SAN DIEGO, USA: Applied Solar, Inc. announced that it had begun the process of restructuring its operations. On May 22, 2009, the Company entered into a definitive loan and security agreement with The Quercus Trust, pursuant to which the company borrowed $698,000 under a short-term loan that matures on June 15, 2009.
As a condition to the loan, the company is required to file for reorganization pursuant to Title 11 of the U.S. Bankruptcy Code within thirty days following the date of the loan. The company is currently engaged in discussions with potential financing sources, including The Quercus Trust, concerning the extension of debtor-in-possession or “DIP” financing to support the Company’s operations during its reorganization.
David Field, President and CEO of the company remarked: “Despite very promising macro and micro business trends affecting the company, including solid relationships with its business partners, the current state of the financial markets combined with a difficult and complicated capital structure have made it extremely challenging for the company to secure needed financing. We are hopeful that a restructuring will enable the company to emerge stronger and in a better position to capitalize on the anticipated future growth in the solar industry.”
At the present time, no binding commitment to provide DIP financing by The Quercus Trust or any other party has been received and there can be no guarantee that the company will obtain such financing.