As covered in a Rueters story, Accredited Home Lenders Holding Company raised questions of its ability to continue to operate in a delayed 2006 10-K filing with the SEC late yesterday. The full SEC filing in question, while a 2006 report, covers significant ground on the first seven months of 2007 as well, and states that due to “adverse conditions in the non-prime mortgage industry,” the company could not give assurance that it “will continue to operate as a going concern.” While you really should read the report — it’s the first 10-K I’ve ever seen read the way this one does — here are some tidbits from the 10-K report that stood out:

In connection with the challenges facing the non-prime lending industry, several of our competitors have recently stopped originating loans or sought protection under bankruptcy laws. Unless the values of our mortgage products cease their decline, and we are able to obtain new sources of liquidity and waivers and modification of the covenants in our credit facilities, we may suffer a similar fate … There has been a severe lack of demand recently for the purchase of whole loan pools of non-prime mortgage loans. For example, Freddie Mac announced in February 2007 that it will no longer purchase non-prime mortgage loans that include “teaserâ€? rates and will limit the use of low documentation loans in connection with these products. As a result, we have been limited in the mortgage loans we can sell, and these loans have remained part of our portfolio, financed primarily through our credit facilities, which are short-term financing sources. As discussed below, these facilities include margin provisions to ensure the adequacy of the pledged collateral, and margin calls made by our lenders during the first quarter of 2007 have reduced the amount of available capital …

Accredited had agreed in June to be bought by Lone Star Funds as part of a deal worth $400 million; the company said it intends to complete the transaction during this quarter.