Uh-oh, Solyndra

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Questions have surfaced about the Fremont company's viability.  Solyndra plans to go public soon, but Reuters reports PricewaterhouseCoopers reports Solyndra's recurring operating losses, negative cash flows, $532.3 million stockholder deficit and other factors "raise substantial doubt about its ability to continue as a going concern." The assessment was disclosed in an amended registration statement filed by Solyndra last month with the U.S. Securities and Exchange Commission.

Solyndra did not immediately return a Reuters call seeking comment.

The company began commercial shipments of its solar panel systems in July 2008.

Last year, Solyndra won a $535 million U.S. Department of Energy loan guarantee under a federal program for advanced clean energy, the first guarantee of its kind, and said it has raised about $970 million in equity financing through January 2.

UPDATE:  The company's posted an open letter in response to the headlines.

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. 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.


The successful completion of our $535 million loan facility guaranteed by the U.S. Department of Energy has been an important first step in increasing our production capacity; however, the Company's current plans contemplate additional expansion which requires us to raise additional capital. An IPO is just one avenue for obtaining the capital required to support this expansion, and we continue to evaluate the various sources of capital that are available to us. Historically, the Company has been able to raise necessary expansion capital as needed, and we believe that the additional capital that we plan to raise will provide us with sufficient liquidity to continue to pursue our current expansion strategy. We believe that our next capital raise will address the issue underlying the explanatory paragraph regarding "going concern" included in PwC's audit opinion.

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About Rachael Myrow

Rachael Myrow hosts the California Report for KQED. Over 17 years in public radio, she's worked for Marketplace and KPCC, filed for NPR and The World, and developed a sizable tea collection that's become the envy of the KQED newsroom. She specializes in politics, economics and history in California - but for emotional balance, she also covers food and its relationship to health and happiness.

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