UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 20232024
or
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☐ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Transition Period from to
Commission File No. 001-32919
Ascent Solar Technologies, Inc.
(Exact name of registrant as specified in its charter)
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Delaware |
| 20-3672603 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
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12300 Grant Street, Thornton, CO |
| 80241 |
(Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number including area code: 720-872-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of exchange on which registered |
Common | ASTI | Nasdaq Capital |
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer |
| ☐ | Accelerated filer |
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Non-accelerated filer |
| ☒ | Smaller reporting company |
| ☒ | |
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| Emerging growth company |
| ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of May 15, 2023,9, 2024, there were 49,929,96730,735,501 shares of our common stock issued and outstanding.
ASCENT SOLAR TECHNOLOGIES, INC.
Quarterly Report on Form 10-Q
For the Period Ended March 31, 20232024
Table of Contents
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Item 1. | 1 | |
Unaudited Condensed Balance Sheets - as of March 31, | 1 | |
2 | ||
3 | ||
5 | ||
6 | ||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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Item 6. | 23 | |
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FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes “forward-looking statements” that involve risks and uncertainties. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future net sales or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historical information and, in particular, appear under headings including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Overview.” When used in this Quarterly Report, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” “foresees,” “likely,” “may,” “should,” “goal,” “target,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon information available to us on the date of this Quarterly Report.
These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, among other things, the matters discussed in this Quarterly Report in the sections captioned “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Factors you should consider that could cause these differences are:
There may be other factors that could cause our actual results to differ materially from the results referred to in the forward-looking statements. We undertake no obligation to publicly update or revise forward-looking statements to reflect subsequent events or circumstances after the date made, or to reflect the occurrence of unanticipated events, except as required by law.
References to “we,” “us,” “our,” “Ascent,” “Ascent Solar” or the “Company” in this Quarterly Report mean Ascent Solar Technologies, Inc.
PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
CONDENSED BALANCE SHEETS
(unaudited)
|
| March 31, |
|
| December 31, |
|
| March 31, |
|
| December 31, |
| ||||
|
| 2023 |
|
| 2022 |
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| 2024 |
|
| 2023 |
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ASSETS |
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Current Assets: |
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents |
| $ | 6,343,687 |
|
| $ | 11,483,018 |
|
| $ | 187,474 |
|
| $ | 1,048,733 |
|
Trade receivables, net of allowance of $26,000 and $26,000, respectively |
|
| 94,875 |
|
|
| 1,769 |
| ||||||||
Trade receivables, net of allowance of $0 and $0, respectively |
|
| - |
|
|
| - |
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Inventories, net |
|
| 513,063 |
|
|
| 615,283 |
|
|
| 448,756 |
|
|
| 447,496 |
|
Prepaid and other current assets |
|
| 1,507,609 |
|
|
| 344,110 |
|
|
| 246,706 |
|
|
| 39,279 |
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Total current assets |
|
| 8,459,234 |
|
|
| 12,444,180 |
|
|
| 882,936 |
|
|
| 1,535,508 |
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|
|
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|
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|
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|
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|
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|
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Property, Plant and Equipment: |
|
| 22,638,819 |
|
|
| 22,590,169 |
|
|
| 19,901,016 |
|
|
| 21,177,892 |
|
Accumulated depreciation |
|
| (22,059,497 | ) |
|
| (22,038,508 | ) |
|
| (19,395,659 | ) |
|
| (20,131,008 | ) |
Property, Plant and Equipment, net |
|
| 579,322 |
|
|
| 551,661 |
|
|
| 505,357 |
|
|
| 1,046,884 |
|
|
|
|
|
|
|
|
|
|
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Other Assets: |
|
|
|
|
|
|
|
|
|
|
|
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Operating lease right-of-use assets, net |
|
| 4,141,958 |
|
|
| 4,324,514 |
|
|
| 2,249,042 |
|
|
| 2,364,672 |
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Patents, net of accumulated amortization of $159,010 and $154,218 |
|
| 81,075 |
|
|
| 79,983 |
| ||||||||
Patents, net of accumulated amortization of $177,099 and $173,387 |
|
| 50,266 |
|
|
| 53,978 |
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Equity method investment |
|
| 68,085 |
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| 61,379 |
|
|
| 67,179 |
|
|
| 68,867 |
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Other non-current assets |
|
| 1,233,725 |
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| 1,214,985 |
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| 1,228,399 |
|
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| 1,228,797 |
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| 5,524,843 |
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| 5,680,861 |
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| 3,594,886 |
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| 3,716,314 |
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Total Assets |
| $ | 14,563,399 |
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| $ | 18,676,702 |
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| $ | 4,983,179 |
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| $ | 6,298,706 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
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Current Liabilities: |
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Accounts payable |
| $ | 581,141 |
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| $ | 595,157 |
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| $ | 1,214,116 |
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| $ | 579,237 |
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Related party payables |
|
| 5,337 |
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| 67,164 |
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| 33,846 |
|
|
| 4,231 |
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Accrued expenses |
|
| 748,076 |
|
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| 888,869 |
|
|
| 1,215,560 |
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| 1,354,159 |
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Accrued payroll |
|
| 754,663 |
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| 927,264 |
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| 234,914 |
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|
| 160,477 |
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Accrued professional services fees |
|
| 1,158,460 |
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|
| 952,573 |
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| 933,872 |
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| 849,282 |
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Accrued interest |
|
| 725,446 |
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| 559,060 |
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| 653,199 |
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| 628,145 |
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Current portion of operating lease liability |
|
| 754,168 |
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| 733,572 |
|
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| 512,158 |
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| 491,440 |
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Current portion of convertible notes |
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| 2,000,000 |
|
|
| - |
| ||||||||
Conversions payable (Note 12) |
|
| - |
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|
| 1,089,160 |
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Cash payable (Note 12) |
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| 199,997 |
|
|
| - |
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Current portion of convertible notes, net |
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| 6,270 |
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| 354,936 |
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Bridge loan |
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| 353,269 |
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|
| - |
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Other payable |
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| 250,000 |
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| 250,000 |
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|
| 250,000 |
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|
| 250,000 |
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Total current liabilities |
|
| 6,977,291 |
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| 4,973,659 |
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| 5,607,201 |
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| 5,761,067 |
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Long-Term Liabilities: |
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Non-current operating lease liabilities |
|
| 3,628,660 |
|
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| 3,827,878 |
|
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| 1,904,892 |
|
|
| 2,043,025 |
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Non-current convertible notes, net |
|
| 6,116,663 |
|
|
| 5,268,399 |
| ||||||||
Accrued warranty liability |
|
| 21,225 |
|
|
| 21,225 |
|
|
| 21,225 |
|
|
| 21,225 |
|
Total liabilities |
|
| 16,743,839 |
|
|
| 14,091,161 |
|
|
| 7,533,318 |
|
|
| 7,825,317 |
|
Commitments and contingencies (Note 14) |
|
|
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Commitments and contingencies (Note 16) |
|
|
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Stockholders’ Equity (Deficit): |
|
|
|
|
|
|
|
|
|
|
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Series A preferred stock, $.0001 par value; 750,000 shares authorized; 48,100 |
|
| 5 |
|
|
| 5 |
| ||||||||
Common stock, $0.0001 par value, 500,000,000 authorized; 37,491,954 |
|
| 3,749 |
|
|
| 3,400 |
| ||||||||
Series A preferred stock, $.0001 par value; 750,000 shares authorized; 48,100 |
|
| 5 |
|
|
| 5 |
| ||||||||
Common stock, $0.0001 par value, 500,000,000 authorized; 6,710,745 |
|
| 671 |
|
|
| 358 |
| ||||||||
Additional paid in capital |
|
| 451,336,338 |
|
|
| 452,135,653 |
|
|
| 482,458,139 |
|
|
| 480,942,526 |
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Accumulated deficit |
|
| (453,511,214 | ) |
|
| (447,537,493 | ) |
|
| (485,016,178 | ) |
|
| (482,478,436 | ) |
Accumulated other comprehensive loss |
|
| (9,318 | ) |
|
| (16,024 | ) | ||||||||
Accumulated other comprehensive income (loss) |
|
| 7,224 |
|
|
| 8,936 |
| ||||||||
Total stockholders’ equity (deficit) |
|
| (2,180,440 | ) |
|
| 4,585,541 |
|
|
| (2,550,139 | ) |
|
| (1,526,611 | ) |
Total Liabilities and Stockholders’ Equity (Deficit) |
| $ | 14,563,399 |
|
| $ | 18,676,702 |
|
| $ | 4,983,179 |
|
| $ | 6,298,706 |
|
The accompanying notes are an integral part of these unaudited condensed financial statements.
1
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited)
|
| Three Months Ended |
|
| Three Months Ended |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Products |
| $ | 99,225 |
|
| $ | 54,210 |
|
| $ | 5,600 |
|
| $ | 99,225 |
|
Milestone and engineering |
|
| 25,000 |
|
|
| 512,000 |
|
|
| - |
|
|
| 25,000 |
|
Total Revenues |
|
| 124,225 |
|
|
| 566,210 |
|
|
| 5,600 |
|
|
| 124,225 |
|
Costs and Expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Costs of revenue |
|
| 461,795 |
|
|
| 532,890 |
|
|
| 9,388 |
|
|
| 461,795 |
|
Research, development and manufacturing |
|
| 1,665,694 |
|
|
| 1,406,322 |
|
|
| 607,233 |
|
|
| 1,665,694 |
|
Selling, general and administrative |
|
| 1,591,821 |
|
|
| 821,266 |
|
|
| 1,060,041 |
|
|
| 1,591,821 |
|
Share-based compensation |
|
| 1,404,450 |
|
|
| - |
|
|
| 259,234 |
|
|
| 1,404,450 |
|
Depreciation and amortization |
|
| 25,781 |
|
|
| 16,665 |
|
|
| 20,757 |
|
|
| 25,781 |
|
Impairment loss |
|
| 524,481 |
|
|
| - |
| ||||||||
Total Costs and Expenses |
|
| 5,149,541 |
|
|
| 2,777,143 |
|
|
| 2,481,134 |
|
|
| 5,149,541 |
|
Loss from Operations |
|
| (5,025,316 | ) |
|
| (2,210,933 | ) |
|
| (2,475,534 | ) |
|
| (5,025,316 | ) |
Other Income/(Expense) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Other income/(expense), net |
|
| 10,000 |
|
|
| - |
|
|
| 64,323 |
|
|
| 10,000 |
|
Interest expense |
|
| (1,068,036 | ) |
|
| (2,086,314 | ) |
|
| (126,555 | ) |
|
| (1,068,036 | ) |
Total Other Income/(Expense) |
|
| (1,058,036 | ) |
|
| (2,086,314 | ) |
|
| (62,232 | ) |
|
| (1,058,036 | ) |
Income/(Loss) on Equity Method Investments |
|
| - |
|
|
| (2 | ) |
|
| 24 |
|
|
| - |
|
Net Income/(Loss) |
| $ | (6,083,352 | ) |
| $ | (4,297,249 | ) |
| $ | (2,537,742 | ) |
| $ | (6,083,352 | ) |
Net Income/(Loss) Per Share (Basic and Diluted) |
| $ | (0.17 | ) |
| $ | (0.20 | ) |
| $ | (0.53 | ) |
| $ | (34.21 | ) |
Weighted Average Common Shares |
|
| 35,569,990 |
|
|
| 21,671,248 |
|
|
| 4,758,077 |
|
|
| 177,850 |
|
Weighted Average Common Shares |
|
| 35,569,990 |
|
|
| 21,671,248 |
|
|
| 4,758,077 |
|
|
| 177,850 |
|
Other Comprehensive Income/(Loss) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Foreign currency translation gain/(loss) |
|
| 6,706 |
|
|
| (7,097 | ) |
|
| (1,712 | ) |
|
| 6,706 |
|
Net Comprehensive Income/(Loss) |
| $ | (6,076,646 | ) |
| $ | (4,304,346 | ) |
| $ | (2,539,454 | ) |
| $ | (6,076,646 | ) |
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
(unaudited)
For the Three Months Ended March 31, 20232024
|
| Series A |
|
| Common Stock |
|
| Additional |
|
| Accumulated |
|
| Other Accumulated Comprehensive |
|
| Total |
| ||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Loss |
|
| (Deficit) |
| ||||||||
Balance at January 1, 2023 |
|
| 48,100 |
|
| $ | 5 |
|
|
| 34,000,812 |
|
| $ | 3,400 |
|
| $ | 452,135,653 |
|
| $ | (447,537,493 | ) |
| $ | (16,024 | ) |
| $ | 4,585,541 |
|
Impact of adopting ASU 2020-06 |
|
| - |
|
| $ | - |
|
|
| - |
|
|
| - |
|
|
| (3,795,874 | ) |
|
| 109,631 |
|
|
| - |
|
|
| (3,686,243 | ) |
Balance at January 1, 2023, as adjusted |
|
| 48,100 |
|
| $ | 5 |
|
|
| 34,000,812 |
|
| $ | 3,400 |
|
| $ | 448,339,779 |
|
| $ | (447,427,862 | ) |
| $ | (16,024 | ) |
| $ | 899,298 |
|
Conversion of L1 Note |
|
| - |
|
|
| - |
|
|
| 1,440,090 |
|
|
| 144 |
|
|
| 508,596 |
|
|
| - |
|
|
| - |
|
|
| 508,740 |
|
Conversion of Sabby Note into |
|
| - |
|
|
| - |
|
|
| 2,051,052 |
|
|
| 205 |
|
|
| 1,083,513 |
|
|
| - |
|
|
| - |
|
|
| 1,083,718 |
|
Share-based compensation |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,404,450 |
|
|
| - |
|
|
| - |
|
|
| 1,404,450 |
|
Net Loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (6,083,352 | ) |
|
| - |
|
|
| (6,083,352 | ) |
Foreign Currency Translation |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 6,706 |
|
|
| 6,706 |
|
Balance at March 31, 2023 |
|
| 48,100 |
|
| $ | 5 |
|
|
| 37,491,954 |
|
| $ | 3,749 |
|
| $ | 451,336,338 |
|
| $ | (453,511,214 | ) |
| $ | (9,318 | ) |
| $ | (2,180,440 | ) |
|
| Series A |
|
| Common Stock |
|
| Additional Paid-In |
|
| Accumulated |
|
| Other Accumulated Comprehensive |
|
| Total |
| ||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Income (Loss) |
|
| (Deficit) |
| ||||||||
Balance at January 1, 2024 |
|
| 48,100 |
|
| $ | 5 |
|
|
| 3,583,846 |
|
| $ | 358 |
|
| $ | 480,942,526 |
|
| $ | (482,478,436 | ) |
| $ | 8,936 |
|
| $ | (1,526,611 | ) |
Conversion of L1 Note and Conversions |
|
| - |
|
|
| - |
|
|
| 2,411,788 |
|
|
| 241 |
|
|
| 1,256,451 |
|
|
| - |
|
|
| - |
|
|
| 1,256,692 |
|
Exercise of prefunded warrants |
|
| - |
|
|
| - |
|
|
| 715,111 |
|
|
| 72 |
|
|
| (72 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
Share-based compensation |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 259,234 |
|
|
| - |
|
|
| - |
|
|
| 259,234 |
|
Net Loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (2,537,742 | ) |
|
| - |
|
|
| (2,537,742 | ) |
Foreign Currency Translation |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (1,712 | ) |
|
| (1,712 | ) |
Balance at March 31, 2024 |
|
| 48,100 |
|
| $ | 5 |
|
|
| 6,710,745 |
|
| $ | 671 |
|
| $ | 482,458,139 |
|
| $ | (485,016,178 | ) |
| $ | 7,224 |
|
| $ | (2,550,139 | ) |
The accompanying notes are an integral part of these unaudited condensed financial statements.
3
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(unaudited)
For the Three Months Ended March 31, 20222023
|
| Series A |
|
| Series 1A |
|
| Common Stock |
|
| Additional |
|
| Accumulated |
|
| Other Accumulated Comprehensive |
|
| Total |
| |||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Loss |
|
| (Deficit) |
| ||||||||||
Balance at January 1, 2022 |
|
| 48,100 |
|
| $ | 5 |
|
|
| 3,700 |
|
| $ | - |
|
|
| 4,786,804 |
|
| $ | 479 |
|
| $ | 424,948,698 |
|
| $ | (427,782,788 | ) |
|
|
|
| $ | (2,833,606 | ) | |
Conversion of TubeSolar Series 1A |
|
| - |
|
|
| - |
|
|
| (2,400 | ) |
|
| - |
|
|
| 4,800,000 |
|
|
| 480 |
|
|
| (480 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
Conversion of Crowdex Series 1A |
|
| - |
|
|
| - |
|
|
| (1,300 | ) |
|
| - |
|
|
| 2,600,000 |
|
|
| 260 |
|
|
| (260 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
Conversion of BD1 Note |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 15,800,000 |
|
|
| 1,580 |
|
|
| 7,898,420 |
|
|
| - |
|
|
| - |
|
|
| 7,900,000 |
|
Conversion of Nanyang Note |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,200,000 |
|
|
| 120 |
|
|
| 599,880 |
|
|
| - |
|
|
| - |
|
|
| 600,000 |
|
Conversion of Fleur Note into |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,400,000 |
|
|
| 140 |
|
|
| 699,860 |
|
|
| - |
|
|
| - |
|
|
| 700,000 |
|
Net Loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (4,297,249 | ) |
|
| - |
|
|
| (4,297,249 | ) |
Foreign Currency Translation |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (7,097 | ) |
|
| (7,097 | ) |
Balance at March 31, 2022 |
|
| 48,100 |
|
| $ | 5 |
|
|
| - |
|
| $ | - |
|
|
| 30,586,804 |
|
| $ | 3,059 |
|
| $ | 434,146,118 |
|
| $ | (432,080,037 | ) |
| $ | (7,097 | ) |
| $ | 2,062,048 |
|
|
| Series A |
|
| Common Stock |
|
| Additional |
|
| Accumulated |
|
| Other Accumulated Comprehensive |
|
| Total |
| ||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Income (Loss) |
|
| (Deficit) |
| ||||||||
Balance at January 1, 2023 |
|
| 48,100 |
|
| $ | 5 |
|
|
| 259,323 |
|
| $ | 26 |
|
| $ | 448,343,153 |
|
| $ | (447,427,862 | ) |
| $ | (16,024 | ) |
| $ | 899,298 |
|
Conversion of L1 Note |
|
| - |
|
|
| - |
|
|
| 7,200 |
|
|
| 1 |
|
|
| 508,739 |
|
|
| - |
|
|
| - |
|
|
| 508,740 |
|
Conversion of Sabby Note into |
|
| - |
|
|
| - |
|
|
| 10,255 |
|
|
| 1 |
|
|
| 1,083,717 |
|
|
| - |
|
|
| - |
|
|
| 1,083,718 |
|
Share-based compensation |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| 1,404,450 |
|
|
| - |
|
|
| - |
|
|
| 1,404,450 |
| ||
Net Loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (6,083,352 | ) |
|
| - |
|
|
| (6,083,352 | ) |
Foreign Currency Translation |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 6,706 |
|
|
| 6,706 |
|
Balance at March 31, 2023 |
|
| 48,100 |
|
| $ | 5 |
|
|
| 276,778 |
|
| $ | 28 |
|
| $ | 451,340,059 |
|
| $ | (453,511,214 | ) |
| $ | (9,318 | ) |
| $ | (2,180,440 | ) |
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
|
| For the Three Months Ended |
|
| For the Three Months Ended |
| ||||||||||
|
| March 31, |
|
| March 31, |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||
Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income/(loss) |
| $ | (6,083,352 | ) |
| $ | (4,297,249 | ) |
| $ | (2,537,742 | ) |
| $ | (6,083,352 | ) |
Adjustments to reconcile net income (loss) to cash used in operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
|
| 25,781 |
|
|
| 16,665 |
|
|
| 20,758 |
|
|
| 25,781 |
|
Share-based compensation |
|
| 1,404,450 |
|
|
| — |
|
|
| 259,234 |
|
|
| 1,404,450 |
|
Operating lease asset amortization |
|
| 182,556 |
|
|
| 168,671 |
|
|
| 115,630 |
|
|
| 182,556 |
|
Amortization of debt discount |
|
| 901,649 |
|
|
| 2,069,206 |
|
|
| 35,530 |
|
|
| 901,649 |
|
Impairment loss |
|
| 524,481 |
|
|
| — |
| ||||||||
Loss on equity method investment |
|
| — |
|
|
| 2 |
|
|
| (24 | ) |
|
| — |
|
Inventory reserve expense |
|
| 97,465 |
|
|
| — |
|
|
| (23,355 | ) |
|
| 97,465 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Accounts receivable |
|
| (93,106 | ) |
|
| (512,004 | ) |
|
| — |
|
|
| (93,106 | ) |
Inventories |
|
| 4,755 |
|
|
| (45,448 | ) |
|
| 22,095 |
|
|
| 4,755 |
|
Prepaid expenses and other current assets |
|
| (1,182,239 | ) |
|
| (411,802 | ) |
|
| (207,029 | ) |
|
| (1,182,239 | ) |
Accounts payable |
|
| (14,016 | ) |
|
| (41,565 | ) |
|
| 634,879 |
|
|
| (14,016 | ) |
Related party payable |
|
| (61,827 | ) |
|
| — |
|
|
| 29,615 |
|
|
| (61,827 | ) |
Operating lease liabilities |
|
| (178,622 | ) |
|
| (157,479 | ) |
|
| (117,415 | ) |
|
| (178,622 | ) |
Accrued interest |
|
| 166,386 |
|
|
| 15,107 |
|
|
| 25,054 |
|
|
| 166,386 |
|
Accrued expenses |
|
| (107,507 | ) |
|
| 403,816 |
|
|
| 20,428 |
|
|
| (107,507 | ) |
Net cash used in operating activities |
|
| (4,937,627 | ) |
|
| (2,792,080 | ) |
|
| (1,197,861 | ) |
|
| (4,937,627 | ) |
Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Contributions to equity method investment |
|
| — |
|
|
| (83,559 | ) | ||||||||
Payments on purchase of assets |
|
| (48,650 | ) |
|
| (57,451 | ) |
|
| — |
|
|
| (48,650 | ) |
Patent activity costs |
|
| (5,884 | ) |
|
| (308 | ) |
|
| — |
|
|
| (5,884 | ) |
Net cash used in investing activities |
|
| (54,534 | ) |
|
| (141,318 | ) |
|
| — |
|
|
| (54,534 | ) |
Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Proceeds from bridge loan |
|
| 350,000 |
|
|
| — |
| ||||||||
Payment of bridge loan |
|
| (13,398 | ) |
|
| — |
| ||||||||
Payment of convertible notes |
|
| (147,170 | ) |
|
| — |
|
|
| — |
|
|
| (147,170 | ) |
Net cash used in financing activities |
|
| (147,170 | ) |
|
| — |
| ||||||||
Net cash provided by/(used in) financing activities |
|
| 336,602 |
|
|
| (147,170 | ) | ||||||||
Net change in cash and cash equivalents |
|
| (5,139,331 | ) |
|
| (2,933,398 | ) |
|
| (861,259 | ) |
|
| (5,139,331 | ) |
Cash and cash equivalents at beginning of period |
|
| 11,483,018 |
|
|
| 5,961,760 |
|
|
| 1,048,733 |
|
|
| 11,483,018 |
|
Cash and cash equivalents at end of period |
| $ | 6,343,687 |
|
| $ | 3,028,362 |
|
| $ | 187,474 |
|
| $ | 6,343,687 |
|
Supplemental Cash Flow Information: |
|
|
|
|
|
| ||||||||||
Cash paid for interest |
| $ | 63,562 |
|
| $ | — |
| ||||||||
Non-Cash Transactions: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Non-cash conversions of convertible notes to equity |
| $ | 1,592,458 |
|
| $ | 9,200,000 |
| ||||||||
Series 1A preferred stock conversion |
| $ | — |
|
| $ | 740 |
| ||||||||
Conversions of preferred stock, convertible notes, and conversions payable to equity |
| $ | 1,256,692 |
|
| $ | 1,592,458 |
| ||||||||
Exercise of Pre-funded warrants |
| $ | 72 |
|
| $ | — |
|
The accompanying notes are an integral part of these unaudited condensed financial statements.
5
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION
Ascent Solar Technologies, Inc. (the “Company") is focusing on integrating its PVphotovoltaic ("PV") products into scalable and high value markets such as agrivoltaics, aerospace, satellites, near earth orbiting vehicles, and fixed wing unmanned aerial vehicles (“UAV”). The value proposition of Ascent’s proprietary solar technology not only aligns with the needs of customers in these industries, but also overcomes many of the obstacles other solar technologies face in these unique markets. Ascent has the capability to design and develop finished products for end users in these areas as well as collaborate with strategic partners to design and develop custom integrated solutions for products like fixed-wing UAVs. Ascent sees significant overlap of the needs of end users across some of these industries and can achieve economies of scale in sourcing, development, and production in commericializingcommercializing products for these customers.
Effective March 13, 2023, the Company began focusing its Thornton manufacturing facility as a Perovskite Center of Excellence and has dedicated the facility to the industrial commercialization of the Company's patent-pending Perovskite solar technologies. On April 18, 2023, the Company completed a transaction to acquire the manufacturing assets of Flisom AG, a Zurich based thin-film solar manufacturer. The Company will continue to be headquartered in Thornton, CO and will commence manufacturing using its new manufacturing assets in Zurich, Switzerland.
NOTE 2. BASIS OF PRESENTATION
The accompanying, unaudited, condensed financial statements have been derived from the accounting records of the Company as of March 31, 20232024 and December 31, 2022,2023, and the results of operations for the three months ended March 31, 20232024 and 2022.2023.
The accompanying, unaudited, condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, these interim financial statements do not include all of the information and footnotes typically found in U.S. GAAP audited annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included. The Condensed Balance Sheet at December 31, 20222023 has been derived from the audited financial statements as of that date but does not include all of the information and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.2023. These unaudited condensed financial statements and notes should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.2023.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Operating results for the three months ended March 31, 20232024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.2024.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company’s significant accounting policies were described in Note 32 to the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Except for the adoption of FASB ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) as disclosed below, there2023. There have been no significant changes to our accounting policies as of March 31, 2023.2024.
Revenue Recognition:
Product revenue. The Company recognizes revenue for the sale of PV modules and other equipment sales at a point in time following the transfer of control of such products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. For module and other equipment sales contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation identified in the contract
6
based on relative standalone selling prices, or estimates of such prices, and recognizes the related revenue as control of each individual product is transferred to the customer.
During the three months ended March 31, 20232024 and 2022,2023, the Company recognized product revenue of $99,2255,600 and $54,21099,225, respectively.
Milestone and engineering revenue. Each milestone and engineering arrangement is a separate performance obligation. The transaction price is estimated using the most likely amount method and revenue is recognized as the performance obligation is satisfied through achieving manufacturing, cost, or engineering targets. During the three months ended March 31, 20232024 and 2022,2023, the Company recognized total milestone and engineering revenue of $25,0000 and $512,00025,000, respectively. The $respectively.-
512,0006
was earned from TubeSolar AG (“TubeSolar”), a related party.
Government contracts revenue. Revenue from government research and development contracts is generated under terms that are cost plus fee or firm fixed price. The Company generally recognizes this revenue over time using cost-based input methods, which recognizes revenue and gross profit as work is performed based on the relationship between actual costs incurred compared to the total estimated costs of the contract. In applying cost-based input methods of revenue recognition, the Company uses the actual costs incurred relative to the total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize.
Cost based input methods of revenue recognition are considered a faithful depiction of the Company’s efforts to satisfy long-term government research and development contracts and therefore reflect the performance obligations under such contracts. Costs incurred that do not contribute to satisfying the Company’s performance obligations are excluded from the input methods of revenue recognition as the amounts are not reflective of transferring control under the contract. Costs incurred towards contract completion may include direct costs plus allowable indirect costs and an allocable portion of the fixed fee. If actual and estimated costs to complete a contract indicate a loss, provision is made currently for the loss anticipated on the contract.
No government contract revenue was recognized during the three months ended March 31, 20232024 and 2022.2023.
Accounts Receivable. As of March 31, 20232024 and December 31, 2022,2023, the Company had an accounts receivable, net balance of $94,8750 and $1,7690, respectively. As of March 31, 20232024 and December 31, 2022,2023, the Company had an allowance for doubtful accounts of $26,0000 and $26,0000, respectively.
Deferred revenue for the three months ended March 31, 20232024 was as follows:
Balance as of January 1, 2023 | $ | 13,000 |
| |||
Balance as of January 1, 2024 | $ | 935 |
| |||
Additions |
| 29,350 |
|
| 7,700 |
|
Recognized as revenue |
| (29,350 | ) |
| (3,425 | ) |
Balance as of March 31, 2023 | $ | 13,000 |
| |||
Balance as of March 31, 2024 | $ | 5,210 |
|
Other Assets:Other assets is comprised of the following:
|
| March 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Lease security deposit |
| $ | 625,000 |
|
| $ | 625,000 |
|
Spare machine parts |
|
| 603,399 |
|
|
| 603,797 |
|
Total Other Assets |
| $ | 1,228,399 |
|
| $ | 1,228,797 |
|
Earnings per Share: Earnings per share (“EPS”) are the amount of earnings attributable to each share of common stock. Basic EPS has been computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Income available to common stockholders has been computed by deducting dividends accumulated for the period on cumulative preferred stock (whether or not earned) from net income. Diluted earnings per share has been computed by dividing net income adjusted on an if-converted basis for the period by the weighted average number of common shares and potentially dilutive common share outstanding (which consist of warrants, options, restricted stock units and convertible securities using the if-converted method to the extent they are dilutive). Approximately 18.47.9 million and 2.40.09 million shares of dilutive shares were excluded from the three months period ended March 31, 20232024 and 2022,2023, respectively, EPS calculation as their impact is antidilutive.
Recently Adopted or to be AdoptedIssued Accounting PoliciesStandards
On January 1,In November 2023, the Company adoptedFASB issued ASU 2020-06.2023-07, Segment Reporting: Improvement to Reportable Segment Disclosures ("ASU 2023-07"). ASU 2023-07 improves segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The adoption resultedamendments in the elimination of the beneficial conversion feature recognized on the Company’s convertible debt. The Company elected to apply the modified retrospective method toASU 2023-07 are effective for all open contracts as of January 1,public entities for fiscal years beginning after December 15, 2023, and the cumulative effect of initially applying ASU 2020-06 was recognized as an adjustment to the Company’s retained earnings balance as of January 1, 2023. Comparativeinterim periods have not been restated and continue to be reported under the accounting standard in effect for those periods.within fiscal years
7
The cumulative effectbeginning after December 15, 2024. Early adoption is permitted. Management is evaluating the impact of this ASU on the changes made to the Company’s January 1, 2023, balance sheet for the adoption of ASU 2020-06 is as follows:Company's financial statements.
In December 2023, the FASB issued ASU 2023-09,
|
| Balance at December 31, 2022 |
|
| Adjustments Due to Adoption |
|
| Balance at January 1, 2023 |
| ||||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| |||
Non-current convertible notes, net |
| $ |
| 5,268,399 |
|
| $ |
| 3,686,243 |
|
| $ |
| 8,954,642 |
|
Shareholders' equity |
|
|
|
|
|
|
|
|
|
|
|
| |||
Additional paid in capital |
|
|
| 452,135,653 |
|
|
|
| (3,795,874 | ) |
|
|
| 448,339,779 |
|
Accumulated deficit |
|
|
| (447,537,493 | ) |
|
|
| 109,631 |
|
|
|
| (447,427,862 | ) |
TheIncome Taxes: Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 improves income tax disclosures by requiring public entities annually to (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 is effective for public entities for annual periods beginning after December 15, 2024. Entities are permitted to early adopt the standard for annual financial statements that have not yet been issued or made available for issuance. Management is evaluating the impact due to the change in accounting principle on net income and earnings per share is as follows:
|
| Post ASU 2020-06 |
|
| Pre ASU 2020-06 |
|
| Difference |
| ||||||
Net Loss |
| $ |
| (6,083,352 | ) |
| $ |
| (8,283,316 | ) |
| $ |
| 2,199,964 |
|
Earnings Per Share (Basic and Diluted) |
|
|
| (0.17 | ) |
|
|
| (0.23 | ) |
|
|
| 0.06 |
|
Other new pronouncements issued but not effective as of March 31, 2023 are not expected to have a material impactthis ASU on the Company’s condensedCompany's financial statements.
NOTE 4. LIQUIDITY, CONTINUED OPERATIONS, AND GOING CONCERN
During the year ended December 31, 2022,2023, the Company entered into multiple financing agreementssold Series 1B preferred stock and completed a public offering to fund operations. Further discussion of these transactions can be found in Notes 1213 and 1514 in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.2023.
The Company redeployedcurrently has limited production capabilities in its Thornton manufacturing facility and continues to focus on restarting production at industrial commercialization of the Company's patent-pending Perovskite solar technologies. Additionally, the Company purchased manufacturing assets in Zurich, Switzerland where the Company plansscale while continuing its research and development activities to begin production.improve its PV products. The Company does not expect that sales revenue and cash flows will be sufficient to support operations and cash requirements until it has fully implemented this strategy. During the three months ended March 31, 20232024 the Company used $4,937,6271,197,861 in cash for operations.
Additional projected product revenues are not anticipated to result in a positive cash flow position for the next twelve months overall and while as of March 31, 2023,2024, the Company has a working capitaldeficit of $1,481,9434,724,265, Management does not believe cash liquidity is sufficient for the next twelve months and will require additional financing.
The Company continues to look for ways to expand its production of PV films at industrial scale and to secure long-term contracts for the sale of such output. The Company also continues activities related to securing additional financing through strategic or financial investors, but there is no assurance the Company will be able to raise additional capital on acceptable terms or at all. If the Company's revenues do not increase rapidly, and/or additional financing is not obtained, the Company will be required to significantly curtail operations to reduce costs and/or sell assets. Such actions would likely have an adverse impact on the Company's future operations.
As a result of the Company’s recurring losses from operations and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises doubt as to the Company’s ability to continue as a going concern.
Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These condensed financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
8
NOTE 5. RELATED PARTY TRANSACTIONS
OnIn September 15, 2021, the Company and TubeSolar AG ("TubeSolar"), a former significant stakeholder in the Company, entered into a Long-Term Supply and Joint Development Agreement (“JDA”("JDA") with TubeSolar. Under the terms of the JDA,where the Company will produce, and TubeSolar will purchase, thin-film photovoltaic (“PV”)would provide PV foils (“PV Foils”) for use in TubeSolar’sTubeSolar's solar modules for agricultural photovoltaic (“APV”) applications that require solar foils for its production.applications. Additionally, the Company will receive (i) up to $4 million of non-recurring engineering (“NRE”) fees, (ii) up to $13.5 million of payments upon achievement of certain agreed upon production and cost structure milestones and (iii) product revenues from sales of PV Foils to TubeSolar. The JDA has no fixed term, and may only be terminated by either party for breach. No revenue was recognized under the JDA during the three months ended March 31, 2023. $512,000 of NRE revenue were recognized under the JDA during the three months ended March 31, 2022.
The Company and TubeSolar have also jointly established Ascent Solar Technologies Germany GmbH (“Ascent Germany”), in which TubeSolar holds of 30% of the entity. Ascent Germany was established to operate a PV manufacturing facility in Germany that will produce and deliver PV Foils exclusively to TubeSolar. The parties expect to jointly develop next generation tooling for use in manufacturing PV Foils at the JV facility. TheThere were no Company accounts for this investment as an equity method investment as it does not have control of this entity, but does have significant influence over the activities that most significantly impact the entity’s operations and financial performance. The Company contributed $0 and $83,559contributions to Ascent Germany during the three months ended March 31, 2024 and 2023.
In June, 2023, TubeSolar filed an application for insolvency proceedings with the insolvency court. Since then, there has been no activity under the JDA and 2022, respectively.minimal activity in Ascent Germany. Management continues to monitor this situation.
8
NOTE 6. SWITZERLAND ASSETS
On April 17, 2023, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Flisom AG (“Seller”), pursuant to which, among other things, the Company purchased certain assets relating to thin-film photovoltaic manufacture and production from Seller (collectively, the “Assets”). The purchase price paid by the Company was $4,083,926 (including $1,283,926 of transaction costs). The Company currently cannot quantifyalso entered into a sublease agreement allowing the Company to use the manufacturing facility where the Assets are located.
During the year ended December 31, 2023, Management concluded that these assets were impaired and recognized an impairment loss of $3,283,715. The remaining carrying value of the Assets, as of December 31, 2023, was $786,000. On April 1, 2024, the Company entered into an agreement with the manufacturing facility landlord (“Landlord”) where the Company would sell all but one equipment from the Assets to the Landlord for 1 CHF and forgiveness of $221,519 in payables and any potential future claims the manufacturing facility landlord may have. The carrying value of the Assets sold was $746,000.
The Company recorded the Assets as assets held for sale at March 31, 2024 as all of the following criteria have been met: (i) a formal commitment to a plan to sell a property has been made and exercised; (ii) the property is available for sale in its maximum exposurepresent condition; (iii) actions required to complete the sale of the property have been initiated; (iv) sale of the property is probable and we expect the sale will occur within one year; and (v) the property is being actively marketed for sale at a price that is reasonable given its current market value. Assets held for sale are recorded in this entity.Property, Plant and Equipment, net in the unaudited condensed balance sheets.
Upon designation as an asset held for sale, the Company recorded the carrying value of the property at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and depreciation of the property ceases. As the estimated fair value of $221,519, the price the Company sold the Assets for is less than their carrying value, the Company recorded an impairment loss of $524,481.
NOTE 6.7. PROPERTY, PLANT AND EQUIPMENT
The following table summarizes property, plant and equipment as of March 31, 20232024 and December 31, 2022:2023:
|
| As of |
|
| As of |
|
| As of |
|
| As of |
| ||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||
Furniture, fixtures, computer hardware and |
| $ | 482,235 |
|
| $ | 482,235 |
|
| $ | 468,589 |
|
| $ | 468,588 |
|
Manufacturing machinery and equipment |
|
| 21,765,284 |
|
|
| 21,739,504 |
|
|
| 19,384,346 |
|
|
| 20,661,222 |
|
Leasehold improvements |
|
| 103,951 |
|
|
| 87,957 |
|
|
| 15,994 |
|
|
| 15,995 |
|
Manufacturing machinery and equipment, |
|
| 287,349 |
|
|
| 280,473 |
|
|
| 32,087 |
|
|
| 32,087 |
|
Depreciable property, plant and equipment |
|
| 22,638,819 |
|
|
| 22,590,169 |
|
|
| 19,901,016 |
|
|
| 21,177,892 |
|
Less: Accumulated depreciation and amortization |
|
| (22,059,497 | ) |
|
| (22,038,508 | ) |
|
| (19,395,659 | ) |
|
| (20,131,008 | ) |
Net property, plant and equipment |
| $ | 579,322 |
|
| $ | 551,661 |
|
| $ | 505,357 |
|
| $ | 1,046,884 |
|
Depreciation expense for the three months ended March 31, 20232024 and 20222023 was $20,98917,045 and $11,87320,989, respectively. Depreciation expense is recorded under “Depreciation and amortization expense” in the unaudited Condensed Statements of Operations.
NOTE 7.8. OPERATING LEASE
The Company’s operating leases are comprised of approximately 100,000 rentable square feet for its manufacturing and operations and a Company car. These leases are classified and accounted for as operating leases. The building lease term is for 88 months commencing on September 21, 2020 at a rent of $50,000 per month including taxes, insurance and common area maintenance until December 31, 2020. Beginning January 1, 2021, the rent adjusted to $80,000 per month on a triple net basis and shall increase at an annual rate of 3% per annum until December 31, 2027.
Effective September 1, 2023, the lease was amended to reduce the rentable square feet from 100,000 to approximately 75,000 square feet and the rent and tenant share of expenses were decreased in proportion to the reduction in rentable square
9
feet. The Company recorded this as a lease modification in accordance with ASC 842, Leases, and recorded a reduction to the right of use asset and lease liability of $1,292,316 and $1,376,994, respectively. The Company recognized a gain on the lease modification of $84,678, which was recorded as other income in the Statement of Operations.
As of March 31, 20232024 and December 31, 2022,2023, assets and liabilities related to the Company’s leases were as follows:
|
| As of |
|
| As of |
| ||
|
| 2023 |
|
| 2022 |
| ||
Operating lease right-of-use assets, net |
| $ | 4,141,958 |
|
| $ | 4,324,514 |
|
Current portion of operating lease liability |
|
| 754,168 |
|
|
| 733,572 |
|
Non-current portion of operating lease liability |
|
| 3,628,660 |
|
|
| 3,827,878 |
|
9
|
| As of |
|
| As of |
| ||
|
| 2024 |
|
| 2023 |
| ||
Operating lease right-of-use assets, net |
| $ | 2,249,042 |
|
| $ | 2,364,672 |
|
Current portion of operating lease liability |
|
| 512,158 |
|
|
| 491,440 |
|
Non-current portion of operating lease liability |
|
| 1,904,892 |
|
|
| 2,043,025 |
|
During the three months ended March 31, 20232024 and 2022,2023, the Company recorded operating lease expense included in selling, general and administrative expenses of $261,343190,497 and $258,392261,343, respectively.
Future maturities of the operating lease liability are as follows:
Remainder of 2023 |
| $ | 772,225 |
| ||||
2024 |
|
| 1,060,187 |
| ||||
Remainder of 2024 |
| $ | 576,847 |
| ||||
2025 |
|
| 1,090,196 |
|
|
| 792,203 |
|
2026 |
|
| 1,112,903 |
|
|
| 815,969 |
|
2027 |
|
| 1,146,290 |
|
|
| 840,449 |
|
Total lease payments |
|
| 5,181,801 |
|
|
| 3,025,468 |
|
Less amounts representing interest |
|
| (798,973 | ) |
|
| (608,418 | ) |
Present value of lease liability |
| $ | 4,382,828 |
|
| $ | 2,417,050 |
|
The remaining weighted average lease term and discount rate of the operating leases is 56.8845.00 months and 7.0%, respectively.
NOTE 8.9. INVENTORIES
Inventories, net of reserves, consisted of the following at March 31, 20232024 and December 31, 2022:2023:
|
| As of |
|
| As of |
|
| As of |
|
| As of |
| ||||
|
| 2023 |
|
| 2022 |
|
| 2024 |
|
| 2023 |
| ||||
Raw materials |
| $ | 474,102 |
|
| $ | 577,799 |
|
| $ | 448,367 |
|
| $ | 445,721 |
|
Work in process |
|
| 38,961 |
|
|
| 37,351 |
|
|
| 389 |
|
|
| 1,775 |
|
Finished goods |
|
| - |
|
|
| 133 |
|
|
| - |
|
|
| - |
|
Total |
| $ | 513,063 |
|
| $ | 615,283 |
|
| $ | 448,756 |
|
| $ | 447,496 |
|
NOTE 9.10. BRIDGE LOAN
On February 27, 2024, the Company entered into a loan agreement ("Loan 1") with a lender ("Lender") for an aggregate principal amount of $375,000. The Company paid origination fees of $25,000 for net proceeds of $350,000. The discount is recorded as interest expense ratably over the term of the loan. Under Loan 1, the Company will make weekly payments of $19,420 for 28 weeks for a total repayment of $543,750. The Company also has an early repayment option where the Company would repay an aggregate of $478,125 if repaid by April 15, 2024. This note is recorded as Bridge loan in the unaudited Condensed Balance Sheets.
On April 17, 2024, the Company entered into a new loan agreement ("Loan 2") with the Lender. Under Loan 2, the Company borrowed an aggregate principal amount of $685,000, incurred origination fees of $34,250, and repaid the outstanding balance of Loan 1 of $428,310 for net proceeds of $222,440. Under Loan 2, the Company will make weekly payments of $31,000 for 32 weeks for a total repayment of $993,250.
10
These loans are not convertible into equity shares of the Company and are secured by a second lien on the Company's assets.
The carrying amount of this bridge loan approximates fair value because the Company's current borrowing rate does not materially differ from market rates for similar bank borrowings and due to its short maturity and is considered to be Level 2.
NOTE 11. OTHER PAYABLE
On June 30, 2017, the Company entered into an agreement with a vendor (“Vendor”) to convert the balance of their account into a note payable in the amount of $250,000. The note bears interest of 5% per annum and matured on February 28, 2018. As of March 31, 2023,2024, the Company had not made any payments on this note, the accrued interest was $68,83684,452, and the note is due upon demand. This note is recorded as Other payable in the unaudited Condensed Balance Sheets.
NOTE 10.12. CONVERTIBLE NOTES
The following table provides a summary of the activity of the Company's secured, convertible, promissory notes:
| Principal |
| Notes converted |
| Principal |
| Less: |
| Net Principal |
| |||||
Sabby Volatility Warrant Master Fund, LTD | $ | 7,392,899 |
| $ | (1,786,212 | ) | $ | 5,606,687 |
| $ | (1,860,185 | ) | $ | 3,746,502 |
|
L1 Capital Global Opportunities Master Fund, Ltd |
| 7,500,000 |
|
| (960,000 | ) |
| 6,540,000 |
|
| (2,169,839 | ) |
| 4,370,161 |
|
| $ | 14,892,899 |
| $ | (2,746,212 | ) | $ | 12,146,687 |
| $ | (4,030,024 | ) | $ | 8,116,663 |
|
Sabby / L1 Convertible Notes
On December 19, 2022, the Company entered into a Securities Purchase Contract (the “Securities Purchase Contract”) with two institutional investors (each, an “Investor” and collectively, the “Investors”) for the issuance to the Investors of $12,500,000 in aggregate principal amount of Senior Secured Original Issue 10% Discount Convertible Advance Notes
10
pursuant to a direct registered offering (the “Registered Advance Notes”) and $2,500,000 in aggregate principal amount of Senior Secured Original Issue 10% Discount Convertible Advance Notes in a concurrent private placement (the “Private Placement Advance Notes” and, together with the Registered Advance Notes, the “Advance Notes”).
On March 29, 2023, the Company and each of the Investors entered into a Waiver and Amendment Agreement (the “Amendment”) relating to the Securities Purchase Contract and the Advance Notes to waive any event of default arising under Section 2.1 of the Advance Notes relating to the Company’s receipt of notice from the Listing Qualifications Department of Nasdaq indicating that the Company is not in compliance with the $1.00 Minimum Bid Price Requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market (the “Specified Default”).
Pursuant to the Amendment, the Company and each of the Investors agreed to waive the Specified Default and further agreed to the amend the Advance Notes to provide that (i) the new “Floor Price” for all purposes of the Advance Notes is $0.20 per share of the Company’s common stock, (ii) until the Company regains compliance with the $1.00 Minimum Bid Price Requirement, “Conversion Price” under the Advance Notes will mean the “Alternative Conversion Price” (as defined in the Advance Notes) and (iii) the Company will make certain prepayments of the Advance Notes held by the Investors on the following dates and in the following aggregate cash amounts, at a price equal to 100% of the principal amount of the Advance Notes to be repaid plus accrued and unpaid interest thereon (if any). The Company's failure to comply with the terms of the Amendment would constitute an Event of Default under the Advance Notes.
On April 12, 2023, the Company and each of the Investors entered in a further amendment to the Amendment (the “Revised Amendment”), to provide for a consistent prepayment schedule for the Advance Notes held by each of the Investors. After giving effect to the Revised Amendment, the Advance Notes will be prepaid by the Company in cash on the following dates and in the following aggregate amounts, at a price equal to 100% of the principal amount of the Advance Notes to be prepaid plus accrued and unpaid interest thereon (if any). The Company’s failure to comply with the terms of the Revised Amendment would constitute an “Event of Default” under the Advance Notes.
Prepayment Date | Aggregate |
| |
April 3, 2023 | $ | 333,333 |
|
April 13, 2023 |
| 333,333 |
|
May 18, 2023 |
| 666,667 |
|
June 19, 2023 |
| 666,667 |
|
| $ | 2,000,000 |
|
The Advance Notes are convertible to Common Stock. The fixed conversion price of the Advance Notes is subject to certain adjustments in accordance with the terms thereof, including certain anti-dilution adjustments in the event that the Company issues shares of Common Stock, securities convertible into, exercisable for or exchangeable for the Company’s Common Stock, rights or options to acquire Common Stock or convertible securities or any combination thereof, including as units with other securities or property in an integrated transaction, at a purchase or conversion, exercise or exchange price of less than the fixed conversion price then in effect with respect to the Advance Notes.
The Securities Purchase Contract also included certain warrants to purchase up to 2,513,406 shares of common stock (the "Warrants"). The Warrants were issued with an exercise price equal to $3.93 per share, subject to certain adjustments in certain events, including the future issuance by the Company of securities with a purchase or conversion, exercise or exchange price that is less than the exercise price of the Warrants then in effect at any time.
On April 14, 2023 the Company entered a securities purchase agreement (“SPA”) with Lucro Investments VCC-ESG Opportunities Fund (“Lucro”) for an approximate $9 million private placement (the “Private Placement”) of an aggregate of 7,499,997 shares of the Company’s Common Stock. The per share purchase price for the Shares is $1.20 per share. The terms of the SPA with Lucro triggered certain adjustments to the Advance Notes and the Warrants in accordance with the existing terms of the outstanding Advance Notes and the outstanding Warrants. Following these adjustments:
11
| Principal |
| Notes converted |
| Principal |
| Less: |
| Net Principal |
| |||||
L1 Capital Global Opportunities Master Fund, Ltd | $ | 406,667 |
| $ | (400,000 | ) | $ | 6,667 |
| $ | (397 | ) | $ | 6,270 |
|
During the three months ended March 31, 2023, Sabby converted2024, $1.79400,000 million of principal was converted for 2,051,053618,384 shares of common stock. During the three months ended March 31, 2023, L1 converted $0.96 million of principal for 1,440,090 shares of common stock. During the three months ended March 31,2024 and 2023, the Company had interest expense of $21,989 and $1,052,928, respectively, of which, $18,863 and $901,649, respectively was due to accretion of discount on the note. Interest payable was $173,40033,064 as of March 31, 2023.2024.
Conversions Payable represents the economic difference between the applicable conversion price of the notes payable and floor price of $0.65. This amount is payable either in shares valued as the VWAP on the conversion day or in cash. If the VWAP on the conversion day is less than the floor price, then the economic different between the conversion day VWAP and the floor price becomes payable in cash and is recorded as Cash payable on the unaudited Condensed Balance Sheet. During the three months ended March 31, 2024, conversions payable increased by $190,622, and the aggregate $1,279,782 conversions payable was converted into 1,793,404 shares of common stock and $199,997 of Cash payable. The Cash payable was paid in April 2024 with the close of the Company's public offering (see Note 17).
NOTE 11.13. SERIES A PREFERRED STOCK
As of January 1, 2023,2024, there were 48,100 shares of Series A Preferred Stock outstanding. Holders of Series A Preferred Stock are entitled to cumulative dividends at a rate of 8% per annum when and if declared by the Board of Directors at its sole discretion. The dividends may be paid in cash or in the form of common stock (valued at 10% below market price, but not to exceed the lowest closing price during the applicable measurement period), at the discretion of the Board of Directors. The dividend rate on the Series A Preferred Stock is indexed to the Company's stock price and subject to adjustment.
The Series A Preferred Stock may be converted into shares of common stock at the option of the Company if the closing price of the common stock exceeds $1,160,000232, million, adjusted for reverse stock splits, for twenty consecutive trading days, or by the holder at any time. The Company has the right to redeem the Series A Preferred Stock at a price of $8.00 per share, plus any accrued and unpaid dividends, plus the make-whole amount (if applicable). At March 31, 2023,2024, the preferred shares were not eligible for conversion to common shares at the option of the Company. The holder of the preferred shares may convert to common shares at any time. After making adjustment for the Company’s prior reverse stock splits, all 48,100 outstanding Series A preferred shares are convertible into less than one common share. Upon any conversion (whether at the option of the Company or the holder), the holder is entitled to receive any accrued but unpaid dividends.
Except as otherwise required by law (or with respect to approval of certain actions), the Series A Preferred Stock shall have no voting rights. Upon any liquidation, dissolution or winding up of the Company, after payment or provision for payment of debts and other liabilities of the Company, the holders of Series A Preferred Stock shall be entitled to receive, pari passu
11
with any distribution to the holders of common stock of the Company, an amount equal to $8.00 per share of Series A Preferred Stock plus any accrued and unpaid dividends.
As of March 31, 2023,2024, there were 48,100 shares of Series A Preferred Stock outstanding and accrued and unpaid dividends of $477,526526,428.
NOTE 12.14. STOCKHOLDERS’ EQUITY (DEFICIT)
Common Stock
At March 31, 2023,2024, the Company had 500 million shares of common stock, $0.0001 par value, authorized for issuance. Each share of common stock has the right to one vote. As of March 31, 2023,2024, the Company had 37,491,9546,710,745 shares of common stock outstanding. The Company has not declared or paid any dividends related to the common stock during the three month ended March 31, 20232024 and 2022.2023.
During the three months ended March 31, 2023,2024, $2.75400,000 million of convertible debt was converted into 3,491,143618,384 shares of common stock and $1,279,782 of conversions payable was converted into 1,793,404 shares of common stock.
During the three months ended March 31, 2024, 715,111 of the pre-funded warrants were exercised into common stock.
Preferred Stock
At March 31, 2023,2024, the Company had 25 million shares of preferred stock, $0.0001 par value, authorized for issuance. Preferred stock may be issued in classes or series. Designations, powers, preferences, rights, qualifications, limitations and restrictions are determined by the Company’s Board of Directors.
12
The following table summarizes the designations, shares authorized, and shares outstanding for the Company’s Preferred Stock:
Preferred Stock Series Designation |
| Shares |
|
| Shares |
|
| Shares |
|
| Shares |
| ||||
Series A |
|
| 750,000 |
|
|
| 48,100 |
|
|
| 750,000 |
|
|
| 48,100 |
|
Series 1A |
|
| 5,000 |
|
|
| — |
|
|
| 5,000 |
|
|
| — |
|
Series B-1 |
|
| 2,000 |
|
|
| — |
|
|
| 2,000 |
|
|
| — |
|
Series 1B |
|
| 900 |
|
|
| — |
| ||||||||
Series B-2 |
|
| 1,000 |
|
|
| — |
|
|
| 1,000 |
|
|
| — |
|
Series C |
|
| 1,000 |
|
|
| — |
|
|
| 1,000 |
|
|
| — |
|
Series D |
|
| 3,000 |
|
|
| — |
|
|
| 3,000 |
|
|
| — |
|
Series D-1 |
|
| 2,500 |
|
|
| — |
|
|
| 2,500 |
|
|
| — |
|
Series E |
|
| 2,800 |
|
|
| — |
|
|
| 2,800 |
|
|
| — |
|
Series F |
|
| 7,000 |
|
|
| — |
|
|
| 7,000 |
|
|
| — |
|
Series G |
|
| 2,000 |
|
|
| — |
|
|
| 2,000 |
|
|
| — |
|
Series H |
|
| 2,500 |
|
|
| — |
|
|
| 2,500 |
|
|
| — |
|
Series I |
|
| 1,000 |
|
|
| — |
|
|
| 1,000 |
|
|
| — |
|
Series J |
|
| 1,350 |
|
|
| — |
|
|
| 1,350 |
|
|
| — |
|
Series J-1 |
|
| 1,000 |
|
|
| — |
|
|
| 1,000 |
|
|
| — |
|
Series K |
|
| 20,000 |
|
|
| — |
|
|
| 20,000 |
|
|
| — |
|
Warrants
As of March 31, 2023,2024, there are 3,929,3119,283,122 outstanding warrants with exercise prices between $3.931.76 and $5.301,060 per share.
Series A Preferred Stock
Refer to Note 1113 for information on Series A Preferred Stock.
12
Series 1A, B-1, B-2, C, D, D-1, E, F, G, H, I, J, J-1, and K Preferred Stock
There were no transactions involving the Series 1A, B-1, B-2, C, D, D-1, E, F, G, H, I, J, J-1, or K during the three months ended March 31, 2023.2024.
NOTE 13.15. SHARE-BASED COMPENSATION
TheIn January 2024, the Company granted459,000 shares of restricted stock units to the Company's Chief Executive Officeremployees and Chief Financial Officer and recognized share-based compensation expense related to restricted stock grantsdirectors. One third of $these shares vested on 1,404,450 for the three months ended March 31, 2023. On April 26, 2023, the2024. The remaining unvested shares will vest prorata on January 1, 2025 and January 1, 2026. The Company terminated its employment contract with the Company's Chief Executive Officer resulting in the forfeiturealso granted members of our advisory board an aggregate of 2,356,39420,000 shares of restricted stock units. These unvested shares will vest prorata on January 1, 2025 and January 1, 2026.
The remaining non-vested sharesCompany had a total of 513,333327,631 unvested units as of March 31, 2024 that are expected to vest in the future. Total unrecognized share-based compensation expense from the remaining unvested restricted stock as of March 31, 20232024 was approximately $1,529,7331,220,860 and is expected to be recognized over 331.75 months.years. The Company recognized share-based compensation expense related to restricted stock grants of $259,234 for the three months ended March 31, 2024. The following table summarizes non-vested restricted stock and the related activity as of March 31, 2023:2024:
|
| Shares |
|
| Weighted Average Grant Date Fair Value |
| ||
Non-vested at January 1, 2023 |
|
| 3,152,033 |
|
|
| 4.95 |
|
Vested |
|
| (282,306 | ) |
|
| 5.04 |
|
Non-vested at March 31, 2023 |
|
| 2,869,727 |
|
|
| 4.94 |
|
|
| Shares |
|
| Weighted Average Grant Date Fair Value |
| ||
Non-vested at January 1, 2024 |
|
| 1,867 |
|
| $ | 596.00 |
|
Granted |
|
| 479,000 |
|
|
| 0.77 |
|
Vested |
|
| (153,236 | ) |
|
| 1.68 |
|
Non-vested at March 31, 2024 |
|
| 327,631 |
|
| $ | 5.09 |
|
The fair values of the respective vesting dates of RSUs were approximately $60,400 and $237,700 for the three months ended March 31, 2024 and 2023, respectively.
13
NOTE 14.16. COMMITMENTS AND CONTINGENCIES
On April 26,August 15, 2023, the board of directors ofH.C. Wainwright & Co., LLC (“Wainwright”) filed an action against the Company terminated Jeffrey Max asin the New York State Supreme Court in New York County. The complaint alleges a breach by the Company of an investment banking engagement letter entered into in October 2021. The Wainwright engagement letter expired in April 2022 without any financing transaction having been completed. The complaint claims that Wainright is entitled, under a “tail provision”, to an 8% fee and 7% warrant coverage on the Company’s President$15 million secured convertible note financing. The complaint seeks damages of $1.2 million, 2,169.5 common stock warrants with a per share exercise price of $605, and Chief Executive Officer. Mr. Max claims that his termination was not for cause as defined in his employment agreement which could enable himattorney fees. Subsequent to certain benefits, including severance and vesting of restricted stock units. Management believes Mr. Max was terminated for cause and any such claims, if asserted, would be without substantial merit. Although the outcome of any legal proceedings is uncertain,March 31, 2024, the Company and Wainwright reached a proposed settlement agreement. The proposed settlement will vigorously defend any future claims made by Mr. Max.not have a material impact on our financial statements.
The Company is subject to various legal proceedings, both asserted and unasserted, that arise in the ordinary course of business. The Company cannot predict the ultimate outcome of such legal proceedings or in certain instances provide reasonable ranges of potential losses. However, as of the date of this report, the Company believes that none of these claims will have a material adverse effect on its financial position or results of operations. In the event of unexpected subsequent developments and given the inherent unpredictability of these legal proceedings, there can be no assurance that the Company’s assessment of any claim will reflect the ultimate outcome, and an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s financial position or results of operations in particular quarterly or annual periods.
NOTE 15.17. SUBSEQUENT EVENTS
OnAs part of the December 19, 2022 Securities Purchase Contract (the “Purchase Contract”) with April 14, 2023two institutional investors (the “Investors”), the Company enteredissued to the Private Placement with Lucro Investments VCC-ESG Opportunities Fundfor an approximate $9 million private placement of an aggregate of 7,499,997 shares of the Company’sInvestors certain common stock $0.0001 par value per share. The per share purchase price is $1.20 per share. The Private Placement will close in nine tranches of approximately $1 million. The first tranche is scheduled to close by May 8, 2023. The ninth and final tranche is scheduled to close in late December 2023. The Company has not received the first tranche funding pursuant to this agreement. Management continues to assess the status and viability of this agreement.
On April 17, 2023, the Company entered into an Asset Purchase Agreementwarrants (the “Asset Purchase Agreement”) with Flisom AG, a leading developer and manufacturer of photovoltaic thin film solar cells (“Seller”), pursuant to which, among other things, the Company purchased certain assets relating to thin-film photovoltaic manufacture and production from Seller (collectively, the “Assets”), including (i) certain manufacturing equipment located at Seller’s Niederhasli, Switzerland facility (the “Manufacturing Facility”) and (ii) related inventory and raw materials at the Manufacturing Facility (collectively, the “Transaction”). In connection with the Transaction, the Company also received a license to certain intellectual property rights used in the operation of the Assets and will also acquire, by operation of Swiss law, the employment contracts of certain employees of Seller in Switzerland who are functionally predominantly working with the Assets, subject to such employees being offered the right to remain employed by Seller after the closing of the Transaction (the “Closing”“Warrants”). The total consideration paid byWarrants have certain “full ratchet” anti-dilution adjustments that are triggered when the Company to Seller in connectionissues securities with the Transaction was an aggregate amount in cash equal to $2,800,000.
At the Closing, the Company and Seller also entered into (i) a Transition Services Agreement requiring that Seller provide transition support for the Company’s operation of the Assets, with fees to be due and payable by the Company for performance of such support services, (ii) a Sublease Agreement related to the Company’s use of the premises at the Manufacturing Facility where the Assets are located (the “Sublease Agreement”), and (iii) a Technology License Agreement, pursuant to which Seller granted the Company a revocable, non-exclusive license to certain intellectual property rights of the Seller used in the operation of the Assets (the “Licensed IP”), subject to certain encumbrances on the Licensed IP in favor of Seller’s lender.
On April 20, 2023, the Company entered into a letter agreement (the “Letter Agreement”) with FL1 Holding GmbH, a German company (“FL1”) that is affiliated with BD 1 Investment Holding, LLC (“BD1”), an affiliate of the Company, BD1 and BD Vermögensverwaltung GmbH (“BD”), the parent entity of FL1 (collectively, the “Affiliates”), in connection with the prospective acquisition by FL1 of substantially all shares in Seller following the Closing, subject to the satisfaction of certain terms and conditions. Pursuant to the Letter Agreement, among other things, FL1 and onepurchase or more of the Affiliates agreed, on behalf of itself and its affiliates (i) to certain noncompetition and nonsolicitation obligations with respect to the Company and the Assets, including certain prospective customers of the products produced using the Assets, for a period of five (5) years from the Closing, subject to certain exceptions, (ii) to cause Seller to use certain of its intellectual property rights for limited internal purposes until such time as a joint collaboration agreement is entered into after the Closing among Seller, the Company and certain other affiliates of FL1 related to the licensing and use of such intellectual property, and otherwise not to dispose of or fail to maintain such intellectual property, (iii) to reimburse the Company for certain pre-Closing liabilities of Seller to the
1413
extent incurredconversion, exercise or exchange price that is less than the exercise price of the Warrants then in effect at any time. Under the full ratchet anti-dilution adjustments, if the Company issues new securities at a price lower than the then applicable exercise price, (i) the exercise price is reduced to the lower new issue price and (ii) the number of warrant shares is proportionately increased. The Warrants have been previously adjusted following past issuances of Company securities. As of March 31, 2024, there were 5,596,232 Warrants exercisable at an exercise price of $1.765.
On March 6, 2024 and March 7, 2024, the Company entered into Warrant Repurchase Agreements (the “Repurchase Agreements”), with each of the Investors. Pursuant to the Repurchase Agreements, if the Company closes a new capital raising transaction with gross proceeds in excess of $5 million (“Qualified Financing”), the Company will repurchase the Warrants from the Investors for an aggregate purchase price of $3.6 million. Following the delivery of the purchase price to the Investors, the Investors will relinquish all rights, title and interest in the Warrants and assign the same to the Company, and the Warrants will be cancelled. On April 12, 2024, the Company entered into Amended and Restated Warrant Repurchase Agreements (the “Amendments”) with each of the Investors. Pursuant to the Amendments, on April 12, 2024, the Company and the Investors agreed to the following:
To extend the repurchase deadline, on April 12, 2024 the Company agreed to issue the Investors approximately 7.1 million warrants in aggregate at an exercise price of $0.14 per warrant. These warrants will be exercisable at any time, and from time to time, in whole or in part, commencing six months from the closing of the Transaction;offering and (iv) to indemnifyexpiring five and a half (5.5) years from the Companydate of issue, and will be exercisable for breachescash only unless an effective registration statement is not available at the time of certain representations, warranties and covenants relating toexercise, in which case the Assets.
Pursuant to the Letter Agreement, each of BD and BD1 have also agreed that (1) it and its affiliates will not offer to acquire or acquire, by merger, tender offer or otherwise, all or substantially all of the outstanding shares of capital stock of the Company not beneficially owned by BD and its affiliates, without the approval ofwarrants could be exercised on a committee comprised of disinterested and independent members of the Company’s Board of Directors and the affirmative vote of a majority of the voting power of outstanding shares of the Company not beneficially owned by BD and its affiliates; (2) BD and its affiliates will not transfer any shares of the Company’s capital stock beneficially owned by them unless the transferee agrees in writing to be bound by the foregoing restriction; and (3) each of them will stand behind the obligations of FL1 pursuant to the Letter Agreement.
The Letter Agreement also grants the Company the option, but not the obligation, (i) to purchase certain intellectual property rights of Seller relating to thin-film photovoltaic manufacture and production for $2,000,000 following the release of certain liens on such intellectual property rights in favor of Seller’s lender, and (ii) for a period of 12 months following the Closing, to resell the Assets to FL1 for an aggregate amount equal to $5,000,000, with such transaction to close within 90 days following the exercise of the Company’s resale right.cashless basis.
On April 19, 20239, 2024, the Company entered into a securities purchaseplacement agency agreement (“SPA”(the “Placement Agent Agreement”) with BD1Dawson James Securities Inc. (“Dawson James”) pursuant to which the Company engaged Dawson James as the placement agent for a registered public offering by the Company (the “Offering”), of up to $56 million privateof shares of common stock or, in lieu of common stock, one prefunded warrant to purchase a share of common stock on a best efforts basis.
The Company agreed to pay Dawson James a placement (the “BD1 Private Placement”) of subordinated promissory notes (the “Notes”). The BD1 Private Placement will closeagent fee in cash equal to four tranches with the first tranche (for $2 million) scheduled to close by May 15, 2023. The fourth and final tranche is scheduled to close in mid-August 2023. The maturity date of all the Notes is September 30, 2026. The Notes will bear interest at 68.00% per annum and are (i) unsecured, (ii) not convertible, and (iii) are subordinatedof the gross proceeds from the sale of the shares of common stock; provided, however, that the placement agent fee shall equal 4% for investors that the Company directs to the Company’s senior indebtedness.Offering. The Company also agreed to reimburse Dawson James for all reasonable travel and other out-of-pocket expenses, including the reasonable fees of legal counsel, not to exceed $155,000.
On April 18, 2024, the Company, completed closings under the Offering of common stock. Aggregate gross proceeds from all closings under the offering total $5.09 million before deducting offering expenses. In the completed closings, the Company has issued an aggregate of (i) 15,179,460 common shares and (ii) 21,162,277 Pre-Funded Warrants. The Pre-Funded Warrants are immediately exercisable at a price of $0.0001 per share of common stock and only expire when such Pre-Funded warrants are fully exercised.
The net proceeds from the closings of the Offering were utilized to retire approximately $200,000 of cash payable and $3.6 million to repurchase and cancel a total of 5,596,232 outstanding common warrants with an exercise price of $1.765 per share that were both issued with our secured notes issued in December 2022. The repurchase of these warrants eliminated a substantial potential future issuance of common stock at a substantially reduced price. These warrants would have been adjusted in accordance with their terms to provide for the purchase of 70,554,495 shares of the Company’s common stock at an exercise price of $0.14 if they had not received funding pursuant to this agreement.been repurchased by the Company.
Subsequent to March 31, 2023, Sabby and L1 converted approximately $2024, 3.1M principal into 12,153,0138,766,000 shares of Common Stock.the pre-funded warrants were exercised into common stock.
15
14
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and the notes to those financial statements appearing elsewhere in this Form 10-Q and our audited financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 20222023 which was filed with the SEC on March 10, 2023.February 21, 2024. This discussion and analysis contains statements of a forward-looking nature relating to future events or our future financial performance. As a result of many factors, our actual results may differ materially from those anticipated in these forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should carefully read the “Risk Factors” section of this Quarterly Report and of our Annual Report on Form 10-K for the year ended December 31, 20222023 to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitled “Forward-Looking Statements.”
Overview
We target high-volume production and high-value specialty solar markets. These include agrivoltaics, space, aerospace and high-value niche manufacturing/construction sectors. This strategy enables us to fully leverage what we believe are the unique advantages of our technology, including flexibility, durability and attractive power to weight and power to area performance. It further enables us to offer unique, differentiated solutions in large markets with less competition, and more attractive pricing.
Specifically, we focus on commercializing our proprietary solar technology in two high-value PV verticals:
I. Aerospace: Space, Near-space and Fixed Wing UAV
II. Agrivoltaics
We believe the value proposition of Ascent’s proprietary solar technology not only aligns with the needs of customers in these verticals, but also overcomes many of the obstacles other solar technologies face in these unique markets. Ascent has the capability to design and develop finished products for end users in these areas as well as collaborate with strategic partners to design and develop custom integrated solutions for products like airships and fixed-wing UAVs. Ascent sees significant overlap in the needs of end users across some of these verticals and believes it can achieve economies of scale in sourcing, development, and production in commercializing products for these customers.
The integration of Ascent's solar modules into space, near space, and aeronautic vehicles with ultra-lightweight and flexible solar modules is an important market opportunity for the Company. Customers in this market have historically required a high level of durability, high voltage and conversion efficiency from solar module suppliers, and we believe our products are well suited to compete in this premium market.
For the three months ended March 31, 2023,2024, we generated $124,2255,600 of total revenue. As of March 31, 2023,2024, we had an accumulated deficit of $453,511,214.$485,016,178.
Due to the high durability enabled by the monolithic integration employed by our technology, the capability to customize modules into different form factors and what we believe is the industry leading light weight and flexibility provided by our modules, we believe that the potential applications for our products are extensive, including integrated solutions anywhere that may need power generation such as vehicles in space or in flight, or dual-use installations on agricultural land.
1615
Commercialization and Manufacturing Strategy
We manufacture our products by affixing a thin CIGS layer to a flexible, plastic substrate using a large format, roll-to-roll process that permits us to fabricate our flexible PV modules in an integrated sequential operation. We use proprietary monolithic integration techniques which enable us to form complete PV modules with little to no back-end assembly cost of inter- cell connections. Traditional PV manufacturers assemble PV modules by bonding or soldering discrete PV cells together. This manufacturing step typically increases manufacturing costs and at times proves detrimental to the overall yield and reliability of the finished product. By reducing or eliminating this added step using our proprietary monolithic integration techniques, we believe we can achieve cost savings in, and increase the reliability of, our PV modules.
We plan to continue the development of our current PV technology to increase module efficiency, improve our manufacturing tooling and process capabilities and reduce manufacturing costs. We also plan to continue to take advantage of research and development contracts to fund a portion of this development.
In March, 2023, the Company redeployed its Thornton manufacturing facility to focus on industrial commercialization of the Company's patent-pending Perovskite solar technologies and has purchased manufacturing assets in Zurich, Switzerland where the Company plans to begin production of its PV modules.
Significant Trends, Uncertainties and Challenges
We believe the significant trends, uncertainties and challenges that directly or indirectly affect our financial performance and results of operations include:
17
Basis of Presentation: The accompanying unaudited condensed financial statements have been derived from the accounting records of Ascent Solar Technologies, Inc. as of March 31, 20232024 and December 31, 2022,2023, and the results of operations for the three months ended March 31, 20232024 and 2022.2023.
16
Critical Accounting Policies and Estimates
Critical accounting policies used in reporting our financial results are reviewed by management on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Processes used to develop these estimates are evaluated on an ongoing basis. Estimates are based on historical experience and various other assumptions that are believed to be reasonable for making judgments about the carrying value of assets and liabilities. Actual results may differ as outcomes from assumptions may change.
The Company’s significant accounting policies were described in Note 32 to the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Except for the adoption of ASU 2020-06, there have been no significant changes to our accounting policies as of March 31, 2023.
Results of Operations
Comparison of the Three Months Ended March 31, 20232024 and 20222023
|
| Three Months Ended |
|
|
|
|
| Three Months Ended |
|
|
|
| ||||||||||||
|
| 2023 |
|
| 2022 |
|
| $ Change |
|
| 2024 |
|
| 2023 |
|
| $ Change |
| ||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Products |
| $ | 99,225 |
|
| $ | 54,210 |
|
| $ | 45,015 |
|
| $ | 5,600 |
|
| $ | 99,225 |
|
| $ | (93,625 | ) |
Milestone and engineering |
|
| 25,000 |
|
|
| 512,000 |
|
|
| (487,000 | ) |
|
| - |
|
|
| 25,000 |
|
|
| (25,000 | ) |
Total Revenues |
|
| 124,225 |
|
|
| 566,210 |
|
|
| (441,985 | ) |
|
| 5,600 |
|
|
| 124,225 |
|
|
| (118,625 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Costs and Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Cost of Revenue |
|
| 461,795 |
|
|
| 532,890 |
|
|
| (71,095 | ) |
|
| 9,388 |
|
|
| 461,795 |
|
|
| (452,407 | ) |
Research, development and |
|
| 1,665,694 |
|
|
| 1,406,322 |
|
|
| 259,372 |
|
|
| 607,233 |
|
|
| 1,665,694 |
|
|
| (1,058,461 | ) |
Selling, general and administrative |
|
| 1,591,821 |
|
|
| 821,266 |
|
|
| 770,555 |
|
|
| 1,060,041 |
|
|
| 1,591,821 |
|
|
| (531,780 | ) |
Share-based compensation |
|
| 1,404,450 |
|
|
| - |
|
|
| 1,404,450 |
|
|
| 259,234 |
|
|
| 1,404,450 |
|
|
| (1,145,216 | ) |
Depreciation and amortization |
|
| 25,781 |
|
|
| 16,665 |
|
|
| 9,116 |
|
|
| 20,757 |
|
|
| 25,781 |
|
|
| (5,024 | ) |
Impairment loss |
|
| 524,481 |
|
|
| - |
|
|
| 524,481 |
| ||||||||||||
Total Costs and Expenses |
|
| 5,149,541 |
|
|
| 2,777,143 |
|
|
| 2,372,398 |
|
|
| 2,481,134 |
|
|
| 5,149,541 |
|
|
| (2,668,407 | ) |
Loss From Operations |
|
| (5,025,316 | ) |
|
| (2,210,933 | ) |
|
| (2,814,383 | ) |
|
| (2,475,534 | ) |
|
| (5,025,316 | ) |
|
| 2,549,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Other Income/(Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Other income/(expense), net |
|
| 10,000 |
|
|
| - |
|
|
| 10,000 |
|
|
| 64,323 |
|
|
| 10,000 |
|
|
| 54,323 |
|
Interest Expense |
|
| (1,068,036 | ) |
|
| (2,086,314 | ) |
|
| 1,018,278 |
|
|
| (126,555 | ) |
|
| (1,068,036 | ) |
|
| 941,481 |
|
Total Other Income/(Expense) |
|
| (1,058,036 | ) |
|
| (2,086,314 | ) |
|
| 1,028,278 |
|
|
| (62,232 | ) |
|
| (1,058,036 | ) |
|
| 995,804 |
|
Income/(Loss) on Equity Method Investments |
|
| - |
|
|
| (2 | ) |
|
| 2 |
|
|
| 24 |
|
|
| - |
|
|
| 24 |
|
Net (Loss)/Income |
| $ | (6,083,352 | ) |
| $ | (4,297,249 | ) |
| $ | (1,786,103 | ) |
| $ | (2,537,742 | ) |
| $ | (6,083,352 | ) |
| $ | 3,545,610 |
|
Comparison of the Three Months Ended March 31, 20232024 and 20222023
Total Revenues. Our total revenues decreased by $441,985,$118,625, or 78%95%, for the three months ended March 31, 20232024 when compared to the same period in 2022.2023. The decrease was primarily due to milestonea customer order and engineering revenue in 2022 from TubeSolar, a related party, of $512,000 that wasthe prior period were not repeated in 2023.the current period.
Cost of revenue. Cost of revenues is primarily comprised of repair and maintenance, material costs, and direct labor and overhead expenses. Our Cost of revenues decreased by $71,095,$452,407, or 13%98%, for the three months ended March 31, 20232024 when compared to the same period in 2022.2023. This decrease is primarily due primarily to a decrease in manufacturing activities, as the Company redeploying its Thornton manufacturing facility to focusfocused on industrial commercialization ofproduct and technology improvements in the Company's patent-pending Perovskite solar technologies resulting in lower cost of revenue.current period.
18
Research, development and manufacturing operations. Research, development and manufacturing operations costs include costs incurred for product development, pre-production and production activities in our manufacturing facility. Research, development and manufacturing operations costs also include costs related to technology development. Research, development and manufacturing operations costs increaseddecreased by $259,372,$1,058,461, or 18%64%, for the three months ended March 31, 20232024 when
17
compared to the same period in 2022.2023. This is primarily due primarily to a decrease in preproduction and manufacturing activities, as the Company redeployingfocused on product and technology improvements in the Thornton manufacturing facility as a Perovskite Center of Excellence and focusing on patent-pending Perovskite solar technologies.current period.
Selling, general and administrative. Selling, general and administrative expenses increaseddecreased by $770,555,$531,780, or 94%33%, for the three months ended March 31, 20232024 when compared to the same period in 2022.2023. The increasedecrease in costs is due primarily to increaseddecreased personnel compensation and administrative costs.
Share-based compensation. Share-based compensation expense increaseddecreased by $1,404,450$1,145,216 or 100%82% for the three months ended March 31, 20232024 when compared to the same period in 2022.2023. The increasedecrease is due to the employment agreement betweentermination of former CEO in April 2023. This is partially offset with Company's grant to employees, directors, and advisory board in 2024.
Impairment loss. The Company recognized an impairment loss of $524,481 on the manufacturing assets purchased from Flisom during the three months ended March 31, 2024 . The Company anddid not recognize an impairment loss during the CEO and CFO for restricted stock units.same period in 2023.
Other Income/Expense. Other expense was $1,058,036$62,232 for the three months ended March 31, 2023,2024, compared to other expense of $2,086,314$1,058,036 for the same period in 2022,2023, a decline of $1,028,278.$995,804. The decline is due primarily to a decrease in interest expense resulting from the convertible debt conversions and the accelerated recognitionaccretion of debt discount and interest expense on the convertible debt recognized in the prior year.period.
Net Loss. Our Net Loss increaseddecreased by $1,786,103,$3,545,610, or 42%58%, for the three months ended March 31, 20232024 compared to the same period in 20222023 due primarily to the items mentioned above.
Liquidity and Capital Resources
The Company currently has redeployedlimited PV production at its Thornton facilities from a manufacturing facility to a research and development facility. Additionally, the Company purchased manufacturing equipment in Zurich, Switzerland where the Company plans to begin production. The Company does not expect that sales revenue and cash flows will be sufficient to support operations and cash requirements until it has fully implementedrestarted its product strategy.production at industrial scale and achieved desired improvements to its PV products. During the three months ended March 31, 20232024 the Company used $4,937,627$1,197,861 in cash for operations.
Additionally, projected total revenues are not anticipated to result in a positive cash flow position for the year overall and, as of March 31, 2023, although2024, the Company has working capital deficit of $1,481,943, Management does not believe cash liquidity is sufficient$4,724,265. As such, additional financing will be required for the next twelve months and will require additional financing.Company to reach a level of sufficient sales to achieve profitability.
The Company has beguncontinues activities related to securing additional financing through strategic or financial investors, but there is no assurance the Company will be able to raise additional capital on acceptable terms or at all. If the Company’s revenues do not increase rapidly, and/or additional financing is not obtained, the Company will be required to significantly curtail operations to reduce costs and/or sell assets. Such actions would likely have an adverse impact on the Company's future operations.
As a result of the Company’s recurring losses from operations, and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises doubt as to the Company’s ability to continue as a going concern.
Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These condensed financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Statements of Cash Flows Comparison of the Three Months Ended March 31, 20232024 and 20222023
For the three months ended March 31, 2023,2024, our cash used in operations was $4,937,627$1,197,861 compared to $2,792,080$4,937,627 for the three months ended March 31, 2022, an increase2023, a decrease of $2,145,547.$3,739,766. This increasedecrease is primarily due primarily to increaseda decrease in manufacturing activities, as the Company expensescontinues to focus on product and timing of when expenses have been paid.technology improvements. For the three months ended March 31, 2023,2024, cash used in investing activities was $54,534$0 compared to $141,318$54,534 used in investing activities for the three months ended March 31, 2022.2023. This change was primarily the result of a decrease purchase of equipment and contributions to Ascent Germany.equipment. During the three months ended March 31, 2023,2024, net cash used in operations of $4,937,627$1,197,861 were primarily funded from 20222023 financing agreements.
1918
Off Balance Sheet Transactions
As of March 31, 2023,2024, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Smaller Reporting Company Status
We are a “smaller reporting company” meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. As a smaller reporting company, we may rely on exemptions from certain disclosure requirement that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and smaller reporting companies have reduced disclosure obligations regarding executive compensation.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Foreign Currency Exchange Risk
We hold no significant funds and have no significant future obligations denominated in foreign currencies as of March 31, 2023.2024.
Although our reporting currency is the U.S. Dollar, we may conduct business and incur costs in the local currencies of other countries in which we may operate, make sales and buy materials. As a result, we are subject to currency translation risk. Further, changes in exchange rates between foreign currencies and the U.S. Dollar could affect our future net sales and cost of sales and could result in exchange losses.
Interest Rate Risk
Our exposure to market risks for changes in interest rates relates primarily to our cash equivalents and investment portfolio. As of March 31, 2023,2024, our cash equivalents consisted only of operating accounts held with financial institutions. From time to time, we may hold restricted funds, money market funds, investments in U.S. government securities and high-quality corporate securities. The primary objective of our investment activities is to preserve principal and provide liquidity on demand, while at the same time maximizing the income we receive from our investments without significantly increasing risk. The direct risk to us associated with fluctuating interest rates is limited to our investment portfolio, and we do not believe a change in interest rates will have a significant impact on our financial position, results of operations, or cash flows.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosures. Our management conducted an evaluation required by Rules 13a-15 and 15d-15 under the Exchange Act of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 and 15d-15 under the Exchange Act as of March 31, 2023.2024. Based on this evaluation, our management concluded the design and operation of our disclosure controls and procedures were effective as of March 31, 2023.2024.
Changes in Internal Control Over Financial Reporting
There were no changes in internal control over financial reporting during the three months ended March 31, 20232024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
2019
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not currently awareExcept as discussed in Note 16 to the financial statements, there were no events required to be reported under Item 1 for the three months ended March 31, 2024, within Part II, Item 1 of any such proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations.this report.
Item 1A. Risk Factors
In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors disclosed under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022.2023. Except as set forth below, there have been no material changes to our risk factors from those included in our Annual Report on Form 10-K for the year ended December 31, 2022.2023.
We may not be able to maintain our current listing for our common stock on the Nasdaq Capital Market. Our inability to maintain our current listing on Nasdaq may limit the liquidity of our stock, increase its volatility, and hinder our ability to raise capital. If our common stock is delisted by Nasdaq, our common stock may be eligible for quotation on an over-the-counter quotation system or on the pink sheets. Upon any such delisting, our common stock would become subject to the regulations of the SEC relating to the market for penny stocks. A penny stock is any equity security not traded on a national securities exchange that has a market price of less than $5.00 per share. The regulations applicable to penny stocks may severely affect the market liquidity for our common stock and could limit the ability of shareholders to sell securities in the secondary market. In such a case, an investor may find it more difficult to dispose of or obtain accurate quotations as to the market value of our common stock, and there can be no assurance that our common stock will be eligible for trading or quotation on any alternative exchanges or markets.
Delisting from Nasdaq could adversely affect our ability to raise additional financing through public or private sales of equity securities, would significantly affect the ability of investors to trade our securities and would negatively affect the value and liquidity of our common stock. Delisting could also have other negative results, including the potential loss of confidence by employees, the loss of institutional investor interest and fewer business development opportunities.
Nasdaq Bid Price Notice
OurOn December 11, 2023, the Company received a written notice (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that the Company is not in compliance with the $1.00 Minimum Bid Price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market (the “Bid Price Requirement”).
The Notice does not result in the immediate delisting of the Company’s common stock was listed on Nasdaq on August 24, 2022.from The Nasdaq listing rulesCapital Market.
The Nasdaq Listing Rules require listed securities to maintain a minimum bid price of $1.00 per share. On March 23, 2023,share and, based upon the Company received a written notice from Nasdaq indicating that the Company was not in compliance with the $1.00 minimumclosing bid price requirement. The notice did not result in the immediate delisting of the Company’s common stock from Nasdaq andfor the 30 consecutive business days for the period October 27 through December 8, 2023, the Company wasno longer meets this requirement.
The Notice indicated that the Company will be provided 180 calendar days (or June 10, 2024) in which to regain compliance. If at any time during this 180 calendar day period the bid price of the Company’s common stock closes at or above $1.00 per share for a minimum of ten consecutive business days, the Nasdaq staff (the “Staff”) will provide the Company with a written confirmation of compliance and the matter will be closed.
Alternatively, if the Company fails to regain compliance with the bid price ruleRule 5550(a)(2) prior to the expiration of the initial 180 calendar day period, the Company may be eligible for an additional 180 calendar day compliance period, provided (i) it meets the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on The Nasdaq Capital Market (except for the bid price requirement)Bid Price Requirement) and (ii) it provides written notice to Nasdaq of its intention to cure this deficiency during the second compliance period by effecting a reverse stock split, if necessary. In the event the Company does not regain compliance with the bid price ruleRule 5550(a)(2) prior to the expiration of the initial 180 calendar day period, and if it appears to the Nasdaq staffStaff that the Company will not be able to cure the deficiency, or if the Company is not otherwise
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eligible, the Nasdaq staffStaff will provide the Company with written notification that its securities are subject to delisting from Nasdaq.The Nasdaq Capital Market. At that time, the Company may appeal the delisting determination to a Nasdaq hearings panel.Hearings Panel.
The Company intends to monitor the closing bid price of its common stock and is considering its options to regain compliance with the Bid Price Requirement. The Company’s receipt of the Notice does not affect the Company’s reporting requirements with the Securities and Exchange Commission.
Nasdaq Stockholder Equity Requirement
Nasdaq Listing Rule 5550(b)(1) requires companies listed on Nasdaq to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing. On July 28, 2023, Staff notified the Company that the Equity Rule served as an additional and separate basis for delisting. The Company requested a hearing, which was scheduled for October 12, 2023 (the “October Hearing”). On October 2, 2023, the Company completed a public offering of units for gross proceeds of $10.3 million and regained compliance with the Equity Rule. As a result, on October 11, 2023, the Company did not have to attend the October Hearing.
On March 5, 2024, the Company received notice (the “Second Notice”) from the Staff stating that the Company is not in compliance with the Equity Rule, as, the Company reported stockholders’ equity of $(1,526,611) in its Form 10-K for the year ended December 31, 2023. In our quarterly report on Form 10-Q for the period ended March 31, 2023,2024, the Company reported stockholders’ equity of $(2,180,440)$(2,550,139).
As a result, the Staff determined to delist the Company’s Common Stock from Nasdaq, unless the Company timely requests an appeal of the Staff’s determination to a Hearings Panel (the “Panel”), pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series.
The Company therefore, may shortly receivehas a written notice from Nasdaq indicating that we are not inhearing on May 9, 2024 before the Panel to appeal the Second Notice and to address compliance with minimum stockholders’ equity requirement.the Equity Rule.
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TableWhile the appeal process is pending, the suspension of Contents
Typically, such a notice would have no immediate on the listingtrading of the Company’s common stock. Nasdaq would typically provides the Company with 45 calendar days to submit a plan to regain compliance. If the plan is accepted, the Company would typicallystock will be granted up to 180 calendar days from notice date to evidence compliance. There can be no assurance that the Company would be able to regain compliance with all applicable continued listing requirements or that its plan would be accepted by the Nasdaq staff. In the event the plan would not be accepted by the Nasdaq staff, or in the event the plan would be acceptedstayed and the extension granted butcommon stock will continue to trade on Nasdaq through the Company fails to regain compliance within the plan period, the Company would have the right to a hearing before an independent panel. The hearing request would stay any suspension or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the panelPanel following the hearing.
There are no assurances however, that a favorable decision will be obtained from the Panel.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable.
Issuer Purchases of Equity Securities
We did not repurchase any of our equity securities during the three months ended March 31, 2023.2024.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
22Rule 10b5-1 Sales Plans
Our policy governing transactions in our securities by directors, officers, and employees permits our officers, directors, and certain other persons to enter into trading plans complying with Rule 10b5-1 under the Exchange Act. Generally, under these trading plans, the individual relinquishes control over the transactions once the trading plan is put into place and can only
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put such plans into place while the individual is not in possession of material non-public information. Accordingly, sales under these plans may occur at any time, including possibly before, simultaneously with, or immediately after significant events involving our company.
During the first quarter of 2024, none of our directors or executive officers had a Rule 10b5-1 plan in effect.
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Item 6. Exhibits
The exhibits listed on the accompanying Index to Exhibits on this Form 10-Q are filed or incorporated into this Form 10-Q by reference.
EXHIBIT INDEX
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3.17 3.18 3.19 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13* Form of 2024 Common Stock Warrants issued to extend the Warrant Repurchase Agreements 10.1 CTR 10.2 CTR 10.3 24 10.4 CTR 10.5 10.6 CTR 10.7 10.8† 10.9† 10.14 10.15 10.16 10.17 10.20†CTR 10.22† 10.37 10.38 10.39 10.40† 10.41† 10.42† 10.43 10.44 10.45 31.1* Chief Executive Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 26 31.2* Chief Financial Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 32.1* Chief Executive Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002 32.2* Chief Financial Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith CTR Portions of this exhibit have been omitted pursuant to a request for confidential treatment. † Denotes management contract or compensatory plan or arrangement. + Certain portions of the exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed. ASCENT SOLAR TECHNOLOGIES, INC. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the May By: /s/ PAUL WARLEY Paul Warley Chief Executive Officer (Principal Executive Officer) May By: /s/ JIN H. JO Jin H. Jo Chief Financial Officer (Principal Financial and Accounting Officer) 2310.910.10†10.10+10.11+10.11+10.12+10.1210.1310.1310.1810.14†10.19†10.15†10.21†10.1610.2310.1710.24242510.1810.2510.1910.2610.2010.2710.2110.2810.2210.2910.2310.3010.2410.3110.2510.3210.2610.3310.2710.3410.2810.3510.29 10.30 10.31†10.36†101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document101.LABInline XBRL Taxonomy Extension Label Linkbase Document101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document25262715th9th day of May, 2023.2024.15, 20239, 202415, 20239, 20242728