Solyndra's Solar Flame-Out

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Basic question for Congress to ask: “Sir, Let’s start with the basics, don’t tell us what you were thinking, tell us if you were thinking.”

Different than most political scandals, the base information available on the internet is from reliable sources, the Securities and Exchange Commission and within their website, PricewaterhouseCoopers, one of the largest and most prestigious accounting firms in the world.

On December 18, 2009, Solyndra filed papers with the SEC indicating that they were planning to sell securities to the general public. These papers show that for the nine months ended in October, 2009, Solyndra sold $58 million of solar panels . That would be great except that it cost $108 million to make the panels  and an additional $115 million to operate the company and market the product. That would be an audited nine months operating loss of $177 million. Solyndra, on September 9, 2009, had received a loan guarantee of $535 million dollars to build a second production facility. The short form is that the Federal government guaranteed a loan to increase production at a time when Solyndra was losing money on every sale. Next question: Since Solyndra was losing money on every sale, did the US government think they were going to make t up in volume? Interestingly, the loan required Solyndra to fund a reserve of $5 million prepayment beginning in December 2010 and quarterly principal payments of $33 million beginning in May 2012. Next question: Why would anyone think Solyndra would be able to make these payments when they  were losing $170 million per year from operations  (exclusive on the construction costs being paid).

By March 16, 2010, the Securities & Exchange Commission required another filing. This filing showed that Solyndra had lost over $500 million over the past three years, were still spending more money producing the product than the sales price and bleeding cash.

At that point, PricewaterhuseCoopers' audit report included the following: “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.“

On June 18th, Solyndra abandoned their plan to sell stock. Next question: Didn’t the abandonment of the public offering send a key message that the business with the enormous Federal loan guarantee was going under?

And then the government allowed two private loans which were prioritized before the Federal government’s loans. This $69 million should be golden as the Solyndra buildings have to have that much value.

So, the final question: And why would we let the Federal government in the form of the Department of Energy ever guarantee another loan? Of course, they just did that to the tune of another $1 billion dollars.