1. REPORT OF R. TODD NEILSON
Chief Restructuring Officer
March 21, 2012
2049 Century Park East, Suite 2525
Los Angeles, CA 90067
310.499.4750
brg-expert.com

2. TABLE OF CONTENTS
I. INTRODUCTION .................................................................................................................................... 1
II. SCOPE OF ANALYSIS.......................................................................................................................... 2
III. SUMMARY OF CONCLUSIONS ........................................................................................................ 3
IV. REPORT SUMMARY .......................................................................................................................... 4
A. General Overview .............................................................................................................. 4
B. Solyndra’s Product and Technology .................................................................................. 6
C. Financing and Construction of Solyndra Manufacturing Facilities ................................... 8
D. The Impact of the Sudden Downturn in the Solar Market and the Global
Financial Crisis ................................................................................................................ 10
E. The DOE Loan Guarantee and Construction of Fab 2 ..................................................... 13
F. Solyndra’s Financial Performance ................................................................................... 18
G. Solyndra’s Restructuring and Capital Raising Efforts in 2010 ........................................ 20
H. Events Leading to and Summary of February 2011 Restructuring .................................. 28
1. Tranche A Debt................................................................................................... 29
I. Events Leading to Bankruptcy Filing .............................................................................. 32
V. SOLAR TECHNOLOGY AND PRODUCTS ...................................................................................... 36
A. History ............................................................................................................................. 36
B. Design .............................................................................................................................. 36
C. Comparative Advantage .................................................................................................. 38
D. New Products ................................................................................................................... 40
VI. EXTERNAL ENVIRONMENT AND MARKET CONDITIONS ..................................................... 41
A. Impact of the Recession of 2008...................................................................................... 42
B. Incentive Programs .......................................................................................................... 44
1. Germany ............................................................................................................. 46
2. Spain ................................................................................................................... 46
3. Italy ..................................................................................................................... 47
C. Competition ..................................................................................................................... 47
1. Polysilicon (P-Si) Based Competitors ................................................................ 48
a. Polysilicon (P-Si) Supply....................................................................... 49
2. China Enters Market ........................................................................................... 50
D. Private Investment in the Solar Industry.......................................................................... 53
VII. CORPORATE STRUCTURE ............................................................................................................ 54
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3. VIII. FAB 1 MANUFACTURING FACILITY ......................................................................................... 56
IX. CUSTOMER AGREEMENTS ............................................................................................................ 59
A. Overview of Customer Agreements................................................................................. 59
B. Key Terms........................................................................................................................ 60
C. Customer Agreements...................................................................................................... 61
1. Phoenix Solar AG ............................................................................................... 61
2. Solar Power, Inc.................................................................................................. 62
3. GeckoLogic GmbH ............................................................................................. 64
4. Carlisle Syntec, Incorporated .............................................................................. 65
5. SunConnex B.V. ................................................................................................. 66
6. EBITSCHenergietechnik GmbH ........................................................................ 67
7. USE Umwelt Sonne Energie GmbH ................................................................... 68
8. Alwitra, GmbH ................................................................................................... 69
9. SunSystem, S.p.A. .............................................................................................. 70
X. $535 MILLION DOE LOAN GUARANTEE ...................................................................................... 72
A. Brief History of the DOE Loan Guarantee Program........................................................ 73
1. Title XVII of the Energy Policy Act of 2005 ..................................................... 74
2. 2006 Advanced Energy Initiative ....................................................................... 75
3. The American Recovery and Reinvestment Act of 2009 ................................... 75
4. Department of Energy Loan Guarantee Office ................................................... 76
B. DOE Loan Guarantee Process ......................................................................................... 79
1. Application Submission ...................................................................................... 79
2. Initial Due Diligence and Term Sheet Negotiation............................................. 80
3. Credit Analysis and Review ............................................................................... 80
4. Deal Approval ..................................................................................................... 80
5. Final Due Diligence and Negotiation of Financing Documents ......................... 81
6. Closing ................................................................................................................ 81
C. The “$535 Million” DOE Loan Guarantee ...................................................................... 81
1. DOE Loan Guarantee Solicitation ...................................................................... 82
2. Solyndra’s Pre-Application................................................................................. 82
3. Invitation to Submit Full Application ................................................................. 83
4. Submission of Full Application .......................................................................... 84
a. Summary of Full Application ................................................................ 85
5. Revisions to Full Application ............................................................................. 86
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4. a. Solyndra’s Key Consultants and Advisors for DOE Loan
Guarantee ............................................................................................... 87
6. DOE Due Diligence Activities and Term Sheet Negotiations. ........................... 88
7. Finalized Term Sheet and DOE Conditional Commitment ................................ 94
8. Loan Closing and Agreements ............................................................................ 95
a. Key Terms of Loan as Executed in Loan Documents ........................... 96
b. Key Agreements and Documentation .................................................... 96
D. Loan Funding and Reporting Requirements .................................................................... 98
1. Loan Funding Requirement ................................................................................ 98
2. Financial Reporting Requirements ................................................................... 100
a. Quarterly Reporting ............................................................................. 100
b. Annual Financial Statements and Reports ........................................... 101
c. Periodic and Other Reporting .............................................................. 101
E. Construction and Loan Funding (Fab 2 Phase I) ........................................................... 101
1. Fab 2 Phase I Construction ............................................................................... 103
a. Equipment Supply Agreement ............................................................. 106
b. Operations and Maintenance Agreement ............................................. 107
F. Second DOE Loan Guarantee Application (Fab 2 Phase II) ......................................... 108
1. Fab 2 – Phase II Loan Application Details ....................................................... 108
2. Construction Plans ............................................................................................ 109
3. Solyndra IPO .................................................................................................... 111
4. Third Party Consultants .................................................................................... 112
a. Status of Application ........................................................................... 114
G. February 2011 Loan Restructuring ................................................................................ 114
1. Activities Leading up to Restructuring ............................................................. 115
2. Summary of Restructuring ................................................................................ 127
a. Tranche A Debt.................................................................................... 128
b. Tranche B Debt .................................................................................... 130
c. Tranche C Debt .................................................................................... 130
d. Tranche D Debt.................................................................................... 130
e. Tranche E Debt .................................................................................... 131
3. Summary of February 2011 Loan Restructuring Documentation..................... 132
a. Key Agreements and Documentation .................................................. 133
4. Modified Financial Reporting Requirements.................................................... 134
a. Weekly Reporting ................................................................................ 134
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5. b. Monthly Reporting............................................................................... 135
c. Quarterly Reporting ............................................................................. 135
d. Annual Reporting................................................................................. 136
XI. HISTORICAL FINANCIAL STATEMENT ANALYSIS ................................................................ 138
A. Financial Analysis Recap............................................................................................... 138
1. Fiscal Years 2005 through 2008 – Prior to DOE Loan Guarantee Facility ...... 139
a. Recap of Operations for Fiscal Year 2005........................................... 139
b. Recap of Operations for Fiscal Year 2006........................................... 139
c. Recap of Operations for Fiscal Year 2007........................................... 139
d. Recap of Operations for Fiscal Year 2008........................................... 140
2. Fiscal Years 2009 through 2011 - Following DOE Loan Guarantee
Facility .............................................................................................................. 141
a. Recap of Operations for Fiscal Year 2009........................................... 141
b. Recap of Operations for Fiscal Year 2010........................................... 142
c. Recap of Operations for Fiscal Years 2005 - 2011 .............................. 143
B. Summary of Quarterly Reports Provided to the DOE ................................................... 146
1. Quarterly Financial Results Reported to the DOE ............................................ 146
XII. FINANCIAL FORECASTS & PROJECTIONS .............................................................................. 148
A. Key Metrics in Forecasts & Plans.................................................................................. 148
B. Risks Facing Solyndra ................................................................................................... 149
C. Impact of Risks on Solyndra’s Forecasts and Plans ...................................................... 152
D. Comparison of Forecast and Historical Financial Results ............................................. 154
1. Forecast #1 - December 2006 - Pre Application to the D.O.E filed on
December 28, 2006 ........................................................................................... 155
2. Forecast #2 - Comparison of Actual Financial Results to the July 31,
2009 Solyndra Sponsor Company Plan ............................................................ 157
a. Revenue Results................................................................................... 159
b. ASP Results ......................................................................................... 160
c. Average Watt Per Panel Results .......................................................... 161
d. Panels Produced Results ...................................................................... 162
e. Summary of Sponsor Forecast Results ................................................ 163
3. Forecast #3 - Consolidation Plan – October 2010 (“Consolidation Plan”)....... 165
4. Forecast #4 - Restructuring Plan – February 2011 ........................................... 169
XIII. SOURCES AND USES OF CASH................................................................................................. 175
A. Sources ........................................................................................................................... 175
1. Collections of Accounts Receivable ................................................................. 176
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6. 2. Sale of Preferred Stock ..................................................................................... 177
3. DOE Loan Guarantee........................................................................................ 177
4. Convertible Secured Promissory Notes (Tranche E) ........................................ 177
5. Tranche A Debt................................................................................................. 177
B. Uses: .............................................................................................................................. 177
1. Property, Plant & Equipment Fab 2 Phase I ..................................................... 178
2. Property, Plant & Equipment Fab 1 .................................................................. 179
3. Payroll ............................................................................................................... 179
4. Direct Materials ................................................................................................ 179
5. Professional Services ........................................................................................ 179
6. Other Uses ........................................................................................................ 181
XIV. COMPENSATION ......................................................................................................................... 181
A. Annual Payroll ............................................................................................................... 181
B. Compensation to Senior Managers ................................................................................ 181
C. Solyndra Headcount and Average Compensation by Year............................................ 182
D. Labor Statistics of California and Local Counties ......................................................... 183
E. Staffing Companies and Temporary Labor.................................................................... 184
F. Executive Incentive Plan (“EIP”) & Key Contributor Incentive Plan (“KCIP”) ........... 185
G. CIGS / System Tech Incentive Program ........................................................................ 186
H. Cash Bonus Program ..................................................................................................... 187
I. Core Retention Bonus Program ..................................................................................... 190
J. Bonus Summary ............................................................................................................. 191
XV. EVENTS LEADING TO BANKRUPTCY FILING ....................................................................... 192
EXHIBITS
Exhibit #1 Resume of R. Todd Neilson
Exhibit #2 Glossary of Defined Terms
Exhibit #3 Timeline of Key Events
Exhibit #4 Private Investment in the Solar Industry Reporting – Thomson Reuters
Exhibit #5 Timeline of Key DOE Loan Guarantee Events
Exhibit #6 Schedule of Identified Financial Projections Sent to the DOE
Exhibit #7 Summary of Key Terms of Finalized Term Sheet (March 2009)
Exhibit #8 Summary of Key Terms of Loan as Executed in Loan Documents (September 2009)
Exhibit #9 Summary of Key Loan Fund Requirements and Procedures (September 2009)
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7. Exhibit #10 Summary of Key Financial Reporting Requirements (September 2009)
Exhibit #11 Summary of Key Terms Relating to the Tranche A Debt
Exhibit #12 Summary of Key Terms Relating to the Tranche B Debt
Exhibit #13 Summary of Key Terms Relating to the Tranche D Debt
Exhibit #14 Summary of Key Terms Relating to the Tranche E Debt
Exhibit #15 Summary of Solyndra, Inc. Quarterly Financial Information (3rd Qtr 2009 – 2nd Qtr 2011)
Exhibit #16 Solyndra – Executive Management Charts (Top Level Mgmt. Organizational Chart)
Exhibit #17 Solyndra 2008 Executive Incentive Plan (EIP) and Key Contributor Incentive Plan
(KCIP) Overview.
APPENDICES 1
Appendix A - List of Appendices
Appendix B - Solyndra Technology
Appendix C - External Market Information
Appendix D - Various Board Minutes & Presentations
Appendix E - Customer Agreements
Appendix F - Solyndra’s Form S-1 Documentation filed with Securities and Exchange Commission
Appendix G - DOE Loan Guarantee Program Background Documentation
Appendix H - Solyndra Pre-Application for DOE Loan Guarantee
Appendix I - Various DOE Related Correspondence and Communications
Appendix J - Various Solyndra Presentations Sent to the DOE
Appendix K - Solyndra DOE Loan Guarantee Application (2008) (Solicitation No: PS01-06LG00001 –
Invitation No: 1013)
Appendix L - Certain DOE Loan Guarantee Term Sheets
Appendix M – Sponsor Payment Letters (DOE Loan Guarantee)
Appendix N - Goldman Sachs, DOE Credit Review Board - Draft Credit Memo Submitted to the DOE,
December 17, 2008.
Appendix O - DOE Independent Consultant Reports
Appendix P - DOE Loan Guarantee Closing Documentation (September 2009)
Appendix Q - DOE Quarterly Reporting Packages
Appendix R - DOE Annual Reporting Packages
Appendix S - Construction Progress Reports (RW Beck)
Appendix T - DOE Loan Guarantee Draws
Appendix U - Second DOE Loan Guarantee Application (Fab 2 Phase II)
1
Appendices are not attached hereto because they are voluminous and contain confidential information.
Appendices may be provided to parties in interest subject to appropriate confidentiality restrictions.
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8. Appendix V - DOE Loan Guarantee Waivers
Appendix W - Restructuring of $535 Million DOE Loan Guarantee Closing Documentation
(February 2011)
Appendix X - DOE Monthly Reporting Packages
Appendix Y - DOE Weekly Reporting Packages
Appendix Z - Audited Financial Statements
Appendix AA – Other Private Equity and Secured Debt Documentation
Appendix AB - Accounts Receivable & Inventory Purchase and Sale Agreement
Appendix AC – Compensation Related Documentation
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9. I.
INTRODUCTION
On October 6, 2011, the Debtors 2 retained R. Todd Neilson as Chief Restructuring
Officer (“CRO”) pursuant to an order of the United States Bankruptcy Court for the District of
Delaware (the “Court”). The CRO’s engagement was approved jointly by the Holdings’ Board
of Directors and Solyndra LLC’s Board of Managers (together, the “Board”). The CRO was
selected by a subcommittee of the Board composed of independent directors and managers
(“Subcommittee”). By order dated November 1, 2011, the Court authorized the employment of
the CRO, along with his firm, Berkeley Research Group, LLC (“BRG”).
The engagement of the CRO by the Board and his subsequent appointment by the Court
was the result of a unique sequence of events that began with the Debtors’ Chapter 11
bankruptcy filings on September 6, 2011. Two days later, on September 8, 2011, the Federal
Bureau of Investigation (“FBI”), acting in concert with the Department of Energy Office of
Inspector General (“OIG”), executed search warrants at the Debtors’ headquarters in Fremont,
California and the United States Attorney commenced a criminal investigation. In addition to
the Federal criminal investigation, pre-petition, Solyndra was also subject to a Congressional
investigation that escalated upon the commencement of these cases.
Shortly after the commencement of the cases, the Board determined that a Chief
Restructuring Officer was needed to manage the Debtors’ bankruptcy cases, particularly in light
of the anticipated resignation of the Debtors’ Chief Executive Officer and as other top
management was expected to leave to find other employment. In light of the Federal criminal
investigation and ongoing Congressional investigation, in addition to the customary roles for a
CRO, the CRO and the Subcommittee agreed that the CRO would act in an independent capacity
in determining if any improprieties had occurred with respect to the Debtors’ finances. Further,
the CRO was to submit a report to the full Board detailing his findings. The Board felt that the
CRO was particularly well-suited to conduct such investigation in light of his unique background
and experience. Among other things, the CRO is a former FBI agent (See Resume attached as
Exhibit #1) who has acted as Chapter 11 Trustee in a number of high profile bankruptcy cases.
2
Solyndra LLC and 360 Degree Solar Holdings, Inc. (“Holdings”) are hereinafter referred to as the “Debtors.”
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10. This report was prepared with the assistance of BRG. The CRO is a Director at BRG.
The CRO has utilized BRG’s services extensively in the preparation of this report. References in
this report to the CRO may reflect the collective analysis and conclusions of both the CRO and
BRG.
The CRO has prepared this report pursuant to his engagement by the Board. A
description of the principal issues addressed by this report is set forth in the section below
entitled “Report Summary.”
The CRO is hopeful that this report will provide an independent analysis for parties in
interest regarding various issues surrounding Solyndra, 3 substantiate the use of investor and
government funds, and describe the circumstances that led to Solyndra’s chapter 11 bankruptcy
filing.
The CRO is appreciative of the personnel at Solyndra who provided assistance in the
preparation of this report. The CRO relied on Solyndra employees for much of the financial and
background information contained in this report, both in documentary form and based on
informal interviews. The CRO attempted to conduct informal interviews of Solyndra’s former
Chief Executive Officers, Dr. Chris Gronet (“Gronet”) and Brian Harrison (“Harrison”). Both
Gronet and Harrison declined, through their legal counsel, to speak directly to the CRO.
The CRO also thanks the Board for its cooperation and assistance. The CRO met with
both the Board and the Subcommittee on a number of occasions. At no time did the CRO feel
any pressure to provide the Board with anything but an unvarnished report of the results of his
analysis and conclusions. Hence, this report reflects the CRO’s independent views based on
access to Solyndra’s records and personnel and other third-party documentation.
II.
SCOPE OF ANALYSIS
The CRO has performed an extensive analysis of the company’s accounting records,
electronic files, internal and external communications, conducted informal interviews of key
3
For purposes of this report, unless otherwise noted, the term “Solyndra” refers collectively to Solyndra LLC,
Holdings, and each of their current and former affiliates.
2

11. personnel, and researched third party documentation regarding certain areas discussed in further
detail throughout this report. The CRO’s work has included, among other things, the analysis of
the Debtors’: (a) solar technology and products; (b) external environment and market conditions;
(c) corporate structure; (d) Fab 1 manufacturing facility; (e) customer agreements; (f) $535
million loan guarantee from the U.S. Department of Energy (“DOE”) for the Fab 2
manufacturing facility; (g) historical financial statements; (h) financial forecasts and projections;
(i) sources and uses of cash; and (j) employee compensation. The report includes a substantial
number of industry specific terms, which are routinely defined within the report. However, due
to the voluminous amount of the defined terms, a glossary is attached herewith as “Exhibit 2 –
Glossary of Defined Terms.”
The work performed by the CRO and his firm BRG involved financial and investigative
accounting services. The CRO has not performed an audit of the financial statements in
accordance with Generally Accepted Auditing Standards (“GAAS”) to determine whether the
financial statements were prepared in accordance with General Accepted Accounting Principles
(“GAAP”), nor has the CRO performed a review or compilation of the financial statements in
accordance with the standards promulgated by the American Institute of Certified Public
Accountants.
III.
SUMMARY OF CONCLUSIONS
As a result of his analysis, the CRO has reached the following independent conclusions,
which are summarized below:
• The CRO has reviewed the accounting records of Solyndra and found that the
construction costs were correctly recorded in the accounting records and no material
funds were diverted from their original intended use.
• The CRO has reviewed the vast level of communications and the underlying records
between the DOE and Solyndra. It is the opinion of the CRO that the DOE had
sufficient information to understand the risks and challenges associated with the
guarantee obtained from DOE and make an informed decision as to the ongoing
financial condition of Solyndra throughout the loan guarantee time frame based upon
the level of documentation and information provided.
3

12. • The CRO undertook a review of the loan draw packages submitted and approved by
the DOE’s independent engineer assigned to the project, RW Beck, Inc. (“RW
Beck”), along with the loan agreements underlying the $535 million Loan Guarantee
between Solyndra and the DOE. It is his opinion that all of the funds drawn under the
DOE Loan Guarantee were spent in accordance with the relevant loan documents.
• The CRO has reviewed the unaudited financial information provided to the DOE by
Solyndra and compared that information to the final audited financial statements
issued by PricewaterhouseCoopers (“PWC”) for the same period to determine
whether the financial information provided by Solyndra in the quarterly reports was
materially correct. It is the opinion of the CRO that the information provided to the
DOE, as certified, was materially correct when compared to the audited financial
statements of PWC.4
• The CRO has reviewed the actual results and underlying metrics which should have
been utilized under the parameters of the Cash Bonus Program and concludes that the
actual calculations used by the company to compute and pay the cash bonuses are
within materially acceptable limits.
The conclusions and bases for these independent conclusions are discussed in further
detail within the Report Summary below and in the various detailed sections of this report. The
conclusions expressed herein are based on the information provided and obtained as of the date
of this report and upon the pattern of facts that the CRO has observed during his review and
analysis of such information. The CRO reserves the right to supplement, update or otherwise
modify this report at a later date based on additional documentation and information he may
receive.
IV.
REPORT SUMMARY
A. General Overview
Founded in 2005 as Gronet Technologies, Inc., 5 Solyndra is a U.S. manufacturer of thin
film solar photovoltaic power systems specifically designed for large commercial and industrial
4
It should be noted that there are non-cash differences between the audited financial statements of the company and
the financial information provided to the DOE related to the accelerated depreciation of equipment caused by the
consolidation of equipment in Fab 1facility and Fab 2 facility (Phase I). Such discrepancies were not surprising
given that the financial effects of such amalgamation were not fully known until the consolidation was fully
completed.
5
Founder Dr. Chris Gronet holds a B.S. in materials science and a Ph.D. in semiconductor processing, both from
Stanford University. He acted as Solyndra’s CEO until July 2010. He retained the title of Chairman until June 2011,
but his involvement with the operations of the company was limited after July 2010.
4

13. rooftops and for certain shaded agricultural applications. Solyndra developed a new technology
for solar panels, as outlined within this report, which offered the promise of clean solar power for
low-slope commercial and industrial white rooftops.
Solyndra received substantial private funding (over $1.2 billion) for this promising
technology and was also the first recipient of a loan guarantee from the DOE. Specifically, in
July 2005, President George W. Bush (“President Bush”) signed into law Title XVII of the
Energy Policy Act of 2005 (“EPAct2005”) authorizing the DOE to issue and administer a loan
guarantee program to provide federal support to alternative energy companies in an effort to spur
commercial investment for “clean” energy. As a result of the tight credit markets created by the
2008 financial crisis, President Barack Obama (“President Obama”) signed into law the
American Recovery and Reinvestment Act of 2009 (“ARRA”) in January 2009, which, among
other things, temporarily expanded the Loan Guarantee Program (“LGP”) to support clean
energy projects facing difficulties in securing financing. 6 According to the Loan Guarantee
Programs Office (“LGPO”) website, the LGP has guaranteed over $35 billion of loans as of
January 31, 2012.
On September 3, 2009, Solyndra, and one of its subsidiaries Solyndra Fab 2, LLC (“Fab
2, LLC”), entered into financing agreements with the Federal Financing Bank (the “FFB”) 7 that
provided for a $535 million loan guaranteed by the DOE 8 to construct a state of the art
manufacturing facility. Unfortunately, like many new start-up companies, Solyndra did not
survive the rigors and uncertainty of the marketplace and, just two years later, filed bankruptcy.
The U.S. government’s involvement in Solyndra and likely loss of over one half billion
dollars has been well publicized. However, there were also a number of private investors who
believed in the promise of Solyndra’s technology to the point of investing over $1.2 billion of
6
See Appendix G.17, Written Statement for the Record of Jonathan Silver, Executive Director of the Loan
Programs Office, U.S. Department of Energy, United States Senate Committee on Energy & Natural Resources,
September 23, 2010.
7
The FFB is a government corporation created by Congress in 1973 under the general supervision of the U.S.
Treasury. The FFB was established to centralize and reduce the cost of federal borrowing and federally-assisted
borrowing from the public.
8
In actuality, the DOE only funded $528 million of the originally agreed sum of $535 million. However, for
purposes of this report we will generally refer to the Solyndra’s loan guarantee as having $535 million in
availability.
5

14. private venture funds, the vast majority of which will be lost, including $195.2 million as a
participatory share for the construction of the manufacturing facility. 9
Exhibit #3 provides an illustration of the key events that are summarized within this
section of the report and further analyzed within the report’s body.
B. Solyndra’s Product and Technology
The solar energy industry has long been dominated by crystalline silicon based modules
(referred to as “conventional panels”). In 2008, roughly 80% of the photovoltaic (“PV”) solar
panel modules sold used this crystalline based silicon process. The process of using semi-
conductor grade polysilicon was adopted due to the availability of polysilicon feedstock from the
semi-conductor industry and the efficiency of the technology to produce electricity. However, as
the global demand for solar modules outpaced the capacity for polysilicon (“P-Si”) production,
many researchers began to explore usable alternatives to the polysilicon based solar modules.
Thin film photovoltaic technology (as utilized in the Solyndra process) is the dominant
alternative to polysilicon based modules. Within the thin film group, amorphous silicon,
cadmium telluride (“CdTe”), and copper, indium, gallium, diselenide (“CIGS”), are the most
common alternative materials used for energy generation. Solyndra believed that CIGS
technology, as adapted to its manufacturing process, could best compete in the global solar
market. Utilizing this unique technology, Solyndra adopted a cylindrical tube design to protect
the CIGS thin film material from degradation and damage caused by moisture, and set forth on a
path to produce large volumes of panels for low-slope commercial and industrial white rooftop
applications.
After extensive analysis on strength, panel weight, cost, and other factors, Solyndra
decided to use a 15mm diameter CIGS coated glass inner tube encapsulated inside of a 22mm
diameter outer tube. Design of the coating equipment set the length of each tube at about 1
meter. This assembly would be called a module and the Solyndra technology was born.
9
The $1.2 billion referenced above includes $75 million from Tranche A, as further outlined in the report, which
will receive a priority distribution from the proceeds of the sale of Solyndra’s assets.
6

15. This design not only protected the CIGS material from degradation, it also allowed the
panel to collect light from more than just direct sunlight making it naturally more efficient at
producing wattage power. The diagram below from a Solyndra marketing presentation shows
how the panels receive direct, diffuse, and reflected sunlight from every angle of the panel.
The ends of the tubes are hermetically sealed with metal caps, eliminating the risk of
exposure and increasing the lifespan of the product. Finally, the tubes were connected using a
“wiring harness” and attached to a mounting system.
At the time of its entry into the market, Solyndra’s leading competitive advantage was its
low Balance of System (“BOS”) cost, which means the aggregate cost associated with installing
and maintaining solar panels. Due to the unique slatted design of the modules, along with their
7

16. ability to be installed with zero degrees of tilt, Solyndra’s panels allowed wind to pass through
with minimal resistance. Unlike traditional crystalline based panels, which require significant
support systems to handle moderate to high wind gusts, Solyndra’s panels could be installed
relatively easily and at a fraction of the cost of traditional systems.
The cost of installation for the end user was a major pricing factor that set Solyndra apart
from its competitors as the ease of installation and the lack of mounting equipment needed to
support wind resistance made the BOS cost for Solyndra panels almost half that of traditional P-
Si modules. In addition, traditional solar systems occasionally required additional supporting
systems to allow the roof to sustain their increased weight while the lightweight Solyndra panel
systems required no such modification.
With thousands of flat roofs throughout the world awaiting the comparatively
uncomplicated installation of efficient Solyndra solar panels, and the active participation of
government subsidies including ample European feed-in tariffs, the future looked bright for
Solyndra and its unique technology.
C. Financing and Construction of Solyndra Manufacturing Facilities
In 2007, Solyndra leased its first fabrication facility (“Fab 1”) and began to focus its
efforts on commercializing its technology and designing and deploying the custom equipment
needed to produce its panels on a large scale. In July, 2008, Solyndra began its first commercial
shipments from Fab 1.
Solyndra’s business plan required scale. Accordingly, Solyndra planned additional
manufacturing facilities. The complex path to the construction of Solyndra’s second
manufacturing facility, hereinafter after referred to as Fab 2 Phase I (“Fab 2 Phase I”) started in
2006, during the Bush administration, when the company learned of a new program that allowed
the DOE to provide federally backed loan guarantees to emerging alternative energy companies.
The program was dedicated to the public policy objectives of pursuing initiatives for energy
independence and clean energy. As a result of this new federal program, Solyndra embarked on
an unexpectedly long and costly road to obtain funding from the DOE to support its vision to
8

17. commercially scale its solar panel technology to be a competitive force in the emerging solar
industry.
The process began in December 2006 with an initial application filed with the DOE and
ended with a $535 million loan in September 2009 from the FFB, which was guaranteed by the
DOE (the “DOE Loan Guarantee”). Solyndra’s efforts to obtain the DOE Loan Guarantee were
costly and time-consuming, and a significant portion of these efforts occurred during the Bush
administration. The process took place over a period of 2 ½ years, during which numerous
meetings and discussions were held with the DOE. In addition, thousands of pages of documents
were provided to the DOE, including financial projections, historical financial performance
analyses, market studies, sensitivity analyses, legal and engineering services documentation, and
numerous meetings were held before the DOE finally approved the application.
During 2007, while Solyndra waited for the DOE to respond to its original pre-
application of December 2006, the company, through investor funds and loans, started to
assemble its first manufacturing facility, which became Fab 1. During that formative period, the
primary issue facing Solyndra was how to ramp up manufacturing quickly in order to fill orders
to satisfy what appeared to be an escalating demand for solar panels. In fact, from the period of
2007 through 2009, Solyndra entered into nine customer agreements, described in Section IX
below, (the “Customer Agreements”) which contemplated, in some form, sales of up to 529
Megawatts 10 (“MW”) and a revenue stream, of up to $1.5 billion11 through 2014.
Notwithstanding that the Customer Agreements did not create a contractual obligation for all
contemplated future sales, they were, at a minimum, a reflection of measurable interest in
Solyndra’s technology at a time when the company had not yet shipped a single solar module. 12
10
A watt is the primary measure of solar panel sales that will be utilized throughout this report. For instance, 529
MWs is 529 million watts. At a price of $1 per watt for illustrative purposes, 529 MWs will translate into $529
million in sales.
11
These agreements were not wholly binding contracts to acquire $1.5 billion of product, but in many instances,
options on the part of buyers.
12
In actuality, for a variety of reasons, including a worldwide reduction in the cost of solar panels, as outlined in the
Customer Agreements section of the Report, the final sales based on these agreements were a fraction of what was
originally anticipated.
9

18. D. The Impact of the Sudden Downturn in the Solar Market and the Global Financial
Crisis
Between the buoyant optimism infused in the filing of the original DOE loan pre-
application in 2006 and Solyndra’s ultimate bankruptcy filing in 2011, the worldwide solar
industry experienced a dramatic shift in market conditions. That shift had a particularly drastic
effect upon Solyndra and its business model.
In 2008, during the period in which Solyndra first started to produce modules, the price
of polysilicon (a critical component of P-Si modules used by competitors) fluctuated between
$250/kg and $500/kg depending on the data source, due to a shortage in capacity to refine the
element to solar grade quality. Consequently, the high price of production materials for
crystalline silicon producers led to a higher average sales price per watt (“ASP”) for all solar
products throughout the market. As previously stated, one of the competitive advantages that
Solyndra’s cylindrical, thin-film solar cells offered, when compared to conventional panel
producers, was the low BOS cost of installation. However, as the price of polysilicon steadfastly
dropped, primarily due to the aggressive entry of Chinese manufacturers into the P-Si market,
panel manufacturers using polysilicon were able to reduce the cost and price of their panels
substantially, and that single component was no longer sufficient to compensate for the disparity
between the prices for Solyndra cylindrical modules and the standard costs of the typical
polysilicon panels of flat panel producers. Due to these circumstances Solyndra was compelled
to reduce its prices in order to remain competitive. Unfortunately, Solyndra’s total costs of
production, including materials, did not experience a commensurate reduction, which was
devastating.
The entry of Chinese manufacturers into the P-Si market between 2009 and 2011, often
with subsidized funds from the Chinese government, resulted in a steep drop in production costs
for solar manufacturers utilizing P-Si in their products. 13 Because Solyndra did not rely on P-Si
in its thin-film solar technology, the company did not benefit from the price declines associated
with P-Si products. Solyndra’s cost structure remained unaffected while its competitors, who
were producing 80% of the world’s solar panels, experienced the beneficial results of the steep
13
In 2005, China produced less than 10% of the global PV market. By 2010, that amount had increased to over
50%. See Appendix C.5, EPIA -- Global Market Outlook for Photovoltaic’s until 2015, pg. 36.
10

19. P-Si price declines. In addition, Chinese producers had access to capital from the China
Development Bank, which allowed such producers to move their products to market at a much
lower cost than their U.S. or European counterparts. 14
At the time of Solyndra’s entry into the market place, the ASP at which the company
could sell its modules was approximately $3.30. 15 Had the price stabilized at approximately
$3.30 per watt and the government subsidies remained in place, it is possible that Solyndra might
have continued its operations and ultimately, may have become a successful company. Given its
unique technology, the company may have had a significant impact on the solar industry.
However, Solyndra simply could not survive under the market conditions imposed by the
precipitous drop in the ASP at which Solyndra could sell its product. At present, the ASP for
solar panels hovers at approximately $1.00 per watt. 16 This rapid drop in ASP was probably the
single greatest contributor to Solyndra’s failure.
The drop in the ASP was accentuated by the fixed costs embedded in the manufacturing
process Solyndra utilized. These static costs intensified Solyndra’s inability to rapidly adapt to
changing market conditions. Nonetheless, Solyndra tried to compensate for the falling sales
prices by boosting other elements, such as manufacturing output and the increase of average
watts per panel (“Wp”), 17 as well as implementing various cost reduction initiatives. While
Solyndra’s technology was certainly capable of being modified and, in certain instances, was
actually improved, it was somewhat resistant to the rapid time demand which was needed to
respond to changing market conditions.
Another problem that beset the solar industry during this period was the European debt
crisis, a spillover from the global recession triggered in 2008, which weighed down the European
economy and led to much slower growth in the overall demand for solar installations between
2009 and 2011. There were two primary reasons for such reduced growth in demand. First, the
global recession caused many businesses to either cancel or delay capital spending projects in
14
See Appendix C.6, European Commission Joint Research Centre Institute for Energy, “PV Status Report 2011,”
July 2011, pg. 83.
15
The price during that period would occasionally rise to the level of $3.75 per watt.
16
See Appendix C.1, PVinsights.com, Solar PV Module Weekly Spot Price, February 22, 2012.
17
The Wp was the primary measurement of wattage output – the higher the wattage, the greater the efficiency and
higher the price that could be charged. (See Section XII. Financial Forecasts and Projections).
11

20. exchange for near term cash savings. Second, reduced tax revenue caused many countries to
substantially reduce or eliminate subsidies previously allocated to the solar industry. The
primary government subsidy program utilized in Europe consisted of feed-in-tariffs (“FiT”),
which are long-term contracts offered to purchase energy generated from a renewable source.
The countries with the most generous FiTs, Germany, Italy and Spain, are the European leaders
in global solar PV demand. Together with the United States, these countries accounted for
almost 70% of the world’s installed PV production capacity at the end of 2010. The reduction or
cessation of European FiTs had a serious effect on Solyndra. The European market accounted
for approximately 60% of Solyndra sales between 2009 and 2011.
The convergence of these two components ((a) the drop in the price for solar panels; and
(b) the withdrawal of many of government subsidies) permanently altered the financial landscape
for Solyndra.
Solyndra had many competitors in different stages of growth with different panel
technologies, none of which were immune to the frenetic changes that the market faced between
2007 and 2011. Examining the value of those companies that are publically traded provides a
clear picture of the dire circumstances faced by the solar market. The most notable company to
fall victim to the external market conditions is Massachusetts-based Evergreen Solar, which filed
for Chapter 11 bankruptcy in August 2011. Executives from that company blamed Evergreen
Solar’s demise on government subsidized competition from China and the failure of the U.S.
government to fully invest in clean energy policies. 18
For those companies that are still operating, market conditions have also taken a
significant toll on the value of their shares. Fellow thin film producer First Solar, Inc saw its
shares fall 70%, from a high of over $300 per share in mid 2008 to under $90 per share at the
time of Solyndra’s bankruptcy filing. Shares of San Jose-based Sunpower Corp. have fallen over
90% from their high of almost $150 per share in November 2007. Finally, China-based Suntech
Power and Yingli Solar both saw reductions in share value of between 88%-95% between
November 2007 and September 2011.
18
See Bloomberg, “Evergreen Solar Seeks Bankruptcy With Plans to Sell Itself,” Steven Church, August 15, 2011.
12

21. Solyndra spent its first several years developing the technology, designing the tools to
manufacture, building the initial infrastructure, and obtaining certification to sell its unique
cylindrical modules. By the end of 2008, Solyndra had incurred a total cumulative net loss of
$385.1 million, and yet the company was eager to introduce its technology to the market and
anticipated its future operations would yield a return. By the end of 2008, Fab 1 had acquired
approximately $247.4 million in property, plant and equipment, primarily purchased with funds
obtained from private investors. Commercial shipments from Fab 1 began in July 2008, yielding
total sales of just over $6 million for that year.
E. The DOE Loan Guarantee and Construction of Fab 2
In 2008, Solyndra received notification from the LGPO that the company had been
selected, based upon Solyndra’s pre-application submitted in December 2006, to submit a full
application to the DOE. Following meetings with the LGPO in Washington, D.C. to address the
requirements and expectations of a full application, Solyndra filed a full application beginning
with a partial submission on May 6, 2008 that was completed by August 27, 2008 (the “Full
Application”). Since the Fab 1 facility was already close to becoming operational, the Full
Application entailed the construction of a new facility, which was referred to as Fab 2 (“Fab 2”).
This partial application was more expansive (including a facility capable of manufacturing up to
420 MW per year) than the application ultimately finalized and was initially deemed too large
for the DOE. As a result of the DOE’s reluctance to fund the larger project originally submitted,
the planned Fab 2 facility was split into two phases, the first phase consisted of a 210 MW
facility with a projected cost of $713 million,19 which would double the projected operational
capability of Fab 1. 20 The Full Application contained over 1,500 pages of documentation and
information including, but not limited to, a project description, technical information, a business
plan, a financing plan, preliminary cash flow and detailed and extensive spread sheets outlining
basic financial projections, estimated project costs, constructions risks and a mitigation strategy,
federal and state approval documents, environmental reports, credit history and audited financial
statements for 2005, 2006, and 2007.
19
The total project costs were ultimately budgeted at $733 million.
20
For a variety of operational reasons associated with the manufacturing process, the total annual output for Fab 1
never exceeded 67 MW, considerably less than the projected annual output of 120 MW.
13

22. In January 2009, President Obama signed into law the ARRA. A component of the
ARRA amended the EPAct2005 by adding Section 1705 which temporarily expanded the loan
guarantee program (the “1705 Program”) in an effort to set in motion the country’s clean energy
sector by supporting projects that faced difficulties in securing financing as a result of the tight
credit markets created by the 2008 financial crisis. 21
In March 2009, 28 months after filing the first pre-application with the DOE, a term sheet
was executed which provided for a $535 million loan from the FFB, guaranteed by the DOE with
Fab 2 LCC as the borrower, and Solyndra, Inc. as the Sponsor. Some of the major terms
included: (a) total project costs of $733 million; (b) loan guarantee by the DOE of $535 million
(73%); (c) equity contribution of $198 million by Solyndra, Inc. (27%); (d) a seven year term;
(e) a low interest rate based on Treasury bill rates; (f) fees to be paid by Solyndra totaling over
$4 million; and (g) a $30 million cost overrun reserve to be funded solely by Solyndra, Inc. 22
Solyndra was the first company to secure a guaranteed loan facility under the LGP. On
September 3, 2009, the company and Fab 2, LLC entered into financing agreements with the
DOE and FFB that provided for a $535 million loan guaranteed by the DOE. The loan to Fab 2,
LLC was for the construction of a new state-of-the-art manufacturing facility in Fremont,
California. The Fab 2 Phase I facility was projected to have approximately 210 MW of annual
manufactured output, over twice the amount of the previous output capability of Fab 1. The Fab
2 Phase I facility was constructed ahead of schedule and under budget.
The aerial overhead below is a reflection of the area surrounding the existing Solyndra
manufacturing facility, Fab 2 Phase I, as well as the original facility, Fab 1.
21
See Appendix G.17, Written Statement for the Record of Jonathan Silver, Executive Director of the Loan
Programs Office, U.S. Department of Energy, United States Senate Committee on Energy & Natural Resources,
September 23, 2010.
22
The term sheet also outlined the significant documentation to be negotiated and executed, conditions precedent to
loan closing, conditions precedent to each periodic approved budget, conditions precedent to each disbursement
date, bank accounts to be opened and maintained, representations and warranties, covenants, events of default,
reporting requirements, reaffirmation that Solyndra agrees to pay all DOE’s independent consultants and outside
legal counsel fees, and various other provisions.
14

24. Funds drawn on the DOE Loan Guarantee were either sent to Solyndra directly, as
reimbursement for invoices paid or pursuant to provisions in the project agreements executed at
loan closing. Solyndra would in turn incur obligations for the benefit of Fab 2 in hiring
employees, contracting with vendors, and constructing the tooling that went into Fab 2. In
certain instances, loan funds were wired directly to the vendor. Each invoice was included in a
packet sent along with the draw request for review by RW Beck. For funds wired directly to
vendors, a confirmation email was required to ensure that the funds were received. Of the $733
million budgeted, $723 million was ultimately drawn by over 100 separate vendors, including
Solyndra, as of the bankruptcy petition date.
The unique cylindrical form factor of the Solyndra module, as well as the proprietary
CIGS manufacturing process, meant that there were no commercially available production tools
for the Fab 2 Phase I project to purchase; Solyndra necessarily would provide the equipment and
personnel. Solyndra, either directly or through its affiliate, Solyndra Operator, LLC (“Operator
LLC”) received almost 50% of the total loan proceeds. The basis for these draws were laid out
within, and such payments were in accordance with, various project related agreements including
the Equipment Supply Agreement (“ESA”) and the Operations and Maintenance Agreement
(“O&M Agreement”).
The ESA was developed to allow Solyndra to “supply and sell” to Fab 2, LLC (the entity
that held title to Fab 2 Phase I) equipment needed to operate Fab 2 Phase I. The ESA was
necessary as the equipment was unique and had to be developed solely for the Solyndra
manufacturing process utilizing the Solyndra technology, and the completed tools of production
were proprietary to Solyndra. In addition, it was a logical conclusion that Solyndra personnel
would, by and large, replicate the machines presently being used in the Fab 1 manufacturing
process, which was already producing Solyndra panels. The agreed-upon contract price for the
ESA was $318.9 million. Solyndra, as the Sponsor, was responsible for any cost overruns. The
actual amount drawn towards the ESA was $312.9 million.
The O&M Agreement was created to designate the operational, management and
maintenance duties of the Fab 2 facility to a new operating entity, Operator LLC. These duties
were designated as either pre-operational services or management services. Pre-operation
16

25. services included material procurement, engineering, and other administrative activities leading
up to the facilities operational period, while management services focused on the ongoing
monitoring and management of the Fab 2 facility. In total, Operator LLC drew $43.5 million
from the DOE loan for providing such services.
As Solyndra moved into fiscal year 2011, Fab 2 Phase I became operational and
commenced shipping product in January 2011. The total projected cost of the Fab 2 Phase I
facility was projected to be $733 million, of which $535 million23 would be funded by the DOE
Loan Guarantee and the remaining $198 million by private investors.
The CRO has reviewed the accounting records of Solyndra and has found that the
construction costs were correctly recorded upon the books. No material funds were diverted
from their original intended use.
As part of his engagement, the CRO undertook a review of the loan draw packages
submitted to RW Beck, along with the loan agreements entered into by Solyndra and the DOE.
It is his opinion that the funds drawn under the DOE Loan Guarantee were spent in accordance
with the loan documents.
Concurrent with the funding of the DOE Loan Guarantee, Solyndra was obligated to
provide internal unaudited financial information directly to the DOE on a quarterly basis,
pending issuance of audited financial statements by PWC. Solyndra’s quarterly statements and
certifications were signed by Solyndra’s Chief Financial Officer. 24
The CRO has reviewed the unaudited financial information provided to the DOE by
Solyndra and compared that information to the final audited financial statements issued by PWC
for the related annual period to determine whether the financial information provided by
Solyndra in the quarterly reports was materially correct. Following that analysis, described in
greater detail in this report, it is the opinion of the CRO that the information provided to the
23
The DOE Loan Guarantee actually only funded $528 million of the $535 million original loan amount.
24
All of the quarterly statements and certifications in the possession of the CRO have been attached as Appendix Q.
17

26. DOE, as certified, was materially correct when compared to the audited financial statements of
PWC.25
F. Solyndra’s Financial Performance
During 2009, when the DOE approved the loan guarantee and construction commenced
on Fab 2, Phase I, signals of impending financial deterioration were starting to appear. Although
Solyndra’s sales would briskly move from $6 million in 2008 to over $100.5 million in 2009,
and the ASP was still in the range of $3.30 per watt, there were two troubling developments.
First, while sales increased, they were not as robust as originally envisioned in the pre-
application in 2006. In fact, sales were less than half of forecast levels in the pre-application. 26
In addition, while sales were only half of the projected amount, manufacturing and operating
costs were almost twice as much as originally projected therein. Solyndra ended 2009 with a net
loss of $172.5 million and a total net loss since 2005 of $557.7 million.
Solydnra continued to search for capital sources in order to fund its expansion of
production capacity and scaling of manufacturing costs. In December 2009, Solyndra filed a
Form S-1 Registration Statement (“S-1”) with the United States Securities and Exchange
Commission (“SEC”) for an initial public offering (“IPO”) to raise additional capital to fund
operations and a portion of the cost for the construction of the second phase of the Fab 2
facility. 27 This public document included a substantial amount of information which was vetted
through an extensive review by the company and its financial advisors, accountants and legal
counsel. The S-1 contained approximately 200 pages of detailed information regarding the
company’s historical operations and performance, technology, customer base and marketing
strategy, capital structure, significant risk associated with projects, and other related information
about the company. The S-1 reflected a frank assessment of the operational changes required for
Solyndra to move into profitability. The S-1 was ultimately withdrawn in the summer of 2010 as
25
It should be noted that there are non-cash differences between the audited financial statements of the company and
the financial information provided to the DOE related to the accelerated depreciation of equipment caused by the
consolidation of equipment in Fab 1 and Fab 2 Phase I. Such discrepancies were not surprising given that the
financial effects of such amalgamation were not fully known until the consolidation was completed.
26
When compared to the original forecast included in the Pre-Application filed with the DOE in December 2006.
27
The Fab 2 Phase II project was originally included in the partial application submitted by Solyndra to the DOE in
May 2008. At the time, the DOE was reluctant to include the second phase due to the size of the combined project.
18

27. the company pursued additional private capital based on the recommendation of investment
advisors.
With the benefit of hindsight, Solyndra’s decision to move forward with the construction
of Fab 2 Phase I in September 2009 was an extremely pivotal decision for the future of the
company. It was the company’s best hope for success, but ultimately, along with other factors,
led to its demise. During the construction of Fab 2 Phase I, the structural changes in the solar
industry resulted in a dramatic reduction of Solyndra’s panel pricing and cash flow from product
sales. The only possible avenue of survival for Solyndra, other than substantial infusions of
capital, lay in massively increased volume. This required Solyndra’s projections and business
plans for the foreseeable future to continue to assume production at full capacity and to sell all
manufactured products and it was critically necessary to reach those levels as quickly as
possible. If that volume was not quickly realized, Solyndra would be overwhelmed by losses
attendant to its fixed operating costs. Solyndra’s investors and lenders were well advised of
these risks facing the company.
These underlying financial problems, which became evident in 2009, became further
aggravated in fiscal year 2010, as evidenced by the circumstances listed below.
• Sales increased from 30.48 MW in 2009 to 57.02 MW in 2010, for an increase of
87%. However, while panel sales increased by 87%, the resulting revenue from those
sales increased only 45%, due in large part to the ASP charged by Solyndra, which
slipped from $3.30 in January to $2.39 at the end of 2010, for a yearly decrease of
approximately 28%. 28
• Concurrently, the price for polysilicon, the primary component in the manufacturing
process of P-Si flat panels, was priced in 2008 ranging from $250 to $500 per kg,
depending on the data source, and started a rapid descent throughout 2009 to
approximately $60 per kilogram at the end of 2010. 29 This precipitous drop in
polysilicon prices of approximately 80% portended serious problems for the future of
Solyndra’s CIGS cylindrical technology.
• During this tumultuous period, Solyndra continued to lose money on each panel sold
while trying to compete. For instance, in June 2010, during the massive construction
process for Fab 2, Solyndra was selling its panels for $3.24 per watt while production
28
This steady decrease in the ASP continued to approximately $2.12 at the time of the Solyndra’s bankruptcy filing
and presently stands at less than $1.00.
29
The weekly spot price for PV grade P-Si ranged between $30.50 to $35.00 per kg as of February 22, 2012
according to PVinsights.com. See Appendix C.1.
19

28. costs exceeded $4.00 per watt. 30 In fact, due to these competing factors and its high
operational burden, Solyndra sold every panel at a loss.
• Employee headcount was over 1,100 at the end of the year and, by and large, the
operational costs were fixed at a high level. 31
• As this inexorable drive to compete intensified, other solar panel factories were
moving toward production costs of $1.00 per watt. Solyndra, however, could only
operate its existing Fab 2 Phase I facility at $2.00 per watt if it reached full
production capacity and met certain technical milestones.
• The Chinese government aggressively moved into the market with substantial low
cost capital and additionally allowed Chinese manufacturers to extend favorable
credit terms. The cash demands pressing upon Solyndra did not allow it to compete
in that manner.
• The expansion of China into the solar market, concurrent with the withdrawal of
many government subsidies, especially in Germany, Italy, and Spain, caused a
worldwide oversupply of photovoltaic panels and severely impacted Solyndra’s
capital requirements and the anticipated time to reach positive cash flow from
operations.
G. Solyndra’s Restructuring and Capital Raising Efforts in 2010
In February 2010, after approximately 19 months of operations in the Fab 1 facility and
five months of construction on the Fab 2 facility, Solyndra management concluded a “ground
up” review of the company’s internal and external operating environments was necessary as a
result of the recent performance and current operating environment. Pursuant to its review, two
revised draft plans 32 were created utilizing various scenarios and alternative assumptions to
address the significant increase in future capital needs. The estimated future funding
requirements were calculated by company management and ranged between $316 million and
$719 million depending on the scenario and assumptions in the revised plans.
A two day meeting with the Board was held in April 2010 to describe the current
financial condition of the company due to the competitive factors referenced herein as well as the
30
See Appendix F.2, Solyndra Amended Form S-1 Registration Statement.
31
The manufacturing costs inherent in Fab 2, were largely fixed costs of operation regardless of actual output in a
given period.
32
The revised draft plans included a “Stretch Plan” and a “Base Plan.” The Stretch Plan was characterized by
company management as an aggressive “target,” a plan the company could strive to accomplish. The Base Plan was
considered by company management to be a high confidence plan. It still had dependencies and risks; however, the
intent was to portray a “base result” that would be achieved absent an unlikely turn of events.
20

29. shortfalls in the prior plan and projections. 33 Solyndra management provided a detailed 143
page presentation describing the company’s current status, sales and marketing efforts,
operations, research and development, cash flow, and finance related areas, which included a
sobering assessment of future business operations as outlined above. 34
Based on the information presented, the company continued to pursue an IPO and
considered alternative paths for financing. The possibility of not completing the construction of
Fab 2 Phase I was considered as an option, but was not pursued. 35 The Board also decided to
conduct a search for a new president and/or CEO. Within a week of the Board meeting,
Solyndra provided the DOE with preliminary insights into the review of the Fab 2, Phase I
financial forecasts including revisions to future ASP based on recent declines in the market. 36
The Board met again on April 21, 2010, a day after Solyndra’s discussion with the DOE,
to better understand the company’s cash requirements, IPO timeline, and the ramifications of
missing the first quarter 2010 estimates. In that meeting, Stover described the need to raise
additional capital by June 2010 should an IPO not be feasible by then.
In an effort to solve the pressing capital needs by June 2010, Steve Mitchell (“Mitchell”),
from Argonaut Ventures I, LLC (“Argonaut”), presented a term sheet 37 to the Board on May 18,
2010 to raise additional capital from insider investors and described the circumstances that led to
formation of the term sheet, including the need to fund substantial additional capital up to $350
million, the immediate need for short-term funding by the middle of June 2010, and the lack of
other viable alternatives within the limited timeframe. Mitchell proposed using a convertible
debt instrument to provide the company with flexibility and additional time to seek additional
capital from outside investors. Mitchell acknowledged the extreme dilution that would occur if
the additional financing from outside investors was not raised by October 2010 and the proposed
33
See Appendix D.1, Solyndra Board Minutes, April 12-13, 2010.
34
See Appendix D.1, Solyndra Board Presentations, April 12-13, 2010.
35
In fact, in the February 2011 agreement between the DOE and Solyndra, the DOE inserted a provision which
would allow the government to assume responsibility for the construction of Fab 2 should Solyndra not be able to
continue in that role. The position of the DOE is understandable in light of a final credit rating letter issued by Fitch
in August 2009 indicating a probability of default rating of “BB-” (considered Speculative under Fitch’s rating
definitions) and an estimated recovery of 89%. (See Appendix P.75, Final Fitch Credit Rating).
36
See Appendix I.100, Email from John Scott (“Scott”), Vice President of Global Project Finance and Business
Development for the company, to DOE dated April 20, 2010.
37
The term sheet was prepared by two of the company’s lead investors, Argonaut and Argonaut and Madrone
Partners, LP (“Madrone”).
21

30. note holders converted into equity; however, if the company did not have a fully funded plan by
October, its long-term viability would be significantly impacted. Mitchell stated to the Board the
importance of having all the inside investors participate in the proposed minimum internal round
of $200 million to be funded by mid-June so the company could continue operations.
Additionally, Stover indicated to the Board that any remaining amounts on the existing $50
million line of credit from Argonaut could not be accessed at this point because the company was
currently unable to meet its commercial shipments covenant. Pursuant to the proposals and
information provided, the Board discussed the proposal in detail, the company’s efforts in
accessing other sources of funds, and any additional cost cutting measures that could be taken. 38
On June 3, 2010, Solyndra provided the DOE with a revised “base case” plan for Fab 2
Phase I, that, among other things: (a) started Fab 2 Phase I production two months earlier than
anticipated; (b) included higher yields and panel power; (c) included lower ASP forecast due to
external pricing pressures; and (d) included the installation of three new CIGS tools to counter
lower-than-expected line speeds.
The higher yields and panel power as outlined in the “base case” plan for Fab 2 Phase I
was based on increasing the Wp (watts per panel), which was a key metric in Solyndra’s
attempts to ameliorate the financial effects of a lower ASP. To a great extent, demand for
Solyndra’s product and the price at which it could be sold were both dependent upon the Wp
which could be achieved in the manufacturing process. The Wp provided the primary
measurement of wattage output – the higher the wattage, the greater the efficiency and the higher
the price that could be charged. Solyndra’s manufacturing process was structurally limited to a
fixed number of tubes and/or solar panels which they could produce. In other words, the
manufacturing facility could only produce a finite number of panels even under optimum
conditions with throughput and yield 39 at their maximum levels. However, Wp was a factor that
the company hoped to improve to maintain an increasing level of watts sold and thereby
38
See Appendix D.4, Solyndra Board Minutes dated May 18, 2010.
39
The forecasts define “output” as a calculation based on three specifications for each tool in the production process:
baseline throughput, utilization percentage, and yield percentage. Baseline throughput is the highest throughput
possible with the facility running at the maximum level of twenty four hours a day and seven days a week.
Utilization percentage is the percentage of time in a given period that a tool is running (i.e., not down for
maintenance and repair). Yield percentage is the percentage of material processed by a tool that goes on to the next
step and meets minimum specifications.
22

31. maintain or increase revenues even with the ASP (averages sales price per watt) declining over
time. Solyndra was successful in improving average Wp over the limited period of time when
Fab 2 Phase I was operational; however, in most projections this remained well below the
forecast levels. 40
On June 9, 2010, the Board was informed the company would not be in a position to
continue operations without an infusion of capital in the next two weeks. As a result, the
company entered into a short-term note purchase agreement with certain investors allowing for
the issuance of convertible secured promissory notes (not to exceed $200 million) to address the
immediate capital needs and bridge the funding gap. Solyndra issued $175 million of
convertible notes (“Convertible Notes”) through September 2010 with a maturity date in
December 2010 in order to continue operations.
In July 2010, the DOE began requesting additional information concerning the
company’s cost cutting measures, current sales, pricing, and average product costs. On July 29,
2010, pursuant to a sizable document and financial information request from the White House
Office of Management and Budget (“OMB”), including the terms of the $175 million
Convertible Notes, information concerning the “going concern” audit opinions, 41 and the reasons
for withdrawing the S-1, 42 Solyndra promptly provided a detailed response on August 4, 2010.
Also in July 2010, Harrison joined Solyndra as its new CEO and President. Following
Harrison’s arrival, he undertook an extensive analysis of the company’s operations, business
models, and sales and marketing strategies. The company and Navigant Consulting, Inc.
(“Navigant”) (as the DOE’s independent market consultant for the Fab 2 Phase II application)
had also analyzed the existing distribution and marketing plans prior to Harrison’s arrival. As a
result of these analyses, the company came to the conclusion that the current distribution model
40
Solyndra introduced the 200 series panel in July 2010. The 200 series panel was averaging almost 210 watts per
panel. This panel was to replace the 150 series panel. Customer demand for the 150 series continued longer
thereby delaying further panel power improvements. Accordingly, actual watts per panel continued to lag forecast
amounts.
41
The “going concern” audit opinions were issued routinely in the Solyndra financial statements beginning in 2007.
The term “going concern” assumes that a business will continue in operation for the “foreseeable future” and
accordingly will be able to realize the benefit of its assets and discharge its liabilities in the normal course of
operations. The term “foreseeable future” takes into consideration all known factors for at least, but not limited to,
twelve months from the balance sheet date.
42
See Appendix I.103, DOE email to Scott dated July 29, 2010 and the OMB request for information.
23

32. developed under Dr. Gronet involving the sales to limited integrators and installers was not
conducive to expanding sales opportunities and was problematic for the future of the company.
Harrison believed a new distribution model focusing more on the ultimate end-users provided
much more promise. The new distribution model being developed would pursue direct strategic
accounts (including larger retailers such as Walmart and Target), real estate owners (such as
REITs), utilities, agricultural applications, and government agencies.
The DOE contacted Solyndra on September 7, 2010 regarding Solyndra’s request for
approvals of various cost cutting measures being implemented by the company which required
the execution of additional agreements with the DOE. Solyndra also informed the DOE that it
would report in November that the company would fall below the 70% Fab 1 performance
targets, set forth in the loan agreements. The DOE acknowledged that Solyndra was bringing the
issue to the DOE’s attention several weeks in advance of required disclosure in the spirit of
managing the loan relationship. Solyndra requested an in-person meeting to introduce Harrison
and discuss various topics and issues. The meeting was scheduled for September 15-16, 2010 in
Washington, D.C. with the LGPO. 43 A day after the initial discussion, the DOE sent Solyndra a
list of detailed questions and requests for Solyndra Inc’s financial information which included,
amount other things: (a) monthly historical data since 2007; (b) projected monthly forecast
through 2016; (c) monthly cash flow forecasts for next 12 months; (d) detailed historical monthly
cash burn for last twelve months; (e) annual and quarterly financial statements for 2009 and
2010; (f) an updated matrix of executed framework agreements; (g) a cost-reduction roadmap;
(h) the offering memorandum and closing documents for Convertible Notes; (i) an accounting
for the Equipment Supply Agreement; (j) a consolidated financial model through 2016; and (k)
details relating to raising additional capital. 44 Solyndra promptly provided its responses to the
DOE questions on September 13, 2010. 45
Solyndra attended two days of meetings with the various DOE representatives in
Washington, D.C. on September 15-16, 2010. The stated purpose of the initial meeting was to
introduce Harrison to the DOE and to discuss the company’s current performance and loan
monitoring issues. During this meeting, Jonathan Silver (“Silver”), the Executive Director of the
43
See Appendix I.105, Scott email to Schwartz dated September 7, 2010.
44
See Appendix I.108, DOE email to Scott and Schwartz dated September 8, 2010 in email chain.
45
See Appendix I.108, Scott email to DOE team dated September 13, 2010.
24

33. LGP, expressed concern regarding Solyndra’s liquidity and its ability to sell out all production.
There were also discussions concerning how Solyndra would manage competition from Chinese
manufacturers given the Chinese government’s policy to support renewable manufacturing. The
majority of the remaining meetings were with Nwachuku, LGPO Director of Portfolio
Management and the LGPO staff to discuss various financial and loan monitoring issues. During
these meetings, the LGPO team 46 questioned Harrison on a variety of issues including cash
balances, financial plans, Fab 1 production, sales forecasts for third and fourth quarters of 2010,
and certain questions regarding the materials recently sent to the DOE. Solyndra also discussed
its continued requests for an agreement to address certain cost cutting measures, including the
use of existing excess capacity at the Fab 2 facility. The DOE acknowledged they understood
the merits of the requests and that Solyndra was currently using the Fab 2 Phase I tools.
Solyndra also reiterated that it would be seeking a waiver with respect to the issue of Fab 1
production falling below the required 70% target metric. Nwachuku was concerned about
Solyndra’s ability to raise additional capital and to compete effectively in an industry challenged
by depressed ASP. Based on her concerns, Nwachuku indicated that the DOE would withhold
approvals of all open requests unless Solyndra agreed to improve the DOE’s security position by
providing a guarantee of Solyndra, Inc. on the entire term of the DOE Loan Guarantee, and an
extension of intellectual property rights to permit the DOE to build-out Fab 2 Phase I in the event
of default. 47 As a result of the meeting, Nwachuku requested another meeting, to follow-up on
the issues discussed. 48
The Board conducted another meeting on September 30, 2010 to obtain a current update
of the company. Harrison discussed the continuing challenges facing the company including
insufficient end-user demand, lower than expected manufacturing execution in the third quarter,
and continued cash burn 49 that would accelerate in the future. The $175 million recently raised
would be depleted by January 1, 2011. The Board was provided an update of recent DOE
meetings, requests by the DOE for additional security and a request for a waiver on the DOE
which could present a problem for future draws on the loan.
46
The DOE team included Nwachuku, Program Manager, Ove Westerheim (“Westerheim”), Ken Cestari, Emilio
Ghersi, Chris Tsai, Daniel Lee, Scott Stevens, Steve Shulman, and Brian Oakley.
47
See Appendix I.109, Scott email to Solyndra management team dated September 17, 2010.
48
See Appendix I.111, Nwachuku email to Scott dated September 27, 2010.
49
Cash was being depleted at $15 to $20 million per month.
25

34. Pursuant to the September 2010 Board meeting, the Board held a conference call on
October 6, 2010 to follow-up on the issues previously discussed. company management
provided the Board with a recommended course of action which included, amount other things;
(a) trimming spending by reducing production and deferring capital expenditures; (b) securing
DOE cooperation for an adjusted plan that demonstrated debt service capability; (c) obtaining
interim financing of $150 million to build demand, achieve positive cash flow, and assure the
DOE of a fully funded plan; and (d) completing the Fab 2 facility by consolidating and utilizing
certain Fab 1 tools and Fab 1 operations (the “Consolidation Plan”). A number of proposed
modifications of the DOE Loan Guarantee were discussed and analyzed by the Board. 50
Harrison contacted the DOE on October 8, 2010 to describe the recent quarterly financial
results which made it impractical to obtain additional capital in the short-term based on the
current financial environment. The DOE, through Silver, questioned the ability of the company
to continue operations into the future. Harrison indicated the company could continue under
various scenarios until either December 31, 2010 or toward the end of March or April 2011
under the company’s new Consolidation Plan, which included redeploying existing Fab 1 tools
and equipment to the Fab 2 facility in hopes of increasing operational efficiency and reducing the
labor force by approximately 200 people. Harrison informed the DOE that under the proposed
Consolidation Plan the company would need to raise an additional $150 million to fund the plan,
and requested flexibility and time from the DOE to develop the plan and marketing revision and
complete the Fab 2 facility.
In response to the call with the DOE, Stover provided a detailed email to Nwachuku on
October 11, 2010 which provided additional materials and details regarding Harrison’s previous
discussions and also requested, among other things, various loan modifications including
maturity extensions, forbearance of further interest payments for a period, removal of an
obligation to fund the $30 million cost overrun account, and consolidation of Fab 1 equipment to
the Fab 2 facility.
Solyndra officials personally met with the DOE in Washington, D.C. on October 15,
2010 to discuss in detail the current situation and the information provided in Stover’s e-mail.
50
See Appendix D.8, Solyndra Board Presentation dated October 6, 2010.
26

35. They discussed the company’s ongoing financial performance, considered various options, the
Consolidation Plan, proposed DOE loan modifications, sales and market information, and
operational issues. 51 Within days of the October 15th meeting, representatives of the DOE
travelled to Solyndra on October 19, 2010 for two days of further detailed meetings and
discussions regarding the company’s sales pipeline, demand forecasts, operational and technical
issues, and the proposed Consolidation Plan.52
In November 2010, Solyndra provided the DOE with “weekly performance dashboard
reports” to track ongoing weekly performance. Solyndra also provided additional information
concerning projected cash flows and revised projections concerning costs and sales. Solyndra
also held additional meetings with the DOE throughout the month.
Another Board meeting was held on December 2, 2010 wherein an update was provided
concerning ongoing efforts to raise additional capital and obtain DOE loan modifications. As a
result of these discussions, the Board reviewed the company’s alternatives, including a
standalone Fab 1 facility, a sale of all or part of the business and a potential bankruptcy filing. 53
Solyndra contacted the DOE to schedule a meeting on December 6, 2010 to negotiate the
restructuring of the DOE Loan Guarantee and provide proposed modifications to the DOE loan.
The DOE, in turn, provided a proposed term sheet. The company and the DOE continued to
negotiate an acceptable term sheet in December 2010 which resulted in final documents in
February 2011 for restructuring of the existing debt, which ultimately included a senior
liquidation preference for a new infusion of $75 million from a group of investors including
Argonaut and Madrone.
Chart #1 below provides the actual results of Operations from March 1, 2009 until
November 30, 2010.
51
See Appendix J.6, Solyndra Presentation to DOE dated October 15, 2010.
52
See Appendix J.7, Solyndra Presentation to DOE dated October 19, 2010 and Appendix J.8, Solyndra
Presentation to DOE dated October 20, 2010.
53
See Appendix D.9, Solyndra Board Minutes and Board Presentation dated December 2, 2010.
27

36. H. Events Leading to and Summary of February 2011 Restructuring
Through the end of fiscal year 2010, Solyndra had received over $961.3 million in
funding from the sale of redeemable convertible preferred stock, including certain bridge loans
converted to preferred stock. Solyndra had also issued an additional $175 million in convertible
notes. The company had acquired property and equipment of $850.3 million in the construction
of Fab 1 and Fab 2 Phase I. The total cumulative losses incurred by Solyndra from inception to
2010 totaled $886.4 million.
As a result of continuing losses, Solyndra consumed the additional infusion of $175
million within six months, and again found itself in need of additional capital. The company
approached both existing and new potential investors, as well as the DOE. Efforts to secure new
investor capital, even with the assistance of investment bankers, proved unsuccessful.
Ultimately, the company’s existing investors came forward with a proposal for a new $75
million loan on terms that were more favorable to the company and its creditors than any other
financing options available to the company at the time. As is customary in cases where
distressed companies seek new debt financing, the lenders required, as a condition to providing
the new capital, that the new financing had priority, in the event of liquidation, over the
28

37. company’s existing debt, including the DOE Loan Guarantee. The parties ultimately finalized a
global restructuring on February 23, 2011 (the “Restructuring”), which included liquidation
priority for the new $75 million loan in the event of a liquidation prior to March 2013. The
agreements and documents were heavily negotiated between the parties and contained over 2,100
pages. 54
The restructuring was intended to consolidate operations, thereby reducing costs, and
obtain additional funding to operate the company while the company repositioned itself to
compete in the deteriorating and challenging solar market. The principal amount of the
restructured secured debt and relative priority by Tranche is as follows:
Table #1
Summary of Restructured Secured Debt
Principal
Amount
55
Secured Debt Committed
Tranche A $75 Million
Tranche B $150 Million
56
Tranche C Not Funded
Tranche D $385 Million
57
Tranche E $186 Million
TOTAL $796 Million
1. Tranche A Debt
The DOE and the company’s investors, lead by Argonaut and Madrone (the “Lead
Investors”) agreed to restructure the company’s existing indebtedness, whereby the new $75
million loan (“Tranche A Debt”) from existing investors that agreed to participate would have a
liquidation priority over the DOE Tranche B debt. The funds were to be used in the
implementation of the Consolidation Plan.
54
See Appendix W, February 2011 Restructuring Agreements and Documentation.
55
Principal amount for Tranche A and Tranche B represent the commitments of the credit parties and not the actual
amounts drawn.
56
Tranche C was not funded pursuant to the February 2011 Restructuring. It was established as a result of near-term
anticipated future capital requirements and allows for funding of an additional $75 million.
57
Tranche E was composed of $175 million in outstanding principal obligations under the Convertible Notes, plus
accrued interest of $11 million through the date of the Restructuring.
29