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Hoku Materials issued not one, but two press releases Wednesday, and the news from the U.S.-based polysilicon start-up is mixed.

On a positive note, the first half-dozen of the company's GEC/MSA Siemens-process reactors have finally arrived at the company's Pocatello, ID, factory construction site (pictured here in December), and two of the big tools are already have been put together and installed at the facility. The manufacturing ramp remains on schedule, Hoku says.

On a more cautionary tip, the firm said it has had to amend downward its poly sales agreement with Chinese silicon/ingot wafer concern, Jiangxi Jinko Solar Co. Just to muddy the waters, the company formerly known as Jiangxi Kinko Energy Co. has become Jinko Solar. Why the renegotiation? Because of Kinko-Jinko's financing and credit woes. But at least the companies have worked out new conditions for their 10-year deal, with the Chinese outfit already making millions in deposits to Hoku, with more on the way soon.

But unlike so many solar and high-tech industry press releases where one has to squeeze the lemon hard just to find a few odd droplets of juicy news (and often ends up with dry pulp), the Hoku announcements contain an overflowing glassful of the stuff.

Take those poly reactors, for example. The company reveals it hoped to receive that initial shipment last month (the first batch of a planned 28 tools), but bad weather on the U.S. West Coast (port of Seattle?) and customs issues delayed their arrival. Ten more reactors should arrive in Pocatello in March, global climate change and Homeland Security permitting.

The company also said that, as of the beginning of this month, "construction of the plant was proceeding according to schedule, with continuing progress on the polysilicon reactor building, the vent gas recovery system, post-processing facilities, and key infrastructure components, including the electrical substation." The company is still sticking to its plan of 3500-4000 metric tons of annual production capacity, with shipments slated to start the first half of 2009.

It turns out the Kinko-Jinko konundrum is not the worst-case scenario burbling in Hoku's customer realm. The company has revealed that although it has received $106 million in prepayments, and that most of its customers were now current on their obligations, one company has welched on the deal--Wealthy Rise (and Fall?) Investment, better known as Solargiga (now remonikered Solarnada).

Solarnada was supposed to have ponied up $43 million out of its $68 million in prepayments, and failed to do so by the end of 2008. That deficit, in combination with the reduced cash coming from Kinko-Jinko, puts Hoku in a bit of a bind, but apparently one that the company is coping with in terms of still moving forward with the plant construction and those all-important customer shipments.

Dustin Shindo (shown at left), chairman/CEO of parent company Hoku Scientific, says that his company is "willing to continue working with Solargiga [sic] to find a way to move the engagement forward, but our first priority is to ensure that we are able to fulfill our product delivery obligations to all of our other customers. As a result, we are considering all options afforded us through our take-or-pay contract with Solargiga [sic], including unilateral resale of their allocated capacity, among other potential remedies."

According to Hoku's calculation, when the revised prepayment schedule in the Kinko-Jinko contract amendment is factored in, a total default by Solarnada would result in a net reduction of $90 million in Hoku's current customer prepayment commitments compared to what was previously reported. So Hoku's aggregate customer prepayment commitments would shrink from $306 million to $216 million, which would reduce the cash available for construction of Hoku's polysilicon plant.

Nothing brings out the creative improviser and inner fiscal manager like a 29% or so hit on one's ever-tightening cash flow. Shindo, putting his best face forward (unlike Solarnada, which has lost some serious face), soldiers on through the collateral damage.

"We believe that we remain on track to meet our delivery obligations to our current customers," states the Hoku head. "We expect to resell any recaptured polysilicon capacity, and we are currently engaged in active discussions with prospective customers." (A bit of lemonade from lemons, perhaps?)

"We recognize that receipt of the prepayments associated with any new polysilicon contracts could be several months later than previously expected," he continues. "As a result, if needed, we could reduce and/or delay our planned capital expenditures."

The company's alternative gameplan includes a possible deferral of about $40 million in capex by pushing back the build-out of its on-site tricholorosilane (TCS) production facility. Hoku is already negotiating with third-party TCS purveyors to allow the company to follow through on the fallback strategy, if necessary. Since the procurement of that outsourced TCS would result in an increased near-term cost of goods sold, the company would still consider building its own TCS capacity in the future.

Hoku says that, depending on (a) whether it can resolve the contract fracus with Solarnada and (b) the timing of the resale of Kinko-Jinko's recaptured capacity, (c) the amount of additional prepayments by new poly customers, and (d) any decisions to buy TCS, the amount of additional funding for construction of its production facility could range from a low end of $3 million up to a high end of $83 million.

Not exactly the tightest guidance ever seen, but at least there's room for optimism in the less-egregious scenarios. Beyond that, Hoku will use a combination of debt and/or equity to meet any additional funding needs, taking from Peter to pay Paul as needed.

Kudos to Shindo and the Hoku team--yes, including its lawyers--for providing such a dense flow of information in those two press releases (and good luck staring down the myriad challenges in the months ahead).

Believe it or not, there are even more details in the announcements for those data junkies who want to dig deeper, especially on the Kinko-Jinko story and the expected outcome and contingency plan numbers.

But I'm plumb Hokued out.