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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, 2023

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 Markets

 

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 15, 2023, there were 49,929,967 shares of our common stock issued and outstanding.

 

 

 

ASCENT SOLAR TECHNOLOGIES, INC.

Quarterly Report on Form 10-Q

For the Period Ended March 31, 2023

Table of Contents

 

PART I. FINANCIAL INFORMATION

 

Item 1.

Unaudited Condensed Financial Statements

1

Unaudited Condensed Balance Sheets - as of March 31, 2023 and December 31, 2022

1

Unaudited Condensed Statements of Operations and Comprehensive Income - For the Three Months Ended March 31, 2023 and 2022

2

Unaudited Condensed Statements of Changes in Stockholders’ Equity (Deficit) - for the Three Months Ended March 31, 2023 and 2022

3

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

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

20

Item 4.

Controls and Procedures

20

PART II. OTHER INFORMATION

21

Item 1.

Legal Proceedings

21

Item 1A.

Risk Factors

21

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

22

Item 3.

Defaults Upon Senior Securities

22

Item 4.

Mine Safety Disclosures

22

Item 5.

Other Information

22

Item 6.

Exhibits

23

SIGNATURES

27

 

 

 

 

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:

•
The impact of the novel coronavirus (“COVID-19”) pandemic on our business, results of operations, cash flows, financial condition and liquidity;
•
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, 2022.

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,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

6,343,687

 

 

$

11,483,018

 

Trade receivables, net of allowance of $26,000 and $26,000, respectively

 

 

94,875

 

 

 

1,769

 

Inventories, net

 

 

513,063

 

 

 

615,283

 

Prepaid and other current assets

 

 

1,507,609

 

 

 

344,110

 

Total current assets

 

 

8,459,234

 

 

 

12,444,180

 

 

 

 

 

 

 

 

Property, Plant and Equipment:

 

 

22,638,819

 

 

 

22,590,169

 

Accumulated depreciation

 

 

(22,059,497

)

 

 

(22,038,508

)

Property, Plant and Equipment, net

 

 

579,322

 

 

 

551,661

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

Operating lease right-of-use assets, net

 

 

4,141,958

 

 

 

4,324,514

 

Patents, net of accumulated amortization of $159,010 and $154,218
   respectively

 

 

81,075

 

 

 

79,983

 

Equity method investment

 

 

68,085

 

 

 

61,379

 

Other non-current assets

 

 

1,233,725

 

 

 

1,214,985

 

 

 

 

5,524,843

 

 

 

5,680,861

 

Total Assets

 

$

14,563,399

 

 

$

18,676,702

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

581,141

 

 

$

595,157

 

Related party payables

 

 

5,337

 

 

 

67,164

 

Accrued expenses

 

 

748,076

 

 

 

888,869

 

Accrued payroll

 

 

754,663

 

 

 

927,264

 

Accrued professional services fees

 

 

1,158,460

 

 

 

952,573

 

Accrued interest

 

 

725,446

 

 

 

559,060

 

Current portion of operating lease liability

 

 

754,168

 

 

 

733,572

 

Current portion of convertible notes

 

 

2,000,000

 

 

 

-

 

Other payable

 

 

250,000

 

 

 

250,000

 

Total current liabilities

 

 

6,977,291

 

 

 

4,973,659

 

Long-Term Liabilities:

 

 

 

 

 

 

Non-current operating lease liabilities

 

 

3,628,660

 

 

 

3,827,878

 

Non-current convertible notes, net

 

 

6,116,663

 

 

 

5,268,399

 

Accrued warranty liability

 

 

21,225

 

 

 

21,225

 

Total liabilities

 

 

16,743,839

 

 

 

14,091,161

 

Commitments and contingencies (Note 14)

 

 

 

 

 

 

Stockholders’ Equity (Deficit):

 

 

 

 

 

 

Series A preferred stock, $.0001 par value; 750,000 shares authorized; 48,100
   and 48,100 shares issued and outstanding, respectively ($862,326 and
   $850,301 Liquidation Preference, respectively)

 

 

5

 

 

 

5

 

Common stock, $0.0001 par value, 500,000,000 authorized; 37,491,954
   and 34,000,812 shares issued and outstanding, respectively

 

 

3,749

 

 

 

3,400

 

Additional paid in capital

 

 

451,336,338

 

 

 

452,135,653

 

Accumulated deficit

 

 

(453,511,214

)

 

 

(447,537,493

)

Accumulated other comprehensive loss

 

 

(9,318

)

 

 

(16,024

)

Total stockholders’ equity (deficit)

 

 

(2,180,440

)

 

 

4,585,541

 

Total Liabilities and Stockholders’ Equity (Deficit)

 

$

14,563,399

 

 

$

18,676,702

 

 

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

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ASCENT SOLAR TECHNOLOGIES, INC.

 

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

2023

 

 

2022

 

Revenues

 

 

 

 

 

 

Products

 

$

99,225

 

 

$

54,210

 

Milestone and engineering

 

 

25,000

 

 

 

512,000

 

Total Revenues

 

 

124,225

 

 

 

566,210

 

Costs and Expenses

 

 

 

 

 

 

Costs of revenue

 

 

461,795

 

 

 

532,890

 

Research, development and manufacturing
   operations

 

 

1,665,694

 

 

 

1,406,322

 

Selling, general and administrative

 

 

1,591,821

 

 

 

821,266

 

Share-based compensation

 

 

1,404,450

 

 

 

-

 

Depreciation and amortization

 

 

25,781

 

 

 

16,665

 

Total Costs and Expenses

 

 

5,149,541

 

 

 

2,777,143

 

Loss from Operations

 

 

(5,025,316

)

 

 

(2,210,933

)

Other Income/(Expense)

 

 

 

 

 

 

Other income/(expense), net

 

 

10,000

 

 

 

-

 

Interest expense

 

 

(1,068,036

)

 

 

(2,086,314

)

Total Other Income/(Expense)

 

 

(1,058,036

)

 

 

(2,086,314

)

Income/(Loss) on Equity Method Investments

 

 

-

 

 

 

(2

)

Net Income/(Loss)

 

$

(6,083,352

)

 

$

(4,297,249

)

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

 

$

(0.17

)

 

$

(0.20

)

Weighted Average Common Shares
   Outstanding (Basic)

 

 

35,569,990

 

 

 

21,671,248

 

Weighted Average Common Shares
   Outstanding (Diluted)

 

 

35,569,990

 

 

 

21,671,248

 

Other Comprehensive Income/(Loss)

 

 

 

 

 

 

Foreign currency translation gain/(loss)

 

 

6,706

 

 

 

(7,097

)

Net Comprehensive Income/(Loss)

 

$

(6,076,646

)

 

$

(4,304,346

)

 

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

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ASCENT SOLAR TECHNOLOGIES, INC.

 

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (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

 

 

Loss

 

 

(Deficit)

 

Balance at January 1, 2023

 

 

48,100

 

 

$

5

 

 

 

34,000,812

 

 

$

3,400

 

 

$

452,135,653

 

 

$

(447,537,493

)

 

$

(16,024

)

 

$

4,585,541

 

Impact of adopting ASU 2020-06

 

 

-

 

 

$

-

 

 

 

-

 

 

 

-

 

 

 

(3,795,874

)

 

 

109,631

 

 

 

-

 

 

 

(3,686,243

)

Balance at January 1, 2023, as adjusted

 

 

48,100

 

 

$

5

 

 

 

34,000,812

 

 

$

3,400

 

 

$

448,339,779

 

 

$

(447,427,862

)

 

$

(16,024

)

 

$

899,298

 

Conversion of L1 Note
   into Common Stock

 

 

-

 

 

 

-

 

 

 

1,440,090

 

 

 

144

 

 

 

508,596

 

 

 

-

 

 

 

-

 

 

 

508,740

 

Conversion of Sabby Note into
   Common Stock

 

 

-

 

 

 

-

 

 

 

2,051,052

 

 

 

205

 

 

 

1,083,513

 

 

 

-

 

 

 

-

 

 

 

1,083,718

 

Share-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,404,450

 

 

 

-

 

 

 

-

 

 

 

1,404,450

 

Net Loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(6,083,352

)

 

 

-

 

 

 

(6,083,352

)

Foreign Currency Translation
   Loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6,706

 

 

 

6,706

 

Balance at March 31, 2023

 

 

48,100

 

 

$

5

 

 

 

37,491,954

 

 

$

3,749

 

 

$

451,336,338

 

 

$

(453,511,214

)

 

$

(9,318

)

 

$

(2,180,440

)

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, 2022

 

 

 

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

 

 

$

-

 

 

 

4,786,804

 

 

$

479

 

 

$

424,948,698

 

 

$

(427,782,788

)

 

 

 

 

$

(2,833,606

)

Conversion of TubeSolar Series 1A
   Preferred Stock into Common
   Stock

 

 

-

 

 

 

-

 

 

 

(2,400

)

 

 

-

 

 

 

4,800,000

 

 

 

480

 

 

 

(480

)

 

 

-

 

 

 

-

 

 

 

-

 

Conversion of Crowdex Series 1A
   Preferred Stock into Common
   Stock

 

 

-

 

 

 

-

 

 

 

(1,300

)

 

 

-

 

 

 

2,600,000

 

 

 

260

 

 

 

(260

)

 

 

-

 

 

 

-

 

 

 

-

 

Conversion of BD1 Note
   into Common Stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

15,800,000

 

 

 

1,580

 

 

 

7,898,420

 

 

 

-

 

 

 

-

 

 

 

7,900,000

 

Conversion of Nanyang Note
   into Common Stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,200,000

 

 

 

120

 

 

 

599,880

 

 

 

-

 

 

 

-

 

 

 

600,000

 

Conversion of Fleur Note into
   Common Stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,400,000

 

 

 

140

 

 

 

699,860

 

 

 

-

 

 

 

-

 

 

 

700,000

 

Net Loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,297,249

)

 

 

-

 

 

 

(4,297,249

)

Foreign Currency Translation
   Loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(7,097

)

 

 

(7,097

)

Balance at March 31, 2022

 

 

48,100

 

 

$

5

 

 

 

-

 

 

$

-

 

 

 

30,586,804

 

 

$

3,059

 

 

$

434,146,118

 

 

$

(432,080,037

)

 

$

(7,097

)

 

$

2,062,048

 

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,

 

 

 

2023

 

 

2022

 

Operating Activities:

 

 

 

 

 

 

Net income/(loss)

 

$

(6,083,352

)

 

$

(4,297,249

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

25,781

 

 

 

16,665

 

Share-based compensation

 

 

1,404,450

 

 

 

—

 

Operating lease asset amortization

 

 

182,556

 

 

 

168,671

 

Amortization of debt discount

 

 

901,649

 

 

 

2,069,206

 

Loss on equity method investment

 

 

—

 

 

 

2

 

Inventory reserve expense

 

 

97,465

 

 

 

—

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(93,106

)

 

 

(512,004

)

Inventories

 

 

4,755

 

 

 

(45,448

)

Prepaid expenses and other current assets

 

 

(1,182,239

)

 

 

(411,802

)

Accounts payable

 

 

(14,016

)

 

 

(41,565

)

Related party payable

 

 

(61,827

)

 

 

—

 

Operating lease liabilities

 

 

(178,622

)

 

 

(157,479

)

Accrued interest

 

 

166,386

 

 

 

15,107

 

Accrued expenses

 

 

(107,507

)

 

 

403,816

 

Net cash used in operating activities

 

 

(4,937,627

)

 

 

(2,792,080

)

Investing Activities:

 

 

 

 

 

 

Contributions to equity method investment

 

 

—

 

 

 

(83,559

)

Payments on purchase of assets

 

 

(48,650

)

 

 

(57,451

)

Patent activity costs

 

 

(5,884

)

 

 

(308

)

Net cash used in investing activities

 

 

(54,534

)

 

 

(141,318

)

Financing Activities:

 

 

 

 

 

 

Payment of convertible notes

 

 

(147,170

)

 

 

—

 

Net cash used in financing activities

 

 

(147,170

)

 

 

—

 

Net change in cash and cash equivalents

 

 

(5,139,331

)

 

 

(2,933,398

)

Cash and cash equivalents at beginning of period

 

 

11,483,018

 

 

 

5,961,760

 

Cash and cash equivalents at end of period

 

$

6,343,687

 

 

$

3,028,362

 

Non-Cash Transactions:

 

 

 

 

 

 

Non-cash conversions of convertible notes to equity

 

$

1,592,458

 

 

$

9,200,000

 

Series 1A preferred stock conversion

 

$

—

 

 

$

740

 

 

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

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Table of Contents

 

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION

Ascent Solar Technologies, Inc. (the “Company") is focusing on integrating its 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 these industries and can achieve economies of scale in sourcing, development, and production in commericializing products for these customers.

Effective March 13, 2023, the Company began focusing its Thornton manufacturing facility as a Perovskite Center of Excellence and has dedicated the facility to the industrial commercialization of the Company's patent-pending Perovskite solar technologies. On April 18, 2023, the Company completed a transaction to acquire the manufacturing assets of Flisom AG, a Zurich based thin-film solar manufacturer. The Company will continue to be headquartered in Thornton, CO and will commence manufacturing using its new manufacturing assets in Zurich, Switzerland.

NOTE 2. BASIS OF PRESENTATION

The accompanying, unaudited, condensed financial statements have been derived from the accounting records of the Company as of March 31, 2023 and December 31, 2022, and the results of operations for the three months ended March 31, 2023 and 2022.

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 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. These 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.

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, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies were described in Note 3 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 have been no significant changes to our accounting policies as of March 31, 2023.

Revenue Recognition:

Product revenue. The Company recognizes revenue for the sale of PV modules and other equipment sales at a point in time following the transfer of control of such products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. For module and other equipment sales contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation identified in the contract

6

Table of Contents

 

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, 2023 and 2022, the Company recognized product revenue of $99,225 and $54,210, 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, 2023 and 2022, the Company recognized total milestone and engineering revenue of $25,000 and $512,000, respectively. The $512,000 was earned from TubeSolar AG (“TubeSolar”), a related party.

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

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

No government contract revenue was recognized during the three months ended March 31, 2023 and 2022.

Accounts Receivable. As of March 31, 2023 and December 31, 2022, the Company had an accounts receivable, net balance of $94,875 and $1,769, respectively. As of March 31, 2023 and December 31, 2022, the Company had an allowance for doubtful accounts of $26,000 and $26,000, respectively.

Deferred revenue for the three months ended March 31, 2023 was as follows:

 

Balance as of January 1, 2023

$

13,000

 

Additions

 

29,350

 

Recognized as revenue

 

(29,350

)

Balance as of March 31, 2023

$

13,000

 

Earnings per Share: Earnings per share (“EPS”) are the amount of earnings attributable to each share of common stock. Basic EPS has been computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Income available to common stockholders has been computed by deducting dividends accumulated for the period on cumulative preferred stock (whether or not earned) from net income. Diluted earnings per share has been computed by dividing net income adjusted on an if-converted basis for the period by the weighted average number of common shares and potentially dilutive common share outstanding (which consist of warrants, options, restricted stock units and convertible securities using the if-converted method to the extent they are dilutive). Approximately 18.4 million and 2.4 million shares of dilutive shares were excluded from the three months period ended March 31, 2023 and 2022, respectively, EPS calculation as their impact is antidilutive.

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.

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The cumulative effect of the changes made to the Company’s January 1, 2023, 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 is as follows:

 

 

 

Post ASU 2020-06

 

 

Pre ASU 2020-06

 

 

Difference

 

Net Loss

 

$

 

(6,083,352

)

 

$

 

(8,283,316

)

 

$

 

2,199,964

 

Earnings Per Share (Basic and Diluted)

 

 

 

(0.17

)

 

 

 

(0.23

)

 

 

 

0.06

 

Other new pronouncements issued but not effective as of March 31, 2023 are not expected to have a material impact on the Company’s condensed financial statements.

NOTE 4. LIQUIDITY, CONTINUED OPERATIONS, AND GOING CONCERN

During the year ended December 31, 2022, the Company entered into multiple financing agreements to fund operations. Further discussion of these transactions can be found in Notes 12 and 15 in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

The Company redeployed its Thornton manufacturing facility to focus on industrial commercialization of the Company's patent-pending Perovskite solar technologies. Additionally, the Company purchased manufacturing assets in Zurich, Switzerland where the Company plans to begin production. The Company does not expect that sales revenue and cash flows will be sufficient to support operations and cash requirements until it has fully implemented this strategy. During the three months ended March 31, 2023 the Company used $4,937,627 in cash for operations.

Additional projected product revenues are not anticipated to result in a positive cash flow position for the next twelve months overall and, while as of March 31, 2023, the Company has a working capital of $1,481,943, 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 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.

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NOTE 5. RELATED PARTY TRANSACTIONS

On September 15, 2021, the Company entered into a Long-Term Supply and Joint Development Agreement (“JDA”) with TubeSolar. Under the terms of the JDA, the Company will produce, and TubeSolar will purchase, thin-film photovoltaic (“PV”) foils (“PV Foils”) for use in TubeSolar’s solar modules for agricultural photovoltaic (“APV”) applications that require solar foils for its production. Additionally, the Company will receive (i) up to $4 million of non-recurring engineering (“NRE”) fees, (ii) up to $13.5 million of payments upon achievement of certain agreed upon production and cost structure milestones and (iii) product revenues from sales of PV Foils to TubeSolar. The JDA has no fixed term, and may only be terminated by either party for breach. No revenue was recognized under the JDA during the three months ended March 31, 2023. $512,000 of NRE revenue were recognized under the JDA during the three months ended March 31, 2022.

The Company and TubeSolar have also jointly established Ascent Solar Technologies Germany GmbH (“Ascent Germany”), in which TubeSolar holds of 30% of the entity. Ascent Germany was established to operate a PV manufacturing facility in Germany that will produce and deliver PV Foils exclusively to TubeSolar. The parties expect to jointly develop next generation tooling for use in manufacturing PV Foils at the JV facility. The Company accounts for this investment as an equity method investment as it does not have control of this entity, but does have significant influence over the activities that most significantly impact the entity’s operations and financial performance. The Company contributed $0 and $83,559 to Ascent Germany during the three months ended March 31, 2023 and 2022, respectively. The Company currently cannot quantify its maximum exposure in this entity.

NOTE 6. PROPERTY, PLANT AND EQUIPMENT

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

 

 

 

As of
March 31,

 

 

As of
December 31,

 

 

 

2023

 

 

2022

 

Furniture, fixtures, computer hardware and
   computer software

 

$

482,235

 

 

$

482,235

 

Manufacturing machinery and equipment

 

 

21,765,284

 

 

 

21,739,504

 

Leasehold improvements

 

 

103,951

 

 

 

87,957

 

Manufacturing machinery and equipment,
   in progress

 

 

287,349

 

 

 

280,473

 

Depreciable property, plant and equipment

 

 

22,638,819

 

 

 

22,590,169

 

Less: Accumulated depreciation and amortization

 

 

(22,059,497

)

 

 

(22,038,508

)

Net property, plant and equipment

 

$

579,322

 

 

$

551,661

 

 

Depreciation expense for the three months ended March 31, 2023 and 2022 was $20,989 and $11,873, respectively. Depreciation expense is recorded under “Depreciation and amortization expense” in the unaudited Condensed Statements of Operations.

NOTE 7. 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.

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

 

 

 

As of
March 31,

 

 

As of
December 31,

 

 

 

2023

 

 

2022

 

Operating lease right-of-use assets, net

 

$

4,141,958

 

 

$

4,324,514

 

Current portion of operating lease liability

 

 

754,168

 

 

 

733,572

 

Non-current portion of operating lease liability

 

 

3,628,660

 

 

 

3,827,878

 

 

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During the three months ended March 31, 2023 and 2022, the Company recorded operating lease expense included in selling, general and administrative expenses of $261,343 and $258,392, respectively.

Future maturities of the operating lease liability are as follows:

 

Remainder of 2023

 

$

772,225

 

2024

 

 

1,060,187

 

2025

 

 

1,090,196

 

2026

 

 

1,112,903

 

2027

 

 

1,146,290

 

Total lease payments

 

 

5,181,801

 

Less amounts representing interest

 

 

(798,973

)

Present value of lease liability

 

$

4,382,828

 

 

The remaining weighted average lease term and discount rate of the operating leases is 56.88 months and 7.0%, respectively.

 

NOTE 8. INVENTORIES

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

 

 

 

As of
March 31,

 

 

As of
December 31,

 

 

 

2023

 

 

2022

 

Raw materials

 

$

474,102

 

 

$

577,799

 

Work in process

 

 

38,961

 

 

 

37,351

 

Finished goods

 

 

-

 

 

 

133

 

Total

 

$

513,063

 

 

$

615,283

 

 

NOTE 9. OTHER PAYABLE

On June 30, 2017, the Company entered into an agreement with a vendor (“Vendor”) to convert the balance of their account into a note payable in the amount of $250,000. The note bears interest of 5% per annum and matured on February 28, 2018. As of March 31, 2023, the Company had not made any payments on this note, the accrued interest was $68,836, and the note is due upon demand. This note is recorded as Other payable in the Condensed Balance Sheets.

NOTE 10. 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
3/31/2023

 

Less:
Discount
Balance

 

Net Principal
Balance
3/31/2023

 

Sabby Volatility Warrant Master Fund, LTD

$

7,392,899

 

$

(1,786,212

)

$

5,606,687

 

$

(1,860,185

)

$

3,746,502

 

L1 Capital Global Opportunities Master Fund, Ltd

 

7,500,000

 

 

(960,000

)

 

6,540,000

 

 

(2,169,839

)

 

4,370,161

 

 

$

14,892,899

 

$

(2,746,212

)

$

12,146,687

 

$

(4,030,024

)

$

8,116,663

 

 

Sabby / L1 Convertible Notes

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

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pursuant to a direct registered offering (the “Registered Advance Notes”) and $2,500,000 in aggregate principal amount of Senior Secured Original Issue 10% Discount Convertible Advance Notes in a concurrent private placement (the “Private Placement Advance Notes” and, together with the Registered Advance Notes, the “Advance Notes”).

On March 29, 2023, the Company and each of the Investors entered into a Waiver and Amendment Agreement (the “Amendment”) relating to the Securities Purchase Contract and the Advance Notes to waive any event of default arising under Section 2.1 of the Advance Notes relating to the Company’s receipt of notice from the Listing Qualifications Department of Nasdaq indicating that the Company is not in compliance with the $1.00 Minimum Bid Price Requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market (the “Specified Default”).

Pursuant to the Amendment, the Company and each of the Investors agreed to waive the Specified Default and further agreed to the amend the Advance Notes to provide that (i) the new “Floor Price” for all purposes of the Advance Notes is $0.20 per share of the Company’s common stock, (ii) until the Company regains compliance with the $1.00 Minimum Bid Price Requirement, “Conversion Price” under the Advance Notes will mean the “Alternative Conversion Price” (as defined in the Advance Notes) and (iii) the Company will make certain prepayments of the Advance Notes held by the Investors on the following dates and in the following aggregate cash amounts, at a price equal to 100% of the principal amount of the Advance Notes to be repaid plus accrued and unpaid interest thereon (if any). The Company's failure to comply with the terms of the Amendment would constitute an Event of Default under the Advance Notes.

On April 12, 2023, the Company and each of the Investors entered in a further amendment to the Amendment (the “Revised Amendment”), to provide for a consistent prepayment schedule for the Advance Notes held by each of the Investors. After giving effect to the Revised Amendment, the Advance Notes will be prepaid by the Company in cash on the following dates and in the following aggregate amounts, at a price equal to 100% of the principal amount of the Advance Notes to be prepaid plus accrued and unpaid interest thereon (if any). The Company’s failure to comply with the terms of the Revised Amendment would constitute an “Event of Default” under the Advance Notes.

Prepayment Date

Aggregate

 

April 3, 2023

$

333,333

 

April 13, 2023

 

333,333

 

May 18, 2023

 

666,667

 

June 19, 2023

 

666,667

 

 

$

2,000,000

 

 

The Advance Notes are convertible to Common Stock. The fixed conversion price of the Advance Notes is subject to certain adjustments in accordance with the terms thereof, including certain anti-dilution adjustments in the event that the Company issues shares of Common Stock, securities convertible into, exercisable for or exchangeable for the Company’s Common Stock, rights or options to acquire Common Stock or convertible securities or any combination thereof, including as units with other securities or property in an integrated transaction, at a purchase or conversion, exercise or exchange price of less than the fixed conversion price then in effect with respect to the Advance Notes.

The Securities Purchase Contract also included certain warrants to purchase up to 2,513,406 shares of common stock (the "Warrants"). The Warrants were issued with an exercise price equal to $3.93 per share, subject to certain adjustments in certain events, including the future issuance by the Company of securities with a purchase or conversion, exercise or exchange price that is less than the exercise price of the Warrants then in effect at any time.

On April 14, 2023 the Company entered a securities purchase agreement (“SPA”) with Lucro Investments VCC-ESG Opportunities Fund (“Lucro”) for an approximate $9 million private placement (the “Private Placement”) of an aggregate of 7,499,997 shares of the Company’s Common Stock. The per share purchase price for the Shares is $1.20 per share. The terms of the SPA with Lucro triggered certain adjustments to the Advance Notes and the Warrants in accordance with the existing terms of the outstanding Advance Notes and the outstanding Warrants. Following these adjustments:

1.
The fixed conversion price of the approximately $10.1 million principal amount currently outstanding Advance Notes has been lowered to $0.3661 per share of Common Stock;
2.
The exercise price of the outstanding Warrants has been lowered to $0.3661 per share of Common Stock; and

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3.
The number of shares that the Warrants are exercisable for has been increased from 2,513,406 to 26,980,840 shares of Common Stock.

During the three months ended March 31, 2023, Sabby converted $1.79 million of principal for 2,051,053 shares of common stock. During the three months ended March 31, 2023, L1 converted $0.96 million of principal for 1,440,090 shares of common stock. During the three months ended March 31, 2023, the Company had interest expense of $1,052,928 of which, $901,649 was due to accretion of discount on the note. Interest payable was $173,400 as of March 31, 2023.

NOTE 11. SERIES A PREFERRED STOCK

As of January 1, 2023, there were 48,100 shares of Series A Preferred Stock outstanding. Holders of Series A Preferred Stock are entitled to cumulative dividends at a rate of 8% per annum when and if declared by the Board of Directors at its sole discretion. The dividends may be paid in cash or in the form of common stock (valued at 10% below market price, but not to exceed the lowest closing price during the applicable measurement period), at the discretion of the Board of Directors. The dividend rate on the Series A Preferred Stock is indexed to the Company's stock price and subject to adjustment.

The Series A Preferred Stock may be converted into shares of common stock at the option of the Company if the closing price of the common stock exceeds $1,160,000, adjusted for reverse stock splits, for twenty consecutive trading days, or by the holder at any time. The Company has the right to redeem the Series A Preferred Stock at a price of $8.00 per share, plus any accrued and unpaid dividends, plus the make-whole amount (if applicable). At March 31, 2023, 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 with any distribution to the holders of common stock of the Company, an amount equal to $8.00 per share of Series A Preferred Stock plus any accrued and unpaid dividends.

As of March 31, 2023, there were 48,100 shares of Series A Preferred Stock outstanding and accrued and unpaid dividends of $477,526.

 

NOTE 12. STOCKHOLDERS’ EQUITY (DEFICIT)

Common Stock

At March 31, 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 March 31, 2023, the Company had 37,491,954 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, 2023 and 2022.

During the three months ended March 31, 2023, $2.75 million of convertible debt was converted into 3,491,143 shares of common stock.

 

Preferred Stock

At March 31, 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 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, 2023, there are 3,929,311 outstanding warrants with exercise prices between $3.93 and $5.30 per share.

 

Series A Preferred Stock

Refer to Note 11 for information on Series A 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 months ended March 31, 2023.

NOTE 13. SHARE-BASED COMPENSATION

The Company granted restricted stock units to the Company's Chief Executive Officer and Chief Financial Officer and recognized share-based compensation expense related to restricted stock grants of $1,404,450 for the three months ended March 31, 2023. On April 26, 2023, the Company terminated its employment contract with the Company's Chief Executive Officer resulting in the forfeiture of 2,356,394 restricted stock units. The remaining non-vested shares of 513,333 units are expected to vest in the future. Total unrecognized share-based compensation expense from the remaining unvested restricted stock as of March 31, 2023 was approximately $1,529,733 and is expected to be recognized over 33 months. The following table summarizes non-vested restricted stock and the related activity as of March 31, 2023:

 

 

 

Shares

 

 

Weighted Average Grant Date Fair Value

 

Non-vested at January 1, 2023

 

 

3,152,033

 

 

 

4.95

 

Vested

 

 

(282,306

)

 

 

5.04

 

Non-vested at March 31, 2023

 

 

2,869,727

 

 

 

4.94

 

 

 

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NOTE 14. 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.

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

NOTE 15. SUBSEQUENT EVENTS

On April 14, 2023, the Company entered the Private Placement with Lucro Investments VCC-ESG Opportunities Fundfor an approximate $9 million private placement of an aggregate of 7,499,997 shares of the Company’s common stock, $0.0001 par value per share. The per share purchase price is $1.20 per share. The Private Placement will close in nine tranches of approximately $1 million. The first tranche is scheduled to close by May 8, 2023. The ninth and final tranche is scheduled to close in late December 2023. The Company has not received the first tranche funding pursuant to this agreement. Management continues to assess the status and viability of this agreement.

On April 17, 2023, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Flisom AG, a leading developer and manufacturer of photovoltaic thin film solar cells (“Seller”), pursuant to which, among other things, the Company purchased certain assets relating to thin-film photovoltaic manufacture and production from Seller (collectively, the “Assets”), including (i) certain manufacturing equipment located at Seller’s Niederhasli, Switzerland facility (the “Manufacturing Facility”) and (ii) related inventory and raw materials at the Manufacturing Facility (collectively, the “Transaction”). In connection with the Transaction, the Company also received a license to certain intellectual property rights used in the operation of the Assets and will also acquire, by operation of Swiss law, the employment contracts of certain employees of Seller in Switzerland who are functionally predominantly working with the Assets, subject to such employees being offered the right to remain employed by Seller after the closing of the Transaction (the “Closing”). 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 that Seller provide transition support for the Company’s operation of the Assets, with fees to be due and payable by the Company for performance of such support services, (ii) a Sublease Agreement related to the Company’s use of the premises at the Manufacturing Facility where the Assets are located (the “Sublease Agreement”), and (iii) a Technology License Agreement, pursuant to which Seller granted the Company a revocable, non-exclusive license to certain intellectual property rights of the Seller used in the operation of the Assets (the “Licensed IP”), subject to certain encumbrances on the Licensed IP in favor of Seller’s lender.

On April 20, 2023, the Company entered into a letter agreement (the “Letter Agreement”) with FL1 Holding GmbH, a German company (“FL1”) that is affiliated with BD 1 Investment Holding, LLC (“BD1”), an affiliate of the Company, BD1 and BD Vermögensverwaltung GmbH (“BD”), the parent entity of FL1 (collectively, the “Affiliates”), in connection with the prospective acquisition by FL1 of substantially all shares in Seller following the Closing, subject to the satisfaction of certain terms and conditions. Pursuant to the Letter Agreement, among other things, FL1 and one or more of the Affiliates agreed, on behalf of itself and its affiliates (i) to certain noncompetition and nonsolicitation obligations with respect to the Company and the Assets, including certain prospective customers of the products produced using the Assets, for a period of five (5) years from the Closing, subject to certain exceptions, (ii) to cause Seller to use certain of its intellectual property rights for limited internal purposes until such time as a joint collaboration agreement is entered into after the Closing among Seller, the Company and certain other affiliates of FL1 related to the licensing and use of such intellectual property, and otherwise not to dispose of or fail to maintain such intellectual property, (iii) to reimburse the Company for certain pre-Closing liabilities of Seller to the

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extent incurred by the Company following the closing of the Transaction; and (iv) to indemnify the Company for breaches of certain representations, warranties and covenants relating to the Assets.

Pursuant to the Letter Agreement, each of BD and BD1 have also agreed that (1) it and its affiliates will not offer to acquire or acquire, by merger, tender offer or otherwise, all or substantially all of the outstanding shares of capital stock of the Company not beneficially owned by BD and its affiliates, without the approval of a committee comprised of disinterested and independent members of the Company’s Board of Directors and the affirmative vote of a majority of the voting power of outstanding shares of the Company not beneficially owned by BD and its affiliates; (2) BD and its affiliates will not transfer any shares of the Company’s capital stock beneficially owned by them unless the transferee agrees in writing to be bound by the foregoing restriction; and (3) each of them will stand behind the obligations of FL1 pursuant to the Letter Agreement.

The Letter Agreement also grants the Company the option, but not the obligation, (i) to purchase certain intellectual property rights of Seller relating to thin-film photovoltaic manufacture and production for $2,000,000 following the release of certain liens on such intellectual property rights in favor of Seller’s lender, and (ii) for a period of 12 months following the Closing, to resell the Assets to FL1 for an aggregate amount equal to $5,000,000, with such transaction to close within 90 days following the exercise of the Company’s resale right.

On April 19, 2023, the Company entered a securities purchase agreement (“SPA”) with BD1 for a $5 million private placement (the “BD1 Private Placement”) of subordinated promissory notes (the “Notes”). The BD1 Private Placement will close in four tranches with the first tranche (for $2 million) scheduled to close by May 15, 2023. The fourth and final tranche is scheduled to close in mid-August 2023. The maturity date of all the Notes is September 30, 2026. The Notes will bear interest at 6% per annum and are (i) unsecured, (ii) not convertible, and (iii) are subordinated to the Company’s senior indebtedness. The Company has not received funding pursuant to this agreement.

Subsequent to March 31, 2023, Sabby and L1 converted approximately $3.1M principal into 12,153,013 shares of Common Stock.

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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 which was filed with the SEC on March 10, 2023. 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 to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitled “Forward-Looking Statements.”

Overview

We target high-volume production and high-value specialty solar markets. These include agrivoltaics, space, aerospace and high-value niche manufacturing/construction sectors. This strategy enables us to fully leverage what we believe are the unique advantages of our technology, including flexibility, durability and attractive power to weight and power to area performance. It further enables us to offer unique, differentiated solutions in large markets with less competition, and more attractive pricing.

Specifically, we focus on commercializing our proprietary solar technology in two high-value PV verticals:

I. Aerospace: Space, Near-space and Fixed Wing UAV

II. Agrivoltaics

We believe the value proposition of Ascent’s proprietary solar technology not only aligns with the needs of customers in these verticals, but also overcomes many of the obstacles other solar technologies face in these unique markets. Ascent has the capability to design and develop finished products for end users in these areas as well as collaborate with strategic partners to design and develop custom integrated solutions for products like airships and fixed-wing UAVs. Ascent sees significant overlap in the needs of end users across some of these verticals and believes it can achieve economies of scale in sourcing, development, and production in commercializing products for these customers.

The integration of Ascent's solar modules into space, near space, and aeronautic vehicles with ultra-lightweight and flexible solar modules is an important market opportunity for the Company. Customers in this market have historically required a high level of durability, high voltage and conversion efficiency from solar module suppliers, and we believe our products are well suited to compete in this premium market.

For the three months ended March 31, 2023, we generated $124,225 of total revenue. As of March 31, 2023, we had an accumulated deficit of $453,511,214.

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.

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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 and has purchased manufacturing assets in Zurich, Switzerland where the Company plans to begin production of its PV modules.

Significant Trends, Uncertainties and Challenges

We believe the significant trends, uncertainties and challenges that directly or indirectly affect our financial performance and results of operations include:

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

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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 March 31, 2023 and December 31, 2022, and the results of operations for the three months ended March 31, 2023 and 2022.

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 3 to the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Except for the adoption of ASU 2020-06, there have been no significant changes to our accounting policies as of March 31, 2023.

Results of Operations

 

Comparison of the Three Months Ended March 31, 2023 and 2022

 

 

 

Three Months Ended
March 31,

 

 

 

 

 

 

2023

 

 

2022

 

 

$ Change

 

Revenues

 

 

 

 

 

 

 

 

 

Products

 

$

99,225

 

 

$

54,210

 

 

$

45,015

 

Milestone and engineering

 

 

25,000

 

 

 

512,000

 

 

 

(487,000

)

Total Revenues

 

 

124,225

 

 

 

566,210

 

 

 

(441,985

)

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

Cost of Revenue

 

 

461,795

 

 

 

532,890

 

 

 

(71,095

)

Research, development and
   manufacturing operations

 

 

1,665,694

 

 

 

1,406,322

 

 

 

259,372

 

Selling, general and administrative

 

 

1,591,821

 

 

 

821,266

 

 

 

770,555

 

Share-based compensation

 

 

1,404,450

 

 

 

-

 

 

 

1,404,450

 

Depreciation and amortization

 

 

25,781

 

 

 

16,665

 

 

 

9,116

 

Total Costs and Expenses

 

 

5,149,541

 

 

 

2,777,143

 

 

 

2,372,398

 

Loss From Operations

 

 

(5,025,316

)

 

 

(2,210,933

)

 

 

(2,814,383

)

 

 

 

 

 

 

 

 

 

Other Income/(Expense)

 

 

 

 

 

 

 

 

 

Other income/(expense), net

 

 

10,000

 

 

 

-

 

 

 

10,000

 

Interest Expense

 

 

(1,068,036

)

 

 

(2,086,314

)

 

 

1,018,278

 

Total Other Income/(Expense)

 

 

(1,058,036

)

 

 

(2,086,314

)

 

 

1,028,278

 

Income/(Loss) on Equity Method Investments

 

 

-

 

 

 

(2

)

 

 

2

 

Net (Loss)/Income

 

$

(6,083,352

)

 

$

(4,297,249

)

 

$

(1,786,103

)

Comparison of the Three Months Ended March 31, 2023 and 2022

Total Revenues. Our total revenues decreased by $441,985, or 78%, for the three months ended March 31, 2023 when compared to the same period in 2022. The decrease was primarily due to milestone and engineering revenue in 2022 from TubeSolar, a related party, of $512,000 that was not repeated in 2023.

Cost of revenue. Cost of revenues is primarily comprised of repair and maintenance, material costs, and direct labor and overhead expenses. Our Cost of revenues decreased by $71,095, or 13%, for the three months ended March 31, 2023 when compared to the same period in 2022. This is due primarily to the Company redeploying its Thornton manufacturing facility to focus on industrial commercialization of the Company's patent-pending Perovskite solar technologies resulting in lower cost of revenue.

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Research, development and manufacturing operations. Research, development and manufacturing operations costs include costs incurred for product development, pre-production and production activities in our manufacturing facility. Research, development and manufacturing operations costs also include costs related to technology development. Research, development and manufacturing operations costs increased by $259,372, or 18%, for the three months ended March 31, 2023 when compared to the same period in 2022. This is due primarily to the Company redeploying the Thornton manufacturing facility as a Perovskite Center of Excellence and focusing on patent-pending Perovskite solar technologies.

Selling, general and administrative. Selling, general and administrative expenses increased by $770,555, or 94%, for the three months ended March 31, 2023 when compared to the same period in 2022. The increase in costs is due primarily to increased personnel compensation and administrative costs.

Share-based compensation. Share-based compensation expense increased by $1,404,450 or 100% for the three months ended March 31, 2023 when compared to the same period in 2022. The increase is due to the employment agreement between the Company and the CEO and CFO for restricted stock units.

Other Income/Expense. Other expense was $1,058,036 for the three months ended March 31, 2023, compared to other expense of $2,086,314 for the same period in 2022, a decline of $1,028,278. The decline is due primarily to a decrease in interest expense resulting from the convertible debt conversions and the accelerated recognition of debt discount in the prior year.

Net Loss. Our Net Loss increased by $1,786,103, or 42%, for the three months ended March 31, 2023 compared to the same period in 2022 due primarily to the items mentioned above.

 

Liquidity and Capital Resources

The Company has redeployed its Thornton facilities from a manufacturing facility to a research and development facility. Additionally, the Company purchased manufacturing equipment in Zurich, Switzerland where the Company plans to begin production. The Company does not expect that sales revenue and cash flows will be sufficient to support operations and cash requirements until it has fully implemented its product strategy. During the three months ended March 31, 2023 the Company used $4,937,627 in cash for operations.

Additionally, projected total revenues are not anticipated to result in a positive cash flow position for the year overall and, as of March 31, 2023, although the Company has working capital of $1,481,943, Management does not believe cash liquidity is sufficient for the next twelve months and will require additional financing.

The Company has begun activities related to securing additional financing through strategic or financial investors, but there is no assurance the Company will be able to raise additional capital on acceptable terms or at all. If the Company’s revenues do not increase rapidly, and/or additional financing is not obtained, the Company will be required to significantly curtail operations to reduce costs and/or sell assets. Such actions would likely have an adverse impact on the Company's future operations.

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

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

Statements of Cash Flows Comparison of the Three Months Ended March 31, 2023 and 2022

For the three months ended March 31, 2023, our cash used in operations was $4,937,627 compared to $2,792,080 for the three months ended March 31, 2022, an increase of $2,145,547. This increase is due primarily to increased Company expenses and timing of when expenses have been paid. For the three months ended March 31, 2023, cash used in investing activities was $54,534 compared to $141,318 used in investing activities for the three months ended March 31, 2022. This change was primarily the result of a decrease purchase of equipment and contributions to Ascent Germany. During the three months ended March 31, 2023, net cash used in operations of $4,937,627 were primarily funded from 2022 financing agreements.

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Table of Contents

 

Off Balance Sheet Transactions

As of March 31, 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Smaller Reporting Company Status

We are a “smaller reporting company” meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. As a smaller reporting company, we may rely on exemptions from certain disclosure requirement that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Risk

We hold no significant funds and have no significant future obligations denominated in foreign currencies as of March 31, 2023.

Although our reporting currency is the U.S. Dollar, we may conduct business and incur costs in the local currencies of other countries in which we may operate, make sales and buy materials. As a result, we are subject to currency translation risk. Further, changes in exchange rates between foreign currencies and the U.S. Dollar could affect our future net sales and cost of sales and could result in exchange losses.

Interest Rate Risk

Our exposure to market risks for changes in interest rates relates primarily to our cash equivalents and investment portfolio. As of March 31, 2023, our cash equivalents consisted only of operating accounts held with financial institutions. From time to time, we may hold restricted funds, money market funds, investments in U.S. government securities and high-quality corporate securities. The primary objective of our investment activities is to preserve principal and provide liquidity on demand, while at the same time maximizing the income we receive from our investments without significantly increasing risk. The direct risk to us associated with fluctuating interest rates is limited to our investment portfolio, and we do not believe a change in interest rates will have a significant impact on our financial position, results of operations, or cash flows.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosures. Our management conducted an evaluation required by Rules 13a-15 and 15d-15 under the Exchange Act of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 and 15d-15 under the Exchange Act as of March 31, 2023. Based on this evaluation, our management concluded the design and operation of our disclosure controls and procedures were effective as of March 31, 2023.

Changes in Internal Control Over Financial Reporting

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

20

Table of Contents

 

PART II. OTHER INFORMATION

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not currently aware of any such proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations.

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. 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.

We may not be able to maintain our current listing for our common stock on the Nasdaq Capital Market. Our inability to maintain our current listing on Nasdaq may limit the liquidity of our stock, increase its volatility, and hinder our ability to raise capital. If our common stock is delisted by Nasdaq, our common stock may be eligible for quotation on an over-the-counter quotation system or on the pink sheets. Upon any such delisting, our common stock would become subject to the regulations of the SEC relating to the market for penny stocks. A penny stock is any equity security not traded on a national securities exchange that has a market price of less than $5.00 per share. The regulations applicable to penny stocks may severely affect the market liquidity for our common stock and could limit the ability of shareholders to sell securities in the secondary market. In such a case, an investor may find it more difficult to dispose of or obtain accurate quotations as to the market value of our common stock, and there can be no assurance that our common stock will be eligible for trading or quotation on any alternative exchanges or markets.

Delisting from Nasdaq could adversely affect our ability to raise additional financing through public or private sales of equity securities, would significantly affect the ability of investors to trade our securities and would negatively affect the value and liquidity of our common stock. Delisting could also have other negative results, including the potential loss of confidence by employees, the loss of institutional investor interest and fewer business development opportunities.

 

Nasdaq Bid Price Notice

Our common stock was listed on Nasdaq on August 24, 2022. The Nasdaq listing rules require listed securities to maintain a minimum bid price of $1.00 per share. On March 23, 2023, the Company received a written notice from Nasdaq indicating that the Company was not in compliance with the $1.00 minimum bid price requirement. The notice did not result in the immediate delisting of the Company’s common stock from Nasdaq and the Company was provided 180 calendar days in which to regain compliance. If at any time during this 180 calendar day period the bid price of the Company’s common stock closes at or above $1.00 per share for a minimum of ten consecutive business days, the Nasdaq staff (the “Staff”) will provide the Company with a written confirmation of compliance and the matter will be closed.

Alternatively, if the Company fails to regain compliance with the bid price rule 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 Nasdaq (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 the bid price rule prior to the expiration of the initial 180 calendar day period, and if it appears to the Nasdaq staff that the Company will not be able to cure the deficiency, or if the Company is not otherwise eligible, the Nasdaq staff will provide the Company with written notification that its securities are subject to delisting from Nasdaq. At that time, the Company may appeal the delisting determination to a Nasdaq hearings panel.

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. In our quarterly report on Form 10-Q for the period ended March 31, 2023, the Company reported stockholders’ equity of $(2,180,440). The Company, therefore, may shortly receive a written notice from Nasdaq indicating that we are not in compliance with minimum stockholders’ equity requirement.

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Table of Contents

 

Typically, such a notice would have no immediate on the listing of the Company’s common stock. Nasdaq would typically provides the Company with 45 calendar days to submit a plan to regain compliance. If the plan is accepted, the Company would typically be granted up to 180 calendar days from notice date to evidence compliance. There can be no assurance that the Company would be able to regain compliance with all applicable continued listing requirements or that its plan would be accepted by the Nasdaq staff. In the event the plan would not be accepted by the Nasdaq staff, or in the event the plan would be accepted and the extension granted but the Company fails to regain compliance within the plan period, the Company would have the right to a hearing before an independent panel. The hearing request would stay any suspension or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the panel following the hearing.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities during the three months ended March 31, 2023.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

22

Table of Contents

 

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

 

 

 

    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)

 

 

 

    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)

 

 

 

23

Table of Contents

 

    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)

 

 

  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))

 

 

  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†

 

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†

 

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+

 

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+

 

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

 

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

 

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†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†

 

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

 

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

 

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)

24

Table of Contents

 

 

 

 

  10.18

 

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

 

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

 

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

 

 

 

  10.21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Subordinated Debt Securities Purchase Agreement dated April 19, 2023 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 25, 2023)

 

 

 

  10.30

 

Form of Subordinated Note under Subordinated Debt Securities Purchase Agreement dated April 19, 2023 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on April 25, 2023)

 

 

 

  10.31†

 

CEO Employment Agreement between the Company and Paul Warley dated as of May 1, 2023

 

 

 

  31.1*

 

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

 

 

  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.

 

 

 

25

Table of Contents

 

†

 

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.

26

Table of Contents

 

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 15th day of May, 2023.

 

 

 

 

 

May 15, 2023

By:

/s/ PAUL WARLEY

 

 

Paul Warley

Chief Executive Officer

(Principal Executive Officer)

 

 

 

May 15, 2023

By:

/s/ JIN H. JO

 

 

Jin H. Jo

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

27
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