rental income associated with this real
estate are recognized in the consolidated statement of operations.

Trade Accounts Receivable

Trade accounts receivable are recorded net of allowances for cash discounts for prompt payment, doubtful

accounts and sales returns. The Company’s policy is to reserve for uncollectible accounts based on its best estimate of the
amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts
receivable to determine whether an allowance for doubtful accounts is necessary based on an analysis of past due
accounts and other factors that may indicate that the collectability of an account may be in doubt. Other factors that the
Company considers include its existing contractual obligations, historical payment patterns of its customers and
individual customer circumstances, and a review of the local economic environment and its potential impact on the
collectability of accounts receivable. Account balances deemed to be uncollectible are written off after all means of
collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2015 and 2014,
the allowance for doubtful accounts was $32 and $110, respectively.

Concentration of Risks and Uncertainties

Financial instruments which potentially subject the Company to credit risk consist primarily of cash and trade

accounts receivable. The Company mitigates its cash risk by maintaining its cash deposits with major financial
institutions in Colombia and the Cayman Islands. At times the balances held at financial institutions in Colombia may
exceed the Colombia government insured limits of the Ministerio de Hacienda y Crédito Público. The Company has not
experienced such losses in such accounts. As discussed above, the Company mitigates its risk to trade accounts
receivable by performing on-going credit evaluations of its customers.

F-12

Related party transactions

The Company has related party transactions such as sales, purchases, leases, guarantees, and other payments.

We periodically performed a related party analysis to identify transactions to disclose. Depending on the transactions, we
aggregate some related party information by type. When necessary we also disclose the name of a related party, if doing
so is required to understand the relationship.

Inventories

Inventories of raw materials, which consist primarily of purchased and processed glass, aluminum, parts and
supplies held for use in the ordinary course of business, are valued at the lower of cost or market. Cost is determined
using a weighted-average method. Inventory consisting of certain job specific materials not yet installed (work in
process) are valued using the specific identification method. Cost for finished product inventory are recorded and
maintained at the lower of cost or market. Cost includes raw materials and direct and applicable indirect manufacturing
overheads. Also, inventories related to contracts in progress are included within work in process and finished goods, and
are stated at using the specific identification method and lower cost of market, respectively, and are expected to turn
over in less than one year.

Reserves for excess or slow-moving raw materials inventories are updated based on historical experience of a
variety of factors including sales volume and levels of inventories at the end of the period. The Company’s reserve for
excess or slow-moving inventories at December 31, 2015 and 2014 amounted to $0 and $292, respectively. The
Company does not maintain allowances for the lower of cost or market for inventories of finished products as its
products are manufactured based on firm orders rather than built-to-stock.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Significant improvements and renewals that extend the

useful life of the asset are capitalized. Interest caused while acquired property is under construction and installation are
capitalized. Repairs and maintenance are charged to expense as incurred. When property is retired or otherwise disposed
of, the cost and related accumulated depreciation are removed from the accounts and any related gains or losses are
included in income as a reduction to or increase in selling, general and administrative expenses. Depreciation is
computed on a straight-line basis, based on the following estimated useful lives:

Buildings ................................................................................................................................................................... 20 years
Machinery and equipment ........................................................................................................................................ 10 years
Furniture and fixtures ............................................................................................................................................... 10 years
Office equipment and software ................................................................................................................................. 5 years
Vehicles .................................................................................................................................................................... 5 years

The Company also records within fixed assets all the underlying assets of a capital lease. Initial recognition of

these assets are done at the present value of all future lease payments. A capital lease is a lease in which the lessor
transferred substantially all of the benefits and risks associated with the ownership of the property.

Long Lived Assets

The Company periodically reviews the carrying values of its long lived assets when events or changes in
circumstances would indicate that it is more likely than not that their carrying values may exceed their realizable values,
and record impairment charges when considered necessary.

When circumstances indicate that an impairment may have occurred, the Company tests such assets for
recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of such assets
and their eventual disposition to their carrying amounts. If the undiscounted future cash flows are less than the carrying
amount of the asset, an impairment loss, measured as the excess of the carrying value of the asset over its estimated fair
value, is recognized. Fair value is determined through various valuation techniques, including discounted cash flow
models, quoted market values and third-party independent appraisals, as considered necessary.

Goodwill

We review goodwill for impairment each year on December 31st or more frequently when events or significant
changes in circumstances indicate that the carrying value may not be recoverable. Under ASC 350-20-35-4 through 35-
8A, the goodwill impairment test requires a comparison of the fair value of the reporting unit with its carrying amount,
including goodwill. If the carrying amount of the reporting unit is greater than zero and its fair value exceeds its carrying
amount, goodwill of the reporting unit is considered not impaired. The Company has only one reporting unit and as such
the impairment analysis was done by comparing the Company’s market capitalization with its book value of equity. As
of our December 31, 2015, the Company’s market capitalization exceeded its book value of equity and as such no
impairment of goodwill was indicated. See Note 7– Goodwill and Intangible Assets for additional information.

F-13

Intangible Assets

Intangible assets with definite lives subject to amortization are amortized on a straight-line basis. We also

review these intangibles for impairment when events or significant changes in circumstance indicate that the carrying
value may not be recoverable. Events or circumstances that indicate that impairment testing may be required include the
loss of a significant customer, loss of key personnel or a significant adverse change in business climate or regulations.
There were no events or circumstances noted and as such no impairment analysis was done for intangible assets subject
to amortization. See Note 7 – Goodwill and Intangible Assets for additional information.

Common Stock Purchase Warrants

The Company classifies as equity any warrants contracts that (i) require physical settlement or net-share
settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement
or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement
(including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s
control) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-
share settlement).

The Company assesses classification of its common stock purchase warrants and other freestanding derivatives,

if any, at each reporting date to determine whether a change in classification between assets and liabilities is required.

Financial Liabilities

Financial liabilities correspond to the financing obtained by the Company through bank credit facilities and

accounts payable to suppliers and creditors. Financial liabilities are initially recognized based on their fair value, which is
usually equal to the transaction value less directly attributable costs. Subsequently, such financial liabilities are carried at
their amortized cost according to the effective interest rate method determined at initial recognition, and recognized in
the results of the period during the time of amortization of the financial obligation.

Warrant liability

An aggregate 9,200,000 warrants were issued as a result of the Public Offering, the Private Placement and the

Merger. Of the aggregate total, 4,200,000 warrants were issued in connection with the Public Offering (“IPO Warrants”),
4,800,000 warrants were issued in connection with the Private Placement (“Insider Warrants”), and 200,000 warrants
were issued upon conversion of a promissory note at the closing of the Merger (“Working Capital Warrants”). The
Company classifies the warrant instruments as a liability at their fair value because the warrants do not meet the criteria
for equity treatment under guidance contained in ASC 815-40-15-7D. The aggregate liability is subject to re-
measurement at each balance sheet date and adjusted at each reporting period until exercised or expired, and any change
in fair value is recognized in the Company’s consolidated statement of operations.

When the warrants are exercised for ordinary shares, the Company re-measures the fair value of the exercised

warrants as of the date of exercise using available fair value methods and records the change in fair value in the
consolidated statement of operations, and records the fair value of the exercised warrants as additional paid in capital in
the shareholders equity section of the Company’s consolidated balance sheet.

Following the SEC’s Notice of Effectiveness dated June 16, 2014 of the Company’s registration statement on

Form S-1 that registered the IPO Warrants and the Working Capital Warrants, an aggregate of 2,428,494 Warrants have
been exercised as of December 31, 2015. See more about the Company’s registration statement at Note 16.

Earnout shares liability

In accordance with ASC 815 – Derivatives and hedging, the earnout shares are not considered indexed to the

Company’s own stock and therefore are accounted for as a liability with fair value changes being recorded in the
consolidated statements of operations and comprehensive income. Earnout shares are released from the escrow account
upon achievement of the conditions set forth in the earnout share agreement. At this time the shares are recorded out of
the earnout share liability and into common stock and additional paid in capital within the shareholders equity section of
the Company’s consolidated balance sheets.

Unit Purchase Options

The Unit Purchase Options (“UPOs”) are derivative contracts in the entity’s own equity in accordance with

guidance in ASC 815-40, paragraphs 15-5 through 15-8 and are not accounted for as assets or liabilities requiring fair
value estimates for the derivative contract in each reporting period.

F-14

The Company accounted for issued UPOs, at issuance date in March 2012, at their fair market value calculated
using a Black-Scholes option-pricing model, including the amount of $500,100 received in cash payments, as an expense
of the Public Offering resulting with a charge directly to shareholders’ equity.

In November and December 2015, holders of UPOs exercised 803,468 unit options (one share and one warrant)

and simultaneously exercised the underlying warrants on a cashless basis, resulting in the issuance of 592,656 ordinary
shares. No cash was received in this simultaneous transaction. Because of the UPOs are accounted for in shareholders’
equity as instruments indexed to the Company’s own equity, and no cash or other consideration was received or
liabilities were settled, there is no measurement or re-measurement of fair value for the purposes of reclassification out of
retained earnings into additional paid in capital (see note 16).

Stock-Based Compensation

We account for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation.

ASC 718 requires compensation costs related to share-based transactions, including employee stock options, to be
recognized based on fair value. The Company accounts for share-based awards exchanged for employee services at the
estimated grant date fair value of the award. During December 31, 2015 and 2014, no share-based awards have been
granted to employees.

Derivative Financial Instruments

The Company records all derivatives on the balance sheet at fair value, regardless of the purpose or intent for

holding them. The Company has not designated its derivatives as hedging instruments; therefore, the Company does not
designate them as fair value or cash flow hedging instruments. The accounting for changes in fair value of the derivatives
is recorded within the Company’s consolidated statement of operations.

Fair Value of Financial Instruments

ASC 820, Fair Value Measurements, establishes a fair value hierarchy which requires us to maximize the use of

observable inputs and minimize the use of unobservable inputs when measuring fair value. We primarily apply the
market approach for financial assets and liabilities measured at fair value on a recurring basis. Fair value is the price we
would receive to sell and asset or pay to transfer a liability in an orderly transaction with a market participant at the
measurement date. In the absence of active markets for identical assets or liabilities, such measurements involve
developing assumptions based on market observable data and, in the absence of such data, internal information that is
consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date.

The standard describes three level of inputs that may be used to measure fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;
quoted prices in markets that are not active; or other inputs that are observable by observable market data for
substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair
value of the assets or liabilities.

See Note 13 – Fair value measurements.

Revenue Recognition

Our principal sources of revenue are derived from product sales of manufactured glass and aluminum products.

Revenue is recognized when (i) persuasive evidence of an arrangement exists in the form of a signed purchase order or
contract, (ii) delivery has occurred per contracted terms, (iii) fees and prices are fixed and determinable, and (iv)
collectability of the sale is reasonably assured. All revenue is recognized net of discounts, returns and allowances.
Delivery to the customer is deemed to have occurred when the title is passed to the customer. Generally, title passes to
the customer upon shipment, but title transfer may occur when the customer receives the product based on the terms of
the agreement with the customer.

Revenues from fixed price contracts, which amount to approximately 22% of the Company’s sales for the year

ended December 31, 2015 are recognized using the percentage-of-completion method, measured by the percentage of
costs incurred to date to total estimated costs for each contract. Revenues recognized in advance of amounts billable
pursuant to contracts terms are recorded as unbilled receivables on uncompleted contracts based on work performed and
costs to date. Unbilled receivables on uncompleted contracts are billable upon various events, including the attainment of
performance milestones, delivery and installation of products, or completion of the contract. Revisions to cost estimates
as contracts progress have the effect of increasing or decreasing expected profits each period. Changes in contract
estimates occur for a variety of reasons, including changes in contract scope, estimated revenue and estimated costs to
complete. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are
determined. Changes in contract performance and estimated profitability may result in revisions to costs and income and
are recognized in the period in which the revisions are determined and do not have a material effect on the Company’s
financial statements.

F-15

Shipping and Handling Costs

The Company classifies amounts billed to customers related to shipping and handling as product revenues. The

Company records and presents shipping and handling costs in selling expenses.

Sales Tax and Value Added Taxes

The Company accounts for sales taxes and value added taxes imposed on its goods and services on a net basis -
value added taxes paid for goods and services purchased is netted against value added tax collected from customers and
the net amount is paid to the government. The current value added tax rate in Colombia for all of the Company’s
products is 16%. A municipal industry and commerce tax (ICA) sales tax of 0.7% is payable on all of the Company’s
products sold in the Colombian market.

Product Warranties

The Company offers product warranties in connection with the sale and installation of its products that are

competitive in the markets in which the products are sold. Standard warranties depend upon the product and service, and
are generally from five to ten years for architectural glass, curtain wall, laminated and tempered glass, window and door
products. Warranties are not priced or sold separately and do not provide the customer with services or coverages in
addition to the assurance that the product complies with original agreed-upon specifications. Claims are settled by
replacement of the warrantied products.

The Company evaluated historical information regarding claims for replacements under warranties and

concluded that the costs that the Company have incurred in relation to these warranties have not been material.

Other Income (expenses)

The Company recognizes other income and expenses from gain and losses on change in fair value of warrant

liability, gains and losses from change in fair value of earnout share liability, interest expense, interest income, and
foreign currency transaction gain and losses, and proceeds from sales of scrap materials and other activities not related to
the Company’s operations.

Non-operating income (net) on our consolidated statement of operations amounted to $13,877 and $12,235, for

the years ended December 31, 2015 and 2014, respectively. Included within these amounts there were net gains from
foreign currency transactions amounting to $10,059 and $10,790, for the years ended December 31, 2015 and 2014,
respectively.

Advertising Costs

Advertising costs are expensed as they are incurred and are included in general and administrative expenses.

Advertising costs for the years ended December 31, 2015 and 2014 amounted to approximately $936 and $420,
respectively.

Employee Benefits

The Company provides benefits to its employees in accordance with Colombian labor laws. Employee benefits

do not give rise to any long term liability.

Income Taxes

The Company’s operations in Colombia are subject to the taxing jurisdiction of the Republic of Colombia.

Tecnoglass LLC and Tecnoglass RE LLC are subject to the taxing jurisdiction of the United States. TGI and Tecnoglass
Holding are subject to the taxing jurisdiction of the Cayman Islands. Annual tax periods prior to December 2014 are no
longer subject to examination by taxing authorities in Colombia.

The Company believes that its income tax positions and deductions would be sustained on audit and does not

anticipate any adjustments that would result in a material changes to its financial position. There are no significant
uncertain tax positions requiring recognition in the Company’s consolidated financial statements. The Company records
interest and penalties, if any, as a component of income tax expense.

The Company accounts for income taxes under the asset and liability model (ASC 740 “Income Taxes”) and

recognizes deferred tax assets and liabilities for the expected impact of differences between the financial statements and
tax bases of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry
forwards. A valuation allowance is established when management determines that it is more likely than not that all or a
portion of deferred tax assets will not be realized.

F-16

The Company presents deferred tax assets and liabilities net as either an asset or liability, depending on the net

deferred tax position and separating current deferred income taxes from non-current income taxes.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial

statements and prescribes a recognition threshold and measurement process for financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return.

Earnings per Share

The Company computes basic earnings per share is computed by dividing net income by the weighted-average

number of ordinary shares outstanding during the period. Income per share assuming dilution (diluted earnings per share)
would give effect to dilutive options, warrants, and other potential ordinary shares outstanding during the period. The
Company considered the dilutive effect of warrants, earnout shares and options to purchase ordinary shares in the
calculation of diluted income per share, which resulted in 3,890,059 shares of dilutive securities for the years ended
December 31, 2014. Calculation of earnings per share or the year ended December 31, 2015, excludes the effect of
3,502,079 shares of dilutive securities given their inclusion would be antidilutive given the net loss for the period.

Recently Issued Accounting Pronouncements

In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers – Deferral of

the Effective Date.” ASU 2015-14 defers the effective date of Update 2014-09 for all entities by one year. Early adoption
is permitted. Below is the description of ASU 2014-09 which the Company is currently evaluating.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09).

ASU 2014-09 provides guidance for revenue recognition and affects any entity that either enters into contracts with
customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets and supersedes the
revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance. The core
principle of ASU 2014-09 is the recognition of revenue when a company transfers promised goods or services to
customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those
goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, companies
will need to use more judgment and make more estimates than under the current guidance. These may include identifying
performance obligations in the contract, estimating the amount of variable consideration to include in the transaction
price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for fiscal
years beginning after December 15, 2017 and interim periods therein, using either of the following transition methods: (i)
a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to
elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU
2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently
evaluating the method and impact the adoption of ASU 2014-09 will have on the Company’s consolidated financial
statements and disclosures.

In September 25, 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period

Adjustments”, that eliminates the requirement to restate prior period financial statements for measurement period
adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the
impact on prior periods) be recognized in the reporting period in which the adjustment is identified. Early adoption is
permitted. The Company early adopted ASU 2015-16 and the impact on prior year is included in note 19.

On February 25, 2016, the FASB released ASU 2016-02, “Leases – ASC 842”, completing its project to
overhaul lease accounting under ASC 840. The new guidance requires the recognition of most leases on its balance sheet.
Also, a modified retrospective transition will be required, although there are significant elective transition reliefs
available for both lessors and lessees. This standard is effective for public companies in fiscal years beginning after
December 15, 2018. Early adoption is permitted. The Company is in the process of analyzing the new standard.

Note 4.

Trade Accounts Receivable

Trade accounts receivable consists of the following:

Trade accounts receivable ..................................................................................................... $
Less: Allowance for doubtful accounts .................................................................................
$

52,547 $
(32)
52,515 $

44,828
(110)
44,718

December 31,

2015

2014

F-17

The changes in allowances for doubtful accounts for the years ended December 31, 2015 and 2014 are as

follows:

Balance at beginning of year ................................................................................................ $
Provision for bad debts .........................................................................................................
Deductions and write-offs .....................................................................................................
Balance at end of year ........................................................................................................... $

110 $
1,286
(1,364)
32 $

403
20
(313)
110

December 31,

2015

2014

Note 5.

Other Assets

Other assets consists of the following

December 31,

2015

2014

Advances to Suppliers and Loans ......................................................................................... $
Prepaid Income Taxes ...........................................................................................................
Employee Receivables ..........................................................................................................
Other Creditors .....................................................................................................................
$

835 $
6,069
327
563
7,794 $

1,353
3,376
552
227
5,508

Note 6.

Other Long Term Assets

Real estate Investments ......................................................................................................... $
Acquired assets pending purchase price allocation ...............................................................
Other Long Term Assets .......................................................................................................
$

4,944 $
-
1,476
6,420 $

-
4,134
587
4,721

Acquired assets pending purchase price allocation are assets acquired from Glasswall LLC in December of

2014. See Note 19– Business Combinations for more information.

December 31,

2015

2014

Note 7.

Goodwill and Intangible Assets

Goodwill

The only goodwill the Company has on its balance sheet is in connection with the acquisition of Glasswall LLC.

As of December 31, 2014, the Company’s provisional amounts for the fair value of the assets acquired did not result in
goodwill. However, after the measurement period adjustments became finalized, the Company reallocated $1,330 from
Acquired assets pending purchase price allocation under Other long term assets to goodwill.

The Company has only one reporting unit and as such the impairment analysis was done by comparing the

Company’s market capitalization with its book value of equity. For purposes of testing goodwill for impairment as of
December 31, 2015, the Company compared its market capitalization amounting to $366 million to its book value of
equity amounting to $67.7 million. No goodwill impairment was necessary since the Company’s market capitalization
exceeded its book value of equity.

During 2015 there was no impairments, foreign currency exchange movements, or acquisitions and as such the

goodwill balance did not change after the measurement period adjustment related to December 31, 2014.

Goodwill as of 12/31/2014 before measurement period adjustment .... $
Measurement period adjustment ..........................................................
Goodwill as of 12/31/2014 ..................................................................
Goodwill as of 12/31/2015 ..................................................................

-
1,330
1,330
1,330

Intangible Assets, Net

In connection to our acquisitions of RC Aluminum and Glasswall LLC, our intangible assets were recorded at

their estimated fair value. In relation to the Glasswall LLC acquisition, we have recognized measurement period
adjustments as provisional amounts became finalized during the final valuation assessment of the intangibles assets that
existed as of the acquisition date.

F-18

Intangible assets, net include the following Miami-Dade County Notices of Acceptances (NOA’s):

Gross amount ...................................................................................
Accumulated Amortization .............................................................
Intangible assets, net ........................................................................

3,455
(1,535)
1,920

1,944
(470)
1,474

The weighted average amortization period is 10 years.

December 31,

2015

2014

During the twelve months ended December 31, 2015 and December 31 2014, the amortization expense

amounted to $1,063 and $470, respectively, and was included within the general and administration expenses in our
consolidated statement of operations. Also, during the twelve months ended December 31, 2015 NOAs amounting to
$1,500 were reclassified from other long term assets pursuant to the final purchase price allocation of the Glasswall
acquisition (See note 19) upon completion of the measurement period adjustment. There were no acquisitions or
impairment and these intangibles are not subject to foreign currency translation adjustments since they are recorded at the
Company’s reporting currency.

The estimated aggregate amortization expense for each of the five succeeding years as of December 31, 2015 is

as follows:

Year ending
2016 ................................................ $
2017 ................................................
2018 ................................................
2019 ................................................
2020 ................................................
$

(in thousands)

496
421
150
150
150
1,367

Note 8.

Inventories

Inventories are comprised of the following

Raw materials ................................................... $
Work in process ................................................
Finished goods ..................................................
Stores and spares ..............................................
Packing material ...............................................

Less: inventory allowances

December 31, December 31,
2014
22,421
2,136
2,158
2,371
171
29,257
(292)
28,965

2015
36,254 $
3,451
2,875
3,190
241
46,011
-
46,011 $

Note 9.

Property, Plant and Equipment

Property, plant and equipment is comprised of the following:

December 31, December 31,

2015

2014

Building ............................................................................................................................... $
Machinery and equipment ...................................................................................................
Office equipment and software ............................................................................................
Vehicles ...............................................................................................................................
Furniture and fixtures ..........................................................................................................
Total property, plant and equipment ...............................................................................
Accumulated depreciation and amortization ........................................................................
Net book value of property and equipment ..........................................................................
Land .....................................................................................................................................
Total property, plant and equipment, net ........................................................................ $

41,804 $
107,179
3,528
1,402
1,569
155,482
(33,018 )
122,464
13,510
135,974 $

36,228
76,497
2,868
1,412
1,651
118,656
(31,646)
87,010
16,970
103,980

F-19

Depreciation expense was $9,906 and $7,531 for the years ended December 31, 2015 and 2014.

Included within the table above are Property, plant and equipment under capital lease, which are comprised of

the following:

December 31, December 31,

2015

2014

Buildings ........................................................................................ $
Land ...............................................................................................
Machinery and Equipment .............................................................
Total assets under capital lease ...................................................
Accumulated Depreciation ............................................................
Total assets under capital lease, net ........................................... $

3,625 $
8,375
26,384
38,384
(3,822)
34,562 $

376
18,459
3,689
22,525
(2,522 )
20,002

For more information on capital lease obligations see note 10 – Debt. Differences between capital lease
obligations and the value of property, plant and equipment under capital lease arise from differences in the maturities of
capital lease obligations and the useful lives of the underlying assets.

The roll forward of Property, plant and equipment for the years ended December 31, 2015 and 2014 was as

follows:

December 31,

2015

2014

Property, Plant and Equipment

Beginning balance ............................................................................................................... $
Acquisitions .........................................................................................................................
Purchase price allocation adjustment ...................................................................................
Disposals ..............................................................................................................................
Reclassification to investment property ...............................................................................
Effect of Foreign currency translation .................................................................................
Ending Balance .................................................................................................................... $

135,626 $
82,032
1,170
(2,114)
(5,080)
(42,642)
168,992 $

Accumulated Depreciation

Beginning Balance ............................................................................................................... $
Depreciation Expense ..........................................................................................................
Disposals ..............................................................................................................................
Reclassification to investment property ...............................................................................
Effect of Foreign Currency Translation ...............................................................................
Ending balance..................................................................................................................... $
Property, plant and Equipment, Net ................................................................................... $

(31,646) $
(9,906)
19
161
8,354
(33,018) $
135,974 $

118,299
52,626
-
(4,909)
-
(30,390)
135,626

(30,919)
(7,531)
-
-
6,804
(31,646)
103,980

Reclassification to investment property corresponds to the reclassification to other long term assets for $4,944
comprised of land and buildings purchased in December 2014 related to the Glasswall acquisition, initially classified as
property, plant and equipment. As of December 31, 2015 these assets have been classified as income producing real
estate investment included within other long term assets following the Company’s decision to use these assets for
investment purposes. The effect of foreign currency translation is the adjustment resulting from translating the amounts
from Colombian Pesos, functional currency of some of the Company’s subsidiaries, into U.S. Dollars, the reporting
currency.

Note 10. Debt

The Company’s debt is comprised of the following:

Revolving lines of credit ......................................................................................................
Loans ...................................................................................................................................
Capital Lease .......................................................................................................................

4,640
107,692
26,082

Total obligations under borrowing arrangements ................................................................ $
Less: Current portion of long-term debt and other current borrowings ...............................
Long-term debt .................................................................................................................... $

138,414 $
16,921
121,493 $

375
78,318
15,505

94,198
54,925
39,273

December 31, December 31,

2015

2014

F-20

At December 31, 2015, the Company owed approximately $138,414 under its various borrowing arrangements
with several banks in Colombia and Panama including obligations under various capital leases as discussed below. The
bank obligations have maturities ranging from six months to 15 years that bear interest at rates ranging from 2.3 % to
17,13%. These loans are generally secured by substantially all of the Company’s accounts receivable or inventory, except
for the 15-year mortgage secured by the Company’s real properties in Miami-Dade County. Most of the company’s
borrowings as of December 31, 2015 were denominated in Colombian pesos except for $52,964 of U.S. Dollar
denominated borrowings.

The mortgage loan with TD Bank secured by Tecno RE in December 2014 to finance the acquisition of real
property in Miami-Dade County, Florida with an outstanding balance of $3,733 as of December 31, 2015, contained a
covenant requiring a 1.0:1 debt service coverage ratio measured on an annual basis. At December 31, 2015, the Company
did not meet the required covenant and received a waiver from TD Bank to defer testing of the covenant until December
31, 2016 with no other remedy or conditions imposed.

The Company had $8,524 and $7,362 of property, plant and equipment as well as $0 and $435 of other long
term assets pledged to secure $ 48,056 and $26,856 under various lines of credit as of December 31, 2015 and 2014,
respectively.

Net proceeds from debt were $10,449 and $9,185 during the years ended December 31, 2015 and 2014,
consisting of $112,805 and $87,109 new obligations entered with similar terms to existing debt, and repayments of debt
for $102,356 and $77,924 for the years ended December 31, 2015 and 2014, respectively.

On January 7, 2016, the Company entered into a $109.5 million, seven-year senior secured credit facility.

Proceeds from the new facility were used to refinance $83.5 million of existing debt, with the remaining $26.0 million
available to the Company for capital expenditures and working capital needs. Approximately $48.4 million of the new
facility were used to refinance short term debt as long term debt. The Company’s consolidated balance sheets as of
December 31, 2015 reflects the effect of this refinance of the Company’s current portion of long term debt and other
current borrowings into long term debt based on the Company’s intent as of that date.. The new facility features two
tranches, including one tranche denominated in USD representing 71% of the facility and another tranche denominated in
Colombian Pesos (COP) representing the remaining 29%. Borrowings under the facility will bear interest at a weighted
average interest rate of 7% for the first year, and thereafter at a rate of LIBOR plus 5.25% and DTF (Colombian index)
plus 5.00% for the respective USD and COP denominated tranches.

Maturities of long term debt and other current borrowings are as follows as of December 31, 2015:

Year Ending December 31,
2016 ................................................................................ $
2017 ................................................................................
2018 ................................................................................
2019 ................................................................................
2020 ................................................................................
Thereafter ........................................................................
Total ................................................................................ $

16,921
6,876
9,649
14,062
20,388
70,518
138,414

Revolving Lines of Credit

The Company has approximately $7,264 in two lines of credit under a revolving note arrangement as of

December 31, 2015. The floating interest rates on the revolving notes are between DTF+4% and DTF+6%. DTF is the
primary measure of interest rates in Colombia. The notes are secured by all assets of the Company. At December 31,
2015 and 2014, $4,640 and $375 was outstanding under these lines, respectively.

Capital Lease Obligations

The Company is obligated under various capital leases under which the aggregate present value of the minimum

lease payments amounted to approximately $21,161. The present value of the minimum lease payments was calculated
using discount rates ranging from 9.2% to 11.4%.

The future minimum lease payments under all capital leases at December 31, 2015 are as follows:

Year Ending December 31,
2016 ................................................................................
2017 ................................................................................
2018 ................................................................................
2019 ................................................................................
2020 ................................................................................
Thereafter ........................................................................
Total minimum lease payments ......................................
Amount representing interest ..........................................
Net minimum lease payments ......................................... $

4,652
4,005
4,401
4,899
5,567
10,831
34,355
(8,273)
26,082

F-21

Differences between capital lease obligations and the value of property, plant and equipment arise from

differences in the maturities of capital lease obligations and the useful lives of the underlying assets.

Interest expense for the year ended December 31, 2015 and 2014 was $9,274 and $8,900, respectively. During

the year ended December 31, 2015, the Company capitalized interests for the amount of $1,383.

Note 11. Note Payable to Shareholder

From September 5, 2013 to November 7, 2013 A. Lorne Weil loaned the Company $150 of which $70 was paid

at closing of the Merger and $80 remained unpaid as of December 31, 2014 and December 31, 2013. During the second
quarter of 2014, the Company paid $1 and a balance of $79 remains unpaid as of December 31, 2015.

Note 12.

Income Taxes

The Company files income tax returns for TG and ES in the Republic of Colombia where, as a general rule,

taxable income for companies is subject to a 25% Income Tax rate, except for taxpayers with special rates approved by
the Congress. A minimum taxable income is calculated as 3% of net equity on the last day of the immediately preceding
period and is used as taxable income if it is higher than taxable income otherwise calculated. Tecnoglass Inc, as well as
all the other subsidiaries in the Cayman Islands and Panama do not currently have any tax obligations.

On December 23, 2014, Colombia’s president signed into effect a tax reform bill amending the Colombian Tax

Statute fixing the Income Tax Rate at 25%. An additional income tax for social equity, the CREE Tax, is based on
taxable income and applies at a rate of 9% to certain taxpayers including the Company. Prior to the reform, the CREE
Tax would only apply for years 2013-2015. The reform makes the CREE tax rate of 9% permanent and an additional
CREE Surtax will also apply for the years 2015 through 2018 at varying rates. The Income tax reform resulted in
deferred tax liabilities being increased by $286 at December 31, 2014 when compared with previous income tax rates.

The following table summarizes income tax rates under the tax reform law.

Income Tax ...............................................
CREE Tax .................................................
CREE Surtax .............................................
Total Tax on Income .................................

2015
25%
9%
5%
39%

2016
25%
9%
6%
40%

2017
25%
9%
8%
42%

2018
25%
9%
9%
43%

2019
25%
9%
-
34%

The components of income tax expense (benefit) are as follows:

Current income tax

Colombia .......................................................................................................................... $

20,810 $

9,453

Deferred income Tax

Colombia ..........................................................................................................................
Total Provision for Income Tax ............................................................................................ $

(119)
20,691 $

(915)
8,538

A reconciliation of the statutory tax rate in Colombia to the Company’s effective tax rate is as follows:

December 31,
2015

2014

December 31,

2015

2014

Income tax expense at statutory rates ...................................................................................

39.0%

Non-deductible expenses ......................................................................................................
Non-taxable income ..............................................................................................................
Effective tax rate ...................................................................................................................

224.3%
-2.2%
261.1%

34.0%

19.3%
-6.0%
47.3%

The Company’s effective tax rate of 261% and 47.3% for the year ended December 31, 2015 reflects non-

deductible losses of $24,901 due to the change in fair value of the Company’s warrant liability during the year ended
December 31, 2015 which contributed to 122.5 percentage points in the reconciliation of the Company’s effective
income tax rate to the statutory rate and non-deductible losses of $10,858 and $10,807 due to the change in fair value of
the Company’s earnout share liability during the year ended December 31, 2015 and 2014, respectively, which
contributed to 53.4 percentage points and 20.4 percentage points in the reconciliation of the Company’s effective income
tax rate to the statutory rate.. There were no other individual items that contributed 5 percentage points or more in the
reconciliation of the Company’s effective tax rate and the statutory rate during the years ended December 31, 2015 and
none during the year ended December 31, 2014.

F-22

The Company has the following net deferred tax assets and liabilities:

Deferred tax assets:
Accounts Receivable Clients - not delivered FOB .............................................................. $
Unbilled receivables on uncompleted contracts ...................................................................
Depreciation .........................................................................................................................
Financial Liabilities .............................................................................................................
Deferred profit on other assets .............................................................................................
Provision Inventory obsolescence ........................................................................................
Total deferred tax assets ......................................................................................................
Less: Current portion of deferred tax assets .........................................................................
Long term portion of deferred tax assets .............................................................................

Deferred tax liabilities:
Inventory - not delivered FOB ............................................................................................. $
Unbilled receivables uncompleted contracts ........................................................................
Depreciation .........................................................................................................................
Financials Liabilities ............................................................................................................
Provision Accounts Receivable ...........................................................................................
Total deferred tax liabilities ................................................................................................. $
Less: Current portion of deferred tax liability .....................................................................
Long term portion of deferred tax liability ..........................................................................

December 31,

2015

2014

2,402 $
-
327
0
433
-
3,162 $
2,271
891

1,646 $
3,947
311
2

5,905 $
5,654
251

1,260
2,452
1,542
5
-
114
5,373
4,960
413

984
6,325
485
-
622
8,416
8,008
408

Net deferred tax liability ................................................................................................... $

2,744 $

3,043

The Company does not have any uncertain tax positions for which it is reasonably possible that the total amount

of gross unrecognized tax benefits will increase or decrease within twelve months of December 31, 2015. The
unrecognized tax benefits may increase or change during the next year for items that arise in the ordinary course of
business and may be subject to inspection by the Colombian tax authorities for a period of up to two years until the
statute of limitations period elapses.

Note 13. Fair Value Measurements

The Company accounts for financial assets and liabilities in accordance with accounting standards that define

fair value and establish a framework for measuring fair value. The hierarchy prioritizes the inputs into three broad levels.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted
prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either
directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3
inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A
financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is
significant to the fair value measurement.

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts

receivable, accounts payable and advances from customers approximate their fair value due to their relatively short-term
maturities. The Company bases its fair value estimate for long term debt obligations on its internal valuation that all debt
is floating rate debt based on current interest rates in Colombia.

Financial assets and liabilities measured at fair value on a recurring basis:

At December 31, 2015
Marketable equity securities ........................................................................
Earnout Shares Liability ..............................................................................
Warrant Liability .........................................................................................

Quotes
Prices
in Active
Markets
(Level 1)

Significant
Other

Significant
Observable Unobservable

Inputs
(Level 2)

Inputs
(Level 3)

428
-
-

-
-
-

-
34,154
31,213

Interest Rate Swap Derivative Liability .......................................................

F-23

At December 31, 2014
Marketable equity securities ........................................................................
Earnout Shares Liability ..............................................................................
Warrant Liability .........................................................................................

Interest Rate Swap Derivative Liability .......................................................

Quotes
Prices
in Active
Markets
(Level 1)

Significant
Other

Significant
Observable Unobservable

Inputs
(Level 2)

Inputs
(Level 3)

667

-
29,061
19,991

134

As of December 31, 2015, financial instruments carried at amortized cost that do not approximate fair value

consist of long-term debt. See Note 10 – Debt. The fair value of long term debt was calculated based on an analysis of
future cash flows discounted with our average cost of debt which is based on market rates, which are level 2 inputs.

The following table summarizes the fair value and carrying amounts of our long term debt:

Fair Value .................................................................... 138,347 43,266
Carrying Value............................................................. 121,493 39,273

Note 14. Related Parties

December 31
2014
2015

The Company’s major related party entities disclosed in this footnote are: (i) ES Windows LLC (“ESW LLC”),

a Florida LLC that imports and resells the Company’s products and is owned by related party members, (ii) Ventanas
Solar S.A. (“VS”), an importer and installer based in Panama and owned by related party family members, and (iii)
Union Temporal ESW (“UT ESW”), a temporary contractual joint venture with Ventanar S. A. under Colombian law that
is managed by related parties and that expires at the end of its applicable contract.

The following is a summary of assets, liabilities, and income and expense transactions with all related parties,

shareholders, directors and managers:

At December 31, At December 31,

2015

2014

Assets

Current Assets
Due from ESW LLC .................................................................................................. $
Due from VS ..............................................................................................................
Due from UT ESW ....................................................................................................
Due from other related parties ...................................................................................
$

Long Term Trade receivable from VS ....................................................................... $
Investments ................................................................................................................

17,887 $
6,895
-
3,291
28,073 $

2,536 $
64

13,814
7,979
2,001
4,770
28,564

4,220
84

Liabilities
Due to related parties ................................................................................................. $

(1,283) $

(1,999)

December 31, December 31,
2014

2015

Revenues ....................................................................... $
Interest Income .............................................................

58,200 $
451

47,630
-

Expenses-
Fees paid to Directors and Officers ..............................
Paid to other related parties ..........................................

1,871
3,036

1,327
3,549

Sales to other related parties were less than $0.1 million in the year ended December 31, 2015 and 2014.

F-24

Due from other related parties as of December 31, 2015 includes $657 due from Daesmo, $524 from Consorcio
Ventanar ESW – Boca Grande. Also included within due from other related parties is a loan to Finsocial, a company that
makes loans to public school system teachers with balances were $256 and $2,255 as of December 31, 2015 and 2014,
respectively.

Paid to other related parties during the year ended December 31, 2015 include charitable contributions to the

Company’s foundation for $1,234, sales commissions for $1,107 and other services for $694 .

During 2015 and 2014, the Company and VS executed a short-term payment agreement and a three-year
payment agreement that were mainly created to fund working capital to VS due the timing difference between the
collections from VS’s customers. The interest rate of these payment agreements are Libor + 4.7% paid semiannually and
Libor +6.5% paid monthly for the short-term agreement and the three-year agreement, respectively.

In December 2014, ESW LLC, a related party, guaranteed a mortgage loan for $3,920 for the acquisition of real

properties in Miami-Dade County, Florida by Tecnoglass RE LLC, a wholly owned subsidiary of the Company.

Analysis of variable interest entities

The Company conducted an evaluation of its involvement with all its significant related party business entities

as of December 31, 2015 and 2014 in order to determine whether these entities were variable interest entities (“VIE”)
requiring consolidation or disclosures in the financial statements of the Company. The Company evaluated the purpose
for which these entities were created and the nature of the risks in the entities as required by the guidance under ASC
810-10-25 - Consolidation and related Subsections.

From all the entities analyzed, only two entities, ESW LLC and VS, resulted in having variable interests.
However, as of the date of the initial evaluation and for the year ended December 31, 2015, the Company concluded that
both entities are not deemed VIEs and as such these entities should not be consolidated within the Company’s
consolidated financial statements.

The Company’s analysis that was performed previously for the preparation of the financial statements as of

December 31, 2014 concluded that these entities were VIEs. However, further analysis of the facts and circumstances
surrounding the Company’s accounting of ESW LLC and VS performed during 2015 determined that the prior analysis
was in error. The Company considered a quantitative and qualitative materiality assessment of the disclosure error and
concluded it was not material to the Company’s previously reported financial statements.

Note 15. Derivative Financial Instruments

In 2012, the Company entered into three interest rate swaps (IRS) contracts as economic hedges against interest
rate risk through 2017, and two currency forward contracts as economic hedges against foreign currency rate risk on U.S.
dollar loans. The currency forwards expired in January 2014. Hedge accounting treatment per guidance in ASC 815-10
and related Subsections was not pursued at inception of the contracts. Changes in the fair value of the derivatives are
recorded in current earnings. The derivatives were recorded as a liability on the Company’s balance sheet at an aggregate
fair value of $42 and $134 as of December 31, 2015 and 2014, respectively.

Note 16. Warrant Liability and Earnout Shares Liability

Warrant Liability

The fair value of the warrant liability was determined by the Company using the Binomial Lattice pricing

model. This model is dependent upon several variables such as the instrument’s expected term, expected strike price,
expected risk-free interest rate over the expected instrument term, the expected dividend yield rate over the expected
instrument term and the expected volatility of the Company’s stock price over the expected term. The expected term
represents the period of time that the instruments granted are expected to be outstanding. The expected strike price is
based upon a weighted average probability analysis of the strike price changes expected during the term as a result of the
down round protection. The risk-free rates are based on U.S. Treasury securities with similar maturities as the expected
terms of the options at the date of valuation. Expected dividend yield is based on historical trends. The Company
measures volatility using a blended weighted average of the volatility rates for a number of similar publicly-traded
companies. The inputs to the model were as follows:

Stock Price ............................................................................................................................ $
Dividend Yield......................................................................................................................
Risk-free rate ........................................................................................................................
Expected Term ......................................................................................................................
Expected Volatility (level 3 input) ........................................................................................
*A quarterly dividend of $0.125 per share commencing in the second quarter of 2016 was assumed.

13.74 $
*
0.65%
0.97
37.69%

10.15
N/A
0.67%
1.97
33.62%

December 31,

2015

2014

F-25

Changes in assumptions could have significant impact on the fair valuation attributed to the Company’s

warrants. When these assumptions change or become known in the future, such differences will impact the liability
carrying value in the period in which they change or become known. The company performed a sensitivity analysis on
the redeemable and non-redeemable warrants to assess the impact of a change in the assumptions.



The value of the redeemable warrants is sensitive to changes in the Company’s common share price. An
increase or decrease in the common share price of 5% would result in a increase or decrease in the value of the
redeemable warrants of approximately 4.5% and 11.5% respectively. The potential increase is limited by the
redemption feature. The value of the redeemable warrants is not particularly sensitive to changes in volatility (a
5% increase or decrease would result in a less than a 1% change in the value of the redeemable warrants), or the
risk-free rate (a 50bps increase or decrease would result in less than a 0.25% change in value of the redeemable
warrants). The value of the redeemable warrants are, in fact, almost completely insensitive to any changes in the
risk-free rate or volatility. This is due to combination of the following circumstances 1) being close to their
maximum value (i.e $13.74 common stock price vs. $14.00 redemption price), 2) their short remaining life (~1
year), and 3) the likelihood of exercise before the first dividend payment.

The value of the non-redeemable warrants is sensitive to changes in the Company’s common share price. An
increase or decrease in the common share price of 5% would result in an increase or decrease in the value of the
non-redeemable warrants of approximately 11.5%, respectively. The value of the non-redeemable warrants is
not particularly sensitive to changes in volatility assumption (a 5% increase or decrease would result in a less
than a 1% change in the non-redeemable warrant value), or changes in the risk-free rate assumption (a 50bps
increase or decrease would result in less than a 0.25% change in the non-redeemable warrant value).

The table below provides a reconciliation of the beginning and ending balances for the warrant liability

measured using significant unobservable inputs (Level 3):

Balance - December 31, 2014 ........................................................................................................................ $
Fair value adjustment for year ended December 31, 2015 .............................................................................
Balance at December 31, 2015 ...................................................................................................................... $

19,991
11,222
31,213

The Company’s warrants are exercisable by the warrant holder in either of two modes: (i) by making a cash

payment at the exercise price and receiving ordinary shares (“cash exercise”), or (ii) by applying a formula in the warrant
agreement that is based on the market price of the shares on the NASDAQ market in order to receive ordinary shares for
the warrant with no cash payment (“cashless exercise”). Of 2,428,494 aggregate warrants exercised since the merger in
December 2013, warrant holders exercised 102,570 warrants for an equal number of shares on a cash basis, and
2,325,924 warrants for 1,001,848 ordinary shares on a cashless basis.

When the warrants are exercised for ordinary shares, the Company re-measures the fair value of the exercised
warrants as of the date of exercise using quoted prices on the OTC Pink Markets and records the change in fair value in
the consolidated statement of operations, and records the fair value of the exercised warrants as additional paid-in capital
in the shareholders equity section of the Company’s balance sheet. In the year ended December 31, 2015, the Company
recorded $ 8,591 in the consolidated statement of operations for the change in fair value of exercised warrants and
recorded $13,679 as additional paid-in capital in the shareholders equity section of the Company’s consolidated balance
sheet as below:

Opening balance as of January 1, 2015 .................................................

Number of Warrants Average Value Fair Value
19,991

9,097,430 $

2.19 $

Change in fair value to the date of cashless exercise charged to income
statement .................................................................................................
Fair value of warrants exercised credited to shareholders equity ...........
Change in fair value of unexercised warrants remaining at December
31, 2015 ..................................................................................................

2,325,924 $
2,325,924 $

8,591
3.69 $
5.88 $ (13,679)

6,771,506 $

2.41 $

16,310

Closing balance as of December 31, 2015 ..............................................

6,771,506 $

4.61 $

31,213

Net gain on exercise of warrants .............................................................
Total change in warrant liability due exercise of warrants and change
in fair value of remaining warrants .........................................................

2,325,924 $

2.19 $

(5,088)

- $

11,222

F-26

Earnout Shares Liability

The fair value of the earnout shares liability is calculated using a Monte Carlo simulation, whereby future net
revenue was simulated over the earnout period using a geometric Brownian Motion. Our model utilized management’s
forecasted net sales and was performed in a risk-neutral environment. The inputs to the model were as follows:

December 31,

2015

2014

Stock Price ........................................................................................................................... $
Risk-free rate .......................................................................................................................
Expected Term .....................................................................................................................
Asset Volatility (level 3 input) .............................................................................................
EquityVolatility (level 3 input) ............................................................................................
*A quarterly dividend of $0.125 per share commencing in the second quarter of 2016 was assumed.

13.74 $
0.41%
1 year
38%
45%

10.15
0.67%
2 years
34%
40%

The value of the earnout share liability is sensitive to changes in equity volatility and the forecasted EBITDA of
the company. An increase or decrease in the equity volatility of 5% would result in an increase or decrease in the value
of the earnout share liability of approximately 0.3%, respectively. An increase or decrease in the EBITDA of 5% would
result in an increase or decrease in the value of the earnout share liability of approximately 0.3%, respectively.

The table below provides a reconciliation of the beginning and ending balances for the earnout shares liability

measured using significant unobservable inputs (Level 3):

Balance - December 31, 2013 ...................................................................................................................... $
Fair value adjustment for year ended December 31, 2014 ...........................................................................
Balance - December 31, 2014 ......................................................................................................................
Fair value adjustment for year ended December 31, 2015 ...........................................................................
Fair value of earnout shares issued credited to shareholders equity ............................................................
Balance at December 31, 2015 .................................................................................................................... $

18,254
10,807
29,061
10,858
(5,765)
34,154

The Company entered into an Agreement and Plan of Reorganization (the “Merger Agreement”) as of August
17, 2013. Pursuant to the Merger Agreement, on the closing date of December 20, 2013, the Company issued 3,000,000
Ordinary Shares (“Earnout Shares”) to be held in escrow and to be released after the closing based on the Company’s
achievement of specified share price targets or targets based on Tecnoglass Holding’s net earnings before interest income
or expense, income taxes, depreciation, amortization and any expenses arising solely from the merger charged to income
(“EBITDA”) in the fiscal years ending December 31, 2014, 2015 or 2016. The following table sets forth the targets and
the number of Earnout Shares issuable upon the achievement of such targets:

Fiscal year ending 12/31/14 ...... $12.00 per share $
Fiscal year ending 12/31/15 ....... $13.00 per share $
Fiscal year ending 12/31/16 ....... $15.00 per share $

Ordinary Share
Price Target

EBITDA Target

Number of Earnout Shares
Minimum Maximum Minimum Maximum
500,000
416,667
875,000 1,000,000
1,333,333 1,500,000

30,000 $
35,000 $
40,000 $

36,000
40,000
45,000

If either the ordinary share target or the maximum EBITDA target is met in any fiscal year, Energy Holding Corp.

receives the maximum number of earnout shares indicated for the year. In the event the ordinary share target is not met
but the combined company’s EBITDA falls within the minimum and maximum EBITDA target for a specified year, the
number of earnout shares to be issued will be interpolated between such targets. In the event neither the ordinary share
target nor the minimum EBITDA target is met in a particular year, but a subsequent year’s share price or EBITDA target
is met, Energy Holding Corp. will earn the earnout shares for the previous year as if the prior year’s target had been met.

Note 17. Commitments and Contingencies

Guarantees

Guarantees on behalf of or from related parties are disclosed in Note 14 - Related Parties.

F-27

Legal Matters

Tecnoglass S.A. and Tecnoglass USA, Inc., a related party, were named in a civil action for wrongful death,
negligence and negligent infliction of emotional distress arising out of a workplace accident where a crate of glass fell
and fatally crushed a worker during the unloading process. TG denied liability and rigorously defended the claim in
court. TG’s insurance carrier provided coverage to TG under a $3.0 million wasting policy, which meant that the
attorneys’ fees and expenses incurred during the defense of the claim reduced the amount of coverage available. On
October 1, 2014 the case was settled. The plaintiffs accepted $1,075, with a payment time of 60 days. The Company’s
insurance policy covered 90% of the loss.

Tecnoglass S.A. is also a named defendant in in the matter of Diplomat Properties, Limited Partnership as

assignee of Shower Concepts, Inc. v. Tecnoglass Colombia, S.A. in the 17 th Judicial Circuit in and for Broward County,
Florida. Plaintiff Diplomat Properties, Limited (“Diplomat”) has asserted a claim for indemnification against TG and
Tecnoglass USA, Inc. The claim arises from the supplying of glass shower doors to a hotel/spa in Broward County,
Florida. Specifically, in 2006, Diplomat commenced arbitration against Shower Concepts, Inc. seeking damages for
breach of contract due to fractures in the installed glass shower doors. Diplomat initiated a complaint asserting various
claims which were dismissed with prejudice. The only remaining claim against the Tecnoglass entities is common law
indemnification. TG denies liability and asserts that Shower Concepts was at fault and that as a joint tort feasor, it cannot
sue for indemnity. A trial date has not yet been set for this case. The claim was settled in December 2015 at no cost to the
Company.

C.I. Energia Solar S.A. filed a lawsuit against Bagatelos Arch Glass in Colombia for $1,560 and in March 2,

2016 also filed a lawsuit against Bagatelos Architectural Glass Systems, Inc (“Bagatelos”) in California. The Company’s
claim arises from Bagatelos refusing to pay outstanding accounts with the Company alleging mounting damages in
Company products that render them outside the terms of sale. The law suit was first filed in Colombia where the court is
likely to have jurisdiction since Bagatelos travelled to the factory and inspected the products and fabrication. It is likely
that a court in California shall recognize a foreign-country judgment and it is highly likely that the lawsuit filed in
California will be placed on temporary hold until a final resolution in the Colombian lawsuit has been completed.
Management and ES’ counsel believes that court is likely to rule in favor of the Company and the Company will be able
to recover outstanding amount from Bagatelos.

General Legal Matters

From time to time, the Company is involved in legal matters arising in the ordinary course of business. While
management believes that such matters are currently not material, there can be no assurance that matters arising in the
ordinary course of business for which the Company is, or could be, involved in litigation, will not have a material
adverse effect on its business, financial condition or results of operations.

Note 18.

Shareholder’s Equity

Preferred Shares

TGI is authorized to issue 1,000,000 preferred shares with a par value of $0.0001 per share with such

designation, rights and preferences as may be determined from time to time by the Company’s board of directors.

As of December 31, 2015, there are no preferred shares issued or outstanding.

Ordinary Shares

The Company is authorized to issue 100,000,000 ordinary shares with a par value of $0.0001 per share. As of

December 31, 2015, a total of 29,395,636 Ordinary shares were issued and outstanding which includes 2,500,000
Earnout shares which have been issued and placed in escrow but have no voting rights. The Earnout shares are not
considered issued and outstanding as a matter of Cayman Islands law.

Legal Reserve

Colombian regulation requires that companies retain 10% of net income until it accumulates to least 50% of

subscribed and paid in capital.

F-28

Earnings per Share

The following table sets forth the computation of the basic and diluted earnings per share for the years ended

December 31, 2015 and 2014:

December 31,

2015

2014

Numerator for basic and diluted earnings per shares

Net (Loss) Income ...............................................................................

(12,765)

9,511

Denominator

Denominator for basic earnings per ordinary share - weighted
average shares outstanding .................................................................. 25,447,564 24,347,620
Effect of dilutive warrants and earnout shares ..................................... 3,502,078 3,890,059
Denominator for diluted earnings per ordinary share - weighted
average shares outstanding .................................................................. 28,949,642 28,237,679

Basic earnings per ordinary share ...........................................................
Diluted earnings per ordinary share ........................................................

(0.50)
(0.50)

0.39
0.34

Calculation of earnings per share for the year ended December 31, 2015 excludes the effect of 3,502,079

dilutive securities because their inclusion would be antidilutive due to the net loss for the period.

Restricted Securities

Energy Holding Corporation, the sole shareholder of Tecnoglass Holding whose shareholders are all of the

former shareholders of Tecnoglass and ES, received 20,567,141 ordinary shares in consideration of all of the outstanding
and issued ordinary shares of Tecnoglass Holding. Under the terms of the merger agreement, the shareholders of Energy
Holding Corporation entered into lock-up agreements precluding the sale or transfer of their shares until December 20,
2014. Certain other holders of ordinary shares and warrants had been restricted from selling any of their securities until
December 20, 2014. This restriction expired on that date.

Pursuant to the merger agreement and plan of reorganization and on filing of financial statements for the fiscal
year ended December 31, 2014, Energy Holding Corporation received an aggregate of 500,000 ordinary shares based on
its achievement of specified EBITDA targets set forth in such agreement and the Company will issue 1,000,000 ordinary
shares upon achievement of specified EBITDA target in the fiscal year ended December 31, 2015. Energy Holding Corp.
also has the contractual right to receive an additional 1,500,000 ordinary shares, to be released upon the attainment of
specified share price targets or targets based on our EBITDA in the fiscal year ending December 31, 2016. The following
table sets forth the targets and the number of earnout shares issuable to Tecnoglass Holding shareholders upon the
achievement of such targets:

Ordinary
Share

EBITDA Target

Number of Earnout
Shares

Price Target Minimum Maximum Minimum Maximum

Fiscal year ending 12/31/16 .......................

$ 15.00 per
share

$ 40,000,000 $ 45,000,000 1,333,333 1,500,000

If either the ordinary share target or the maximum EBITDA target is met in any fiscal year, Energy Holding

Long Term Incentive Compensation Plan

F-29

Registration Statements and Company Securities

On February 11, 2014, the Registrant filed a registration statement on Form S-3 (Registration No. 333-193882),

which was subsequently amended on Form S-1 and declared effective by the Securities and Exchange Commission on
June 16, 2014 (“2014 Registration Statement”). The 2014 Registration Statement also constituted a Post-Effective
Amendment No. 1 to Form S-1 to the Registrant’s Registration Statement No. 333-178061 declared effective on March
16, 2012 (“2012 Registration Statement”).

The Company filed post-effective amendments to the registration statement on Form S-1 filed on Form S-3

pursuant to Section 10(a)(3) of the Securities Act of 1933, as amended, to update the 2014 Registration Statement and
2012 Registration Statement to include the audited consolidated financial statements and the notes thereto included in the
Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the SEC on April 15,
2015 and certain other information in such Registration Statements.

The post effective amendments relate to up to 5,904,484 ordinary shares and 3,416,681 warrants of the

Company which may be sold from time to time representing up to (i) 649,382 ordinary shares issued pursuant to two
subscription agreements in connection with our initial business combination, (ii) 1,040,000 ordinary shares issued in
connection with our formation, (iii) 30,018 ordinary shares and 30,018 warrants underlying unit purchase options
originally issued in connection with our initial public offering, (iv) 3,386,663 warrants, or ‘‘insider warrants,’’ (and
3,386,663 ordinary shares underlying the insider warrants) purchased in a private placement that was consummated
simultaneously with our initial public offering, (v) 78,401 ordinary shares underlying warrants, or ‘‘working capital
warrants,’’ issued upon conversion of a promissory note issued in consideration of a working capital loan Securityholder,
(vi) 206,547 ordinary shares underlying warrants, or ‘‘insider warrants,’’ purchased in a private placement that was
consummated simultaneously with our initial public offering, and (vii) 95,693 ordinary shares sold pursuant to a
subscription agreement in March 2014, and (viii) 417,780 ordinary shares issued upon exercise of certain insider
warrants and unit purchase options. No additional securities were registered under the registration statement or the
amendments thereto. As of the latest practicable date before these financial statements were available for publication,
the registration statement had not been declared effective by the SEC.

The Company has not receive any proceeds from the sale of the securities in the registration statement, although

the Company could receive up to $56.0 million upon the exercise of all of the insider warrants and working capital
warrants, up to $1.0 million upon the exercise of the unit purchase options, up to $0.8 million upon the exercise of the
warrants underlying such unit purchase options and up to $20.7 million upon the exercise of the warrants issued in the
Public Offering. Any amounts received from such exercises will be used for working capital and other general corporate
purposes.

On July 9, 2015, the Company filed an Offer to Exchange Warrants to Acquire Ordinary Shares Of Tecnoglass

Inc. for Ordinary Shares of Tecnoglass Inc. (the “Exchange Offer”) in a registration statement on Form S-4 and
amendments thereto. The Exchange Offer proposes to acquire all of the Company’s outstanding warrants in exchange for
ordinary shares of the Company at conversion ratio of 2.3 in exchange for one ordinary share and subsequently amending
its filing on March 11, 2016 to offer an exchange ratio 2.5 warrants for each ordinary share. warrants. The Exchange
Offer will remain open for a period of 30 days once exchange documentation is sent to warrant holders and the first
quarterly dividend payment as approved by the Board of Directors will be made to shareholders of record 15 days after
the end of the Exchange Offer. As of the latest practicable date before these consolidated financial statements were
available for publication, the SEC had not yet declared effective the Exchange Offer.

Issuance of Common Stock

In March 2014, the Company entered into an agreement with an affiliate of A Lorne Weil, the Company’s Non-
Executive Chairman of the board, for the sale of 95,693 ordinary shares at a price of approximately $10.45 per share in a
private placement transaction, for proceeds to the company of $1.0 million.

Following the SEC’s Notice of Effectiveness dated June .16, 2014 of the Company’s registration statement on
Form S-1 that registered the IPO Warrants and Working Capital Warrants, 102,570 warrants were exercised by warrant
holders as of December 31, 2015 resulting in the issuance of the same number of shares and cash proceeds of $821.

In December 2014, the Company entered into two asset purchase agreements with Glasswall LLC, a south

Florida based manufacturer of impact resistant windows and door systems. Total consideration paid by the Company was
$9,000, of which 4,000 were paid with the issuance of 388,199 ordinary shares issued to Glasswall at $10.30 per share.

In April 2015, 500,000 shares were issued to Energy Holding Corporation, the sole shareholder of Tecnoglass

Holding based on its achievement of the specific EBITDA targets for the year ended December 31, 2014.

F-30

From July 6, 2015 to December 31, 2015, 200,000 working capital warrants, 609,255 insider warrants and

1,516,669 warrants issued in our initial public offering were exercised on a “cashless basis” which resulted in the
issuance of 1,001,848 ordinary shares as more fully described in Note 15 to these financial statements.

In November and December of 2015, the Company issued 592,656 shares in connection with the exercise of

803,462 unit purchase options and the underlying warrants.

The issuances of stock in 2015 are summarized as follows:

Shares issued for achievement of EBITDA targets...............................
Shares issued for warrant exercises ......................................................
Shares issued for exercise of unit purchase options ..............................
Total ordinary shares issued .................................................................

500,000
1,001,848
592,656
2,094,504

As of March 28th, 2016, the latest practicable date before these consolidated financial statements were available

for publication, 102,570 warrants have been exercised for proceeds of $820,560. As of the same date, an additional
200,000 working capital warrants, 609,255 insider warrants and 1,516,669 warrants issued in our initial public offering
have been exercised on a ‘‘cashless basis’’ as more fully described in the Notes 16 to these financial statements.

Note 19. Business Combinations

In June 2014, we acquired selected assets of RC Aluminum Industries, Inc. (“RC Aluminum”) for $1,900. RC

Aluminum designs, manufactures and installs glass products for architects, designers, developers and general contractors.
The primary assets acquired include Miami-Dade County Notices of Acceptance (NOA) form more than 50 products
manufactured and sold by RC Aluminum and the right to complete two of RC Aluminum’s contracted projects with an
estimated value of approximately $12 million. The assets acquired from RC Aluminum were recorded as intangible
assets at fair values including transaction costs of $1,094 for the NOA permitted designs and $850 for the customer list of
projects.

In December 2014, we acquired assets of Glasswall, LLC, a Miami, South Florida based manufacturer of
impact-resistant windows and door systems used in high-rise commercial and residential buildings. As part of the
transaction, we acquired a 160,000 square foot warehouse / manufacturing / office facility in Miami for $5,167, and
manufacturing and assembly equipment, and Miami-Dade NOAs for products manufactured and sold by Glasswall and
other tangible and intangible assets for $4,134 accounted under other assets as of December 31, 2014.

Total consideration consisted 388,199 ordinary shares for $4,000 in our stock and $5,301 million in cash

financed in part by a 15-year, $3.920 term loan that we secured to acquire the facilities. The allocation of the
consideration transferred was based on management’s judgement after evaluation of several factors, including a
preliminary valuation assessment. Finalization of the analysis resulted in a change in the composition of other assets into
equipment, intangible assets, and goodwill. ASC 805 provides for measurement period adjustments, which is the period
of time during which the acquirer may adjust preliminary amounts recognized at the acquisition date to their
subsequently determined final acquisition date fair value.

The following table summarizes the purchase price allocation of consideration transferred:

Preliminary
Purchase Price
Allocation

Measurement
period
adjustments

Final Purchase
Price
Allocation

Land ..............................................
Buildings .......................................
Equipment .....................................
Intangibles (NOAs) .......................
Goodwill .......................................
Other Assets ..................................
Total ..............................................

Consideration Transferred:
Liabilities assumed (mortgage) .....
Common Stock .............................
Cash ..............................................
Total consideration transferred .....

1,952
3,215
-
-
-
4,134
9,301

3,920
4,000
1,381
9,301

1,170
1,500
1,330
(4,000)

1,952
3,215
1,170
1,500
1,330
134
9,301

F-31

The excess of the consideration transferred over the estimated fair values of assets acquired and liabilities

assumed was recorded as goodwill. The only identifiable intangible asset subject to amortization was the NOAs
amounting to $1.5 million, which have a remaining useful life of 10 years. See Note 7 – Goodwill and Intangible Assets
for additional information.

Note 20.

Segment and Geographic Information

The Company has one operating segment, Architectural Glass and Windows, which is also its reporting

segment, comprising the design, manufacturing, distribution, marketing and installation of high-specification
architectural glass and windows products sold to the construction industry.

In reviewing the Company’s segmentation, the Company followed guidance under ASC 280-10-50-1 which

states that “an operating segment is a component of a public entity that has all of the following characteristics: (i) it
engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses
relating to transactions with other components of the same public entity), (ii) its operating results are regularly reviewed
by the public entity’s chief operating decision maker [CODM] to make decisions about resources to be allocated to the
segment and assess its performance, and (iii) its discrete financial information is available. Based on the Company’s
review discussed below, the Company believes that its identification of a single operating and reportable segment –
Architectural Glass and Windows - is consistent with the objectives and basic principles of Segment Reporting, which
are to “help financial statement readers better understand the public entity’s performance, better assess its prospects for
future net cash flows and make more informed judgments about the public entity as a whole.”

The following tables present geographical information about external customers and revenues from external

customer by product groups. Geographical information is based on the location where there the sale was originated.

Colombia ......................................................... $
United States ....................................................
Panama.............................................................
Other ................................................................
Total Revenues ............................................ $

Glass and framing components ........................ $
Windows and architectural systems .................
Total Revenues ............................................. $

December 31,

2015

81,290 $
141,801
7,329
8,413
238,833 $

2014

80,062
101,612
11,351
4,427
197,452

December 31,

2015

85,034 $
153,799
238,833 $

2014

69,122
128,330
197,452

Excluding related parties, only one customer accounted for more than 10% or more of our net sales, amounting
to 32.0 million or 13% of sales each one during the year ended December 31, 2015. The loss of such customer would not
have a material adverse effect on the Company.

Note 21. Operating Expenses

Selling expenses for the years ended December 31, 2015 and 2014 were comprised of the following:

December 31,

2015

2014

Personnel .................................................................................. $
Shipping and Handling .............................................................
Sales commissions ....................................................................
Allowance for doubtful accounts and write-off’s .....................
Services .....................................................................................
Packaging ..................................................................................
Other Selling Expenses .............................................................
Total Selling Expense ............................................................. $

4,906 $
11,202
4,073
1,286
1,735
1,092
3,285
27,579 $

5,318
7,994
2,652
20
970
929
4,854
22,737

F-32

General and administrative expenses for the years ended December 31, 2015 and 2014 were comprised of the

following:

December 31,

2015

2014

Personnel .................................................................................. $
Professional Fees ......................................................................
Taxes .........................................................................................
Services .....................................................................................
Depreciation and Amortization .................................................
Other expenses ..........................................................................
Total General and administrative expenses .......................... $

4,359 $
3,645
1,530
2,462
2,303
4,621
18,920 $

4,454
3,070
582
2,315
1,315
4,591
16,327

Note 22. Non-Operating Income, net

Non-operating income (net) on our consolidated statement of operations amounted to $13,877 and $12,235, for

Note 23.

Subsequent Events

On January 6, 2016, the Company’s shares commenced trading on the Bolsa de Valores de Colombia (“BVC”),
the principal stock exchange of Colombia, under the symbol TGLSC, The listing of the Company’s shares on the BVC is
secondary to the primary listing on the NASDAQ Market. No new shares were issued in connection with the admission
to trading on the BVC.

On January 7, 2016, the Company entered into a $109.5 million, seven-year senior secured credit facility.

Proceeds from the new facility were used to refinance $83.5 million of existing debt, with the remaining $26.0 million
available to the Company for capital expenditures and working capital needs. Approximately $51.6 million of the new
facility were used to refinance short term debt as long term debt. The Company’s consolidated balance sheets as of
December 31, 2015 reflects the effect of this refinance of the Company’s current portion of long term debt and other
current borrowings into long term debt based on the Company’s intent as of that date.. The new facility features two
tranches, including one tranche denominated in USD representing 71% of the facility and another tranche denominated in
Colombian Pesos (COP) representing the remaining 29%. Borrowings under the facility will bear interest at a weighted
average interest rate of 7% for the first year, and thereafter at a rate of LIBOR plus 5.25% and DTF (Colombian index)
plus 5.00% for the respective USD and COP denominated tranches.

On March 11, 2016, the Company filed a second amendment to its Registration Statement on Form S-4 with the

Securities and Exchange Commission (“SEC”) in connection with a proposed exchange of its warrants for its ordinary
shares. Under the original terms of the warrant exchange offer, each of Company’s warrant holders had the opportunity
to receive one ordinary share of the Company in exchange for every 2.3 of the Company’s outstanding warrants tendered
by the holder and exchanged pursuant to the offer. The amended filing changed the exchange ratio from 2.3 to 2.5 to
reflect the Company’s most recent stock price movement. The Exchange Offer will commence as soon as practicable
after the registration statement becomes effective and is expected to remain open for not less than 30 days.

During March, 2016, the Company entered into a credit facility, denominated in Colombian Pesos, for an

equivalent amount of US$ 25 million, and immediately placed it in a short term cash deposit in U.S. dollars, with the
objective of hedging its net assets foreign currency exposure risk, estimated in the same amount. This facility will be
repaid with the cash from the deposit upon maturity. Additionally, the Company entered into a short term facility for
approximately US$6 million to cover specific seasonal working capital needs which will be repaid out of our cash flow
from operations.

F-33