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Restatement
 6 Months Ended
Jun. 30, 2011
Restatement and Recently Issued Accounting Pronouncements [Abstract]  
Restatement

3. Restatement

This filing amends and restates our previously reported consolidated financial statements for the three and six month periods ended June 30, 2011 and 2010 to reflect revised accounting treatment for a single solar development project under the financing method for a sale of real estate as opposed to percentage of completion method as was previously used.

Based on its review, management determined that the Company improperly recognized revenue at the date of the initial sale on a solar development project initiated in 2009 under the percentage of completion method for construction work for the new owner. The transaction should have been accounted for in accordance with accounting standards for sales of real estate and due to continuing involvement with the project after the transaction, no sale should have been recognized. Instead the transaction should have been accounted for using the financing method.

 

In May 2009, the Company entered into a Power Purchase Agreement (“PPA”) with Aerojet General Corp. (“Aerojet”) to supply solar energy and commenced construction of a Solar Energy Facility (“SEF”). In September 2009, the Company transferred the partially completed SEF to Solar Tax Partners 1 (the “Buyer”), and entered into contracts with the Buyer to assign them the rights under the associated PPA, and complete construction of the SEF. The Company accounted for this transaction under the percentage of completion method in its third quarter 2009 consolidated financial statements.

In the fourth quarter 2009, the Company completed construction of the SEF for a price of $19.6 million and received $6.7 million in cash, $3.6 million in promissory note and with $9.3 million balance amount outstanding. The Company applied the cost recovery method of revenue recognition to this transaction due to degree of uncertainty for the collectability of the outstanding amount. Accordingly, for the year ended December 31, 2009, the Company recorded total revenue of $14.9 million and an equivalent cost of goods sold amount of $14.9 million.

Prior to September 30, 2009, the only parties to the SEF arrangement were Aerojet and the Company, pursuant to the PPA. The Company had access to the Aerojet property under an implied easement, had completed a significant portion of the physical construction of the SEF, and was therefore considered the owner of the partially completed SEF. Accordingly, the Company reassessed the accounting treatment and determined that the project should be accounted for as a sale of real estate. As a result, while the Company maintains its continuing involvement through guarantees given to the investor, it will apply the financing method.

The following tables disclose the impact of the changes on the Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010. Consolidated Statements of Operations for the three months and six months ended June 30, 2011 and 2010, and on the Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010:

 

                                                 
Consolidated Balance Sheets   As of June 30, 2011     As of December 31, 2010  
(Dollars in thousands)   As reported     Adjustments     As restated     As reported     Adjustments     As restated  
             

Property, plant and equipment at cost, net

   $ 765     $ 13,738     $ 14,503     $ 915     $ 14,109     $ 15,024  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Assets

   $ 61,106     $ 13,738     $ 74,844     $ 23,806     $ 14,109     $ 37,915  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
             

Loans payable, financing and capital lease obligations, net of current portion

   $ 5     $ 14,316     $ 14,321     $ 13     $ 14,620     $ 14,633  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total liabilities

   $ 24,541     $ 14,316     $ 38,857     $ 15,943     $ 14,620     $ 30,563  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
             

Accumulated deficit

   $ (38,145 )    $ (578 )    $ (38,723 )    $ (34,016 )    $ (511 )    $ (34,527 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total stockholders’ equity

   $ 36,565     $ (578 )    $ 35,987     $ 7,863     $ (511 )    $ 7,352  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total liabilities and stockholders’ equity

   $ 61,106     $ 13,738     $ 74,844     $ 23,806     $ 14,109     $ 37,915  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                                                                 

Consolidated Statements of Operations

   For three months ended June 30     For six months ended June 30  
(Dollars in thousands)   2011     2010     2011     2010  
    As
reported		     Adjustments     As
restated		     As
reported		     Adjustments     As
restated		     As
reported		     Adjustments     As
restated		     As
reported		     Adjustments     As
restated		  
                         

Net Sales

   $ 14,940     $ 588     $ 15,528     $ 10,950     $ 573     $ 11,523     $ 20,430     $ 848     $ 21,278     $ 16,782     $ 820     $ 17,602  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cost of goods sold

   $ 13,662     $ 196     $ 13,858     $ 9,838     $ 195     $ 10,033     $ 18,600       392     $ 18,992     $ 15,048       391     $ 15,439  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross Profit

   $ 1,278     $ 392     $ 1,670     $ 1,112     $ 378     $ 1,490     $ 1,830       456     $ 2,286     $ 1,734       429     $ 2,163  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
                                    $ —                                                            

General and administrative

   $ 1,915     $ 15     $ 1,930     $ 2,365     $ 16     $ 2,381     $ 3,468       31     $ 3,499     $ 4,363       31     $ 4,394  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating loss

   $ (2,162 )    $ 377     $ (1,785 )    $ (2,597 )    $ 362     $ (2,235 )    $ (3,766 )      425     $ (3,341 )    $ (5,270 )      398     $ (4,872 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest expense

   $ (277 )    $ (246 )    $ (523 )    $ (38 )    $ (248 )    $ (286 )    $ (408 )      (492 )    $ (900 )    $ (43 )      (499 )    $ (542 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net loss

   $ (2,384 )    $ 131     $ (2,253 )    $ (3,285 )    $ 114     $ (3,171 )    $ (4,129 )      (67 )    $ (4,196 )    $ (6,501 )      (101 )    $ (6,602 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                 
Consolidated Statements of Cash Flow      
(Dollars in thousands)   For six months ended June 30, 2011     For six months ended June 30, 2010  
    As reported     Adjustments     As restated     As reported     Adjustments     As restated  
             

Net loss

   $ (4,129 )      (67 )    $ (4,196 )    $ (6,501 )      (101 )    $ (6,602 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Depreciation

   $ 127       371     $ 498     $ 314       371     $ 685  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income from solar system subject to financing obligation

   $ —         (304 )    $ (304 )    $ —         (270 )    $ (270 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The effect of the restatement on the consolidated statements of stockholders’ equity and comprehensive loss for the six months ended June 30, 2011 and 2010 is $(67,000) and $(101,000), respectively.