The risk factors in fillings are mostly a matter of formality. Also, it's entirely possible that even Lyndon Rive doesn't fully understand SCTY's financial position, considering how complicated it is.
I did actually spend several painful days trying to understand what was going on; a lot of the problems are common to all solar installers operating in the US and selling to the not-very-rich market. The main obfustication is the damn "tax equity financing" stuff. The problem is that this contaminates practically everything in the financial reports. It's actually pretty harmless, though.
The key thing to understand is that every solar panel which wasn't sold outright (or sold with a bank loan) is put in some sort of trust or partnership. That trust or partnership receives the lease or PPA payments. It pays SolarCity for maintenance services. This is all well and good (as long as there are no warranty issues) and is completely harmless.
The thing which got SolarCity in trouble is that SolarCity financed a lot of these themselves: they paid for large hunks of the installation upfront and were getting repaid by the homeowner (via the trust) over 20 years. If one of these is "fully monetized", then that means someone else (Soros, or whoever) pays off SolarCity's initial installation costs and buys the future revenue stream. If I'm not mistaken, Solarcity *still* gets to take its maintenance costs off the top, so that's not a risk.
Back to the trusts which SolarCity still holds themselves. Most of them were partly paid for by the "tax equity investors", who gave SolarCity cash in exchange for the ability to use the tax deduction. Usually slightly less cash than the tax deduction was worth, but it's a good deal if neither the homeowner nor Solarcity has enough income to use the tax deduction. (Note that if SolarCity were part of a profitable business, they could use the tax deduction themselves.) However, the tax deduction is roughly 30%, so most of these still require 70% financing.
Again, look at the trusts which SolarCity still holds themselves. In some cases, SolarCity secured long-term 20-year loans to pay for them. This is fine. The income from the homeowner paying their lease goes to pay the loan, month by month. This is probably profitable, and even if it's at a small loss, it's a tiny bleed.
But again, look at the trusts which SolarCity still holds themselves where they *didn't* do this. Here lies the big problem. For some of these they were financed by 6-month loans. This is no good. The main risk for SolarCity *sudden bankruptcty* (as opposed to just, well, doing poorly, which could happen for a number of other reasons) was that they would be unable to refinance these at reasonable rates for 20 years.
There's an added problem: the stock markets simply don't value the out-year income streams. SCTY had made hundreds of presentations pointing out that this was real money coming in and that the credit default risk was extremely low, but the stock market investors don't care, and basically value it at 0.
The health of SolarCity financially is, therefore, absolutely tied to the ability to immediately monetize all the PPAs and leases by selling them to people who do value the out-year income streams. Because the Rives... aren't great businessmen.... they weren't doing this earlier. There seems to be a deliberate and aggressive program to do this now. Make of it what you will; I think it's a very good sign.
Once the PPAs and leases are *all* monetized, the financial statements will look a lot more comprehensible. There will still be bizarrely large entries for "minority interest" revenues (that's the people who own the future revenues from the trusts) but you will be able to basically subtract those from the revenues to get the "true" revenues.
