SunPower, a leading solar energy company, has revealed its plans to restate the financial results for 2022 and the first two quarters of 2023. This decision was prompted by the findings of the board’s audit committee, which determined that certain financial statements issued by the company cannot be relied upon any longer.
After thorough analysis, SunPower discovered that the value of consignment inventory of microinverter components at certain third-party locations had been overstated during the affected periods. This overstatement amounted to approximately $16 million to $20 million, resulting in an understatement of the associated cost of revenue.
Additionally, SunPower acknowledged the existence of “other immaterial errors” in the affected periods that also require correction.
Furthermore, SunPower’s management identified a material weakness in the company’s internal control over financial reporting. They also concluded that both the disclosure controls and procedures and internal control over financial reporting were ineffective as of January 1, 2023. In addition, the disclosure controls and procedures were found to be ineffective as of April 2, 2023, and July 2, 2023.
Ernst & Young LLP, the independent registered public accounting firm for SunPower for the year ended January 1, 2023, determined that their report on internal control over financial reporting as of January 1, 2023, will be revised to indicate an adverse opinion, highlighting the ineffectiveness of internal control over financial reporting.
To address the ramifications of the restatement under the Credit Agreement, SunPower is currently engaged in discussions with Bank of America, N.A., which serves as the agent for a credit agreement from September of last year.