LightSquared, “the upstart wireless company that is being bankrolled by Philip Falcone’s $5 billion Harbinger Capital Partners hedge fund could run out of money during the second quarter of 2012, according to the company’s financial statement,” reports Reuters.
LightSquared had regustered a $427 million loss during the first nine months of the year. In a statement reviewed by Reuters, the company “may not be able to continue as a going concern unless it can raise additional capital.”
The statement read,”There is a need to raise substantial capital beyond the beginning of the second quarter of 2012 in order to have sufficient liquidity.” While it is no secret that LightSquared has been running on fumes, especially with its struggle to get approval lfrom the government for its planned nationwide 4g network, the financial statement paints a bleak outlook – and the stakes are high.
“A spokesman for LightSquared said the company has cash through the next several quarters,” reports Reuters. “A person familiar with LightSquared said the company does not need any additional money until the Federal Communication Commission rules on a company plan for dealing with potential interference issues with global positioning systems. It is not clear when the FCC will rule.” According to the financial statement, “If the company fails to obtain the necessary financing on a timely basis, the execution of the company’s business strategy could be materially delayed, costs could materially increase or the company may have to discontinue operations or seek a purchaser for the business or assets.”
Falcone’s hedge fund, Harbinger Capital, “has committed more than $3 billion in equity and loan commitments to the company,” owning all but a small sliver of the company.