Hoku Scientific Inc. yesterday said cash problems could force it to close its doors or delay completing an Idaho-based polysilicon plant if it is unable to find more financing in the next year.

The company, which has been broadsided by the nation's credit crunch and a drop in the polysilicon market, yesterday said it continues to look for new sources of cash but that if it's not successful, it may not be able to continue as a going concern for the next 12 months.

"We've never hidden the fact that we need to raise money — it's just a little tighter now," said Darryl Nakamoto, Hoku chief financial officer.

"We are doing things to make sure we continue as a going concern. We're not going to quit without a fight."

Hoku detailed the financing problem as it announced a quarterly loss and detailed steps it is taking to find money to complete its plant in Pocatello, Idaho.

The Honolulu-based company disclosed it has cut spending, negotiated with vendors to make smaller payments, and is delaying a test run at the plant to conserve cash.

It also said the company expects its costs to continue to increase and that it may continue to incur losses for the foreseeable future.

Nakamoto said Hoku made remarks about the possibility of closing or delaying plant completion because the company has always tried to give investors as much information as it can about the financing issue.

Otherwise, the company said, it remains poised to complete the plant and initiate commercial operations in the next year when financing is found, he said.

"We have some stark financing challenges to resolve in order to remain on this schedule, but we continue to address those head-on," Dustin Shindo, Hoku chief executive officer, said in a statement.

Hoku's financing problems began last year as credit markets dried up and Merrill Lynch backed away from a nonbinding term sheet for Hoku to borrow up to $185 million.

So far, Hoku has rebounded by raising all but $106 million of the plant's $390 million price tag. It hopes to raise more from new customers in coming months. When completed, the plant will produce polysilicon material, used in the cells of photovoltaic panels. At one time, Hoku hoped to start commercial shipments during the first half of this year, but now sees initial production in the second half of the year, subject to receipt of financing.

The company reported a lower fiscal fourth-quarter loss. It narrowed to $904,000, or 4 cents a share, in the three months ended March 31.

That compared with the net loss it reported a year earlier of $2.1 million, or 12 cents a share.

Hoku also reported that revenue shrank to $112,000 from $621,000 a year earlier, with all of the sales this year coming from photovoltaic system installation and related services.

The company reported cash and cash equivalents on March 31 of $17.4 million, while accounts payable and accrued expenses totaled $38.2 million. Nakamoto said some of what's owed is among the vendor payments that have been restructured.

Meanwhile, Hoku Scientific's wholly owned subsidiary, Hoku Solar Inc., which markets, sells, and installs turnkey photovoltaic (PV) systems in Hawai'i, increased its aggregate installed PV capacity more than 400 percent during the 13-month period from April 2008 through April 2009, compared with the prior year.

In April 2009, Hoku Solar completed the installation and commissioning of solar power arrays at Hawai'i Department of Transportation sites throughout the state, including ones at several Neighbor Island airports.

In addition, Hoku Solar developed other commercial and industrial PV systems in fiscal 2009, including systems installed on O'ahu for Paradise Beverages, Prudential Locations, and Xcel International (Billabong), among others.

"We expect to continue expanding Hoku Solar's focus on large-scale PV projects," Shindo said, including an installation in Kapolei on land owned by the James Campbell Co.

Hoku Scientific released its quarterly report after regular trading hours, during which its shares closed at $4.38.

In after-hours trading, the shares traded as low as $2.61.