Filed Pursuant to Rule 424(b)(3)

Registration No. 333-259837

 

PROSPECTUS SUPPLEMENT NO. 1

(To Prospectus Dated October 12, 2021)

 

 

ASCENT SOLAR TECHNOLOGIES, INC.

3,000,000,000 Shares of Common Stock

This prospectus supplement no. 1 supplements the prospectus dated October 12, 2021, relating to the resale by the selling stockholders identified in the prospectus, or their pledgees, donees, transferees, distributees, beneficiaries or other successors-in-interest, from time to time of up to 3,000,000,000 shares of common stock of Ascent Solar Technologies, Inc., par value $0.0001 per share, consisting of (i) 1,000,000,000 shares of common stock consisting of shares issuable and previously issued upon conversion of 100 shares of Series 1A Convertible Preferred Stock (“Series 1A Preferred Stock”) at a conversion price of $0.0001, per the stated value of the Series 1A Preferred Stock, which is $1,000 per share, (ii) and 2,000,000,000 shares of common stock (of a total of 6,000,000,000) issuable upon conversion of a convertible promissory note with principal amount of $600,000, maturing on December 18, 2025, convertible into common stock at a conversion price equal to $0.0001 per share.

This prospectus supplement incorporates into our prospectus the information contained in our attached Quarterly Report on Form 10-Q, which was filed with the Securities and Exchange Commission on November 10, 2021.

You should read this prospectus supplement in conjunction with the prospectus, including any supplements and amendments thereto. This prospectus supplement is qualified by reference to the prospectus except to the extent that the information in the prospectus supplement supersedes the information contained in the prospectus.

This prospectus supplement is not complete without, and may not be delivered or utilized except in connection with, the prospectus, including any supplements and amendments thereto.

You should carefully consider matters discussed under the caption “Risk Factors” beginning on page 2 of the prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus supplement is November 17, 2021.


 


 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

 

 

 

 

 

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

 

For the quarterly period ended September 30, 2021

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

OTC

 

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 electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 November 10, 2021, there were 21,012,250,143 shares of our common stock issued and outstanding.

 

 

 


 

 

ASCENT SOLAR TECHNOLOGIES, INC.

Quarterly Report on Form 10-Q

For the Period Ended September 30, 2021

Table of Contents

 

PART I. FINANCIAL INFORMATION

 

Item 1.

Unaudited Condensed Consolidated Financial Statements

1

 

Unaudited Condensed Consolidated Balance Sheets - as of September 30, 2021 and December 31, 2020

1

 

Unaudited Condensed Consolidated Statements of Operations - For the Three and Nine Months Ended September 30, 2021 and September 30, 2020

2

 

Unaudited Condensed Consolidated Statements of Changes in Stockholder's Deficit - for the Three and Nine Months Ended September 30, 2021 and September 30, 2020

3

 

Unaudited Condensed Consolidated Statements of Cash Flow - For the Nine Months Ended September 30, 2021 and September 30, 2020

5

 

Notes to the Unaudited Condensed Consolidated Financial Statements

6

Item 2.

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

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

23

Item 4.

Controls and Procedures

24

PART II. OTHER INFORMATION

26

Item 1.

Legal Proceedings

26

Item 1A.

Risk Factors

26

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

26

Item 3.

Defaults Upon Senior Securities

26

Item 4.

Mine Safety Disclosures

26

Item 5.

Other Information

26

Item 6.

Exhibits

27

SIGNATURES

29

 

 

 

 


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 “Business.” 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, including OEMs, system integrators, distributors, and e-commerce companies, who deal directly with end users in our target markets;

 

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 OTC Market;

 

The commencement, or outcome, of legal proceedings against us, or by us, including ongoing ligation 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 consumer electronics, 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 consumer electronics and 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, 2020.

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 Consolidated Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,281,094

 

 

$

167,725

 

Trade receivables, net of allowance of $26,000 and $45,833, respectively

 

 

3,971

 

 

 

5,539

 

Inventories, net

 

 

615,674

 

 

 

534,431

 

Prepaid and other current assets

 

 

189,730

 

 

 

71,575

 

Total current assets

 

 

5,090,469

 

 

 

779,270

 

 

 

 

 

 

 

 

 

 

Property, Plant and Equipment:

 

 

24,148,192

 

 

 

24,867,176

 

Accumulated depreciation

 

 

(23,964,362

)

 

 

(24,848,408

)

Property, Plant and Equipment, net

 

 

183,830

 

 

 

18,768

 

 

 

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

 

 

Operating lease right-of-use assets, net

 

 

5,150,718

 

 

 

5,633,663

 

Patents, net of accumulated amortization of $495,745 and $467,102,

   respectively

 

 

393,545

 

 

 

439,836

 

Other non-current assets

 

 

625,000

 

 

 

500,000

 

Total Assets

 

$

11,443,562

 

 

$

7,371,537

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

650,720

 

 

$

736,986

 

Related party payables

 

 

45,000

 

 

 

135,834

 

Accrued expenses

 

 

1,031,017

 

 

 

1,518,212

 

Accrued interest

 

 

479,872

 

 

 

438,063

 

Notes payable

 

 

250,000

 

 

 

250,000

 

Current portion of operating lease liability

 

 

628,438

 

 

 

575,404

 

Promissory notes, net

 

 

-

 

 

 

193,200

 

Convertible notes, net

 

 

250,000

 

 

 

-

 

Embedded derivative liability

 

 

-

 

 

 

5,303,984

 

Total current liabilities

 

 

3,335,047

 

 

 

9,151,683

 

Long-Term Liabilities:

 

 

 

 

 

 

 

 

Non-current operating lease liabilities

 

 

4,698,431

 

 

 

5,179,229

 

Non-current secured promissory notes, net

 

 

-

 

 

 

5,405,637

 

Non-current convertible notes, net

 

 

8,006,452

 

 

 

7,813,048

 

Accrued warranty liability

 

 

21,225

 

 

 

14,143

 

Total liabilities

 

 

16,061,155

 

 

 

27,563,740

 

Stockholders’ Deficit:

 

 

 

 

 

 

 

 

Series A preferred stock, $.0001 par value; 750,000 shares authorized; 48,100

   and 48,100 shares issued and outstanding, respectively ($789,241 and

   $752,765 Liquidation Preference, respectively)

 

 

5

 

 

 

5

 

Common stock, $0.0001 par value, 30,000,000,000 authorized; 19,678,916,809

   and 18,102,583,473 shares issued and outstanding, respectively

 

 

1,967,891

 

 

 

1,810,258

 

Additional paid in capital

 

 

417,608,765

 

 

 

399,780,319

 

Accumulated deficit

 

 

(424,194,254

)

 

 

(421,782,785

)

Total stockholders’ deficit

 

 

(4,617,593

)

 

 

(20,192,203

)

Total Liabilities and Stockholders’ Deficit

 

$

11,443,562

 

 

$

7,371,537

 

 

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

1


Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

$

11,723

 

 

$

6,293

 

 

$

557,369

 

 

$

60,445

 

Total Revenues

 

11,723

 

 

 

6,293

 

 

 

557,369

 

 

 

60,445

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of revenue

 

687,885

 

 

 

5,528

 

 

 

1,184,528

 

 

 

101,156

 

Research, development and manufacturing

   operations

 

1,086,513

 

 

 

150,060

 

 

 

2,716,395

 

 

 

485,592

 

Selling, general and administrative

 

882,641

 

 

 

315,660

 

 

 

2,244,771

 

 

 

505,053

 

Depreciation and amortization

 

15,111

 

 

 

26,325

 

 

 

40,047

 

 

 

137,978

 

Total Costs and Expenses

 

2,672,150

 

 

 

497,573

 

 

 

6,185,741

 

 

 

1,229,779

 

Loss from Operations

 

(2,660,427

)

 

 

(491,280

)

 

 

(5,628,372

)

 

 

(1,169,334

)

Other Income/(Expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income/(expense), net

 

67,644

 

 

 

3,055,366

 

 

 

68,443

 

 

 

3,314,966

 

Interest expense

 

(167,983

)

 

 

(963,648

)

 

 

(899,533

)

 

 

(3,227,112

)

Change in fair value of derivatives and

   gain/(loss) on extinguishment of

   liabilities, net

 

195,852

 

 

 

990,183

 

 

 

4,047,993

 

 

 

8,707,333

 

Total Other Income/(Expense)

 

95,513

 

 

 

3,081,901

 

 

 

3,216,903

 

 

 

8,795,187

 

Net Income/(Loss)

$

(2,564,914

)

 

$

2,590,621

 

 

$

(2,411,469

)

 

$

7,625,853

 

Net Income/(Loss) Per Share (Basic)

$

(0.00

)

 

$

0.00

 

 

$

(0.00

)

 

$

0.00

 

Net Income/(Loss) Per Share (Diluted)

$

(0.00

)

 

$

0.00

 

 

$

(0.00

)

 

$

0.00

 

Weighted Average Common Shares

   Outstanding (Basic)

 

19,074,521,203

 

 

 

5,230,490,450

 

 

 

18,531,805,287

 

 

 

5,053,300,857

 

Weighted Average Common Shares

   Outstanding (Diluted)

 

19,074,521,203

 

 

 

66,848,261,292

 

 

 

18,531,805,287

 

 

 

65,693,072,463

 

 

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

2


Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(unaudited)

For the Three and Nine Months Ended September 30, 2021

 

 

 

Series A

Preferred Stock

 

 

Series 1A

Preferred Stock

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Total

Stockholders’

Equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

(Deficit)

 

Balance at December 31,

   2020

 

 

48,100

 

 

$

5

 

 

 

1,300

 

 

$

-

 

 

 

18,102,583,473

 

 

$

1,810,258

 

 

$

399,780,319

 

 

$

(421,782,785

)

 

$

(20,192,203

)

Proceeds from issuance of

   Series 1A Preferred

   Stock

 

 

-

 

 

 

-

 

 

 

2,500

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,500,000

 

 

 

-

 

 

 

2,500,000

 

Proceeds from issuance of

   Common Stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

75,000,000

 

 

 

7,500

 

 

 

2,992,500

 

 

 

-

 

 

 

3,000,000

 

Conversion of Global

   Ichiban Note into

   Common Shares

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

168,000,000

 

 

 

16,800

 

 

 

5,783,200

 

 

 

-

 

 

 

5,800,000

 

Relieved on Conversion of

   Derivative Liability

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,686,079

 

 

 

-

 

 

 

1,686,079

 

Net Income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

153,445

 

 

 

153,445

 

Balance at June 30,

   2021

 

 

48,100

 

 

 

5

 

 

 

3,800

 

 

 

-

 

 

 

18,345,583,473

 

 

 

1,834,558

 

 

 

412,742,098

 

 

 

(421,629,340

)

 

 

(7,052,679

)

Proceeds from issuance of

  Common Shares

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

333,333,336

 

 

 

33,333

 

 

 

4,966,667

 

 

 

-

 

 

 

5,000,000

 

Conversion of TubeSolar

   Series 1A Preferred Stock

   into Common Shares

 

 

-

 

 

 

-

 

 

 

(100

)

 

 

-

 

 

 

1,000,000,000

 

 

 

100,000

 

 

 

(100,000

)

 

 

 

 

 

 

 

 

Net Loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,564,914

)

 

 

(2,564,914

)

Balance at September 30,

   2021

 

 

48,100

 

 

$

5

 

 

 

3,700

 

 

$

-

 

 

 

19,678,916,809

 

 

$

1,967,891

 

 

$

417,608,765

 

 

$

(424,194,254

)

 

$

(4,617,593

)

 

3


Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(unaudited)

For the Three and Nine Months Ended September 30, 2020

 

 

 

Series A

Preferred Stock

 

 

Series 1A

Preferred Stock

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Total

Stockholders’

Equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

(Deficit)

 

Balance at December 31,

   2019

 

 

48,100

 

 

$

5

 

 

 

-

 

 

$

-

 

 

 

4,759,161,650

 

 

$

475,917

 

 

$

397,817,526

 

 

$

(423,400,229

)

 

$

(25,106,781

)

Interest and Dividend

   Expense paid with

   Common Stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

21,328,800

 

 

 

2,132

 

 

 

-

 

 

 

-

 

 

 

2,132

 

Proceeds from issuance of

   Series 1A Preferred Stock

 

 

-

 

 

 

-

 

 

 

2,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,000,000

 

 

 

-

 

 

 

2,000,000

 

Conversion of Bellridge

   Note into Common Shares

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

450,000,000

 

 

 

45,000

 

 

 

-

 

 

 

-

 

 

 

45,000

 

Net Income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,035,232

 

 

 

5,035,232

 

Balance at June 30,

   2020

 

 

48,100

 

 

 

5

 

 

 

2,000

 

 

 

-

 

 

 

5,230,490,450

 

 

 

523,049

 

 

 

399,817,526

 

 

 

(418,364,997

)

 

 

(18,024,417

)

Net Income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,590,621

 

 

 

2,590,621

 

Balance at September 30,

   2020

 

 

48,100

 

 

$

5

 

 

 

2,000

 

 

$

-

 

 

 

5,230,490,450

 

 

$

523,049

 

 

$

399,817,526

 

 

$

(415,774,376

)

 

$

(15,433,796

)

 

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

4


Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

For the Nine Months Ended

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

Operating Activities:

 

 

 

 

 

 

 

 

Net income/(loss)

 

$

(2,411,469

)

 

$

7,625,853

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

40,047

 

 

 

137,978

 

Operating lease asset amortization

 

 

482,945

 

 

 

28,710

 

Realized (gain) on sale and foreclosure of assets

 

 

 

 

 

(3,314,966

)

Amortization of deferred financing costs

 

 

 

 

 

2,692

 

Non-cash interest expense

 

 

 

 

 

807,368

 

Amortization of debt discount

 

 

837,767

 

 

 

1,331,417

 

Bad debt expense

 

 

 

 

 

(141

)

Warranty reserve

 

 

7,082

 

 

 

(7,654

)

Change in fair value of derivatives and gain on extinguishment of liabilities, net

 

 

(4,047,993

)

 

 

(8,707,333

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

1,568

 

 

 

(5,608

)

Inventories

 

 

(81,243

)

 

 

23,843

 

Prepaid expenses and other current assets

 

 

(243,155

)

 

 

(283,912

)

Accounts payable

 

 

(86,266

)

 

 

(388,113

)

Related party payable

 

 

(90,834

)

 

 

 

Operating lease liabilities

 

 

(427,764

)

 

 

(16,129

)

Accrued interest

 

 

44,461

 

 

 

1,008,568

 

Accrued expenses

 

 

(252,959

)

 

 

283,439

 

Net cash (used in) operating activities

 

 

(6,227,813

)

 

 

(1,473,988

)

Investing Activities:

 

 

 

 

 

 

 

 

Proceeds on sale of assets

 

 

 

 

 

254,600

 

Payments on purchase of assets

 

 

(176,466

)

 

 

 

Patent activity costs

 

 

17,648

 

 

 

(156

)

Net cash (used in) provided by investing activities

 

 

(158,818

)

 

 

254,444

 

Financing Activities:

 

 

 

 

 

 

 

 

Repayment of debt

 

 

 

 

 

(145,000

)

Proceeds from issuance of debt

 

 

 

 

 

443,200

 

Proceeds from issuance of stock

 

 

10,500,000

 

 

 

2,000,000

 

Net cash provided by financing activities

 

 

10,500,000

 

 

 

2,298,200

 

Net change in cash and cash equivalents

 

 

4,113,369

 

 

 

1,078,656

 

Cash and cash equivalents at beginning of period

 

 

167,725

 

 

 

 

Cash and cash equivalents at end of period

 

$

4,281,094

 

 

$

1,078,656

 

Non-Cash Transactions:

 

 

 

 

 

 

 

 

Non-cash conversions of preferred stock and convertible notes to equity

 

$

5,800,000

 

 

$

47,132

 

Non-cash forgiveness of PPP loan

 

$

193,200

 

 

 

 

 

Operating lease assets obtained in exchange for operating lease liabilities

 

 

 

 

 

$

(5,819,489

)

Non-cash mortgage derecognition

 

 

 

 

 

$

(6,443,897

)

Non-cash property foreclosure

 

 

 

 

 

$

6,443,897

 

 

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

 

5


 

 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION

Ascent Solar Technologies, Inc. and its wholly owned subsidiary, Ascent Solar (Asia) Pte. Ltd. (collectively, the “Company") is focusing on integrating its PV products into high value markets such as aerospace, satellites, near earth orbiting vehicles, and fixed wing unmanned aerial vehicles (“UAV”). The value proposition of Ascent’s proprietary solar technology not only aligns with the needs of customers in these industries, but also overcomes many of the obstacles other solar technologies face in these unique markets. Ascent has the capability to design and develop finished products for end users in these areas as well as collaborate with strategic partners to design and develop custom integrated solutions for products like fixed-wing UAVs. Ascent sees significant overlap of the needs of end users across some of these industries and can achieve economies of scale in sourcing, development, and production in commercializing products for these customers.

On September 15, 2021, the Company entered into a Long-Term Supply and Joint Development Agreement (“JDA”) with TubeSolar AG (“TubeSolar”), a significant existing stakeholder in the Company. 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. Under the JDA, the Company will receive up (i) to $4 million of non-recurring engineering (“NRE”) fees, (ii) up to $13.5 million of payments upon achievement of certain agreed 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. There has been no activity under the JDA as of September 30, 2021.  

The Company and TubeSolar have also jointly established a subsidiary company in Germany, in which TubeSolar holds a minority stake of 30% (the “JV”). The purpose of the JV is to establish and operate a PV manufacturing facility in Germany that will produce and deliver PV Foils exclusively to TubeSolar. Until the JV facility is fully operational, PV Foils will be manufactured in the Company’s existing facility in Thornton, Colorado. The parties expect to jointly develop next generation tooling for use in manufacturing PV Foils at the JV facility. The Company is required to purchase 17,500 shares of the JV for 1 Euro per share, which has not been funded as of September 30, 2021. There has been no activity under the JV as of September 30, 2021.

NOTE 2. BASIS OF PRESENTATION

The accompanying, unaudited, condensed consolidated financial statements have been derived from the accounting records of the Company as of September 30, 2021 and December 31, 2020, and the results of operations for the three and nine months ended September 30, 2021 and 2020. All significant inter-company balances and transactions have been eliminated in the accompanying condensed consolidated financial statements.

The accompanying, unaudited, condensed consolidated 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 Consolidated Balance Sheet at December 31, 2020 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, 2020. These condensed consolidated 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, 2020.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

6


 

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, 2020. There have been no significant changes to our accounting policies as of September 30, 2021.

Derivatives: The Company evaluates its financial instruments under FASB ASC 815, "Derivatives and Hedging" to determine whether the instruments contain an embedded derivative. When an embedded derivative is present, the instrument is evaluated for a fair value adjustment upon issuance and at the end of every reporting period. Any adjustments to fair value are treated as gains and losses in fair values of derivatives and are recorded in the Condensed Consolidated Statements of Operations.

Refer to Notes 8, 10 and 11 for further discussion on the embedded derivatives of each instrument.

Paycheck Protection Program Loan: The Company has elected to account for the forgivable loan received under the Paycheck Protection Program (“PPP”) provisions of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act as a debt instrument and to accrue interest on the outstanding loan balance. Additional interest at a market rate (due to the stated interest rate of the PPP loan being below market) is not imputed, as the transactions where interest rates prescribed by governmental agencies are excluded from the scope of accounting guidance on imputing interest. The proceeds from the loan will remain recorded as a liability until either (1) the loan is, in part or wholly, forgiven and the Company has been legally released or (2) the Company repays the loan to the lender.

Refer to Note 9 for further discussion.

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 options and convertible securities using the treasury stock method or the if-converted method, as applicable, to the extent they are dilutive). Approximately 144 billion and 939 billion shares of dilutive shares were excluded from the three and nine months periods ended September 30, 2021 EPS calculation, respectively, as their impact is antidilutive. There were approximately 67 billion and 66 billion shares of dilutive shares for the three and nine months periods ended September 30, 2020, respectively.  

Recently Adopted or to be Adopted Accounting Policies

In August 2020, the FASB issued 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 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current U.S. GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective for public companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Management has not yet evaluated the impact that the adoption of ASU 2020-06 will have on the Company’s condensed consolidated financial statement presentation or disclosures.

Other new pronouncements issued but not effective as of September 30, 2021 are not expected to have a material impact on the Company’s condensed consolidated financial statements.

7


 

NOTE 4. LIQUIDITY, CONTINUED OPERATIONS, AND GOING CONCERN    

During the nine months ended September 30, 2021 and the year ended December 31, 2020, the Company entered into multiple financing agreements to fund operations. Further discussion of these transactions can be found in Notes 9, 10, 11 and 14 of the financial statements presented as of, and for, the nine months ended September 30, 2021, and in Notes 8, 9, 10, 11, 12, 15 and 22 of the financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

The Company has continued limited PV production at its manufacturing facility. 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 nine months ended September 30, 2021 the Company used $6,227,813 in cash for operations.

Additional projected product revenues are not anticipated to result in a positive cash flow position for the next twelve months overall and, as of September 30, 2021, the Company has working capital of $1,755,422. As such, cash liquidity is not sufficient for the next twelve months and will require additional financing.

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. The Company scaled down its operations in 2019 and 2020, due to cash flow issues. During 2021, the Company secured additional financing to being ramping up operations.  However, additional financing will be needed to continue this process.

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

NOTE 5. PROPERTY, PLANT AND EQUIPMENT

The following table summarizes property, plant and equipment as of September 30, 2021 and December 31, 2020:

 

 

 

As of

September 30,

 

 

As of

December 31,

 

 

 

2021

 

 

2020

 

Furniture, fixtures, computer hardware and

   computer software

 

$

437,532

 

 

$

489,421

 

Manufacturing machinery and equipment

 

 

23,607,580

 

 

 

-

 

Manufacturing machinery and equipment,

   in progress

 

 

103,080

 

 

 

24,377,755

 

Depreciable property, plant and equipment

 

 

24,148,192

 

 

 

24,867,176

 

Less: Accumulated depreciation and

   amortization

 

 

(23,964,362

)

 

 

(24,848,408

)

Net property, plant and equipment

 

$

183,830

 

 

$

18,768

 

 

The Company analyzes its long-lived assets for impairment, both individually and as a group, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

Depreciation expense for the three months ended September 30, 2021 and 2020 was $5,956 and $15,316, respectively. Depreciation expense for the nine months ended September 30, 2021 and 2020 was $11,404 and $103,014, respectively. Depreciation expense is recorded under “Depreciation and amortization expense” in the unaudited Condensed Consolidated Statements of Operations.

8


 

On July 29, 2020 the Company’s owned facility at 12300 Grant Street, Thornton, CO 80241 (the “Building”) was foreclosed by the Building’s first lien holder (“Mortgage Holder”) and sold at public auction. The successful bidder for the Building was the Mortgage Holder, at the price of $7.193 million. As a result, the Company’s obligations to Mortgage Holder and all of the Company’s outstanding real property taxes on the Building were considered fully repaid.

On September 21, 2020, the Company entered into a lease agreement with 12300 Grant LLC (“Landlord”), an affiliated company of the Mortgage Holder, for approximately 100,000 rentable square feet of the Building (the “Lease”). The lease is classified as an operating lease and accounted for accordingly. The Lease term is for 88 months and commenced 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.

At September 30, 2021, the Company recorded an operating lease asset and liability totaling $5,150,718 and $5,326,869, respectively. During the three and nine months ended September 30, 2021, the Company recorded operating lease costs included in Selling, general, and administrative expense on the Condensed Consolidated Statement of Operations totaling $258,392 and $775,177, respectively. During the three months ended September 30, 2020, the Company recorded operating lease costs included in Selling, general, and administrative expense on the Condensed Consolidated Statement of Operations totaling $28,710.

Future maturities of the operating lease liability are as follows:

 

Remainder of 2021

 

$

240,000

 

2022

 

 

988,800

 

2023

 

 

1,018,464

 

2024

 

 

1,049,018

 

2025

 

 

1,080,488

 

Thereafter

 

 

2,259,194

 

Total lease payments

 

 

6,635,964

 

Less amounts representing interest

 

 

(1,309,095

)

Present value of lease liability

 

$

5,326,869

 

 

The remaining lease term and discount rate of the operating lease is 75.5 months and 7.0%, respectively.

 

NOTE 6. INVENTORIES

Inventories, net of reserves, consisted of the following at September 30, 2021 and December 31, 2020:

 

 

 

As of

September 30,

 

 

As of

December 31,

 

 

 

2021

 

 

2020

 

Raw materials

 

$

614,656

 

 

$

525,626

 

Work in process

 

 

992

 

 

 

-

 

Finished goods

 

 

26

 

 

 

8,805

 

Total

 

$

615,674

 

 

$

534,431

 

 

NOTE 7. NOTES PAYABLE

On June 30, 2017, the Company entered into an agreement with a vendor (“Vendor”) to convert the balance of their account into a note payable in the amount of $250,000. The note bears interest of 5% per annum and matured on February 28, 2018. As of September 30, 2021, the Company had not made any payments on this note, the accrued interest was $53,185, and the note is due upon demand. To the best of our knowledge, Vendor has not made any attempts to recover any amount owing to them since 2019.

9


 

NOTE 8. SECURED PROMISSORY NOTES

 

Global Ichiban Secured Promissory Notes

Prior to 2021, the Company had issued a secured convertible promissory note to Global Ichiban Limited (“Global”) that had a remaining principal balance of $5,800,000, and no accrued interest, as of January 1, 2021.

The note was to mature on September 30, 2022. Principal, if not converted, was to be payable in a lump sum on September 30, 2022. The note did not bear any interest. Customary default provisions applied. The note was secured by a lien on substantially all of the Company’s assets pursuant to the Security Agreement dated November 30, 2017 (the “Security Agreement”) entered into between the Company and Global.

The conversion option associated with the note was deemed to include an embedded derivative that required bifurcation and separate accounting. Refer to Note 11. Derivative Liabilities for further details.

On March 9, 2021, the Company entered into a settlement agreement (“Settlement”) with Global. Pursuant to the Settlement, the Company issued 168,000,000 shares of Common Stock of the Company (“Settlement Shares”) to Global in exchange for the cancellation of the outstanding secured promissory note of $5,800,000 (the “Secured Note”). The Secured Note, which was originally scheduled to mature on September 30, 2022, had a variable-rate conversion feature that entitled Global to convert into shares of Common Stock of the Company at 80% of the 5-day average closing bid-price prior to any conversion. The Secured Note also had a lien on substantially all of the Company’s assets including intellectual properties. Following the Settlement, the lien was removed and the Company’s assets are currently unencumbered.

NOTE 9. PROMISSORY NOTES

SBA PPP

On April 17, 2020, the Company obtained a PPP Loan from Vectra Bank Colorado (“Vectra”) in the aggregate amount of $193,200, which was established under the CARES Act, as administered by the Small Business Association (“SBA”). Under the terms of the CARES Act and the PPP, all or a portion of the principal amount of the PPP Loan is subject to forgiveness so long as, over the 24-week period following the Company’s receipt of the proceeds of the PPP Loan, the Company uses those proceeds for payroll costs, rent, utility costs or the maintenance of employee and compensation levels. The PPP Loan is unsecured, guaranteed by the SBA, and has a two-year term, maturing on April 17, 2022. Interest accrues on the loan beginning with the initial disbursement; however, payments of principal and interest are deferred until Vectra’s determination of the amount of forgiveness applied for by the Company is approved by the SBA. If the Company does not apply for forgiveness within 10 months after the last day of the covered period (defined, at the Company’s election as 24 weeks), such payments will be due that month. On September 4, 2021, the Company received notification from Vectra that the SBA has forgiven the PPP loan. The Company recognized $195,852 of forgiven principal and accrued interest in Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net in the Condensed Consolidated Statement of Operations.  

 

10


 

 

NOTE 10. CONVERTIBLE NOTES

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

 

 

 

Principal

Balance

12/31/2020

 

Less:

Discount

Balance

 

Net

Principal

Balance

12/31/2020

 

Principal

Balance

9/30/2021

 

Less:

Discount

Balance

 

Net

Principal

Balance

9/30/2021

 

BD 1 Notes

  (related party)

$

10,500,000

 

$

(2,936,952

)

$

7,563,048

 

$

9,900,000

 

$

(2,351,060

)

$

7,548,940

 

Nanyang Notes

 

-

 

 

-