Real Goods Solar, Inc. - 10-Q filing on 2013-08-13

Organization, Nature of Operations, and Principles of Consolidation	6 Months Ended
Jun. 30, 2013
Organization, Nature of Operations, and Principles of Consolidation	1. Organization, Nature of Operations, and Principles of Consolidation Real Goods Solar, Inc. (“the Company”) is a leading residential and commercial solar energy integrator. The Company incorporated in Colorado on January 29, 2008. The Company’s initial public offering of common stock occurred on May 7, 2008. The Company has prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States, or GAAP, including its accounts and those of its subsidiaries. Intercompany transactions and balances have been eliminated. The unaudited condensed consolidated financial position, results of operations and cash flows for the interim periods disclosed in this report are not necessarily indicative of future financial results. Amounts are reported in thousands, except share, per share and monthly amounts, or as otherwise noted. Certain prior period amounts have been reclassified to conform to the current period presentation. Liquidity and Financial Resources Update The Company has experienced recurring losses in recent years, including $47,206 for the fiscal year ended December 31, 2012 and a loss of $6,701 for the six months ended June 30, 2013. The Company believes the seasonality of its operations, investments in its selling and marketing efforts and reductions in operating expenses will significantly reduce future losses. The Company increased its financial resources during the six months ended June 30, 2013. On June 3, 2013, the Company closed a private placement with unaffiliated investors resulting in the Company receiving net proceeds of $8,414 (See Note 7. Shareholders’ Equity). At June 30, 2013 the Company has cash of $6,859 and unused borrowing capacity of $5,247 with Silicon Valley Bank. As of June 30, 2013, the Company had no outstanding borrowings under its revolving credit facility. The Company does not believe it will borrow against the facility prior to September 30, 2013. The Company’s revolving line of credit with Silicon Valley Bank (See Note 4. Revolving Line of Credit) matures on September 30, 2013. The Company is presently discussing an extension of the revolving line of credit with Silicon Valley Bank. The Company believes it has sufficient resources to operate through June 30, 2014 and that a replacement revolving line of credit will be in place prior to maturity of the Silicon Valley Bank line of credit on September 30, 2013. However, there can be no assurance that the Company will be able to renew the revolving line of credit, continue to maintain sufficient receivables and maintain borrowing availability under the revolving line of credit, continue to reduce its losses, have sufficient resources to continue to invest in its selling and marketing efforts or to otherwise expand its business, or be able to repay related party debt with Gaiam of $2,600 maturing in April 2014.

Organization, Nature of Operations, and Principles of Consolidation

6 Months Ended

Jun. 30, 2013

Organization, Nature of Operations, and Principles of Consolidation

1. Organization, Nature of Operations, and Principles of Consolidation

Real Goods Solar, Inc. (“the Company”) is a leading residential and commercial solar energy integrator. The Company incorporated in Colorado on January 29, 2008. The Company’s initial public offering of common stock occurred on May 7, 2008.

The Company has prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States, or GAAP, including its accounts and those of its subsidiaries. Intercompany transactions and balances have been eliminated.

The unaudited condensed consolidated financial position, results of operations and cash flows for the interim periods disclosed in this report are not necessarily indicative of future financial results.

Amounts are reported in thousands, except share, per share and monthly amounts, or as otherwise noted. Certain prior period amounts have been reclassified to conform to the current period presentation.

Liquidity and Financial Resources Update

The Company has experienced recurring losses in recent years, including $47,206 for the fiscal year ended December 31, 2012 and a loss of $6,701 for the six months ended June 30, 2013. The Company believes the seasonality of its operations, investments in its selling and marketing efforts and reductions in operating expenses will significantly reduce future losses. The Company increased its financial resources during the six months ended June 30, 2013. On June 3, 2013, the Company closed a private placement with unaffiliated investors resulting in the Company receiving net proceeds of $8,414 (See Note 7. Shareholders’ Equity). At June 30, 2013 the Company has cash of $6,859 and unused borrowing capacity of $5,247 with Silicon Valley Bank. As of June 30, 2013, the Company had no outstanding borrowings under its revolving credit facility. The Company does not believe it will borrow against the facility prior to September 30, 2013.

The Company’s revolving line of credit with Silicon Valley Bank (See Note 4. Revolving Line of Credit) matures on September 30, 2013. The Company is presently discussing an extension of the revolving line of credit with Silicon Valley Bank.

The Company believes it has sufficient resources to operate through June 30, 2014 and that a replacement revolving line of credit will be in place prior to maturity of the Silicon Valley Bank line of credit on September 30, 2013. However, there can be no assurance that the Company will be able to renew the revolving line of credit, continue to maintain sufficient receivables and maintain borrowing availability under the revolving line of credit, continue to reduce its losses, have sufficient resources to continue to invest in its selling and marketing efforts or to otherwise expand its business, or be able to repay related party debt with Gaiam of $2,600 maturing in April 2014.