Fremont, Calif.-headquartered Solyndra Inc., a designer and manufacturer of commercial PV systems using proprietary cylindrical modules, faces an uncertain future after PricewaterhouseCoopers LLP (PwC) questioned the company's prospects in an audit statement.
As Solyndra prepares for a $300 million initial public offering (IPO), its negative cashflow, operating losses, stockholder deficits and other factors ‘raise substantial doubt about its ability to continue as a going concern,’ PwC stated, according to a Reuters report.
In the U.S. Securities and Exchange Commission filing where PwC's statement appeared, Solyndra reported a $172.5 million net loss for the year ending Jan. 2 – compared with a net loss of $232.1 million last year.
‘According to generally accepted auditing standards, a company's future financing plans are not considered when evaluating whether a 'going concern' explanatory paragraph is necessary,’ said Chris Gronet, CEO of Solyndra, in a letter published on the company's Web site. ‘The inclusion of such an explanatory paragraph in an auditor's opinion for a start-up company that is preparing for an IPO is not uncommon, since many of these companies, like us, are raising capital in order to fund the expansion required for profitability.’
Gronet further noted that the successful completion of its $535 million loan facility guaranteed by the U.S. Department of Energy was an important first step in increasing the company's production capacity, but current plans contemplate additional expansion, thus requiring additional capital. Sources other than an IPO may be considered.
‘We believe that our next capital raise will address the issue underlying the explanatory paragraph regarding 'going concern' included in PwC's audit opinion,’ Gronet states. ‘We continue to be confident in our ability to execute our expansion plans.’