(Reuters) – 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.
LightSquared, which registered a $427 million net loss during the first nine months of this year, may not be able to “continue as a going concern” unless it can raise additional capital and financing, the statement reviewed by Reuters said.
“There is a need to raise substantial capital beyond the beginning of the second quarter of 2012 in order to have sufficient liquidity,” the company’s statement said.
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It’s been no secret in the telecom world that LightSquared is in need of cash, but the financial statement paints a fairly bleak outlook for the Reston, Virginia-based company. A failure of LightSquared would be another jolt to investors in Falcone’s hedge fund, which has committed more than $3 billion in equity and loan commitments to the company. Falcone gained fame after making billions in 2007 by shorting subprime mortgages.
A spokesman for LightSquared said the company “has cash through the next several quarters.” 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.