10-Q 1 asti-20240331.htm 10-Q 10-Q
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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 March 31, 2024

or

 

 

 

 

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 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:

 

Large accelerated filer

 

Accelerated filer

 

 

 

 

 

 

 

 

Non-accelerated filer

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of May 9, 2024, there were 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 March 31, 2024

Table of Contents

 

PART I. FINANCIAL INFORMATION

 

Item 1.

Unaudited Condensed Financial Statements

1

Unaudited Condensed Balance Sheets - as of March 31, 2024 and December 31, 2023

1

Unaudited Condensed Statements of Operations and Comprehensive Income - For the Three Months Ended March 31, 2024 and 2023

2

Unaudited Condensed Statements of Changes in Stockholders’ Equity (Deficit) - for the Three Months Ended March 31, 2024 and 2023

3

Unaudited Condensed Statements of Cash Flow - For the Three Months Ended March 31, 2024 and 2023

5

Notes to the Unaudited Condensed Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

19

Item 4.

Controls and Procedures

19

PART II. OTHER INFORMATION

20

Item 1.

Legal Proceedings

20

Item 1A.

Risk Factors

20

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

21

Item 3.

Defaults Upon Senior Securities

21

Item 4.

Mine Safety Disclosures

21

Item 5.

Other Information

21

Item 6.

Exhibits

23

SIGNATURES

28

 

 

 

 


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; 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, 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)

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

187,474

 

 

$

1,048,733

 

Trade receivables, net of allowance of $0 and $0, respectively

 

 

-

 

 

 

-

 

Inventories, net

 

 

448,756

 

 

 

447,496

 

Prepaid and other current assets

 

 

246,706

 

 

 

39,279

 

Total current assets

 

 

882,936

 

 

 

1,535,508

 

 

 

 

 

 

 

 

Property, Plant and Equipment:

 

 

19,901,016

 

 

 

21,177,892

 

Accumulated depreciation

 

 

(19,395,659

)

 

 

(20,131,008

)

Property, Plant and Equipment, net

 

 

505,357

 

 

 

1,046,884

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

Operating lease right-of-use assets, net

 

 

2,249,042

 

 

 

2,364,672

 

Patents, net of accumulated amortization of $177,099 and $173,387
   respectively

 

 

50,266

 

 

 

53,978

 

Equity method investment

 

 

67,179

 

 

 

68,867

 

Other non-current assets

 

 

1,228,399

 

 

 

1,228,797

 

 

 

 

3,594,886

 

 

 

3,716,314

 

Total Assets

 

$

4,983,179

 

 

$

6,298,706

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,214,116

 

 

$

579,237

 

Related party payables

 

 

33,846

 

 

 

4,231

 

Accrued expenses

 

 

1,215,560

 

 

 

1,354,159

 

Accrued payroll

 

 

234,914

 

 

 

160,477

 

Accrued professional services fees

 

 

933,872

 

 

 

849,282

 

Accrued interest

 

 

653,199

 

 

 

628,145

 

Current portion of operating lease liability

 

 

512,158

 

 

 

491,440

 

Conversions payable (Note 12)

 

 

-

 

 

 

1,089,160

 

Cash payable (Note 12)

 

 

199,997

 

 

 

-

 

Current portion of convertible notes, net

 

 

6,270

 

 

 

354,936

 

Bridge loan

 

 

353,269

 

 

 

-

 

Other payable

 

 

250,000

 

 

 

250,000

 

Total current liabilities

 

 

5,607,201

 

 

 

5,761,067

 

Long-Term Liabilities:

 

 

 

 

 

 

Non-current operating lease liabilities

 

 

1,904,892

 

 

 

2,043,025

 

Accrued warranty liability

 

 

21,225

 

 

 

21,225

 

Total liabilities

 

 

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 ($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

 

 

482,458,139

 

 

 

480,942,526

 

Accumulated deficit

 

 

(485,016,178

)

 

 

(482,478,436

)

Accumulated other comprehensive income (loss)

 

 

7,224

 

 

 

8,936

 

Total stockholders’ equity (deficit)

 

 

(2,550,139

)

 

 

(1,526,611

)

Total Liabilities and Stockholders’ Equity (Deficit)

 

$

4,983,179

 

 

$

6,298,706

 

 

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

1


Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

 

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

2024

 

 

2023

 

Revenues

 

 

 

 

 

 

Products

 

$

5,600

 

 

$

99,225

 

Milestone and engineering

 

 

-

 

 

 

25,000

 

Total Revenues

 

 

5,600

 

 

 

124,225

 

Costs and Expenses

 

 

 

 

 

 

Costs of revenue

 

 

9,388

 

 

 

461,795

 

Research, development and manufacturing
   operations

 

 

607,233

 

 

 

1,665,694

 

Selling, general and administrative

 

 

1,060,041

 

 

 

1,591,821

 

Share-based compensation

 

 

259,234

 

 

 

1,404,450

 

Depreciation and amortization

 

 

20,757

 

 

 

25,781

 

Impairment loss

 

 

524,481

 

 

 

-

 

Total Costs and Expenses

 

 

2,481,134

 

 

 

5,149,541

 

Loss from Operations

 

 

(2,475,534

)

 

 

(5,025,316

)

Other Income/(Expense)

 

 

 

 

 

 

Other income/(expense), net

 

 

64,323

 

 

 

10,000

 

Interest expense

 

 

(126,555

)

 

 

(1,068,036

)

Total Other Income/(Expense)

 

 

(62,232

)

 

 

(1,058,036

)

Income/(Loss) on Equity Method Investments

 

 

24

 

 

 

-

 

Net Income/(Loss)

 

$

(2,537,742

)

 

$

(6,083,352

)

Net Income/(Loss) Per Share (Basic and Diluted)

 

$

(0.53

)

 

$

(34.21

)

Weighted Average Common Shares
   Outstanding
 (Basic)

 

 

4,758,077

 

 

 

177,850

 

Weighted Average Common Shares
   Outstanding
 (Diluted)

 

 

4,758,077

 

 

 

177,850

 

Other Comprehensive Income/(Loss)

 

 

 

 

 

 

Foreign currency translation gain/(loss)

 

 

(1,712

)

 

 

6,706

 

Net Comprehensive Income/(Loss)

 

$

(2,539,454

)

 

$

(6,076,646

)

 

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

2


Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

 

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(unaudited)

For the Three Months Ended March 31, 2024

 

 

 

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.

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Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

 

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(unaudited)

For the Three Months Ended March 31, 2023

 

 

 

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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Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

 

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

For the Three Months Ended

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

Operating Activities:

 

 

 

 

 

 

Net income/(loss)

 

$

(2,537,742

)

 

$

(6,083,352

)

Adjustments to reconcile net income (loss) to cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

20,758

 

 

 

25,781

 

Share-based compensation

 

 

259,234

 

 

 

1,404,450

 

Operating lease asset amortization

 

 

115,630

 

 

 

182,556

 

Amortization of debt discount

 

 

35,530

 

 

 

901,649

 

Impairment loss

 

 

524,481

 

 

 

 

Loss on equity method investment

 

 

(24

)

 

 

 

Inventory reserve expense

 

 

(23,355

)

 

 

97,465

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

 

 

 

(93,106

)

Inventories

 

 

22,095

 

 

 

4,755

 

Prepaid expenses and other current assets

 

 

(207,029

)

 

 

(1,182,239

)

Accounts payable

 

 

634,879

 

 

 

(14,016

)

Related party payable

 

 

29,615

 

 

 

(61,827

)

Operating lease liabilities

 

 

(117,415

)

 

 

(178,622

)

Accrued interest

 

 

25,054

 

 

 

166,386

 

Accrued expenses

 

 

20,428

 

 

 

(107,507

)

Net cash used in operating activities

 

 

(1,197,861

)

 

 

(4,937,627

)

Investing Activities:

 

 

 

 

 

 

Payments on purchase of assets

 

 

 

 

 

(48,650

)

Patent activity costs

 

 

 

 

 

(5,884

)

Net cash used in investing activities

 

 

 

 

 

(54,534

)

Financing Activities:

 

 

 

 

 

 

Proceeds from bridge loan

 

 

350,000

 

 

 

 

Payment of bridge loan

 

 

(13,398

)

 

 

 

Payment of convertible notes

 

 

 

 

 

(147,170

)

Net cash provided by/(used in) financing activities

 

 

336,602

 

 

 

(147,170

)

Net change in cash and cash equivalents

 

 

(861,259

)

 

 

(5,139,331

)

Cash and cash equivalents at beginning of period

 

 

1,048,733

 

 

 

11,483,018

 

Cash and cash equivalents at end of period

 

$

187,474

 

 

$

6,343,687

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

Cash paid for interest

 

$

63,562

 

 

$

 

Non-Cash Transactions:

 

 

 

 

 

 

Conversions of preferred stock, convertible notes, and conversions payable to equity

 

$

1,256,692

 

 

$

1,592,458

 

Exercise of Pre-funded warrants

 

$

72

 

 

$

 

 

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

5


NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION

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

NOTE 2. BASIS OF PRESENTATION

The accompanying, unaudited, condensed financial statements have been derived from the accounting records of the Company as of March 31, 2024 and December 31, 2023, and the results of operations for the three months ended March 31, 2024 and 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 considered necessary for a fair statement have been included. The Condensed Balance Sheet at December 31, 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, 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, 2023.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies were described in Note 2 to the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. There have been no significant changes to our accounting policies as of 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 March 31, 2024 and 2023, the Company recognized product revenue of $5,600 and $99,225, respectively.

Milestone and engineering revenue. Each milestone and engineering arrangement is a separate performance obligation. The transaction price is estimated using the most likely amount method and revenue is recognized as the performance obligation is satisfied through achieving manufacturing, cost, or engineering targets. During the three months ended March 31, 2024 and 2023, the Company recognized total milestone and engineering revenue of $0 and $25,000, respectively.-

6


Government contracts revenue. Revenue from government research and development contracts is generated under terms that are cost plus fee or firm fixed price. The Company generally recognizes this revenue over time using cost-based input methods, which recognizes revenue and gross profit as work is performed based on the relationship between actual costs incurred compared to the total estimated costs of the contract. In applying cost-based input methods of revenue recognition, the Company uses the actual costs incurred relative to the total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize.

Cost based input methods of revenue recognition are considered a faithful depiction of the Company’s efforts to satisfy long-term government research and development contracts and therefore reflect the performance obligations under such contracts. Costs incurred that do not contribute to satisfying the Company’s performance obligations are excluded from the input methods of revenue recognition as the amounts are not reflective of transferring control under the contract. Costs incurred towards contract completion may include direct costs plus allowable indirect costs and an allocable portion of the fixed fee. If actual and estimated costs to complete a contract indicate a loss, provision is made currently for the loss anticipated on the contract.

No government contract revenue was recognized during the three months ended March 31, 2024 and 2023.

Accounts Receivable. As of March 31, 2024 and December 31, 2023, the Company had an accounts receivable, net balance of $0 and $0, respectively. As of March 31, 2024 and December 31, 2023, the Company had an allowance for doubtful accounts of $0 and $0, respectively.

Deferred revenue for the three months ended March 31, 2024 was as follows:

 

Balance as of January 1, 2024

$

935

 

Additions

 

7,700

 

Recognized as revenue

 

(3,425

)

Balance as of March 31, 2024

$

5,210

 

Other Assets: Other assets is comprised of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Lease security deposit

 

$

625,000

 

 

$

625,000

 

Spare machine parts

 

 

603,399

 

 

 

603,797

 

Total Other Assets

 

$

1,228,399

 

 

$

1,228,797

 

Earnings per Share: Earnings per share (“EPS”) are the amount of earnings attributable to each share of common stock. Basic EPS has been computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Income available to common stockholders has been computed by deducting dividends accumulated for the period on cumulative preferred stock (whether or not earned) from net income. Diluted earnings per share has been computed by dividing net income adjusted on an if-converted basis for the period by the weighted average number of common shares and potentially dilutive common share outstanding (which consist of warrants, options, restricted stock units and convertible securities using the if-converted method to the extent they are dilutive). Approximately 7.9 million and 0.09 million shares of dilutive shares were excluded from the three months period ended March 31, 2024 and 2023, respectively, EPS calculation as their impact is antidilutive.

 

Recently Issued Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting: Improvement to Reportable Segment Disclosures ("ASU 2023-07"). ASU 2023-07 improves segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The amendments in ASU 2023-07 are effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years

7


beginning after December 15, 2024. Early adoption is permitted. Management is evaluating the impact of this ASU on the 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, 2023, the Company sold Series 1B preferred stock and completed a public offering to fund operations. Further discussion of these transactions can be found in Notes 13 and 14 in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

The Company currently has limited production capabilities in its Thornton facility and continues to focus on restarting production at industrial scale while continuing its 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 it has fully implemented this strategy. During the three months ended March 31, 2024 the Company used $1,197,861 in cash for operations.

Additional projected product revenues are not anticipated to result in a positive cash flow position for the next twelve months overall and as of March 31, 2024, the Company has a working deficit of $4,724,265, Management does not believe cash liquidity is sufficient for the next twelve months and will require additional financing.

The Company continues to look for ways to expand its production of PV films at industrial scale and to secure long-term contracts for the sale of such output. The Company also continues activities related to securing additional financing through strategic or financial investors, but there is no assurance the Company will be able to raise additional capital on acceptable terms or at all. If the Company's revenues do not increase rapidly, and/or additional financing is not obtained, the Company will be required to significantly curtail operations to reduce costs and/or sell assets. Such actions would likely have an adverse impact on the Company's future operations.

As a result of the Company’s recurring losses from operations and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises doubt as to the Company’s ability to continue as a going concern.

Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These condensed financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

NOTE 5. RELATED PARTY TRANSACTIONS

In September 2021, the Company and TubeSolar AG ("TubeSolar"), a former significant stakeholder in the Company, entered into a Long-Term and Joint Development Agreement ("JDA") where the Company would provide PV foils for use in TubeSolar's solar modules for agricultural photovoltaic applications. Additionally, the Company and TubeSolar 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. There were no Company contributions to Ascent Germany during the three months ended March 31, 2024 and 2023.

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

8


NOTE 6. SWITZERLAND ASSETS

On April 17, 2023, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Flisom AG (“Seller”), pursuant to which, among other things, the Company purchased certain assets relating to thin-film photovoltaic manufacture and production from Seller (collectively, the “Assets”). The purchase price paid by the Company was $4,083,926 (including $1,283,926 of transaction costs). The Company 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 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 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 March 31, 2024 and December 31, 2023:

 

 

 

As of
March 31,

 

 

As of
December 31,

 

 

 

2024

 

 

2023

 

Furniture, fixtures, computer hardware and
   computer software

 

$

468,589

 

 

$

468,588

 

Manufacturing machinery and equipment

 

 

19,384,346

 

 

 

20,661,222

 

Leasehold improvements

 

 

15,994

 

 

 

15,995

 

Manufacturing machinery and equipment,
   in progress

 

 

32,087

 

 

 

32,087

 

Depreciable property, plant and equipment

 

 

19,901,016

 

 

 

21,177,892

 

Less: Accumulated depreciation and amortization

 

 

(19,395,659

)

 

 

(20,131,008

)

Net property, plant and equipment

 

$

505,357

 

 

$

1,046,884

 

 

Depreciation expense for the three months ended March 31, 2024 and 2023 was $17,045 and $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 operating leases are comprised of approximately 100,000 rentable square feet for its manufacturing and operations and a Company car. These leases are classified and accounted for as operating leases. The building lease term is for 88 months commencing on September 21, 2020 at a rent of $50,000 per month including taxes, insurance and common area maintenance until December 31, 2020. Beginning January 1, 2021, the rent adjusted to $80,000 per month on a triple net basis and shall increase at an annual rate of 3% per annum until December 31, 2027.

Effective September 1, 2023, the lease was amended to reduce the rentable square feet from 100,000 to approximately 75,000 square feet and the rent and tenant share of expenses were decreased in proportion to the reduction in rentable square

9


feet. The Company recorded this as a lease modification in accordance with ASC 842, Leases, and recorded a reduction to the right of use asset and lease liability of $1,292,316 and $1,376,994, respectively. The Company recognized a gain on the lease modification of $84,678, which was recorded as other income in the Statement of Operations.

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

 

 

 

As of
March 31,

 

 

As of
December 31,

 

 

 

2024

 

 

2023

 

Operating lease right-of-use assets, net

 

$

2,249,042

 

 

$

2,364,672

 

Current portion of operating lease liability

 

 

512,158

 

 

 

491,440

 

Non-current portion of operating lease liability

 

 

1,904,892

 

 

 

2,043,025

 

During the three months ended March 31, 2024 and 2023, the Company recorded operating lease expense included in selling, general and administrative expenses of $190,497 and $261,343, respectively.

Future maturities of the operating lease liability are as follows:

 

Remainder of 2024

 

$

576,847

 

2025

 

 

792,203

 

2026

 

 

815,969

 

2027

 

 

840,449

 

Total lease payments

 

 

3,025,468

 

Less amounts representing interest

 

 

(608,418

)

Present value of lease liability

 

$

2,417,050

 

 

The remaining weighted average lease term and discount rate of the operating leases is 45.00 months and 7.0%, respectively.

 

NOTE 9. INVENTORIES

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

 

 

 

As of
March 31,

 

 

As of
December 31,

 

 

 

2024

 

 

2023

 

Raw materials

 

$

448,367

 

 

$

445,721

 

Work in process

 

 

389

 

 

 

1,775

 

Finished goods

 

 

-

 

 

 

-

 

Total

 

$

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.

10


These loans are not convertible into equity shares of the Company and are secured by a second lien on the Company's assets.

The carrying amount of this bridge loan approximates fair value because the Company's current borrowing rate does not materially differ from market rates for similar bank borrowings and due to its short maturity and is considered to be Level 2.

 

NOTE 11. OTHER PAYABLE

On June 30, 2017, the Company entered into an agreement with a vendor (“Vendor”) to convert the balance of their account into a note payable in the amount of $250,000. The note bears interest of 5% per annum and matured on February 28, 2018. As of March 31, 2024, the Company had not made any payments on this note, the accrued interest was $84,452, and the note is due upon demand. This note is recorded as Other payable in the unaudited Condensed Balance Sheets.

NOTE 12. CONVERTIBLE NOTES

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

 

 

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

 

During the three months ended March 31, 2024, $400,000 of principal was converted for 618,384 shares of common stock. During the three months ended March 31, 2024 and 2023, the Company had interest expense of $21,989 and $1,052,928, respectively, of which, $18,863 and $901,649, respectively was due to accretion of discount on the note. Interest payable was $33,064 as of 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 13. SERIES A PREFERRED STOCK

As of January 1, 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 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

11


with any distribution to the holders of common stock of the Company, an amount equal to $8.00 per share of Series A Preferred Stock plus any accrued and unpaid dividends.

As of March 31, 2024, there were 48,100 shares of Series A Preferred Stock outstanding and accrued and unpaid dividends of $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.

12


Series 1A, B-1, B-2, C, D, D-1, E, F, G, H, I, J, J-1, and K Preferred Stock

There were no transactions involving the Series 1A, B-1, B-2, C, D, D-1, E, F, G, H, I, J, J-1, or K during the three months ended March 31, 2024.

NOTE 15. SHARE-BASED COMPENSATION

In January 2024, the Company granted 459,000 shares of restricted stock units to employees and 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 also granted members of our advisory board an aggregate of 20,000 shares of restricted stock units. These unvested shares will vest prorata on January 1, 2025 and January 1, 2026.

The Company had a total of 327,631 unvested units as of March 31, 2024 that are expected to vest in the future. Total unrecognized share-based compensation expense from the remaining unvested restricted stock as of March 31, 2024 was approximately $1,220,860 and is expected to be recognized over 1.75 years. The Company recognized share-based compensation expense related to restricted stock grants of $259,234 for the three months ended March 31, 2024. The following table summarizes non-vested restricted stock and the related activity as of March 31, 2024:

 

 

 

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 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. Subsequent to March 31, 2024, the Company and Wainwright reached a proposed settlement agreement. The proposed settlement will not have a material impact on our financial statements.

The Company is subject to various legal proceedings, both asserted and unasserted, that arise in the ordinary course of business. The Company cannot predict the ultimate outcome of such legal proceedings or in certain instances provide reasonable ranges of potential losses. However, as of the date of this report, the Company believes that none of these claims will have a material adverse effect on its financial position or results of operations. In the event of unexpected subsequent developments and given the inherent unpredictability of these legal proceedings, there can be no assurance that the Company’s assessment of any claim will reflect the ultimate outcome, and an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s financial position or results of operations in particular quarterly or annual periods.

NOTE 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

13


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 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 up to $6 million of shares of common stock or, in lieu of common stock, one prefunded warrant to purchase a share of common stock on a best efforts basis.

The Company agreed to pay Dawson James a placement agent fee in cash equal to 8.00% of the gross proceeds from the sale of the shares of common stock; provided, however, that the placement agent fee shall equal 4% for investors that the Company directs to the Offering. The Company also agreed to reimburse Dawson James for all reasonable travel and other out-of-pocket expenses, including the reasonable fees of legal counsel, not to exceed $155,000.

On April 18, 2024, the Company, completed closings under the Offering of common stock. Aggregate gross proceeds from all closings under the offering total $5.09 million before deducting offering expenses. In the completed closings, the Company has issued an aggregate of (i) 15,179,460 common shares and (ii) 21,162,277 Pre-Funded Warrants. The Pre-Funded Warrants are immediately exercisable at a price of $0.0001 per share of common stock and only expire when such Pre-Funded warrants are fully exercised.

The net proceeds from the closings of the Offering were utilized to retire approximately $200,000 of cash payable and $3.6 million to repurchase and cancel a total of 5,596,232 outstanding common warrants with an exercise price of $1.765 per share that were both issued with our secured notes issued in December 2022. The repurchase of these warrants eliminated a substantial potential future issuance of common stock at a substantially reduced price. These warrants would have been adjusted in accordance with their terms to provide for the purchase of 70,554,495 shares of the Company’s common stock at an exercise price of $0.14 if they had not been repurchased by the Company.

Subsequent to March 31, 2024, 8,766,000 of the pre-funded warrants were exercised into common stock.

 

14


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and the notes to those financial statements appearing elsewhere in this Form 10-Q and our audited financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023 which was filed with the SEC on 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, 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 three months ended March 31, 2024, we generated $5,600 of total revenue. As of March 31, 2024, we had an accumulated deficit of $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.

15


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.

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.

Basis of Presentation: The accompanying unaudited condensed financial statements have been derived from the accounting records of Ascent Solar Technologies, Inc. as of March 31, 2024 and December 31, 2023, and the results of operations for the three months ended March 31, 2024 and 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 2 to the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Results of Operations

 

Comparison of the Three Months Ended March 31, 2024 and 2023

 

 

 

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