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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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|
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2022
or
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|
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☐
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the Transition Period
from to
Commission File No. 001-32919
Ascent Solar Technologies, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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20-3672603
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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12300 Grant Street, Thornton, CO
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80241
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number including area code:
720-872-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
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Trading Symbol(s)
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Name of exchange on which registered
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Common
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ASTI
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OTC
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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
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒
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Smaller reporting company
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☒
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|
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Emerging growth company
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☐
|
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 12, 2022, there were 30,586,804 shares of our common
stock issued and outstanding.
ASCENT SOLAR TECHNOLOGIES, INC.
Quarterly Report on Form 10-Q
For the Period Ended March 31, 2022
Table of Contents
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;
|
|
•
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Our
operating history and lack of profitability;
|
|
•
|
Our
ability to develop demand for, and sales of, our
products;
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|
•
|
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;
|
|
•
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General
economic and business conditions, and in particular, conditions
specific to consumer electronics and the solar power industry;
and
|
|
•
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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,
2021.
|
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)
|
|
March 31,
|
|
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December 31,
|
|
|
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2022
|
|
|
2021
|
|
ASSETS
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|
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|
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|
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Current Assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,028,362
|
|
|
$
|
5,961,760
|
|
Trade receivables, net of allowance of $26,000 and $26,000,
respectively
|
|
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561,254
|
|
|
|
49,250
|
|
Inventories, net
|
|
|
637,620
|
|
|
|
592,172
|
|
Prepaid and other current assets
|
|
|
659,538
|
|
|
|
247,736
|
|
Total current assets
|
|
|
4,886,774
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|
|
|
6,850,918
|
|
|
|
|
|
|
|
|
|
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Property, Plant and Equipment:
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22,483,386
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|
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22,425,935
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Accumulated depreciation
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|
|
(22,158,146
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)
|
|
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(22,146,273
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)
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Property, Plant and Equipment, net
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325,240
|
|
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279,662
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|
|
|
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Other Assets:
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|
|
|
|
|
|
|
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Operating lease right-of-use assets, net
|
|
|
4,816,017
|
|
|
|
4,984,688
|
|
Patents, net of accumulated amortization of $139,842 and
$135,050
respectively
|
|
|
82,111
|
|
|
|
86,595
|
|
Equity method investment
|
|
|
97,665
|
|
|
|
21,205
|
|
Other non-current assets
|
|
|
625,000
|
|
|
|
625,000
|
|
Total Assets
|
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$
|
10,832,807
|
|
|
$
|
12,848,068
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
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|
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Current Liabilities:
|
|
|
|
|
|
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|
|
Accounts payable
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$
|
600,600
|
|
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$
|
642,165
|
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Related party payables
|
|
|
45,000
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|
|
|
45,000
|
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Accrued expenses
|
|
|
1,395,350
|
|
|
|
991,534
|
|
Accrued interest
|
|
|
490,778
|
|
|
|
475,671
|
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Notes payable
|
|
|
250,000
|
|
|
|
250,000
|
|
Current portion of operating lease liability
|
|
|
665,585
|
|
|
|
646,742
|
|
Total current liabilities
|
|
|
3,447,313
|
|
|
|
3,051,112
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|
Long-Term Liabilities:
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|
|
|
|
|
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Non-current operating lease liabilities
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4,356,168
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4,532,490
|
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Non-current convertible notes, net
|
|
|
946,053
|
|
|
|
8,076,847
|
|
Accrued warranty liability
|
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|
21,225
|
|
|
|
21,225
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Total liabilities
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|
|
8,770,759
|
|
|
|
15,681,674
|
|
Stockholders’ Equity (Deficit):
|
|
|
|
|
|
|
|
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Series A preferred stock, $.0001 par value; 750,000
shares authorized; 48,100
and 48,100 shares issued and outstanding, respectively
($813,558 and
$801,533 Liquidation Preference, respectively)
|
|
|
5
|
|
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|
5
|
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Common stock, $0.0001 par value, 500,000,000 authorized;
30,586,804
and 4,786,804 shares issued and outstanding,
respectively
|
|
|
3,059
|
|
|
|
479
|
|
Additional paid in capital
|
|
|
434,146,118
|
|
|
|
424,948,698
|
|
Accumulated deficit
|
|
|
(432,080,037
|
)
|
|
|
(427,782,788
|
)
|
Accumulated other comprehensive loss
|
|
|
(7,097
|
)
|
|
|
-
|
|
Total stockholders’ equity (deficit)
|
|
|
2,062,048
|
|
|
|
(2,833,606
|
)
|
Total Liabilities and Stockholders’ Equity (Deficit)
|
|
$
|
10,832,807
|
|
|
$
|
12,848,068
|
|
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 AND COMPREHENSIVE
INCOME
(unaudited)
|
Three Months Ended
March 31,
|
|
|
2022
|
|
|
|
|
2021
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Products
|
$
|
54,210
|
|
|
|
|
$
|
165,158
|
|
Milestone and engineering
|
|
512,000
|
|
|
|
|
|
-
|
|
Total Revenues
|
|
566,210
|
|
|
|
|
|
165,158
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
Costs of revenue
|
|
532,890
|
|
|
|
|
|
72,782
|
|
Research, development and manufacturing operations
|
|
1,406,322
|
|
|
|
|
|
728,036
|
|
Selling, general and administrative
|
|
821,266
|
|
|
|
|
|
561,709
|
|
Depreciation and amortization
|
|
16,665
|
|
|
|
|
|
12,872
|
|
Total Costs and Expenses
|
|
2,777,143
|
|
|
|
|
|
1,375,399
|
|
Loss from Operations
|
|
(2,210,933
|
)
|
|
|
|
|
(1,210,241
|
)
|
Other Income/(Expense)
|
|
|
|
|
|
|
|
|
|
Other income/(expense), net
|
|
-
|
|
|
|
|
|
800
|
|
Interest expense
|
|
(2,086,314
|
)
|
|
|
|
|
(562,079
|
)
|
Change in fair value of derivatives and
gain/(loss) on extinguishment of
liabilities, net
|
|
-
|
|
|
|
|
|
3,617,904
|
|
Total Other Income/(Expense)
|
|
(2,086,314
|
)
|
|
|
|
|
3,056,625
|
|
Income/(Loss) on Equity Method Investments
|
|
(2
|
)
|
|
|
|
|
-
|
|
Net Income/(Loss)
|
$
|
(4,297,249
|
)
|
|
|
|
$
|
1,846,384
|
|
Net Income/(Loss) Per Share (Basic)
|
$
|
(0.20
|
)
|
|
|
|
$
|
0.51
|
|
Net Income/(Loss) Per Share (Diluted)
|
$
|
(0.20
|
)
|
|
|
|
$
|
0.05
|
|
Weighted Average Common Shares
Outstanding (Basic)
|
|
21,671,248
|
|
|
|
|
|
3,633,730
|
|
Weighted Average Common Shares
Outstanding (Diluted)
|
|
21,671,248
|
|
|
|
|
|
32,511,508
|
|
Other Comprehensive Income/(Loss)
|
|
|
|
|
|
|
|
|
|
Foreign currency translation gain/(loss)
|
|
(7,097
|
)
|
|
|
|
|
-
|
|
Net Comprehensive Income/(Loss)
|
$
|
(4,304,346
|
)
|
|
|
|
$
|
1,846,384
|
|
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’
EQUITY (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 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 Income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,297,249
|
)
|
|
|
-
|
|
|
|
(4,297,249
|
)
|
Foreign currency translation
gain/(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 consolidated financial statements.
3
Table of Contents
ASCENT SOLAR TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’
DEFICIT
(unaudited)
For the Three Months Ended March 31, 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 January 1,
2021
|
|
|
48,100
|
|
|
$
|
5
|
|
|
|
1,300
|
|
|
$
|
-
|
|
|
|
3,659,828
|
|
|
$
|
366
|
|
|
$
|
401,590,211
|
|
|
$
|
(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
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,500
|
|
|
|
2
|
|
|
|
2,999,998
|
|
|
|
-
|
|
|
|
3,000,000
|
|
Conversion of Global
Ichiban Note into
Common Shares
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
33,600
|
|
|
|
3
|
|
|
|
5,799,997
|
|
|
|
-
|
|
|
|
5,800,000
|
|
Relieved on Conversion of
Derivative Liability
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,686,079
|
|
|
|
-
|
|
|
|
1,686,079
|
|
Net Income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,846,384
|
|
|
|
1,846,384
|
|
Balance at March 31,
2021
|
|
|
48,100
|
|
|
$
|
5
|
|
|
|
3,800
|
|
|
$
|
-
|
|
|
|
3,694,928
|
|
|
$
|
371
|
|
|
$
|
414,576,285
|
|
|
$
|
(419,936,401
|
)
|
|
$
|
(5,359,740
|
)
|
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 Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2022
|
|
|
2021
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
$
|
(4,297,249
|
)
|
|
$
|
1,846,384
|
|
Adjustments to reconcile net income (loss) to cash used in
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
16,665
|
|
|
|
12,874
|
|
Operating lease asset amortization
|
|
|
168,671
|
|
|
|
158,502
|
|
Amortization of debt discount
|
|
|
2,069,206
|
|
|
|
542,164
|
|
Loss on equity method investment
|
|
|
2
|
|
|
|
—
|
|
Warranty reserve
|
|
|
—
|
|
|
|
(463
|
)
|
Gain on extinguishment of liabilities, net
|
|
|
—
|
|
|
|
(3,617,904
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(512,004
|
)
|
|
|
(12,100
|
)
|
Inventories
|
|
|
(45,448
|
)
|
|
|
(130,369
|
)
|
Prepaid expenses and other current assets
|
|
|
(411,802
|
)
|
|
|
(161,592
|
)
|
Accounts payable
|
|
|
(41,565
|
)
|
|
|
(96,691
|
)
|
Related party payable
|
|
|
—
|
|
|
|
(103,334
|
)
|
Operating lease liabilities
|
|
|
(157,479
|
)
|
|
|
(140,105
|
)
|
Accrued interest
|
|
|
15,107
|
|
|
|
5,413
|
|
Accrued expenses
|
|
|
403,816
|
|
|
|
(312,073
|
)
|
Net cash used in operating activities
|
|
|
(2,792,080
|
)
|
|
|
(2,009,294
|
)
|
Investing Activities:
|
|
|
|
|
|
|
|
|
Contributions to equity method investment
|
|
|
(83,559
|
)
|
|
|
—
|
|
Payments on purchase of assets
|
|
|
(57,451
|
)
|
|
|
—
|
|
Patent activity costs
|
|
|
(308
|
)
|
|
|
—
|
|
Net cash used in investing activities
|
|
|
(141,318
|
)
|
|
|
—
|
|
Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance of stock
|
|
|
—
|
|
|
|
5,500,000
|
|
Net cash provided by financing activities
|
|
|
—
|
|
|
|
5,500,000
|
|
Net change in cash and cash equivalents
|
|
|
(2,933,398
|
)
|
|
|
3,490,706
|
|
Cash and cash equivalents at beginning of period
|
|
|
5,961,760
|
|
|
|
167,725
|
|
Cash and cash equivalents at end of period
|
|
$
|
3,028,362
|
|
|
$
|
3,658,431
|
|
Non-Cash Transactions:
|
|
|
|
|
|
|
|
|
Non-cash conversions of preferred stock and convertible notes to
equity
|
|
$
|
9,200,000
|
|
|
$
|
5,800,000
|
|
Series 1A preferred stock conversion
|
|
$
|
740
|
|
|
$
|
—
|
|
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
5
Table of Contents
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 January 28, 2022 as of 5:00 pm Eastern Time, the Company
effected a reverse stock split of the Company’s common stock, par
value $0.0001 per share (the “Common Stock”) at a ratio of
one-for-five thousand
(the “Reverse Stock Split”). The Company’s common stock began
trading on a split-adjusted basis at 9:30 am Eastern Time on
January 31, 2022. Stockholders also received one whole share of
Common Stock in lieu of a fractional share and no fractional shares
were issued. All shares and per share amounts in the condensed
consolidated financial statements and accompanying notes have been
retroactively adjusted to give effect to the Reverse Stock
Split.
Following the Reverse Stock Split, the Company’s issued and
outstanding shares of Common Stock were decreased from
approximately 23.7 billion pre-split shares to 4.8 million
post-split shares. In connection with the Reverse Stock Split
effectiveness, the number of authorized shares of the Company's
Common Stock were decreased from 30 billion to 500 million
shares.
NOTE 2. BASIS OF PRESENTATION
The accompanying, unaudited, condensed consolidated financial
statements have been derived from the accounting records of the
Company as of March 31, 2022 and December 31, 2021, and the results
of operations for the three months ended March 31, 2022 and 2021.
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, 2021 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, 2021. 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,
2021.
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, 2022 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2022.
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, 2021. There have been no significant changes to our accounting
policies as of March 31, 2022.
6
Table of Contents
Revenue Recognition:
Product revenue. The Company
recognizes revenue for the sale of PV modules and other equipment
sales at a point in time following the transfer of control of such
products to the customer, which typically occurs upon shipment or
delivery depending on the terms of the underlying contracts. For
module and other equipment sales contracts that contain multiple
performance obligations, the Company allocates the transaction
price to each performance obligation identified in the contract
based on relative standalone selling prices, or estimates of such
prices, and recognizes the related revenue as control of each
individual product is transferred to the customer.
During the three months ended March 31, 2022 and 2021, the
Company recognized product revenue of $54,210 and $165,158,
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, 2022, the
Company recognized Milestone and engineering revenue of $512,000
from TubeSolar AG (“TubeSolar”), a
significant existing stakeholder in the Company and a related
party. The Company did not have Milestone and engineering
revenue during the three
months ended March 31, 2021.
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, 2022 and 2021.
As of March 31, 2022 and December 31, 2021, the Company
had an accounts receivable, net balance of $561,254 and
$49,250, respectively. As
of March 31, 2022 and December 31, 2021, the Company had
an allowance for doubtful accounts of $26,000 and $26,000,
respectively.
Deferred revenue was as
follows:
Balance as of January 1, 2022
|
$
|
22,500
|
|
Additions
|
|
198,500
|
|
Recognized as revenue
|
|
(22,500
|
)
|
Balance as of March 31, 2022
|
$
|
198,500
|
|
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 2.4 million shares of
dilutive shares were excluded from the three months period ended
March 31, 2022 EPS calculation as their impact is
antidilutive. There were approximately 32.5 million shares of
dilutive shares for the three months period ended March 31,
2021.
7
Table of Contents
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 March 31,
2022 are not expected to have a material impact on the Company’s
condensed consolidated financial statements.
NOTE 4. LIQUIDITY, CONTINUED OPERATIONS, AND GOING
CONCERN
During the year ended December 31, 2021, the Company entered into
multiple financing agreements to fund operations. Further
discussion of these transactions can be found in Notes 8, 9, 10,
and 11 in the Company's Annual Report on Form 10-K for the year
ended December 31, 2021.
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 three months ended March 31, 2022 the Company
used $2,792,080 in cash for operations.
Additional projected product revenues are not anticipated to result
in a positive cash flow position for the next twelve months overall
and, as of March 31, 2022, the Company has working capital of
$1,439,461. As such, cash liquidity is not sufficient for the next
twelve months and will require additional financing.
The Company continues to accelerate sales and marketing efforts
related to its consumer and military solar products and specialty
PV application strategies through expansion of its sales and
distribution channels. 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
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. RELATED PARTY TRANSACTIONS
On September 15, 2021, the Company entered into a Long-Term Supply
and Joint Development Agreement (“JDA”) with TubeSolar AG
(“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 up
(i) to $4 million of non-recurring engineering (“NRE”) fees, and
(ii) up to $13.5 million of payments upon achievement of certain
agreed production and cost
8
Table of Contents
structure milestones. The JDA has no fixed term, and may only be
terminated by either party for breach.
$500,000
of NRE
revenue was 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. The purpose of Ascent
Germany is to establish and operate a PV manufacturing facility in
Germany that will produce and deliver PV Foils exclusively to
TubeSolar. Until Ascent Germany’s 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 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 impacts the entity’s operations and financial
performance. The Company contributed $83,559 to Ascent Germany
during the three months ended March 31, 2022. 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, 2022 and December 31, 2021:
|
|
As of
March 31,
|
|
|
As of
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
Furniture, fixtures, computer hardware and
computer software
|
|
$
|
494,897
|
|
|
$
|
473,448
|
|
Manufacturing machinery and equipment
|
|
|
21,867,097
|
|
|
|
21,863,624
|
|
Manufacturing machinery and equipment,
in progress
|
|
|
121,392
|
|
|
|
88,863
|
|
Depreciable property, plant and equipment
|
|
|
22,483,386
|
|
|
|
22,425,935
|
|
Less: Accumulated depreciation and amortization
|
|
|
(22,158,146
|
)
|
|
|
(22,146,273
|
)
|
Net property, plant and equipment
|
|
$
|
325,240
|
|
|
$
|
279,662
|
|
Depreciation expense for the three months ended March 31, 2022 and
2021 was $11,873 and $2,724, respectively. Depreciation
expense is recorded under “Depreciation and amortization expense”
in the unaudited Condensed Consolidated Statements of
Operations.
NOTE 7. OPERATING LEASE
The Company leases approximately 100,000 rentable square feet for
its manufacturing and operations. The lease is classified as an
operating lease and accounted for accordingly. The 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, 2022 and December 31, 2021, assets and
liabilities related to the Company’s lease were as follows:
|
|
As of
March 31,
|
|
|
As of
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
Operating lease right-of-use assets, net
|
|
$
|
4,816,017
|
|
|
$
|
4,984,688
|
|
Current portion of operating lease liability
|
|
|
665,585
|
|
|
|
646,742
|
|
Non-current portion of operating lease liability
|
|
|
4,356,168
|
|
|
|
4,532,490
|
|
During the three months ended March 31, 2022 and 2021 the
Company recorded operating lease costs included in rent expense of
$258,392 and $258,393, respectively.
9
Table of Contents
Future maturities of the operating lease liability are as
follows:
Remainder of 2022
|
|
$
|
741,600
|
|
2023
|
|
|
1,018,464
|
|
2024
|
|
|
1,049,018
|
|
2025
|
|
|
1,080,488
|
|
2026
|
|
|
1,112,903
|
|
Thereafter
|
|
|
1,146,290
|
|
Total lease payments
|
|
|
6,148,763
|
|
Less amounts representing interest
|
|
|
(1,127,010
|
)
|
Present value of lease liability
|
|
$
|
5,021,753
|
|
The remaining lease term and discount rate of the operating lease
is 69.5 months and 7.0%, respectively.
NOTE 8. INVENTORIES
Inventories, net of reserves, consisted of the following at March
31, 2022 and December 31, 2021:
|
|
As of
March 31,
|
|
|
As of
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
Raw materials
|
|
$
|
592,300
|
|
|
$
|
575,154
|
|
Work in process
|
|
|
41,619
|
|
|
|
15,803
|
|
Finished goods
|
|
|
3,700
|
|
|
|
1,215
|
|
Total
|
|
$
|
637,620
|
|
|
$
|
592,172
|
|
NOTE 9. 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
March 31, 2022, the Company had not made any payments on this
note, the accrued interest was $59,418, 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.
NOTE 10. CONVERTIBLE NOTES
The following table provides a summary of the activity of the
Company's unsecured, convertible, promissory notes:
|
Principal
Balance
1/1/2022
|
|
New
Notes
|
|
Notes assigned or exchanged
|
|
Notes
converted
|
|
Principal
Balance
3/31/2022
|
|
Less:
Discount
Balance
|
|
Net
Principal
Balance
3/31/2022
|
|
BD1 Notes
(related party)
|
$
|
9,900,000
|
|
$
|
—
|
|
$
|
(2,000,000
|
)
|
$
|
(7,900,000
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Nanyang Note
|
|
500,000
|
|
|
—
|
|
|
1,000,000
|
|
|
(600,000
|
)
|
|
900,000
|
|
|
(190,442
|
)
|
|
709,558
|
|
Fleur Note
|
|
—
|
|
|
—
|
|
|
1,000,000
|
|
|
(700,000
|
)
|
|
300,000
|
|
|
(63,505
|
)
|
|
236,495
|
|
|
$
|
10,400,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(9,200,000
|
)
|
$
|
1,200,000
|
|
$
|
(253,947
|
)
|
$
|
946,053
|
|
BD1 Convertible Note
On January 3, 2022, BD 1 Investment Holding, LLC (“BD1”) sold and
assigned $1,000,000 of its convertible notes (“BD1 Convertible
Notes”) to Fleur Capital Pte Ltd (“Fleur”). On January 21, 2022,
BD1 sold and assigned $1,000,000 of its convertible notes to
Nanyang Investment Management Pte Ltd (“Nanyang”). The aggregate
remaining principal balance held by BD1 after these assignments was
$7,900,000. On February 1, 2022, BD1 converted its $7,900,000
aggregate outstanding
10
Table of Contents
principal amount into
15,800,000
shares of common stock.
The
remaining discount of
approximately
$1,721,000
was charged to
interest expense
upon conversion.
Nanyang Convertible Note
On January 21, 2022, as discussed above, BD1 assigned $1,000,000 of
the BD1 Convertible Notes to Nanyang. This note does not bear any
interest and will mature on December 18, 2025. Nanyang has the
right, at any time until the note is fully paid, to convert any
outstanding and unpaid principal into share of common stock at a
fixed conversion price equal to $0.50 per share. Shares of common
stock may not be issued pursuant to this note if, after giving
effect to the conversion or issuance, Nanyang, together with its
affiliates, would beneficially own in excess of 4.99% of the
outstanding shares of the Company’s common stock.
On February 2, 2022, Nanyang converted $600,000 of their
convertible notes into 1,200,000 shares of common stock. The
associated discount on the converted portion of the notes of
approximately $133,000 was charged to interest expense. The
discount on the remaining principal will be charged to interest
expense, ratably, over the life of the note.
Fleur Convertible Note
On January 21, 2022, as discussed above, BD1 assigned $1,000,000 of
the BD1 Convertible Notes to Fleur. This note does not bear any
interest and will mature on December 18, 2025. Fleur has the right,
at any time until the note is fully paid, to convert any
outstanding and unpaid principal into share of common stock at a
fixed conversion price equal to $0.50 per share. Shares of common
stock may not be issued pursuant to this note if, after giving
effect to the conversion or issuance, Fleur, together with its
affiliates, would beneficially own in excess of 4.99% of the
outstanding shares of the Company’s common stock.
On February 2, 2022, Fleur converted $700,000 of their convertible
notes into 1,400,000 shares of common stock. The associated
discount on the converted portion of the notes of approximately
$155,000 was charged to interest expense. The discount on the
remaining principal will be charged to interest expense, ratably,
over the life of the note.
NOTE 11. SERIES A PREFERRED STOCK
As of January 1, 2022, 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 in 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. In addition, the Series A Preferred
Stock contains a make-whole provision whereby, conversion or
redemption of the preferred stock within 4 years of issuance will
require dividends for the full four year period to be paid by the
Company in cash or common stock (valued at 10% below market price,
but not to exceed the lowest closing price during the applicable
measurement period). This make-whole provision expired in June
2017.
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, as adjusted, 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, 2022, 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, 2022, there were 48,100 shares of Series A
Preferred Stock outstanding and accrued and unpaid dividends of
$428,758.
11
Table of Contents
NOTE 12. SERIES 1A PREFERRED STOCK
Series 1A Preferred Stock – Tranche 1 Closing
As of January 1, 2022, there were 3,700 shares of Series 1A
Preferred Stock outstanding; 1,300 shares owned by Crowdex
Investment, LLC (“Crowdex”) and 2,400 shares owned by TubeSolar.
Each share of Series 1A Preferred Stock has an original issue price
of $1,000 per share. Shares of the Series 1A Preferred Stock are
convertible into common stock at a fixed conversion price equal to
$0.50 per common share, subject to standard ratable anti-dilution
adjustments.
Outstanding shares of Series 1A Preferred Stock are entitled to
vote together with the holders of common stock as a single class
(on an as-converted to common stock basis) on any matter presented
to the stockholders of the Company for their action or
consideration at any meeting of stock holders (or written consent
of stockholders in lieu of meeting).
Holders of the Series 1A Preferred Stock are not entitled to any
fixed rate of dividends. If the Company pays a dividend or
otherwise makes a distribution payable on shares of common stock,
holders of the Series 1A Preferred Stock will receive such dividend
or distribution on an as-converted to common stock basis. There are
no specified redemption rights for the Series 1A Preferred Stock.
Upon liquidation, dissolution or winding up, holders of Series 1A
Preferred Stock will be entitled to be paid out of our assets,
prior to the holders of our common stock, an amount equal to $1,000
per share plus any accrued but unpaid dividends (if any)
thereon.
On February 1, 2022 Crowdex and TubesSolar converted their
remaining shares 1,300 and 2,400, respectively, of Series 1A
Preferred Stock into 2,600,000 and 4,800,000, respectively shares
of common stock.
NOTE 13. STOCKHOLDERS’ EQUITY (DEFICIT)
Common Stock
At March 31, 2022, 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,
2022, the Company had 30,586,804 shares of common stock
outstanding. The Company has not declared or paid any dividends
related to the common stock through March 31, 2022.
Preferred Stock
At March 31, 2022, the Company had 25 million shares of
preferred stock, $0.0001 par value, authorized for issuance.
Preferred stock may be issued in classes or series. Designations,
powers, preferences, rights, qualifications, limitations and
restrictions are determined by the Company’s Board of
Directors.
12
Table of Contents
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
|
|
|