UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)





☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2023~~March 31, 2024




☐	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)




Delaware		20-3672603
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

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 ~~Markets~~Market

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:

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 ~~November 14, 2023,~~May 9, 2024, there were ~~3,406,723~~30,735,501 shares of our common stock issued and outstanding.

ASCENT SOLAR TECHNOLOGIES, INC.

Quarterly Report on Form 10-Q

For the Period Ended ~~September 30, 2023~~March 31, 2024

Table of Contents


PART I. FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Financial Statements	1
	Unaudited Condensed Balance Sheets - as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023	1
	Unaudited Condensed Statements of Operations and Comprehensive Income - For the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~	2
	Unaudited Condensed Statements of Changes in Stockholders’ Equity (Deficit) - ~~For~~for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~	3
	Unaudited Condensed Statements of Cash Flow - For the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~	5
	Notes to the Unaudited Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2015
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2519
Item 4.	Controls and Procedures	2519
PART II. OTHER INFORMATION		2720
Item 1.	Legal Proceedings	2720
Item 1A.	Risk Factors	2720
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2821
Item 3.	Defaults Upon Senior Securities	2821
Item 4.	Mine Safety Disclosures	2821
Item 5.	Other Information	2821
Item 6.	Exhibits	2923
SIGNATURES		3328

Table of Contents

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:

•

Our operating history and lack of profitability;

•

Our ability to develop demand for, and sales of, our products;

•

Our ability to attract and retain qualified personnel to implement our business plan and corporate growth strategies;

•

Our ability to develop sales, marketing and distribution capabilities;

•

Our ability to successfully develop and maintain strategic relationships with key partners;

•

The accuracy of our estimates and projections;

•

Our ability to secure additional financing to fund our short-term and long-term financial needs;

•

Our ability to maintain the listing of our common stock on the Nasdaq Capital Market.

•

The commencement, or outcome, of legal proceedings against us, or by us, including ongoing litigation proceedings;

•

Changes in our business plan or corporate strategies;

•

The extent to which we are able to manage the growth of our operations effectively, both domestically and abroad, whether directly owned or indirectly through licenses;

•

The supply, availability and price of equipment, components and raw materials, including the elements needed to produce our photovoltaic modules;

•

Our ability to expand and protect the intellectual property portfolio that relates to our photovoltaic modules and processes;

•

Our ability to maintain effective internal controls over financial reporting;

•

Our ability to achieve projected operational performance and cost metrics;

•

General economic and business conditions, and in particular, conditions specific to the solar power industry;

•

~~The impact of the novel coronavirus (“COVID-19”) pandemic on our business, results of operations, cash flows, financial condition and liquidity;~~ and

•

Other risks and uncertainties discussed in greater detail elsewhere in this Quarterly Report and in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

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.

Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

PART I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

CONDENSED BALANCE SHEETS

(unaudited)


	September 30,			December 31,			March 31,			December 31,
	2023			2022			2024			2023
ASSETS
Current Assets:
Cash and cash equivalents	$	2,249,764		$	11,483,018		$	187,474		$	1,048,733
Trade receivables, net of allowance of $0 and $26,000, respectively		-			1,769
Trade receivables, net of allowance of $0 and $0, respectively								-			-
Inventories, net		636,019			615,283			448,756			447,496
Prepaid and other current assets		258,691			344,110			246,706			39,279
Total current assets		3,144,474			12,444,180			882,936			1,535,508

Property, Plant and Equipment:		24,182,295			22,590,169			19,901,016			21,177,892
Accumulated depreciation		(20,125,328	)		(22,038,508	)		(19,395,659	)		(20,131,008	)
Property, Plant and Equipment, net		4,056,967			551,661			505,357			1,046,884

Other Assets:
Operating lease right-of-use assets, net		2,476,958			4,324,514			2,249,042			2,364,672
Patents, net of accumulated amortization of $168,595 and $154,218 respectively		84,925			79,983
Patents, net of accumulated amortization of $177,099 and $173,387 respectively								50,266			53,978
Equity method investment		65,779			61,379			67,179			68,867
Other non-current assets		1,327,543			1,214,985			1,228,399			1,228,797
		3,955,205			5,680,861			3,594,886			3,716,314
Total Assets	$	11,156,646		$	18,676,702		$	4,983,179		$	6,298,706
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	1,300,814		$	595,157		$	1,214,116		$	579,237
Related party payables		27,885			67,164			33,846			4,231
Accrued expenses		984,568			888,869			1,215,560			1,354,159
Accrued payroll		585,774			927,264			234,914			160,477
Accrued professional services fees		791,679			952,573			933,872			849,282
Accrued interest		668,495			559,060			653,199			628,145
Current portion of operating lease liability		471,497			733,572			512,158			491,440
Conversions payable (Note 11)		6,470,540			-
Conversions payable (Note 12)								-			1,089,160
Cash payable (Note 12)								199,997			-
Current portion of convertible notes, net		319,541			-			6,270			354,936
Bridge loan								353,269			-
Other payable		250,000			250,000			250,000			250,000
Total current liabilities		11,870,793			4,973,659			5,607,201			5,761,067
Long-Term Liabilities:
Non-current operating lease liabilities		2,171,440			3,827,878			1,904,892			2,043,025
Non-current convertible notes, net		-			5,268,399
Accrued warranty liability		21,225			21,225			21,225			21,225
Total liabilities		14,063,458			14,091,161			7,533,318			7,825,317
Commitments and contingencies (Note 16)
Stockholders’ Equity (Deficit):
Series A preferred stock, $.0001 par value; 750,000 shares authorized; 48,100 and 48,100 shares issued and outstanding, respectively ($886,777 and $850,301 Liquidation Preference, respectively)		5			5
Common stock, $0.0001 par value, 500,000,000 authorized; 549,199 and 259,323 shares issued and outstanding, respectively		55			26
Series A preferred stock, $.0001 par value; 750,000 shares authorized; 48,100 and 48,100 shares issued and outstanding, respectively ($911,228 and $899,069 Liquidation Preference, respectively)								5			5
Common stock, $0.0001 par value, 500,000,000 authorized; 6,710,745 and 3,583,846 shares issued and outstanding, respectively								671			358
Additional paid in capital		468,075,287			452,139,027			482,458,139			480,942,526
Accumulated deficit		(470,987,945	)		(447,537,493	)		(485,016,178	)		(482,478,436	)
Accumulated other comprehensive loss		5,786			(16,024	)
Accumulated other comprehensive income (loss)								7,224			8,936
Total stockholders’ equity (deficit)		(2,906,812	)		4,585,541			(2,550,139	)		(1,526,611	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	11,156,646		$	18,676,702		$	4,983,179		$	6,298,706

The accompanying notes are an integral part of these unaudited condensed financial statements.

Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2023			2022			2023			2022			2024			2023
Revenues
Products	$	209,496		$	6,344		$	395,106		$	688,125		$	5,600		$	99,225
Milestone and engineering		20,458			-			60,374			522,000			-			25,000
Total Revenues		229,954			6,344			455,480			1,210,125			5,600			124,225
Costs and Expenses
Costs of revenue		692,752			409,819			1,820,816			1,519,703			9,388			461,795
Research, development and manufacturing operations		344,942			1,540,170			2,832,956			4,399,765			607,233			1,665,694
Selling, general and administrative		1,407,493			1,890,218			4,178,146			3,583,366			1,060,041			1,591,821
Share-based compensation		139,067			3,796,151			2,104,378			3,796,151			259,234			1,404,450
Depreciation and amortization		23,723			20,497			73,947			54,998			20,757			25,781
Impairment loss														524,481			-
Total Costs and Expenses		2,607,977			7,656,855			11,010,243			13,353,983			2,481,134			5,149,541
Loss from Operations		(2,378,023	)		(7,650,511	)		(10,554,763	)		(12,143,858	)		(2,475,534	)		(5,025,316	)
Other Income/(Expense)
Other income/(expense), net		756,859			20,000			766,859			22,000			64,323			10,000
Interest expense		(288,109	)		(252,571	)		(2,118,023	)		(2,371,256	)		(126,555	)		(1,068,036	)
Total Other Income/(Expense)		468,750			(232,571	)		(1,351,164	)		(2,349,256	)		(62,232	)		(1,058,036	)
Income/(Loss) on Equity Method Investments		-			(27,484	)		(170	)		(27,486	)		24			-
Net Income/(Loss)		(1,909,273	)		(7,910,566	)		(11,906,097	)		(14,520,600	)	$	(2,537,742	)	$	(6,083,352	)
Net Income/(Loss) Per Share (Basic and Diluted)	$	(4.04	)	$	(47.71	)	$	(66.40	)	$	(101.70	)	$	(0.53	)	$	(34.21	)
Weighted Average Common Shares Outstanding (Basic)		473,159			165,795			354,830			14,277			4,758,077			177,850
Weighted Average Common Shares Outstanding (Diluted)		473,159			165,795			354,830			14,277			4,758,077			177,850
Other Comprehensive Income/(Loss)
Foreign currency translation gain/(loss)		19,940			(2,671	)		21,810			(16,024	)		(1,712	)		6,706
Net Comprehensive Income/(Loss)	$	(1,889,333	)	$	(7,913,237	)	$	(11,884,287	)	$	(14,536,624	)	$	(2,539,454	)	$	(6,076,646	)

The accompanying notes are an integral part of these unaudited condensed financial statements.

Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(unaudited)

For the Three ~~and Nine~~ Months Ended ~~September 30, 2023~~March 31, 2024

Series A
Preferred Stock

Series 1B
Preferred Stock

Common Stock

Additional
Paid-In

Accumulated

Other Accumulated Comprehensive

Total
Stockholders’
Equity

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Loss

(Deficit)

Balance at January 1, 2023

48,100

$
5

-

$
-

259,323

$
26

$
452,139,027

$
(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

-

$
-

259,323

$
26

$
448,343,153

$
(447,427,862
)

$
(16,024
)

$
899,298

Conversion of L1 Note
   into Common Stock

-

-

-

-

45,129

5

1,240,813

-

-

1,240,818

Conversion of Sabby Note into
   Common Stock

-

-

-

-

63,030

6

2,123,643

-

-

2,123,649

Share-based compensation

-

-

-

-

-

-

1,965,311

-

-

1,965,311

Common stock issued for services

-

-

-

-

1,425

-

92,750

-

-

92,750

Proceeds from issurance of
   Series 1B Preferred Stock

-

-

900

-

-

-

900,000

-

-

900,000

Preferred Stock issuance cost

(20,000
)

(20,000
)
Down round deemed dividend

-

-

-

-

-

-

11,653,986

(11,653,986
)

-

-

Net Loss

-

-

-

-

-

-

-

(9,996,824
)

-

(9,996,824
)
Foreign Currency Translation
   Gain/(Loss)

-

-

-

-

-

-

-

-

1,870

1,870

Balance at June 30, 2023

48,100

$
5

900

$
-

368,907

$
37

$
466,299,656

$
(469,078,672
)

$
(14,154
)

$
(2,793,128
)
Conversion of L1 Note
   into Common Stock

-

-

-

-

106,250

11

(603,668
)

-

-

(603,657
)
Conversion of Sabby Note into
   Common Stock

-

-

-

-

74,042

7

151,942

-

-

151,949

Prepayment of Common Stock
   purchase

-

-

-

-

-

-

2,088,290

-

-

2,088,290

Share-based compensation

-

-

-

-

-

-

139,067

-

-

139,067

Net Loss

-

-

-

-

-

-

-

(1,909,273
)

-

(1,909,273
)
Foreign Currency Translation
   Gain/(Loss)

-

-

-

-

-

-

-

-

19,940

19,940

Balance at September 30, 2023

48,100

$
5

900

$
-

549,199

$
55

$
468,075,287

$
(470,987,945
)

$
5,786

$
(2,906,812
)


	Series A Preferred Stock				Common Stock				Additional Paid-In			Accumulated			Other Accumulated Comprehensive			Total Stockholders’ Equity
	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 Payable into Common Stock		-		-		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 Loss		-		-		-		-		-			-			(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.

Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(unaudited)

For the Three ~~and Nine~~ Months Ended ~~September 30, 2022~~March 31, 2023

Series A
Preferred Stock

Series 1A
Preferred Stock

Common Stock

Additional
Paid-In

Accumulated

Other Accumulated Comprehensive

Total
Stockholders’
Equity

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Loss

(Deficit)

Balance at January 1, 2022

48,100

$
5

3,700

$
-

113,256

$
12

$
424,949,165

$
(427,782,788
)

$
-

$
(2,833,606
)
Conversion of TubeSolar Series 1A
   Preferred Stock into Common
   Stock

-

-

(2,400
)

-

24,000

2

(2
)

-

-

-

Conversion of Crowdex Series 1A
   Preferred Stock into Common
   Stock

-

-

(1,300
)

-

13,000

1

(1
)

-

-

-

Conversion of BD1 Note
   into Common Stock

-

-

-

-

79,000

8

7,899,992

-

-

7,900,000

Conversion of Nanyang Note
   into Common Stock

-

-

-

-

6,000

1

599,999

-

-

600,000

Conversion of Fleur Note into
   Common Stock

-

-

-

-

7,000

1

699,999

-

-

700,000

Net Loss

-

-

-

-

-

-

-

(6,610,034
)

-

(6,610,034
)
Foreign Currency Translation
   Gain/(Loss)

-

-

-

-

-

-

-

-

(13,353
)

(13,353
)
Balance at June 30, 2022

48,100

$
5

-

$
-

242,256

$
25

$
434,149,152

$
(434,392,822
)

$
(13,353
)

$
(256,993
)
Conversion of Nanyang Note
   into Common Stock

-

-

-

-

9,000

1

899,999

-

-

900,000

Conversion of Fleur Note into
   Common Stock

-

-

-

-

3,000

-

300,000

-

-

300,000

Proceeds from private placement:

-

-

-

-

-

-

-

-

-

   Common stock (8/19 @$540)

-

-

-

-

4,717

-

2,551,405

-

-

2,551,405

  Warrants (8/19 @ $346)

-

-

-

-

-

-

2,448,595

-

-

2,448,595

Private placement costs

-

-

-

-

-

-

(119,617
)

-

-

(119,617
)
Share-based compensation

-

-

-

-

-

-

3,796,150

-

-

3,796,150

Net Loss

-

-

-

-

-

-

-

(7,910,566
)

-

(7,910,566
)
Foreign Currency Translation
   Gain/(Loss)

-

-

-

-

-

-

-

-

(2,671
)

(2,671
)
Balance at September 30, 2022

48,100

$
5

-

$
-

258,973

$
26

$
444,025,684

$
(442,303,388
)

$
(16,024
)

$
1,706,303


	Series A Preferred Stock				Common Stock				Additional Paid-In		Accumulated			Other Accumulated Comprehensive			Total Stockholders’ Equity
	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 into Common Stock		-		-		7,200		1		508,739		-			-			508,740
Conversion of Sabby Note into Common Stock		-		-		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 Loss		-		-		-		-		-		-			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.

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ASCENT SOLAR TECHNOLOGIES, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)


	For the Nine Months Ended						For the Three Months Ended
	September 30,						March 31,
	2023			2022			2024			2023
Operating Activities:
Net income/(loss)	$	(11,906,097	)	$	(14,520,600	)	$	(2,537,742	)	$	(6,083,352	)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization		73,947			54,998			20,758			25,781
Share-based compensation		2,104,378			3,796,150			259,234			1,404,450
Services paid in common stock		92,750			—
Gain on lease modification		(84,678	)		—
Loss on disposal of assets		77,210			—
Operating lease asset amortization		555,240			515,803			115,630			182,556
Amortization of debt discount		1,773,621			2,323,153			35,530			901,649
Impairment loss								524,481			—
Loss on equity method investment								(24	)		—
Inventory reserve expense		111,028			—			(23,355	)		97,465
Loss on equity method investment		170			27,486
Changes in operating assets and liabilities:
Accounts receivable		1,769			(62,750	)		—			(93,106	)
Inventories		(131,764	)		(92,213	)		22,095			4,755
Prepaid expenses and other current assets		(27,139	)		(746,922	)		(207,029	)		(1,182,239	)
Accounts payable		705,657			74,889			634,879			(14,016	)
Related party payable		(39,279	)		(2,334	)		29,615			(61,827	)
Operating lease liabilities		(541,519	)		(486,848	)		(117,415	)		(178,622	)
Accrued interest		109,435			45,825			25,054			166,386
Accrued expenses		(204,127	)		1,147,577			20,428			(107,507	)
Net cash used in operating activities		(7,329,398	)		(7,925,786	)		(1,197,861	)		(4,937,627	)
Investing Activities:
Contributions to equity method investment		—			(83,559	)
Payments on purchase of assets		(3,844,644	)		(94,140	)		—			(48,650	)
Patent activity costs		(19,319	)		(8,004	)		—			(5,884	)
Net cash used in investing activities		(3,863,963	)		(185,703	)		—			(54,534	)
Financing Activities:
Proceeds from issuance of Series 1B Preferred Stock		880,000			—
Proceeds from issuance of bridge loan		—			1,000,000
Proceeds from issuance of stock and warrants		—			4,000,000
Prepayment of Equity Offering		2,088,290			—
Proceeds from bridge loan								350,000			—
Payment of bridge loan								(13,398	)		—
Payment of convertible notes		(1,025,423	)		—			—			(147,170	)
Net cash provided by financing activities		1,942,867			5,000,000
Effect of foreign exchange rate on cash		17,240			—
Net cash provided by/(used in) financing activities								336,602			(147,170	)
Net change in cash and cash equivalents		(9,233,254	)		(3,111,489	)		(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	$	2,249,764		$	2,850,271		$	187,474		$	6,343,687
Supplemental Cash Flow Information:
Cash paid for interest							$	63,562		$	—
Non-Cash Transactions:
Conversion of bridge loan into common stock and warrants	$	—		$	1,000,000
Right-of-use assets acquired through operating lease liabilities	$	—		$	21,045
Purchase and return of equipment purchased on credit	$	(202,556	)	$	202,556
Non-cash conversions of convertible notes to equity	$	2,912,759		$	10,400,000
Series 1A preferred stock conversion	$	—		$	740
Down round deemed dividend	$	11,653,986		$	—
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest	$	233,436		$	—
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.

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NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION

Ascent Solar Technologies, Inc. (the “Company") is focusing on integrating its photovoltaic ("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 ~~commericializing~~commercializing products for these customers.

On March 13, 2023, the Company redeployed its Thornton manufacturing facility as a Perovskite Center of Excellence and dedicated the facility to the industrial commercialization of the Company's patent-pending Perovskite solar technologies. On April 18, 2023, the Company completed its acquisition of the manufacturing assets of Flisom AG ("Flisom"), a Zurich based thin-film solar manufacturer and on June 16, 2023, exercised a put option to sell the assets (see Note 5). The Company is planning to restart production at its Thornton facility.

~~On September 11, 2023, the Company effected a reverse stock split of the Company’s common stock at a ratio of~~ ~~one-for-two hundred~~ (the “Reverse Stock Split”). The Company’s common stock began trading on a split-adjusted basis on September 12, 2023. Stockholders also received one whole share of common stock in lieu of a fractional share and no fractional shares were issued. All shares and per share amounts in the unaudited condensed financial statements and accompanying notes have been retroactively adjusted to give effect to the Reverse Stock Split.

NOTE 2. BASIS OF PRESENTATION

The accompanying, unaudited, condensed financial statements have been derived from the accounting records of the Company as of ~~September 30, 2023,~~March 31, 2024 and December 31, ~~2022,~~2023, and the results of operations for the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024 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, ~~2022,~~2023 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 ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024 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, there~~2023. There have been no significant changes to our accounting policies as of ~~September 30, 2023.~~

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March 31, 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 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 ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ the Company recognized product revenue of $~~209,496~~5,600 and $~~6,344~~99,225, respectively. ~~During the nine months ended September 30, 2023 and 2022, the Company recognized product revenue of $395,106~~ ~~and $688,125, respectively. For the three and nine months ended September 30, 2023, one customer comprised~~ ~~100% and~~ 75~~% of total product revenue, 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 ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ the Company recognized total milestone and engineering revenue of $~~20,458~~ ~~and $–, respectively. During the nine months ended September 30, 2023 and 2022, the Company recognized total milestone and engineering revenue of $60,374~~0 and $~~522,000~~25,000, ~~respectively. $~~respectively.-

~~512,000~~6

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~~of the $522,000~~ ~~earned in the nine months ended September 30, 2022 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 ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~2022.~~2023.

Accounts Receivable. As of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company had an accounts receivable, net balance of $–$0 and $~~1,769~~0, respectively. As of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company had an allowance for doubtful accounts of $–$0 and $~~26,000~~0, respectively.

Deferred revenue for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 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		(42,350	)		(3,425	)
Balance as of September 30, 2023	$	-
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) ~~and deemed dividends due to down round financings~~ from net income. ~~For the nine months ended September 30, 2023, income available to common stockholders was adjusted for deemed dividends due to down round financings of $11,653,986~~ ~~(Note 11).~~ Diluted earnings per share has been computed by dividing net income ~~available to common stockholders~~ adjusted on an if-converted basis for the period by the

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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 ~~or treasury stock~~ method to the extent they are dilutive). Approximately ~~1,144~~7.9 ~~thousand~~million and ~~381~~0.09 million shares of dilutive shares were excluded from the three months period ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively, EPS calculation as their impact is antidilutive. ~~Approximately~~ ~~537~~

Recently Issued Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting: Improvement to Reportable Segment Disclosures ~~thousand~~("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 58 ~~shares of dilutive shares were excluded from the nine months period ended September 30,~~contain other disclosure requirements. The amendments in ASU 2023-07 are effective for all public entities for fiscal years beginning after December 15, 2023, and ~~2022, respectively, EPS calculation as their impact is antidilutive.~~interim periods within fiscal years

~~Net loss attributable to common shareholders for the three and nine months ended September 30, 2023 was as follows:~~7

Three months ended

Nine months ended

September 30, 2023

September 30, 2023

Net Loss

$

(1,909,273
)

$

(11,906,097
)
Down round deemed dividend

-

(11,653,986
)
Net Loss attributable to common shareholders

(1,909,273
)

(23,560,083
)
Earnings Per Share (Basic and Diluted)

(4.04
)

(66.40
)

~~Recently Adopted or to be Adopted Accounting Policies~~

On January 1, 2023, the Company adopted ASU 2020-06. The adoption resulted in the elimination of the beneficial conversion feature recognized on the Company’s convertible debt. The Company elected to apply the modified retrospective method to all open contracts as of January 1, 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. Comparative periods have not been restated and continue to be reported under the accounting standard in effect for those periods.

~~The cumulative effect of the changes made to the Company’s January 1, 2023, unaudited condensed balance sheet for the adoption of ASU 2020-06 is as follows:~~

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
)

~~The impact due to the change in accounting principle on net income and earnings per share for the three and nine months ended September 30, 2023 is as follows:~~

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Post ASU 2020-06

Pre ASU 2020-06

Difference

Three months ended September 30, 2023

Net Loss

$

(1,909,273
)

$

(5,668,147
)

$

3,758,874

Net Loss attributable to common shareholders

(1,909,273
)

(5,668,147
)

3,758,874

Earnings Per Share (Basic and Diluted)

(4.04
)

(11.98
)

(7.94
)

Nine months ended September 30, 2023

Net Loss

$

(11,906,097
)

$

(20,553,708
)

$

8,647,611

Net Loss attributable to common shareholders

(23,560,083
)

(32,207,694
)

8,647,611

Earnings Per Share (Basic and Diluted)

(66.40
)

(90.77
)

(24.37
)

~~Other new pronouncements issued but not effective as~~beginning after December 15, 2024. Early adoption is permitted. Management is evaluating the impact of ~~September 30, 2023 are not expected to have a material impact~~this ASU on the ~~Company’s unaudited condensed~~Company's financial statements.

In December 2023, the FASB issued ASU 2023-09, Income 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 of this ASU on the Company'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 agreements~~sold 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.

~~In March 2023, the~~The Company ~~redeployed~~currently has limited production capabilities in its Thornton ~~manufacturing~~ facility and continues to focus on industrial commercialization of the Company's patent-pending Perovskite solar technologies. In April 2023, the Company purchased manufacturing assets in Zurich, Switzerland with plans to commence manufacturing using this equipment; however, in June 2023, Management exercised its put option to sell the this equipment (see Note 5) and is planning to restartrestarting production at industrial scale while continuing its ~~Thornton facility. Management~~research and development activities to 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 ~~the Company is able to achieve large scale production capacities.~~it has fully implemented this strategy. During the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 the Company used $~~7,329,398~~1,197,861 in cash for operations.

~~Additionally,~~Additional projected product revenues ~~may~~are not anticipated to result in a positive cash flow position for the next twelve ~~months. The~~months overall and as of March 31, 2024, the Company ~~had~~has a working ~~capital~~ deficit of $~~8,726,319~~4,724,265 ~~as of September 30, 2023.~~, 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 ~~produce~~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 ~~unaudited~~ condensed financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

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~~NOTE 5. ASSET ACQUISITION~~

On ~~April 17, 2023~~, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Flisom (the “Seller”), pursuant to which, among other things, the Company purchased certain assets relating to thin-film photovoltaic manufacturing and production from the 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 acquired, 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 total consideration paid by the Company to Seller in connection 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 the Seller to provide transition support for the Company’s operation of the Assets, with fees to be paid by the Company for performing defined support services, (ii) a Sublease Agreement allowing the Company’s to use the Manufacturing Facility where the Assets are located, 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. The Company will also receive proceeds from fulfilling a supply agreement obligation for one of the Seller’s customers.

~~The total purchase price, including transaction costs of $1,283,926, was allocated as follows:~~

Asset Price Allocation

Inventory

Raw Material
$
130,030

Finished Goods

62,427

Other Assets

98,746

Fixed Assets

Manufacturing machinery and equipment

3,682,621

Furniture, fixtures, computer hardware and
computer software

110,102

~~In addition to the Asset Purchase Agreement, 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. The Letter Agreement, among other things, granted 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 the Affiliates 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. On June 16, 2023, the Company exercised its option to resell the Assets to the Affiliates. The Company has not received payment on this option and Management continues to discuss with the Affiliates the Company's options and rights to resolve this matter.

In September, 2023, Flisom filed for bankruptcy in Switzerland. These proceeding are in the initial phase in which the bankruptcy office will need to determine if the proceedings can be carried out with a creditors' meeting, without a creditors' meeting, or will be discontinued due to lack of Flisom assets to pay for these proceedings. The Company's purchased Assets are currently located in the Manufacturing Facility.

Management has retained legal counsel who have been in discussions with the bankruptcy office and the Manufacturing Facility landlord. While it is too early to predict the outcome of this matter or whether an adverse result would have a material adverse impact on our operations or financial position, Management continues to assess its options.

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~~As of September 30, 2023, the Company's the book value of the Assets was approximately $4,070~~ ~~thousand and the Company had a payable to Flisom of approximately $750~~ ~~thousand.~~

NOTE 6.5. 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’s~~TubeSolar'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 and nine months ended September 30, 2023. $512,000~~ of NRE revenue were recognized under the JDA during the nine months ended September 30, 2022. In June, 2023, TubeSolar filed an application for the opening of insolvency proceedings with the competent insolvency court due to insolvency.

~~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. The~~There 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 $- and $~~83,559~~contributions to Ascent Germany during the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023.

In June, 2023, ~~and 2022, respectively. There~~TubeSolar filed an application for insolvency proceedings with the insolvency court. Since then, there has been no ~~material~~activity under the JDA and minimal activity in Ascent ~~Germany since its establishment and~~Germany. Management continues to monitor this situation.

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NOTE 6. SWITZERLAND ASSETS

On April 17, 2023, the Company ~~currently cannot quantify~~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 also 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 exposure~~present 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 7. PROPERTY, PLANT AND EQUIPMENT

The following table summarizes property, plant and equipment as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022:~~2023:


	As of September 30,			As of December 31,			As of March 31,			As of December 31,
	2023			2022			2024			2023
Furniture, fixtures, computer hardware and computer software	$	578,690		$	482,235		$	468,589		$	468,588
Manufacturing machinery and equipment		23,552,252			21,739,504			19,384,346			20,661,222
Leasehold improvements		15,994			87,957			15,994			15,995
Manufacturing machinery and equipment, in progress		35,359			280,473			32,087			32,087
Depreciable property, plant and equipment		24,182,295			22,590,169			19,901,016			21,177,892
Less: Accumulated depreciation and amortization		(20,125,328	)		(22,038,508	)		(19,395,659	)		(20,131,008	)
Net property, plant and equipment	$	4,056,967		$	551,661		$	505,357		$	1,046,884

Depreciation expense for the three months ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~ was $~~18,931~~17,045 and $~~15,705, respectively. Depreciation expense for the nine months ended September 30, 2023 and 2022 was $59,570~~ ~~and $40,623~~20,989, respectively. Depreciation expense is recorded under “Depreciation and amortization expense” in the unaudited Condensed Statements of Operations.

NOTE 8. OPERATING LEASE

The Company’s ~~lease is primarily~~operating leases are comprised of approximately 100,000 rentable square feet for its manufacturing and ~~operations.~~ ~~This lease is~~operations and a Company car. These leases are classified and accounted for as an operating ~~lease.~~ 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 ~~73,319~~75,000 square feet and the rent and tenant share of expenses were decreased in proportion to the reduction in rentable square

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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

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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 ~~unaudited Condensed~~ Statement of Operations.

As of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, assets and liabilities related to the Company’s leases were as follows:


	As of September 30,		As of December 31,		As of March 31,		As of December 31,
	2023		2022		2024		2023
Operating lease right-of-use assets, net	$	2,476,958	$	4,324,514	$	2,249,042	$	2,364,672
Current portion of operating lease liability		471,497		733,572		512,158		491,440
Non-current portion of operating lease liability		2,171,440		3,827,878		1,904,892		2,043,025

During the three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ the Company recorded operating lease expense included in selling, general and administrative expenses of $~~236,925~~190,497 and $~~261,069, respectively. During the nine months ended September 30, 2023 and 2022, the Company recorded operating lease expense included in selling, general and administrative expenses of $770,836~~ ~~and $777,854~~261,343, respectively.

Future maturities of the operating lease liability are as follows:


Remainder of 2023	$	186,682
2024		769,130
Remainder of 2024				$	576,847
2025		792,203			792,203
2026		815,969			815,969
2027		840,449			840,449
Total lease payments		3,404,433			3,025,468
Less amounts representing interest		(761,496	)		(608,418	)
Present value of lease liability	$	2,642,937		$	2,417,050

The remaining weighted average lease term and discount rate of the operating leases is 5145.00 months and ~~12.0~~7.0%, respectively.

NOTE 9. INVENTORIES

Inventories, net of reserves, consisted of the following at ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022:~~2023:


	As of September 30,		As of December 31,		As of March 31,		As of December 31,
	2023		2022		2024		2023
Raw materials	$	577,536	$	577,799	$	448,367	$	445,721
Work in process		10,267		37,351		389		1,775
Finished goods		48,216		133		-		-
Total	$	636,019	$	615,283	$	448,756	$	447,496

NOTE 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.

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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 ~~September 30, 2023,~~March 31, 2024, the Company had not made any payments on this note, the accrued interest was $~~78,185~~84,452, and the note is due upon demand. This note is recorded as Other payable in the unaudited Condensed Balance Sheets.

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NOTE ~~11.~~12. CONVERTIBLE NOTES

The following table provides a summary of the activity of the Company's secured, convertible, promissory notes:

Principal
Balance
12/31/2022

Notes converted

Principal
Balance
9/30/2023

Less:
Discount
Balance

Net Principal
Balance
9/30/2023

Sabby Volatility Warrant Master Fund, LTD
$
7,392,899

$
(7,392,899
)
$
—

$
—

$
—

L1 Capital Global Opportunities Master Fund, Ltd

7,500,000

(7,093,333
)

406,667

(87,126
)

319,541

$
14,892,899

$
(14,486,232
)
$
406,667

$
(87,126
)
$
319,541


	Principal Balance 1/1/2024		Notes converted			Principal Balance 3/31/2024		Less: Discount Balance			Net Principal Balance 3/31/2024
L1 Capital Global Opportunities Master Fund, Ltd	$	406,667	$	(400,000	)	$	6,667	$	(397	)	$	6,270

~~Sabby / L1 Convertible Notes~~

~~On December 19, 2022,~~During the ~~Company entered into a Securities Purchase Contract (the “Securities Purchase Contract”) with two institutional investors (each, an “Investor” and collectively, the “Investors”)~~three months ended March 31, 2024, $400,000 of principal was converted for ~~the issuance to the Investors of $12,500,000~~ ~~in aggregate principal amount of Senior Secured Original Issue~~ 10~~% Discount Convertible Advance Notes 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

~~On May 22, 2023, the Investors and the Company agreed to defer for 90 days each of the two prepayments of $666,667~~ ~~that were scheduled for May 18, 2023 and June 19, 2023. Accordingly,~~ ~~(i) the May 18, 2023 payment is deferred until~~ ~~August 16, 2023, and (ii) the June 19, 2023 payment is delayed until~~ ~~September 17, 2023~~.

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On May 25, 2023, the Company and each of the Investors entered into a Waiver and Amendment Agreement (the “Second Amendment”) relating to the Securities Purchase Contract and the Advance Notes. Pursuant to the Second Amendment, the Company and each of the Investors agreed to amend the Advance Notes to provide that if the Company receives a Notice of Conversion at a time that the Conversion Price (or, as applicable, the Alternative Conversion Price) then in effect Price, without regard to the Floor Price (the “Applicable Conversion Price”), is less than the Floor Price then in effect, the Company shall issue a number of shares equal to the Conversion Amount divided by such Floor Price and, at its election (x) pay the economic difference between the Applicable Conversion Price and such Floor Price (the “Outstanding Conversion Amount”) in cash at such time or (y) pay the Outstanding Conversion Amount following the consummation of a reverse stock split by the Company (1) in cash or (2) by issuing to the Holder a number of shares of Common Stock with an aggregate value equal to the Outstanding Conversion Amount, with the value per share of Common Stock for purposes of such calculation equal to (i) if such shares are issued on or prior to August 23, 2023, the daily VWAP of the Common Stock on the Trading Day following the date of the consummation of such reverse stock split or (ii) if such shares are issued after August 23, 2023, 90~~% of the daily VWAP of the Common Stock on the Trading Day following the date of the consummation of such reverse stock split. As of September 30, 2023, the Company had $6,470,540~~ ~~in Outstanding Conversion Amounts recorded as Conversions Payable on the unaudited Condensed Balance Sheets.~~

~~The Securities Purchase Contract also included certain warrants to purchase up to~~ ~~12,567~~618,384 shares of common ~~stock (the "Warrants"). The Warrants were issued with an exercise price equal to $786~~ 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~~ ~~37,500~~ ~~shares of the Company’s Common Stock. The per share purchase price for the Shares is $240~~ 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:

~~The fixed conversion price of the remaining principal outstanding on the Advance Notes was lowered to $73.22~~ ~~per share of Common Stock;~~

~~The exercise price of the outstanding Warrants was lowered to $73.22~~ ~~per share of Common Stock; and~~

~~The number of shares that the Warrants are exercisable for increased from~~ ~~12,567~~ to ~~134,904~~ ~~shares of Common Stock.~~

On ~~June 29, 2023~~ ~~the Company entered a securities purchase agreement (“Series 1B SPA”) with accredited investors (the "Accredited Investors") for the private placement of $900,000~~ ~~for~~ ~~900~~ shares of the Company’s newly designated Series 1B Convertible Preferred Stock (“Series 1B Preferred Stock”) (Note 13). Shares of the Series 1B Preferred Stock are convertible at the option of the holder into common stock at an initial conversion price of equal to $~~28.00~~ ~~per share.~~

The terms of the Series 1B SPA triggered certain further 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 further adjustments in June 2023:

~~The fixed conversion price of the remaining principal outstanding on the Advance Notes was lowered to $25.36~~ ~~per share of Common Stock;~~

T~~he exercise price of the outstanding Warrants was lowered to $25.36~~ ~~per share of Common Stock; and~~

~~The number of shares that the Warrants are exercisable for increased from~~ ~~134,904~~ to ~~389,500~~ ~~shares of Common Stock.~~

~~Pursuant to ASC 260,~~ ~~Earnings per Share, the Company recorded a deemed dividend for the down round adjustments of $11,653,986~~ ~~which reduced income available to common shareholders in the Company's earnings per share calculations.~~

~~Under the existing terms of the Advance Notes the conversion price may in no event be less than a floor price (the “Floor Price”) of $~~40 ~~currently. The new adjusted fixed conversion price of the Advance Notes ($1.765) is less than the Floor Price. Accordingly, upon conversion of the Advance Notes, the Company shall issue a number of shares equal to the Conversion~~

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Amount divided by such Floor Price and, at its election (x) pay the economic difference between the Applicable Conversion Price and such Floor Price (the “Outstanding Conversion Amount”) in cash at such time or (y) pay the Outstanding Conversion Amount following the consummation of a reverse stock split by the Company (1) in cash or (2) by issuing to the Holder a number of shares of Common Stock with an aggregate value equal to the Outstanding Conversion Amount, with the value per share of Common Stock for purposes of such calculation equal to (i) if such shares are issued on or prior to August 23, 2023, the daily VWAP of the Common Stock on the Trading Day following the date of the consummation of such reverse stock split or (ii) if such shares are issued after August 23, 2023, 90~~% of the daily VWAP of the Common Stock on the Trading Day following the date of the consummation of such reverse stock split.~~

~~During the nine months ended September 30, 2023, the Company settled $14.5~~ ~~million of principal as follows:~~

Debt Settlement

Equity issued for convertible debt
$
2,912,759

Conversions payable

6,470,540

Cash repayments

1,025,423

Accelerated discount recognized in APIC

4,077,510

Principal settled during the nine months ended September 30, 2023
$
14,486,232

stock. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, the Company had interest expense of $~~271,162~~21,989 and $~~2,070,669~~1,052,928, respectively, of which, $~~231,536~~18,863 and $~~1,773,633~~901,649 ~~for the three and nine months ended September 30, 2023,~~, respectively was due to accretion of discount on the ~~Advanced Notes.~~note. Interest payable was $~~85,731~~33,064 as of ~~September 30, 2023.~~March 31, 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 ~~12.~~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 $232 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 ~~September 30, 2023,~~March 31, 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

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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 ~~September 30, 2023,~~March 31, 2024, there were 48,100 shares of Series A Preferred Stock outstanding and accrued and unpaid dividends of $~~501,977~~526,428.

NOTE 14. STOCKHOLDERS’ EQUITY (DEFICIT)

Common Stock

At March 31, 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, 2024, the Company had 6,710,745 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, 2024 and 2023.

During the three months ended March 31, 2024, $400,000 of convertible debt was converted into 618,384 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, 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.

The following table summarizes the designations, shares authorized, and shares outstanding for the Company’s Preferred Stock:


Preferred Stock Series Designation	Shares Authorized		Shares Outstanding
Series A		750,000		48,100
Series 1A		5,000		—
Series B-1		2,000		—
Series 1B		900		—
Series B-2		1,000		—
Series C		1,000		—
Series D		3,000		—
Series D-1		2,500		—
Series E		2,800		—
Series F		7,000		—
Series G		2,000		—
Series H		2,500		—
Series I		1,000		—
Series J		1,350		—
Series J-1		1,000		—
Series K		20,000		—

Warrants

As of March 31, 2024, there are 9,283,122 outstanding warrants with exercise prices between $1.76 and $1,060 per share.

Series A Preferred Stock

Refer to Note 13 for information on Series A Preferred Stock.

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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, 2024.

~~NOTE 13. SERIES 1B PREFERRED STOCK~~

On ~~June 29, 2023, the Company entered into the Series 1B SPA with Accredited Investors for the private placement of~~ ~~900~~ ~~shares of Series 1B Preferred Stock for $900,000~~ ~~gross proceeds.~~

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The Series 1B Preferred Stock ranks senior to the common stock with respect to dividends and rights upon liquidation. Holders of the Series 1B Preferred Stock do not have voting rights and are not entitled to any fixed rate of dividends; however, if the Company pays a dividend or otherwise makes a distribution or distributions payable on shares of common stock, then the Company will make a dividend or distribution to the holders of the Series 1B Preferred Stock in such amounts as each share of Series 1B Preferred Stock would have been entitled to receive if such share of Series 1B Preferred Stock was converted into shares of common stock at the time of payment of the stock dividend or distribution.

There is no scheduled or mandatory redemption for the Series 1B Preferred Stock and there is no redemption for the Series 1B Preferred Stock exercisable (i) at the option of the Investor, or (ii) at the option of the Company.

~~Upon our liquidation, dissolution or winding up, holders of Series 1B Preferred Stock will be entitled to be paid out of our assets, prior to the holders of our common stock, an amount equal to $1,000~~ ~~per share plus any accrued but unpaid dividends (if any) thereon.~~

~~Shares of the Series 1B Preferred Stock are convertible at the option of the holder into common stock at an initial conversion price of equal to $28.00~~ per share. The conversion price for the Series 1B Preferred Stock is subject to adjustment on the earliest of the date that (a) a resale registration statement relating to the shares of common stock underlying the Series 1B Preferred Stock has been declared effective by the SEC, (b) all of such underlying shares of common stock have been sold pursuant to SEC Rule 144 or may be sold pursuant to SEC Rule 144 without volume or manner-of-sale restrictions, (c) the one year anniversary of the closing provided that a holder of such underlying shares is not an affiliate of the Company or (d) all of such underlying shares may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions (such earliest date, the “Reset Date”).

~~On the Reset Date, the conversion price shall be equal to the lower of (i) $0.14~~ ~~and (ii)~~ 90~~% of the lowest VWAP for the Company’s common stock out of the~~ 10 ~~trading days commencing~~ 5 ~~trading days immediately prior to the Reset Date, provided that the conversion price may not be adjusted to less than $10.00~~ ~~per share.~~

Holders of the Series 1B Preferred Stock (together with its affiliates) may not convert any portion of such Investor’s Series 1B Preferred Stock to the extent that the holder would beneficially own more than ~~4.99% of the Company’s outstanding shares of common stock after conversion, except that upon at least~~ ~~61 days~~’ prior notice from the holders to the Company, the holder may increase the maximum amount of its beneficial ownership of outstanding shares of the Company’s Common Stock after converting the holder’s Series 1B Preferred Stock up to ~~9.99~~% of the number of shares of Common Stock outstanding immediately after giving effect to the conversion, as such percentage ownership is determined in accordance with the terms of the Series 1B Preferred Stock.

~~NOTE 14. STOCKHOLDERS’ EQUITY (DEFICIT)~~

~~Common Stock~~

~~At September 30, 2023, 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 September 30, 2023, the Company had~~ ~~549,199~~ ~~shares of common stock outstanding. The Company has not declared or paid any dividends related to the common stock during the three or nine months ended September 30, 2023 and 2022.~~

~~During the nine months ended September 30, 2023, $14.5~~ ~~million of convertible debt principal was converted into~~ ~~288,451~~ ~~shares of common stock and~~ ~~1,425~~ ~~shares of common stock was issued for vendor services.~~

~~Preferred Stock~~

~~At September 30, 2023, 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.

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~~The following table summarizes the designations, shares authorized, and shares outstanding for the Company’s Preferred Stock:~~

Preferred Stock Series Designation

Shares
Authorized

Shares
Outstanding

Series A

750,000

48,100

Series 1A

5,000

—

Series B-1

2,000

—

Series B-2

1,000

—

Series 1B

900

900

Series C

1,000

—

Series D

3,000

—

Series D-1

2,500

—

Series E

2,800

—

Series F

7,000

—

Series G

2,000

—

Series H

2,500

—

Series I

1,000

—

Series J

1,350

—

Series J-1

1,000

—

Series K

20,000

—

~~Warrants~~

~~As of September 30, 2023, there are~~ ~~396,576~~ ~~outstanding warrants with exercise prices between $25.36~~ ~~and $1,060~~ ~~per share.~~

~~Series A Preferred Stock~~

~~Refer to Note 12 for information on Series A Preferred Stock.~~

~~Series 1B Preferred Stock~~

~~Refer to Note 13 for information on Series 1B Preferred Stock.~~

~~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 and nine months ended September 30, 2023.~~

NOTE 15. SHARE-BASED COMPENSATION

In ~~2022,~~January 2024, the Company granted459,000 shares of restricted stock units to ~~its Chief Executive Officer~~employees and ~~Chief Financial Officer. On April 26, 2023, the~~directors. One third of these shares vested on March 31, 2024. 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 then Chief Executive Officer resulting in the forfeiture~~also granted members of our advisory board an aggregate of ~~11,389~~20,000 shares of restricted stock units. These unvested shares will vest prorata on January 1, 2025 and January 1, 2026.

The ~~remaining non-vested shares~~Company had a total of ~~2,100~~327,631 unvested units as of ~~September 30, 2023~~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 ~~September 30, 2023~~March 31, 2024 was approximately $~~1,251,600~~1,220,860 and is expected to be recognized over 271.75 ~~months.~~years. The Company recognized share-based compensation expense related to restricted stock grants of $~~139,067~~ ~~and $2,104,378~~259,234 for the three ~~and nine~~ months ended ~~September 30, 2023.~~March 31, 2024. The following table summarizes non-vested restricted stock and the related activity as of ~~September 30, 2023:~~March 31, 2024:

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Shares

Weighted Average Grant Date Fair Value

Non-vested at January 1, 2023

15,760

989.08

Vested

2,271

926.66

Forfeited

11,389

1,074.00

Non-vested at September 30, 2023

2,100

596.00


	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.

NOTE 16. COMMITMENTS AND CONTINGENCIES

On April 26, 2023, the board of directors of the Company terminated Jeffrey Max as the Company’s President and Chief Executive Officer. Mr. Max claims that his termination was not for cause as defined in his employment agreement which could enable him 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, the Company will vigorously defend any future claims made by Mr. Max.

On August 15, 2023, H.C. Wainwright & Co., LLC (“Wainwright”) filed an action against the Company in 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 $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 attorney fees. ~~While it is too early~~Subsequent to ~~predict~~March 31, 2024, the ~~outcome of this legal proceeding or whether an adverse result would~~Company and Wainwright reached a proposed settlement agreement. The proposed settlement will not have a material ~~adverse~~ impact on our ~~operations or~~ financial ~~position, we believe we have meritorious defenses and intend to defend this legal matter vigorously.~~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 17. SUBSEQUENT EVENTS

As part of the December 19, 2022 Securities Purchase Contract (the “Purchase Contract”) with two institutional investors (the “Investors”), the Company issued to the Investors certain common stock warrants (the “Warrants”). The Warrants have certain “full ratchet” anti-dilution adjustments that are triggered when the Company issues securities with a purchase or

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conversion, 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 ~~September 28, 2023,~~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:

•

First Repurchase. On April 12, 2024, the Investors agree to convey, assign and transfer 50% of the Warrants to the Company in exchange for the payment by the Company for an aggregate purchase price of $1.8 million.

•

Second Repurchase. On or before April 18, 2024, the Investors agree to convey, assign and transfer all remaining Warrants to the Company for an aggregate purchase price of $1.8 million.

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 offering and expiring five and a half (5.5) years from the date of issue, and will be exercisable for cash only unless an effective registration statement is not available at the time of exercise, in which case the warrants could be exercised on a cashless basis.

On April 9, 2024 the Company entered into a placement agency agreement (the “Placement Agent Agreement”) with Dawson 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 ~~an aggregate of~~ ~~3,572,635~~ ~~units (“Units”) at a price of~~up to $~~2.88~~ ~~per Unit, for gross proceeds of approximately $10.3~~6 million ~~before deducting offering expenses.~~

~~Each Unit is comprised~~ of ~~(i) one share~~shares of common stock or, in lieu of common stock, one prefunded warrant to purchase a share of common stock ~~and (ii) one common warrant to purchase~~on a ~~share of common stock. The prefunded warrants are immediately exercisable at a price of $~~best efforts basis.~~0.0001~~ ~~per share of common stock and only expire when such prefunded warrants are fully exercised. The common warrants are immediately exercisable at a price of $2.88~~ ~~per share of common stock and will expire~~ ~~five years~~ ~~from the date of issuance.~~

The Company agreed to pay Dawson James a placement agent fee in cash equal to 8.00% of the gross proceeds from the sale of the ~~Units.~~shares of common stock; provided, however, that the placement agent fee shall equal 4% for investors that the Company directs to the 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.

~~The Offering closed on October 2, 2023 and, in~~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) ~~389,024~~15,179,460 common shares and (ii) ~~3,183,611~~21,162,277 ~~prefunded~~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 ~~and (iii)~~ ~~3,572,635~~ ~~common warrants.~~

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are fully exercised.

The ~~Company used a portion of the~~net proceeds from the closings of the Offering were utilized to retire approximately $~~5,212~~200,000 ~~thousand~~ of ~~the outstanding conversion amount~~cash payable ~~related to the Company’s secured convertible notes~~ and ~~all~~ $~~900~~3.6 ~~thousand~~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 ~~outstanding Series 1B Preferred Stock.~~common stock at an exercise price of $0.14 if they had not been repurchased by the Company.

Subsequent to ~~September 30, 2023,~~March 31, 2024, ~~2,468,500~~8,766,000 of the pre-funded warrants were exercised into common stock.

The terms of the Offering triggered certain further 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 further adjustments in October 2023:

•

~~The fixed conversion price of the approximately then outstanding $400,000~~ ~~principal amount currently outstanding Advance Notes has been lowered to $1.765~~ ~~per share of Common Stock;~~

•

~~The exercise price of the outstanding Warrants has been lowered to $1.765~~ ~~per share of Common Stock; and~~

•

~~The number of shares that the Warrants are exercisable for has been increased from~~ ~~389,500~~ to ~~5,596,232~~ ~~shares of Common Stock.~~

1914

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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, ~~2022~~2023 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, ~~2022~~2023 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 ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, we generated $~~455,480~~5,600 of total revenue. As of ~~September 30, 2023,~~March 31, 2024, we had an accumulated deficit of ~~$470,987,945.~~$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.

2015

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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. In April 2023, the Company purchased manufacturing assets in Zurich, Switzerland with plans to commence manufacturing using this equipment; however, in June 2023, Management exercised its put option on the equipment to sell it to Affiliates and is planning to restart production at its Thornton facility.

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:

•

Our operating history and lack of profitability;

•

Our ability to develop demand for, and sales of, our products;

•

Our ability to attract and retain qualified personnel to implement our business plan and corporate growth strategies;

•

Our ability to develop sales, marketing and distribution capabilities;

•

Our ability to successfully develop and maintain strategic relationships with key partners;

•

The accuracy of our estimates and projections;

•

Our ability to secure additional financing to fund our short-term and long-term financial needs;

•

Our ability to maintain the listing of our common stock on the Nasdaq Capital Market;

•

The commencement, or outcome, of legal proceedings against us, or by us, including ongoing litigation proceedings;

•

Changes in our business plan or corporate strategies;

•

The extent to which we are able to manage the growth of our operations effectively, both domestically and abroad, whether directly owned or indirectly through licenses;

•

The supply, availability and price of equipment, components and raw materials, including the elements needed to produce our photovoltaic modules;

•

Our ability to expand and protect the intellectual property portfolio that relates to our photovoltaic modules and processes;

•

Our ability to maintain effective internal controls over financial reporting;

•

Our ability to achieve projected operational performance and cost metrics; and

•

General economic and business conditions, and in particular, conditions specific to the solar power ~~industry; and~~industry.

•

~~The impact of the COVID-19 pandemic on our business, results of operations, cash flows, financial condition and liquidity.~~

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Basis of Presentation: The accompanying unaudited condensed financial statements have been derived from the accounting records of Ascent Solar Technologies, Inc. as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, and the results of operations for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~2022.~~2023.

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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 September 30,~~ 2023.

Results of Operations

Comparison of the Three Months Ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~

Three Months Ended
September 30,

2023

2022

$ Change

Revenues

Products

$
209,496

$
6,344

$
203,152

Milestone and engineering

20,458

-

20,458

Total Revenues

229,954

6,344

223,610

Costs and Expenses

Cost of Revenue

692,752

409,819

282,933

Research, development and
manufacturing operations

344,942

1,540,170

(1,195,228
)
Selling, general and administrative

1,407,493

1,890,218

(482,725
)
Share-based compensation

139,067

3,796,151

(3,657,084
)
Depreciation and amortization

23,723

20,497

3,226

Total Costs and Expenses

2,607,977

7,656,855

(5,048,878
)
Loss From Operations

(2,378,023
)

(7,650,511
)

5,272,488

Other Income/(Expense)

Other income/(expense), net

756,859

20,000

736,859

Interest Expense

(288,109
)

(252,571
)

(35,538
)
Total Other Income/(Expense)

468,750

(232,571
)

701,321

Income/(Loss) on Equity Method Investments

-

(27,484
)

27,484

Net (Loss)/Income

$
(1,909,273
)

$
(7,910,566
)

$
6,001,293

~~Total Revenues.~~ Our total revenues increased by $223,610, or 100%, for the three months ended September 30, 2023 when compared to the same period in 2022. Increase is primarily due to revenue generated from fulfilling a supply agreement obligation for one of Flisom's customers acquired as part of the Flisom asset acquisition and increased nonrecurring engineering fees.

~~Cost of revenue.~~ Cost of revenues is primarily comprised of repair and maintenance, material costs, and direct labor and manufacturing overhead expenses. Our Cost of revenues increased by $282,933, or 69%, for the three months ended September 30, 2023 when compared to the same period in 2022. Increase in cost of revenue is primarily due to expenses incurred from our asset acquisition of Flisom's manufacturing equipment and related costs partially offset by the decrease in production costs with the redeployment of the Thornton facility as a Perovskite research facility.

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~~Research, development and manufacturing operations.~~ Research, development and manufacturing operations costs include costs incurred for product development and pre-production activities in our manufacturing facility. It also includes costs related to technology development. Research, development and manufacturing operations costs decreased by $1,195,228, or 78%, for the three months ended September 30, 2023 when compared to the same period in 2022. This is primarily due to a decrease in manufacturing operations cost, as the Company redeployed its Thornton manufacturing facility as a perovskite research facility.

~~Selling,general and administrative.~~ Selling, general and administrative expenses decreased by $482,725, or 26%, for the three months ended September 30, 2023 when compared to the same period in 2022. The decrease in costs is due primarily to a one-time termination expense of approximately $500,000 recognized with the departure of our former CEO in the prior period.

~~Share-based compensation.~~ Share-based compensation expense decreased by $3,657,084 or 96% for the three months ended September 30, 2023 when compared to the same period in 2022. The decrease is primarily due to the employment termination of former CEO on April 26, 2023. The prior period expense also includes the immediate vesting of 20% of the former CEO's restricted stock units.

~~Other Income/Expense.~~ Other income was $468,750 for the three months ended September 30, 2023, compared to other expense of $232,571 for the same period in 2022, an increase of $701,321. The increase is due primarily to a one-time employment retention credit received and a gain on lease modification, partially offset by an asset disposal.

~~Net Loss.~~ ~~Our Net Loss decreased by $6,001,293, or 76%, for the three months ended September 30, 2023 compared to the same period in 2022 due primarily to the items mentioned above.~~


	Three Months Ended March 31,
	2024			2023			$ Change
Revenues
Products	$	5,600		$	99,225		$	(93,625	)
Milestone and engineering		-			25,000			(25,000	)
Total Revenues		5,600			124,225			(118,625	)

Costs and Expenses
Cost of Revenue		9,388			461,795			(452,407	)
Research, development and manufacturing operations		607,233			1,665,694			(1,058,461	)
Selling, general and administrative		1,060,041			1,591,821			(531,780	)
Share-based compensation		259,234			1,404,450			(1,145,216	)
Depreciation and amortization		20,757			25,781			(5,024	)
Impairment loss		524,481			-			524,481
Total Costs and Expenses		2,481,134			5,149,541			(2,668,407	)
Loss From Operations		(2,475,534	)		(5,025,316	)		2,549,782

Other Income/(Expense)
Other income/(expense), net		64,323			10,000			54,323
Interest Expense		(126,555	)		(1,068,036	)		941,481
Total Other Income/(Expense)		(62,232	)		(1,058,036	)		995,804
Income/(Loss) on Equity Method Investments		24			-			24
Net (Loss)/Income	$	(2,537,742	)	$	(6,083,352	)	$	3,545,610

Comparison of the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~

Nine Months Ended
September 30,

2023

2022

$ Change

Revenues

Product Revenue

$
395,106

$
688,125

$
(293,019
)
Milestone and engineering

60,374

522,000

(461,626
)
Total Revenues

455,480

1,210,125

(754,645
)

Costs and Expenses

Cost of Revenue

1,820,816

1,519,703

301,113

Research, development and
manufacturing operations

2,832,956

4,399,765

(1,566,809
)
Selling, general and administrative

4,178,146

3,583,366

594,780

Share-based compensation

2,104,378

3,796,151

(1,691,773
)
Depreciation and amortization

73,947

54,998

18,949

Total Costs and Expenses

11,010,243

13,353,983

(2,343,740
)
Loss From Operations

(10,554,763
)

(12,143,858
)

1,589,095

Other Income/(Expense)

Other Income/(Expense), net

766,859

22,000

744,859

Interest Expense

(2,118,023
)

(2,371,256
)

253,233

Total Other Income/(Expense)

(1,351,164
)

(2,349,256
)

998,092

Income/(Loss) on Equity Method Investments

(170
)

(27,486
)

27,316

Net (Loss)/Income

$
(11,906,097
)

$
(14,520,600
)

$
2,614,503

Total Revenues. Our total revenues decreased by ~~$754,645,~~$118,625, or ~~62%~~95%, for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 when compared to the same period in ~~2022. This is~~2023. The decrease was primarily due to a ~~large~~ customer order and engineering revenue in the prior period ~~that was~~were not repeated in the current period, partially offset by product revenue earned from fulfilling a supply agreement obligation under the Asset Purchase Agreement. Additionally, the Company recognized $512,000 in engineering revenue from TubeSolar in the prior period which was not repeated in the current period.

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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 ~~increased~~decreased by ~~$301,113,~~$452,407, or ~~20%~~98%, for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 when compared to the same period in ~~2022.~~2023. ~~The increase~~This decrease is primarily due to ~~expenses from our asset acquisition of Flisom's~~a decrease in manufacturing ~~equipment~~activities, as the Company focused on product and ~~employee contracts, partially offset by a reduction~~technology improvements in ~~production costs by redeploying~~ the ~~Company's manufacturing facilities as a perovskite research facility.~~current period.

Research, development and manufacturing operations. Research, development and manufacturing operations costs include costs incurred for product development, pre-production and ~~pre-production~~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 decreased by ~~$1,566,809,~~$1,058,461, or ~~36%~~64%, for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 when

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compared to the same period in ~~2022.~~2023. This is primarily due to a decrease in preproduction and manufacturing ~~operations cost,~~activities, as the Company ~~redeployed its Thornton manufacturing facility as a perovskite research facility.~~focused on product and technology improvements in the current period.

Selling, general and administrative. Selling, general and administrative expenses ~~increased~~decreased by ~~$594,780,~~$531,780, or ~~17%~~33%, for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 when compared to the same period in ~~2022.~~2023. The ~~increase~~decrease in costs is due primarily to ~~increased professional services~~decreased personnel compensation and ~~other~~ administrative ~~expenses.~~costs.

Share-based compensation. Share-based compensation expense decreased by ~~$1,691,773~~$1,145,216 or ~~45%~~82% for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 when compared to the same period in ~~2022.~~2023. The decrease is ~~primarily~~ due to the employment termination 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 ~~April 26,~~the manufacturing assets purchased from Flisom during the three months ended March 31, 2024 . The Company did not recognize an impairment loss during the same period in 2023. ~~The prior period expense also includes the immediate vesting of 20% of the former CEO's restricted stock units.~~

Other Income/Expense. Other expense was ~~$1,351,164~~$62,232 for the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, compared to other expense of ~~$2,349,256~~$1,058,036 for the same period in ~~2022,~~2023, a ~~decrease~~decline of ~~$998,092.~~$995,804. The decline is due primarily to a ~~one-time employment retention credit received and a gain on lease modification. Additionally,~~decrease in interest expense resulting from the ~~Company recording accelerating~~accretion of debt discount asand interest expense on the convertible debt recognized in the prior ~~year. With the adoption of ASU 2020-06, the accelerated debt discount is now recorded in stockholders' equity.~~period.

Net Loss. Our Net Loss decreased by ~~$2,614,503,~~$3,545,610, or ~~18%~~58%, for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 compared to the same period in ~~2022~~2023 due primarily to the items mentioned above.

Liquidity and Capital Resources

~~In March, 2023, the~~The Company redeployed its Thornton facilities from a manufacturing facility to a research and development facility. In April 2023, the Company purchased manufacturing assets in Zurich, Switzerland with plans to commence manufacturing using this equipment; however, in June 2023, Management exercised its put option on the equipment and is planning to restartcurrently has limited PV production at its ~~Thornton~~manufacturing facility. ~~Management~~The Company does not expect that sales revenue and cash flows will be sufficient to support operations and cash requirements until ~~the Company is able~~it has fully restarted its production at industrial scale and achieved desired improvements to ~~achieve large-scale production capacities.~~its PV products. During the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 the Company used ~~$7,329,398~~$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 ~~September 30, 2023,~~March 31, 2024, the Company has working capital deficit of ~~$8,726,319.~~$4,724,265. As such, ~~cash liquidity would not~~additional financing will be ~~sufficient~~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 begun~~continues activities related to securing additional financing through strategic or financial investors, ~~and has closed on an equity offering on October 2, 2023,~~ but there is no assurance the Company will be able ~~to continue~~ 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.

24Statements of Cash Flows Comparison of the Three Months Ended March 31, 2024and2023

For the three months ended March 31, 2024, our cash used in operations was $1,197,861 compared to $4,937,627 for the three months ended March 31, 2023, a decrease of $3,739,766. This decrease is primarily due to a decrease in manufacturing activities, as the Company continues to focus on product and technology improvements. For the three months ended March 31, 2024, cash used in investing activities was $0 compared to $54,534 used in investing activities for the three months ended March 31, 2023. This change was primarily the result of a decrease purchase of equipment. During the three months ended March 31, 2024, net cash used in operations of $1,197,861 were primarily funded from 2023 financing agreements.

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~~Statements of Cash Flows Comparison of the Nine Months Ended September 30, 2023and2022~~

For the nine months ended September 30, 2023, our cash used in operations was $7,329,398 compared to $7,925,786 for the nine months ended September 30, 2022, a decrease of $596,388. This decrease is due primarily to decreased Company expenses and revenue and timing of cash outflows. For the nine months ended September 30, 2023, cash used in investing activities was $3,863,963 compared to $185,703 used in investing activities for the nine months ended September 30, 2022. This change was primarily the result of the asset acquisition in Zurich, Switzerland. During the nine months ended September 30, 2023, net cash used in operations of $7,329,398 were primarily funded from 2022 financing agreements.

Off Balance Sheet Transactions

As of ~~September 30, 2023,~~March 31, 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 ~~requirements~~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, 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.

~~We currently do not engage in hedging transactions to reduce our exposure to changes in currency exchange rates, although, we may do so in the future.~~

~~We hold no significant funds denominated in foreign currencies as of September 30, 2023.~~

Interest Rate Risk

Our exposure to market risks for changes in interest rates relates primarily to our cash equivalents and investment portfolio. As of ~~September 30, 2023,~~March 31, 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

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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 ~~September 30, 2023.~~March 31, 2024. Based on this evaluation, our management concluded the design and operation of our disclosure controls and procedures were effective as of ~~September 30, 2023.~~March 31, 2024.

Changes in Internal Control Over Financial Reporting

There were no changes in internal control over financial reporting during the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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. Except as discussed in Note 16 to the financial statements, there were no events required to be reported under Item 1for the three months ended ~~September 30, 2023,~~March 31, 2024, within Part II, Item 1 of 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. ~~Failure to maintain the listing of our common stock on Nasdaq could adversely affect the liquidity of our common stock.~~

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

On ~~March 23,~~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 ~~was~~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”). ~~In accordance with~~

The Notice does not result in the immediate delisting of the Company’s common stock from The Nasdaq Capital Market.

The Nasdaq Listing ~~Rule 5810(c)(3)(A),~~Rules require listed securities to maintain a minimum bid price of $1.00 per share and, based upon the closing bid price of the Company’s common stock for the 30 consecutive business days for the period October 27 through December 8, 2023, the Company ~~was~~no 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 Rule 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) 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 Rule 5550(a)(2) prior to the expiration of the initial 180 calendar day period, and if it appears to the Staff that the Company will not be able to cure the deficiency, or if the Company is not otherwise

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eligible, the Staff will provide the Company with written notification that its securities are subject to delisting from The Nasdaq Capital Market. At that time, the Company may appeal the delisting determination to a 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”) ~~that Nasdaq had determined~~from the Staff stating that the ~~Company’s common stock had a closing bid price~~Company is not in compliance with the Equity Rule, as, the Company reported stockholders’ equity of ~~$0.10 or less~~$(1,526,611) in its Form 10-K for ~~ten consecutive trading days triggering application~~the year ended December 31, 2023. In our quarterly report on Form 10-Q for the period ended March 31, 2024, the Company reported stockholders’ equity of Listing Rule 5810(c)(3)(A)(iii) which states in part: if during any compliance period specified in Rule 5810(c)(3)(A), a company’s security has a closing bid price of $0.10 or less for ten consecutive trading days, the Listing Qualifications Department shall issue a Staff Delisting Determination under Rule 5810 with respect to that security (the “Low Priced Stocks Rule”)$(2,550,139).

As a result, the ~~Nasdaq staff~~Staff determined to delist the Company’s ~~common stock~~Common Stock from Nasdaq, unless the Company timely requests an appeal of the ~~staff’s~~Staff’s determination to a Hearings Panel (the “Panel”), pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series.

~~In addition, Nasdaq Listing Rule 5550(b)(1) (the “Stockholders’ Equity Rule”) requires companies listed~~The Company has a hearing on ~~Nasdaq~~May 9, 2024 before the Panel to ~~maintain a minimum of $2,500,000 in stockholders’ equity for continued listing. On May 25, 2023, we received a letter from Nasdaq indicating that we were not in~~appeal the Second Notice and to address compliance with the ~~Stockholders’~~ Equity Rule.

~~On July 28, 2023,~~While the ~~Company received notice that Nasdaq had determined that~~appeal process is pending, the suspension of trading of the Company’s common stock ~~had a closing bid price~~will be stayed and the common stock will continue to trade on Nasdaq through the hearing and the expiration of ~~$0.10 or less for ten consecutive trading days triggering application of Listing Rule 5810(3)(A)(iii) which states in part: if during~~ any ~~compliance~~additional extension period ~~specified in Rule 5810(c)(3)(A), a company’s security has a closing bid price of $0.10 or less for ten consecutive trading days,~~granted by the ~~Listing Qualifications Department shall issue a Staff Delisting Determination under Rule 5810 with respect to that security (the “Low Priced Stocks Rule”). As a result,~~Panel following the ~~Nasdaq staff determined to delist~~hearing.

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~~the Company’s common stock from Nasdaq, unless the Company timely requests an appeal of the staff’s determination to~~There are no assurances however, that a Hearings Panel (the “Panel”), pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series. The Company requested a hearing before the Panel, which was scheduled for October 12, 2023.

On September 12, 2023, the Company implemented a reverse stock split in an effort to regain compliance with the $1 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”), and by letter dated September 29, 2023, the Company was notified by the Staff that the Company had regained compliance with the Bid Price Rule. The Staff, however, determined that, following the reverse split, the Company no longer satisfied the minimum 500,000 publicly held shares requirement set forth in Nasdaq Listing Rule 5550(a)(4) (the “Public Float Rule”).

On October 2, 2023, the Company completed a public offering of units (each unit consisting of (x) one share or one prefunded warrant and (y) one common stock warrant) for gross proceeds of $10.3 million. As a result of the offering, the Company had the minimum of $2.5 million in stockholders’ equity and has therefore regained compliance with the Equity Rule. The offering also resulted in an increase in the Company’s publicly held shares above the minimum Nasdaq threshold of 500,000 shares and as such the Company believes it has regained compliance with the Public Float Rule.

~~On October 11, 2023, the Company received notice~~favorable decision will be obtained from the Nasdaq Listing Qualifications staff that the Company has regained compliance with Nasdaq’s minimum $2.5 million stockholders’ equity requirement in Listing Rule 5550(b)(1) and the minimum 500,000 publicly held shares requirement under Listing Rule 5550(a)(4), and that the Company is therefore in compliance with the Nasdaq Capital Market’s listing requirements.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 ~~nine~~three months ended ~~September 30, 2023.~~March 31, 2024.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~None.~~

28Rule 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


Exhibit No.		Description

1.1*		2024 Placement Agency Agreement

3.1		Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to our Registration Statement on Form SB-2 filed on January 23, 2006 (Reg. No. 333-131216))

3.2		Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2011)

3.3		Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed February 11, 2014)

3.4		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated August 26, 2014. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed September 2, 2014)

3.5		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated October 27, 2014 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K dated October 28, 2014)

3.6		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated December 22, 2014. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K dated December 23, 2014)

3.7		Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed on February 17, 2009)

3.8		First Amendment to Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2009)

3.9		Second Amendment to Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed January 25, 2013)

3.10		Third Amendment to Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed December 18, 2015)

3.11		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated May 26, 2016 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed June 2, 2016)

3.12		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated September 15, 2016 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed September 16, 2016)

3.13		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated March 16, 2017 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed March 17, 2017)

3.14		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated July 19, 2018 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed July 23, 2018)

3.15		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated September 23, 2021 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed September 24, 2021)

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3.16		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated January 27, 2022 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed February 2, 2022)

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3.17		Form of Series 1B Preferred Stock Certificate of Designation (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on June 30, 2023)

3.18		Amendment to the Series 1B Preferred Stock Certificate of Designation dated July 25, 2023 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on July 31, 2023)

3.19		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated September 8, 2023 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on September 15, 2023).

4.1		Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form SB-2/A filed on June 6, 2006 (Reg. No. 333-131216))

4.2		Certificate of Designations of Series A Preferred Stock (filed as Exhibit 4.2 to our Registration Statement on Form S-3 filed July 1, 2013 (Reg. No. 333-189739))

4.3		Description of Securities (incorporated by reference to Exhibit 4.3 to our Annual Report on Form 10-K filed May 13, 2021)

4.4		Form of 2023 Common Warrant (incorporated by reference to Exhibit 4.4 filed with Amendment No. 3 to the Company’s Registration on Form S-1 (File no. 333-274231))

4.5		Form of 2023 Prefunded Warrant (incorporated by reference to Exhibit 4.6 filed with Amendment No. 3 to the Company’s Registration on Form S-1 (File no. 333-274231))

4.6		Form of 2023 Placement Agent Warrant (incorporated by reference to Exhibit 4.5 filed with Amendment No. 3 to the Company’s Registration on Form S-1 (File no. 333-274231))

4.7		Form of 2023 Common Warrant Agency Agreement (incorporated by reference to Exhibit 4.7 filed with Amendment No. 3 to the Company’s Registration on Form S-1 (File no. 333-274231))

4.8		Form of 2023 Prefunded Warrant Agency Agreement (incorporated by reference to Exhibit 4.8 filed with Amendment No. 3 to the Company’s Registration on Form S-1 (File no. 333-274231))

4.9		Form of 2023 Securities Purchase Agreement (incorporated by reference to Exhibit 4.9 filed with Amendment No. 3 to the Company’s Registration on Form S-1 (File no. 333-274231))

4.10		Form of 2024 Placement Agent’s Warrant (incorporated by reference to Exhibit 4.4 to our Registration Statement on Form S-1 (File no. 333-277070) Amendment No. 3 filed on April 9, 2024).

4.11		Form of 2024 Pre-Funded Warrant (incorporated by reference to Exhibit 4.6 to our Registration Statement on Form S-1 (File no. 333-277070) Amendment No. 1 filed on February 23, 2024)

4.12		Form of 2024 Pre-Funded Warrant Agency Agreement (incorporated by reference to Exhibit 4.8 filed with Amendment No. 1 to the Company’s Registration on Form S-1 (File no. 333-277070) filed on February 23, 2024)

4.13*		Form of 2024 Common Stock Warrants issued to extend the Warrant Repurchase Agreements

10.1 CTR		Securities Purchase Agreement, dated January 17, 2006, between the Company and ITN Energy Systems, Inc. (incorporated by reference to Exhibit 10.1 to our Registration Statement on Form SB-2 filed on January 23, 2006 (Reg. No. 333-131216))

10.2 CTR		Invention and Trade Secret Assignment Agreement, dated January 17, 2006, between the Company and ITN Energy Systems, Inc. (incorporated by reference to Exhibit 10.2 to our Registration Statement on Form SB-2 filed on January 23, 2006 (Reg. No. 333-131216))

10.3		Patent Application Assignment Agreement, dated January 17, 2006, between the Company and ITN Energy Systems, Inc. (incorporated by reference to Exhibit 10.3 to our Registration Statement on Form SB-2 filed on January 23, 2006 (Reg. No. 333-131216))

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10.4 CTR		License Agreement, dated January 17, 2006, between the Company and ITN Energy Systems, Inc. (incorporated by reference to Exhibit 10.4 to our Registration Statement on Form SB-2 filed on January 23, 2006 (Reg. No. 333-131216))

10.5		Letter Agreement, dated November 23, 2005, among the Company, ITN Energy Systems, Inc. and the University of Delaware (incorporated by reference to Exhibit 10.16 to our Registration Statement on Form SB-2/A filed on May 26, 2006 (Reg. No. 333-131216))

10.6 CTR		License Agreement, dated November 21, 2006, between the Company and UD Technology Corporation (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on November 29, 2006)

10.7		Novation Agreement, dated January 1, 2007, among the Company, ITN Energy Systems, Inc. and the United States Government (incorporated by reference to Exhibit 10.23 to our Annual Report on Form 10-KSB for the year ended December 31, 2006)

10.8†

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		Executive Employment Agreement, dated April 4, 2014, between the Company and Victor Lee (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on April 9, 2014)
~~10.8~~
10.9†		Seventh Amended and Restated 2005 Stock Option Plan (incorporated by reference to Annex B of our definitive proxy statement dated April 22, 2016)

~~10.9~~10.10†		Seventh Amended and Restated 2008 Restricted Stock Plan Stock Option Plan Plan (incorporated by reference to Annex A of our definitive proxy statement dated April 22, 2016)

~~10.10+~~10.11+		Industrial Lease for 12300 Grant Street, Thornton, Colorado dated September 21, 2020 (incorporated by reference to Exhibit 10.50 to our Annual Report on Form 10-K filed January 29, 2021)

~~10.11+~~10.12+		Long-Term Supply and Joint Development Agreement dated September 15, 2021 (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021)

~~10.12~~10.13		Fleur Capital Unsecured Convertible Promissory Note dated January 3, 2022 (incorporated by reference to Exhibit 10.13 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022)

10.14		Nanyang Unsecured Convertible Promissory Note dated January 21, 2022 (incorporated by reference to Exhibit 10.14 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022)

10.15		Bridge Promissory Note dated August 3, 2022 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 8, 2022)

10.16		Securities Purchase Agreement dated August 8, 2022 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on August 8, 2022)

10.17		Form of Common Stock Warrant Related to Securities Purchase Agreement dated August 8, 2022 (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on August 8, 2022)

~~10.13~~10.18		Common Stock Warrant dated August 19, 2022 (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on August 19, 2022)

~~10.14†~~10.19†		Separation Agreement and Release of Claims between the Company and Victor Lee dated September 21, 2022 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on September 22, 2022)

10.20†CTR		Employment Agreement between the Company and Jeffrey Max dated September 21, 2022 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on September 27, 2022)

~~10.15†~~10.21†		Separation Agreement between the Company and Michael Gilbreth effective December 11, 2022 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on December 12, 2022)

10.22†		Employment Agreement between the Company and Paul Warley dated December 12, 2022 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on December 12, 2022)

~~10.16~~10.23		Securities Purchase Contract, dated as of December 19, 2022 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on December 20, 2022)

~~10.17~~10.24		Form of Security Agreement, dated as of December 19, 2022 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on December 20, 2022)

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~~10.18~~10.25		Form of Registered Advance Note 2022 (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on December 20, 2022)

~~10.19~~10.26		Form of Private Placement Advance Note (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed on December 20, 2022)

~~10.20~~10.27		Form of 2022 Common Stock Warrant ~~Note~~ (incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed on December 20, 2022)

~~10.21~~10.28		Waiver and Amendment Agreement, dated as of March 29, 2023 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on March 29, 2023)

~~10.22~~10.29		Amendment to Waiver and Amendment Agreement (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 13, 2023)

~~10.23~~10.30		Common Stock Securities Purchase Agreement dated April 14, 2023 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 20, 2023)

~~10.24~~10.31		Asset Purchase Agreement, dated as of April 17, 2023 (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on April 21, 2023)

~~10.25~~10.32		Transition Services Agreement, dated as of April 17, 2023 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 21, 2023)

~~10.26~~10.33		Sublease Agreement, dated as of April 17, 2023 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on April 21, 2023)

~~10.27~~10.34		Technology License Agreement, dated as of April 17, 2023 (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on April 21, 2023)

~~10.28~~10.35		Letter Agreement, dated as of April 20, 2023 (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on April 21, 2023)

~~10.29†~~10.36†		CEO Employment Agreement between the Company and Paul Warley dated as of May 1, 2023 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 3, 2023)

~~Table of Contents~~


~~10.30~~10.37		Waiver and Amendment Agreement, dated as of May 25, 2023 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 26, 2023)

~~10.31~~10.38		Form of Series 1B Preferred Stock Purchase Agreement dated June 29, 2023 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on June 30, 2023)

~~10.32~~10.39		2024 Placement Agent Agreement (incorporated by reference to Exhibit 1.1 filed with Amendment No. 3 to the Company’s Registration on Form S-1 (File no. 333-274231))

~~10.33†~~10.40†		Employment Agreement between the Company and Bobby Gulati dated as of October 19, 2023 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on October 23, 2023)

~~10.34†~~10.41†		Employment Agreement between the Company and Jin Jo dated as of October 19, 2023 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on October 23, 2023)

10.42†		Ascent Solar 2023 Equity Incentive Plan (incorporated by reference to Annex A of our definitive proxy statement dated October 23, 2023)

10.43		Warrant Repurchase Agreement dated March 6, 2024 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on March 7, 2024)

10.44		Warrant Repurchase Agreement dated March 7, 2024 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on March 7, 2024)

10.45		Cedar Loan Agreement dated April 17, 2024 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 18, 2024)

31.1*		Chief Executive Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002

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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

~~101.CAL~~		~~Inline XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~		~~Inline XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~		~~Inline XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~		~~Inline XBRL Taxonomy Extension Presentation Linkbase 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.

3227

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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 ~~14th~~9th day of ~~November, 2023.~~May, 2024.




~~November 14, 2023~~May 9, 2024	By:	/s/ PAUL WARLEY
		Paul Warley Chief Executive Officer (Principal Executive Officer)

~~November 14, 2023~~May 9, 2024	By:	/s/ JIN H. JO
		Jin H. Jo Chief Financial Officer (Principal Financial and Accounting Officer)

3328


	Series A Preferred Stock				Series 1B Preferred Stock				Common Stock				Additional Paid-In			Accumulated			Other Accumulated Comprehensive			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Loss			(Deficit)
Balance at January 1, 2023		48,100	$	5		-	$	-		259,323	$	26	$	452,139,027		$	(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		-	$	-		259,323	$	26	$	448,343,153		$	(447,427,862	)	$	(16,024	)	$	899,298
Conversion of L1 Note into Common Stock		-		-		-		-		45,129		5		1,240,813			-			-			1,240,818
Conversion of Sabby Note into Common Stock		-		-		-		-		63,030		6		2,123,643			-			-			2,123,649
Share-based compensation		-		-		-		-		-		-		1,965,311			-			-			1,965,311
Common stock issued for services		-		-		-		-		1,425		-		92,750			-			-			92,750
Proceeds from issurance of Series 1B Preferred Stock		-		-		900		-		-		-		900,000			-			-			900,000
Preferred Stock issuance cost														(20,000	)								(20,000	)
Down round deemed dividend		-		-		-		-		-		-		11,653,986			(11,653,986	)		-			-
Net Loss		-		-		-		-		-		-		-			(9,996,824	)		-			(9,996,824	)
Foreign Currency Translation Gain/(Loss)		-		-		-		-		-		-		-			-			1,870			1,870
Balance at June 30, 2023		48,100	$	5		900	$	-		368,907	$	37	$	466,299,656		$	(469,078,672	)	$	(14,154	)	$	(2,793,128	)
Conversion of L1 Note into Common Stock		-		-		-		-		106,250		11		(603,668	)		-			-			(603,657	)
Conversion of Sabby Note into Common Stock		-		-		-		-		74,042		7		151,942			-			-			151,949
Prepayment of Common Stock purchase		-		-		-		-		-		-		2,088,290			-			-			2,088,290
Share-based compensation		-		-		-		-		-		-		139,067			-			-			139,067
Net Loss		-		-		-		-		-		-		-			(1,909,273	)		-			(1,909,273	)
Foreign Currency Translation Gain/(Loss)		-		-		-		-		-		-		-			-			19,940			19,940
Balance at September 30, 2023		48,100	$	5		900	$	-		549,199	$	55	$	468,075,287		$	(470,987,945	)	$	5,786		$	(2,906,812	)


	Series A Preferred Stock				Series 1A Preferred Stock					Common Stock				Additional Paid-In			Accumulated			Other Accumulated Comprehensive			Total Stockholders’ Equity
	Shares		Amount		Shares			Amount		Shares		Amount		Capital			Deficit			Loss			(Deficit)
Balance at January 1, 2022		48,100	$	5		3,700		$	-		113,256	$	12	$	424,949,165		$	(427,782,788	)	$	-		$	(2,833,606	)
Conversion of TubeSolar Series 1A Preferred Stock into Common Stock		-		-		(2,400	)		-		24,000		2		(2	)		-			-			-
Conversion of Crowdex Series 1A Preferred Stock into Common Stock		-		-		(1,300	)		-		13,000		1		(1	)		-			-			-
Conversion of BD1 Note into Common Stock		-		-		-			-		79,000		8		7,899,992			-			-			7,900,000
Conversion of Nanyang Note into Common Stock		-		-		-			-		6,000		1		599,999			-			-			600,000
Conversion of Fleur Note into Common Stock		-		-		-			-		7,000		1		699,999			-			-			700,000
Net Loss		-		-		-			-		-		-		-			(6,610,034	)		-			(6,610,034	)
Foreign Currency Translation Gain/(Loss)		-		-		-			-		-		-		-			-			(13,353	)		(13,353	)
Balance at June 30, 2022		48,100	$	5		-		$	-		242,256	$	25	$	434,149,152		$	(434,392,822	)	$	(13,353	)	$	(256,993	)
Conversion of Nanyang Note into Common Stock		-		-		-			-		9,000		1		899,999			-			-			900,000
Conversion of Fleur Note into Common Stock		-		-		-			-		3,000		-		300,000			-			-			300,000
Proceeds from private placement:		-		-		-			-		-				-			-			-			-
Common stock (8/19 @$540)		-		-		-			-		4,717		-		2,551,405			-			-			2,551,405
Warrants (8/19 @ $346)		-		-		-			-		-		-		2,448,595			-			-			2,448,595
Private placement costs		-		-		-			-		-		-		(119,617	)		-			-			(119,617	)
Share-based compensation		-		-		-			-		-		-		3,796,150			-			-			3,796,150
Net Loss		-		-		-			-		-		-		-			(7,910,566	)		-			(7,910,566	)
Foreign Currency Translation Gain/(Loss)		-		-		-			-		-		-		-			-			(2,671	)		(2,671	)
Balance at September 30, 2022		48,100	$	5		-		$	-		258,973	$	26	$	444,025,684		$	(442,303,388	)	$	(16,024	)	$	1,706,303


	Three months ended			Nine months ended
	September 30, 2023			September 30, 2023
Net Loss	$	(1,909,273	)	$	(11,906,097	)
Down round deemed dividend		-			(11,653,986	)
Net Loss attributable to common shareholders		(1,909,273	)		(23,560,083	)
Earnings Per Share (Basic and Diluted)		(4.04	)		(66.40	)


	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	)


	Post ASU 2020-06			Pre ASU 2020-06			Difference
Three months ended September 30, 2023
Net Loss	$	(1,909,273	)	$	(5,668,147	)	$	3,758,874
Net Loss attributable to common shareholders		(1,909,273	)		(5,668,147	)		3,758,874
Earnings Per Share (Basic and Diluted)		(4.04	)		(11.98	)		(7.94	)

Nine months ended September 30, 2023
Net Loss	$	(11,906,097	)	$	(20,553,708	)	$	8,647,611
Net Loss attributable to common shareholders		(23,560,083	)		(32,207,694	)		8,647,611
Earnings Per Share (Basic and Diluted)		(66.40	)		(90.77	)		(24.37	)


	Asset Price Allocation
Inventory
Raw Material	$	130,030
Finished Goods		62,427
Other Assets		98,746
Fixed Assets
Manufacturing machinery and equipment		3,682,621
Furniture, fixtures, computer hardware and computer software		110,102


	Principal Balance 12/31/2022		Notes converted			Principal Balance 9/30/2023		Less: Discount Balance			Net Principal Balance 9/30/2023
Sabby Volatility Warrant Master Fund, LTD	$	7,392,899	$	(7,392,899	)	$	—	$	—		$	—
L1 Capital Global Opportunities Master Fund, Ltd		7,500,000		(7,093,333	)		406,667		(87,126	)		319,541
	$	14,892,899	$	(14,486,232	)	$	406,667	$	(87,126	)	$	319,541


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


	Debt Settlement
Equity issued for convertible debt	$	2,912,759
Conversions payable		6,470,540
Cash repayments		1,025,423
Accelerated discount recognized in APIC		4,077,510
Principal settled during the nine months ended September 30, 2023	$	14,486,232


	Shares		Weighted Average Grant Date Fair Value
Non-vested at January 1, 2023		15,760		989.08
Vested		2,271		926.66
Forfeited		11,389		1,074.00
Non-vested at September 30, 2023		2,100		596.00

Large accelerated filer

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Non-accelerated filer

Smaller reporting company

Emerging growth company