Applied Solar, Inc. (fka APSOQ)

[JJdivini]

APSO News: Applied Solar to seek bankruptcy protection... A potential future "Q" play!

Fri May 22, 2009 8:39pm EDT;

*Applied Solar to seek Chapter 11 bankruptcy in next month

*Reached loan deal with primary investor The Quercus Trust

*In talks about extension of DIP financing

LOS ANGELES, May 22 (Reuters) - U.S. solar company Applied Solar Inc (APSO.OB) said on Friday it will seek Chapter 11 bankruptcy protection in the next month as part of a loan agreement with its largest investor, The Quercus Trust.

The San Diego maker of building-integrated solar products said it borrowed $698,000 from Quercus, an investment firm that focuses on clean technology companies. Quercus is run by investor David Gelbaum.

As part of its agreement with Quercus, Applied Solar is required to file for bankruptcy within 30 days following the date of the loan.

Quercus officials were not immediately available for further comment on the announcement.

"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," Chief Executive David Field said in a statement.

"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."

Earlier this month, Applied Solar said Quercus had advised the company that it was unwilling to fund its operations at current expense levels.

On Feb. 28, the company had $900,000 in cash, it said in a filing with the U.S. Securities and Exchange Commission.

The company is in talks with potential financing sources, including Quercus, concerning the extension of debtor-in-possession (DIP) financing.

Applied Solar, formerly known as Open Energy, earlier this year struck an exclusive licensing deal with Chinese solar company Suntech Power Holdings Co Ltd (STP.N). Under that deal, Suntech said it would manufacture, distribute and market Applied's lightweight solar roofing products.

Suntech officials were not immediately available to comment on Applied Solar's planned bankruptcy. (Reporting by Nichola Groom; Editing by Richard Chang)

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