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Solyndra auditors cast doubt over solar upstart

A financial audit casts doubt over the company's financial picture, which could make it harder for Solyndra to raise money by going public as planned.

Updated on April 7 with response from Solyndra.

Solar company Solyndra's current finances raise "substantial doubt" over the start-ups ability to operate as a going concern, according to the company's auditor.

Solyndra is one of handful of energy technology companies seeking to go public this year to raise money and scale up its operations. It is also one of the few companies to secure a loan, worth $535 million, from the Department of Energy's loan guarantee program.

Solyndra manufactures solar arrays which use thin-film solar cells designed for flat rooftops. Solyndra

In an audit of its finances earlier this year, PricewaterhouseCoopers noted that the company is heavily in debt, having raised $970 million, and has incurred significant net losses. The auditor's assessment was included in an addendum to Solyndra's S-1 filing to go public on the stock market.

"The company has suffered recurring losses from operations, negative cash flows since inception and has a net stockholders' deficit that, among other factors, raise substantial doubt about its ability to continue as a going concern," according to PricewatersCoopers.

Solyndra makes rooftop solar panels, which use a series of tubes built with thin film solar cells, designed for flat commercial building rooftops. The company plans to raise $300 million through an initial public offering.

Even before PricewaterhouseCoopers' audit, investors and analysts familiar with Solyndra have raised concerns with its plans to go public to raise additional capital.

There are now a few green-tech companies which have over the past few months filed papers indicating their plans to go public. The success of these public offerings could have very significant influence over investor interest in the entire sector.

On April 3, Solyndra posted a note to customers and suppliers on its Web site, saying that having an auditor issue a "going concern" note for a start-up seeking to go public is not uncommon. CEO Chris Gronet said the company expects it can raise capital, either through an IPO or other means.

"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," he said in the letter.