Months after settling charges over failing to disclose financial information and after laying off 170 employees, smart glass manufacturer View Inc. is in the news again.

The Milpitas, Calif.-based smart glass manufacturer pleaded guilty to unlawfully discharging wastewater into a publicly owned treatment works in Mississippi. The company failed to obtain a valid state permit. As a result, it has been ordered to pay nearly $5 million in fines, community service payments and civil penalties.

View is just a month removed from settling charges brought by the U.S. Securities and Exchange Commission (SEC) for failing to disclose $28 million in projected warranty-related liabilities. The SEC charged former chief financial officer Vidul Prakash for failing to tell investors about liabilities before the company went public in 2021.

Illegal Wastewater Discharge

View Inc. pleaded guilty to unlawfully discharging wastewater into a publicly owned treatment works in Mississippi.

According to the U.S. Attorney’s Office, Northern District of Mississippi, View’s sole manufacturing facility is located in Olive Branch, Miss. As part of its manufacturing process, View discharges wastewater from glass cutting, grinding, washing and polishing to two discharge points connected to the city’s sewer system. Discharging approximately 248,000 gallons per day registers the company as a Significant Industrial User, accounting for more than 38% of the city’s designed and permitted capacity of 537,000 gallons per day.

Starting on or about Dec. 11, 2018, through on or about June 28, 2021, View and through its employees “negligently violated a requirement of a pretreatment program approved under 33 U.S.C. § 1342(b) by discharging without a permit,” the U.S. Attorney’s Office stated.

In September and August of 2021, the Mississippi Commission on Environmental Quality, Desoto County Regional Utility Authority and the City of Olive Branch, Miss., issued notices and orders to View regarding wastewater the company discharges from its Olive Branch facility into a publicly owned treatment works.

The U.S. District Court issued a Subpoena to Testify Before a Grand Jury for the Northern District of Mississippi in August 2021. This required View officials to produce various related documents to the Environmental Protection Agency (EPA). Among the records requested were those for hazardous waste, air emissions, stormwater discharge and wastewater disposal. According to its recent SEC filings, the company cooperated fully.

On April 13, 2022, View and the U.S. Attorney’s Office for the U.S. District Court for the Northern District of Mississippi agreed in principle to the terms of a plea agreement, company officials said. The EPA’s Criminal Investigation Division and the Mississippi Department of Environmental Quality investigated the case, after which U.S. District Judge Sharion Aycock sentenced the company to a three-year term of probation and a fine of $3 million.

The court also ordered View to make a community service payment to DeSoto County Regional Utility Authority in the amount of $450,000 to help expand wastewater treatment capacity in DeSoto County. As part of resolving criminal charges, View has also entered into an Agreed Order with the Mississippi Commission on Environmental Quality assessing a civil penalty in the amount of $1.5 million.

“Unpermitted discharges of industrial wastewater can pose a serious threat to our nation’s wastewater treatment systems,” said Charles Carfagno, the special agent in charge of EPA’s Southeast branch. “This prosecution and today’s sentencing demonstrates that EPA and its partner agencies are committed to protecting the environment and pursuing those who chose to ignore environmental laws.”

Financial Instability

The fines come days after View it’s quarter two (Q2) financial results, showing revenue growth of $28 million—a 72% year-over-year increase compared to $16 million in Q2 of last year. Non-GAAP adjusted EBITDA improved from $61 million in Q2 2022 to $31 million in Q2 2023.

The latest news represents a pattern of instability for View after disclosing in its quarter one SEC filing in March 2023 that it would lay off 170 employees while expressing a need for additional funding. Officials reported that the company had pursued greater efficiency and lowered its structural costs while executing a non-binding term sheet with a lead investor for up to a $150 million secured debt facility.

View reported approximately $45 million in annualized combined fixed cost of sales and operating expense reductions in its latest financial statements. Cash, cash equivalents and short-term investments were $80 million as of June 30, 2023, compared to $130 million as of March 31, 2023. At the time of its last report, management expected to achieve a gross margin positive in quarter three of 2023.

Leave a Reply

Your email address will not be published. Required fields are marked *