Unassociated Document
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
Form 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (date of earliest event reported):
February 26, 2009

AKEENA SOLAR, INC.
(Exact name of registrant as specified in its charter)
         
Delaware
  
000-52385
  
90-0181035
(State or other jurisdiction of incorporation)
  
(Commission File No.)
  
(I.R.S. Employer Identification No.)

16005 Los Gatos Boulevard
Los Gatos, California 94032
(Address of principal executive offices)

Registrant’s telephone number, including area code:
(408) 402-9400

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 
Item 8.01        Other Events.
 
Recent Developments
 
We plan to amend our 2007 Credit Facility with Comerica Bank.  In conjunction with this amendment, we plan to repay the outstanding principal balance on the 2007 Credit Facility by using $17,500,000 of our cash balance that is on deposit with Comerica, and any needed amount beyond that from our working capital. After the amendment, our credit facility with Comerica will have a limit of $1 million, subject to our obligation to maintain cash as collateral for any borrowings we incur or any letters of credit issued on our behalf.  The amendment will also eliminate the asset-based line of credit from our credit facility.  We are currently in discussions with lending institutions regarding a replacement asset-based line of credit facility.
 
Among other recent events affecting the overall market for solar power systems, there has been a pronounced softening in the price of solar panels, including a decrease in the price at which we are able to obtain solar panels from our suppliers.  We will take a non-cash charge of approximately $2.6 million in the fourth quarter of 2008 as the result of a write down to market value of our inventory of solar panels acquired in late 2008.
 
In late 2008, one of our customers that is a power purchase company lost the project funding it had arranged for a commercial construction project on which we are the solar system installation contractor.  Our work on that project is approximately three-quarters completed.  Our customer has not made the second scheduled payment to us.  Given the current uncertainty regarding this project, we expect to take a non-cash charge of approximately $963,000 in the fourth quarter of 2008 as a reserve against our receivable balance on the project.  We continue to pursue our discussions with the counterparties and to take legal recourse to obtain full payment.
 
We have taken recent cost reduction measures, including a reduction in force and the closure of our Connecticut office.  We are eliminating approximately 45 positions, or approximately 25% of our current workforce, and reducing the regular hours and salaries of our remaining workforce by 10%.  We believe these measures will adjust our capacity to a level that reflects our current customer demand and improving sales, design and installation efficiency.  In 2008, we derived less than 8% of our revenue from the region supported by the Connecticut office.  We believe we can address the Northeastern market more cost effectively by distributing our Andalay product to other systems integrators in the region, and without continuing to have an office location that provides installation services in that region.  We expect these changes to result in a significant reduction in our monthly operating expenses, as well as a corresponding reduction in the level of revenue we need to become break-even on the basis of our continuing operations.  However even after these changes, we anticipate that we will continue to sustain losses in the near term, and we cannot assure investors that we will be successful in reaching break-even.
 
 
 
 
 
Fourth Quarter and 2009 Financial Results
 
Our preliminary, unaudited results for the fourth quarter and year ended December 31, 2008, and for the corresponding periods in 2007 are set forth below.
 
 
 
 
 
AKEENA SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
   
Three Months Ended December 31,
    
Twelve Months Ended December 31,
  
   
2008
    
2007
    
2008
    
2007
  
                         
Net sales
   $ 10,855,599     $ 10,320,150     $ 40,761,302     $ 32,211,761  
Cost of sales
     9,694,819       8,445,880       34,796,546       25,372,691  
Gross profit
     1,160,780       1,874,270       5,964,756       6,839,070  
Operating expenses
                                
Sales and marketing
     2,060,910       2,102,767       8,618,139       5,978,799  
Inventory revaluation
     2,646,292       -       2,646,292       -  
General and administrative
     5,487,372       4,352,059       19,052,489       11,941,700  
Total operating expenses
     10,194,574       6,454,826       30,316,920       17,920,499  
Loss from operations
     (9,033,794 )     (4,580,556 )     (24,352,164 )     (11,081,429 )
Other income (expense)
                                
Interest income (expense), net
     (143,386 )     114,665       4,786       34,650  
Total other income (expense)
     (143,386 )     114,665       4,786       34,650  
Loss before provision for income taxes
     (9,177,180 )     (4,465,891 )     (24,347,378 )     (11,046,779 )
Provision for income taxes
     -       -       -       -  
Net loss
   $ (9,177,180 )   $ (4,465,891 )   $ (24,347,378 )   $ (11,046,779 )
                                 
                                 
Loss per common and common equivalent share:
                                
Basic
   $ (0.32 )   $ (0.18 )   $ (0.87 )   $ (0.52 )
Diluted
   $ (0.32 )   $ (0.18 )   $ (0.87 )   $ (0.52 )
                                 
Weighted average shares used in computing loss
                                
per common and common equivalent share:
                                
Basic
     28,376,624       25,465,409       28,124,047       21,117,399  
Diluted
     28,376,624       25,465,409       28,124,047       21,117,399  
 
 
 
 
 
AKEENA SOLAR, INC.
Consolidated Balance Sheet
(unaudited)
 
   
December 31,
    
December 31,
  
   
2008
    
2007
  
Assets
            
Current assets
            
  Cash and cash equivalents
   $ 148,230     $ 22,313,717  
  Restricted cash
     17,500,000       -  
  Accounts receivable, net
     7,660,039       9,465,055  
  Other receivables
     331,057       278,636  
  Inventory, net
     10,495,572       8,848,467  
  Prepaid expenses and other current assets, net
     3,704,375       3,055,787  
  Total current assets
     39,839,273       43,961,662  
Property and equipment, net
     1,806,269       1,796,567  
Customer list, net
     -       84,698  
Goodwill
     298,500       318,500  
Other assets
     194,346       162,880  
  Total assets
   $ 42,138,388     $ 46,324,307  
Liabilities and Stockholders' Equity
                
Current liabilities
                
Accounts payable   $ 1,922,480     $ 6,716,475  
  Customer rebate payable
     271,121       346,097  
  Accrued liabilities
     2,410,332       1,431,880  
  Accrued warranty
     1,056,655       647,706  
  Deferred purchase price payable
     -       20,000  
  Deferred revenue
     1,057,941       1,442,834  
  Credit facility
     18,746,439       -  
  Current portion of capital lease obligations
     23,292       24,130  
  Current portion of long-term debt
     219,876       191,845  
  Total current liabilities
     25,708,136       10,820,967  
                 
Capital lease obligations, less current portion
     20,617       46,669  
Long-term debt, less current portion
     535,302       644,595  
  Total liabilities
     26,264,055       11,512,231  
                 
Commitments, contingencies and subsequent events
                
                 
Stockholders' equity:
                
  Common stock $0.001 par value; 50,000,000 shares authorized; 28,460,837 and
                
   27,410,684 shares issued and outstanding at December 31, 2008 and December 31, 2007
     28,460       27,411  
  Additional paid-in capital
     52,821,104       47,412,518  
  Accumulated deficit
     (36,975,231 )     (12,627,853 )
  Total stockholders' equity
     15,874,333       34,812,076  
  Total liabilities and stockholders' equity
   $ 42,138,388     $ 46,324,307  
 
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date:  February 26, 2009
 
 
AKEENA SOLAR, INC.
  
       
By:
/s/ Gary R. Effren  
   
Gary R. Effren,
  
   
Chief Financial Officer