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Solexa Stock Falls 12 Percent After Firm Discloses Solvency Doubts Made by Accountant

NEW YORK, May 16 (GenomeWeb News) - Shares in Solexa were down 12.54 percent, or $.74, at $5.16 in mid-afternoon trading after the company today said its outside auditor had raised doubts about the firm's ability to remain in business through "at least" the end of the year.

 

Solexa said the comments, made by Ernst & Young in a March 31 SEC filing, led it to raise money through a private stock sale. In April, Solexa said it secured $32.5 million in private-equity financing led by ValueAct Capital of San Francisco.

Solexa had said it intends to use the cash to develop and launch its sequencing-by-synthesis instrument, and to repay a loan to Silicon Valley Bank.

In its annual 10-K filing with the SEC for fiscal 2004, Solexa said Ernst & Young stated the company will require additional funding if it wishes to stay in business through the end of the year. The accounting firm said Solexa's current financial position raises "substantial doubt" over its ability to remain solvent.

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