Active Power Still Has 'Going Concern' in Annual Report (ACPW)

Active Power, Inc. (NASDAQ: ACPW) has another “going concern” in its annual report filed with the SEC.  You have to go all the way to page 61 and look in the “Summary of Significant Accounting Policies” and the going concern wording is in there.  There are actually four mentions of it, and this was should not have been anything that shareholders should be surprised about.

The wording is below:

• The accompanying consolidated financial statements have also been prepared on the assumption that the Company will continue to operate as a going concern. Accordingly assets and liabilities are recorded on the basis that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company’s history of operating losses and use of cash, in the absence of other factors, may cause uncertainty as to its ability to continue as a going concern. We have reviewed the current and prospective sources of liquidity, significant conditions and events and forecast financial results and concluded that we have adequate resources to continue to operate as a going concern. Our business plan and our assumptions around the adequacy of our liquidity are based on estimates regarding expected revenues and future costs. However, our revenues may not meet our projections or our costs may exceed our estimates.  Further, our estimates may change and future events or developments may also affect our estimates. Any of these factors may change our expectation of cash usage in 2012 or significantly affect our level of liquidity, which may require us to seek additional financing or take other measures to reduce our operating costs in order to continue operating. These financial statements do not include any adjustments that might result from the Company not being able to continue as a going concern.

Not all instances are negative in this case, but the going concern risk remains active here.

Active Power shares closed at $0.69 and the 52-week trading range is $0.59 to $3.03.  The market capitalization is only $55.4 million according to Yahoo! Finance.