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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ascent Solar Technologies Inc (PK) | USOTC:ASTI | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 10.00 | 9.60 | 11.00 | 0.00 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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)
|
Large accelerated filer
|
|
o
|
|
Accelerated filer
|
|
o
|
|
|
|
|
|||
Non-accelerated filer
|
|
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
x
|
|
|
|
|
Emerging growth company
|
|
o
|
|
|
|
|
||
Item 1.
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|
|
|
|
||||
Current Assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,083,029
|
|
|
$
|
130,946
|
|
Trade receivables, net of allowance for doubtful accounts of $48,201 and $60,347, respectively
|
|
24,809
|
|
|
549,204
|
|
||
Inventories, net
|
|
1,067,056
|
|
|
2,569,816
|
|
||
Prepaid expenses and other current assets
|
|
394,511
|
|
|
983,796
|
|
||
Total current assets
|
|
2,569,405
|
|
|
4,233,762
|
|
||
Property, Plant and Equipment
|
|
36,645,862
|
|
|
36,639,460
|
|
||
Less accumulated depreciation and amortization
|
|
(31,873,054
|
)
|
|
(30,983,448
|
)
|
||
|
|
4,772,808
|
|
|
5,656,012
|
|
||
Other Assets:
|
|
|
|
|
||||
Patents, net of accumulated amortization of $386,538 and $169,626, respectively
|
|
1,502,576
|
|
|
1,647,505
|
|
||
Other non-current assets
|
|
56,750
|
|
|
77,562
|
|
||
|
|
1,559,326
|
|
|
1,725,067
|
|
||
Total Assets
|
|
$
|
8,901,539
|
|
|
$
|
11,614,841
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
||||
Current Liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
631,263
|
|
|
$
|
4,902,471
|
|
Related party payables
|
|
201,616
|
|
|
214,903
|
|
||
Accrued expenses
|
|
1,480,733
|
|
|
1,469,684
|
|
||
Current portion of long-term debt
|
|
337,791
|
|
|
243,113
|
|
||
Notes Payable
|
|
1,587,760
|
|
|
—
|
|
||
Promissory Notes, net of discount of $2,627,529 and zero, respectively
|
|
1,535,912
|
|
|
1,430,000
|
|
||
Current portion of litigation settlement
|
|
—
|
|
|
339,481
|
|
||
Series E preferred stock, net of discount of $63,640
|
|
—
|
|
|
56,360
|
|
||
Series F preferred stock
|
|
140,001
|
|
|
160,001
|
|
||
Series G preferred stock, net of discount of $699,674
|
|
—
|
|
|
408,326
|
|
||
July 2016 convertible notes, net of discount of $1,634,357
|
|
—
|
|
|
1,159,610
|
|
||
Series I exchange notes, net of discount of $199,474
|
|
—
|
|
|
26,597
|
|
||
Series J preferred stock
|
|
1,075,000
|
|
|
1,350,000
|
|
||
October 2016 convertible notes, net of discount of $66,000 and $264,000 respectively
|
|
264,000
|
|
|
66,000
|
|
||
St. George convertible note, net of discount and cash payment premium of $817,506 and zero, respectively
|
|
1,079,994
|
|
|
|
|
||
Tertius Financial Group promissory notes, net of discount of $59,658
|
|
—
|
|
|
542,808
|
|
||
Short term embedded derivative liabilities
|
|
2,412,212
|
|
|
6,578,154
|
|
||
Make-whole dividend liability
|
|
264,289
|
|
|
500,176
|
|
||
Total current liabilities
|
|
11,010,571
|
|
|
19,447,684
|
|
||
Long-Term Debt
|
|
5,206,403
|
|
|
5,281,776
|
|
||
Series K preferred stock
|
|
2,810,000
|
|
|
—
|
|
||
Accrued Warranty Liability
|
|
105,102
|
|
|
176,457
|
|
||
Commitments and Contingencies (Notes 4 & 23)
|
|
|
|
|
||||
Mezzanine Equity:
|
|
|
|
|
||||
Series J-1 preferred stock: 700 shares authorized; zero and 700 and issued and outstanding as of September 30, 2017 and December 31, 2016, respectively
|
|
—
|
|
|
700,000
|
|
||
Stockholders’ Deficit:
|
|
|
|
|
||||
Series A preferred stock, $.0001 par value; 750,000 shares authorized and issued; 60,756 shares and 125,044 shares outstanding as of September 30, 2017 and December 31, 2016, respectively ($746,550 and $1,500,528 Liquidation Preference)
|
|
6
|
|
|
13
|
|
||
Common stock, $0.0001 par value, 20,000,000,000 shares authorized; 8,717,859,917 and 554,223,320 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively
|
|
871,786
|
|
|
55,422
|
|
||
Additional paid in capital
|
|
385,479,540
|
|
|
369,886,065
|
|
||
Accumulated deficit
|
|
(396,581,869
|
)
|
|
(383,932,576
|
)
|
||
Total stockholders’ deficit
|
|
(10,230,537
|
)
|
|
(13,991,076
|
)
|
||
Total Liabilities, Mezzanine Equity and Stockholders’ Deficit
|
|
$
|
8,901,539
|
|
|
$
|
11,614,841
|
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Products, net
|
|
$
|
242,055
|
|
|
$
|
436,708
|
|
|
$
|
547,792
|
|
|
$
|
1,369,823
|
|
Government contracts
|
|
—
|
|
|
15,966
|
|
|
—
|
|
|
48,396
|
|
||||
Revenues
|
|
$
|
242,055
|
|
|
$
|
452,674
|
|
|
$
|
547,792
|
|
|
$
|
1,418,219
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (exclusive of depreciation shown below)
|
|
535,258
|
|
|
1,332,153
|
|
|
2,323,125
|
|
|
4,769,059
|
|
||||
Research, development and manufacturing operations (exclusive of depreciation shown below)
|
|
1,311,944
|
|
|
1,660,203
|
|
|
3,829,918
|
|
|
5,131,969
|
|
||||
Inventory impairment costs
|
|
—
|
|
|
—
|
|
|
363,758
|
|
|
—
|
|
||||
Selling, general and administrative (exclusive of depreciation shown below)
|
|
1,341,850
|
|
|
2,576,297
|
|
|
4,511,944
|
|
|
8,519,993
|
|
||||
Depreciation and amortization
|
|
310,207
|
|
|
422,971
|
|
|
1,012,183
|
|
|
3,180,529
|
|
||||
Total Costs and Expenses
|
|
3,499,259
|
|
|
5,991,624
|
|
|
12,040,928
|
|
|
21,601,550
|
|
||||
Loss from Operations
|
|
(3,257,204
|
)
|
|
(5,538,950
|
)
|
|
(11,493,136
|
)
|
|
(20,183,331
|
)
|
||||
Other Income/(Expense)
|
|
|
|
|
|
|
|
|
||||||||
Other Income/(Expense), net
|
|
(15,053
|
)
|
|
42,789
|
|
|
564,093
|
|
|
75,122
|
|
||||
Interest expense
|
|
(898,916
|
)
|
|
(1,789,599
|
)
|
|
(5,137,975
|
)
|
|
(5,442,591
|
)
|
||||
Warrant Expense
|
|
(335,739
|
)
|
|
—
|
|
|
(335,739
|
)
|
|
—
|
|
||||
Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net
|
|
2,151,478
|
|
|
(4,500,151
|
)
|
|
3,753,465
|
|
|
(7,928,578
|
)
|
||||
Total Other Income/(Expense)
|
|
901,770
|
|
|
(6,246,961
|
)
|
|
(1,156,156
|
)
|
|
(13,296,047
|
)
|
||||
Net Loss
|
|
$
|
(2,355,434
|
)
|
|
$
|
(11,785,911
|
)
|
|
$
|
(12,649,292
|
)
|
|
$
|
(33,479,378
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net Loss Per Share (Basic and diluted)
|
|
$
|
(0.0003
|
)
|
|
$
|
(0.1457
|
)
|
|
$
|
(0.0026
|
)
|
|
$
|
(0.9350
|
)
|
Weighted Average Common Shares Outstanding (Basic and diluted)
|
|
8,062,351,305
|
|
|
80,896,300
|
|
|
4,806,752,298
|
|
|
35,806,147
|
|
|
|
Nine Months Ended
|
|
||||||
|
|
September 30,
|
|
||||||
|
|
2017
|
|
2016
|
|
||||
Operating Activities:
|
|
|
|
|
|
||||
Net loss
|
|
$
|
(12,649,292
|
)
|
|
$
|
(33,479,378
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
|
1,012,183
|
|
|
3,180,529
|
|
|
||
Share based compensation
|
|
108,717
|
|
|
708,776
|
|
|
||
Warrant expense
|
|
335,739
|
|
|
—
|
|
|
||
Realized gain on sale of assets
|
|
(1,199,606
|
)
|
|
—
|
|
|
||
Amortization of financing costs to interest expense
|
|
73,018
|
|
|
125,902
|
|
|
||
Write down of previously capitalized inventory
|
|
363,758
|
|
|
—
|
|
|
||
Non-cash interest expense
|
|
1,273,087
|
|
|
298,149
|
|
|
||
Amortization of debt discount
|
|
3,656,430
|
|
|
4,437,611
|
|
|
||
Change in fair value of derivatives and (gain)/loss on extinguishment of liabilities, net
|
|
(3,753,465
|
)
|
|
7,928,578
|
|
|
||
Inducement conversion costs
|
|
635,514
|
|
|
—
|
|
|
||
Bad debt expense
|
|
514
|
|
|
246,116
|
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||
Accounts receivable
|
|
545,481
|
|
|
1,506,462
|
|
|
||
Inventories
|
|
1,139,001
|
|
|
813,735
|
|
|
||
Prepaid expenses and other current assets
|
|
493,008
|
|
|
497,325
|
|
|
||
Accounts payable
|
|
(1,469,670
|
)
|
|
382,738
|
|
|
||
Related party payable
|
|
(13,287
|
)
|
|
—
|
|
|
||
Accrued expenses
|
|
(850,314
|
)
|
|
238,768
|
|
|
||
Accrued litigation settlement
|
|
(339,481
|
)
|
|
(401,268
|
)
|
|
||
Warranty reserve
|
|
(71,355
|
)
|
|
(34,834
|
)
|
|
||
Net cash used in operating activities
|
|
(10,710,020
|
)
|
|
(13,550,791
|
)
|
|
||
Investing Activities:
|
|
|
|
|
|
||||
Purchase of property, plant and equipment
|
|
(6,402
|
)
|
|
(40,262
|
)
|
|
||
Proceeds from the sale of assets
|
|
150,000
|
|
|
—
|
|
|
||
Patent activity costs
|
|
(50,898
|
)
|
|
(152,076
|
)
|
|
||
Net cash provided by/(used in) investing activities
|
|
92,700
|
|
|
(192,338
|
)
|
|
||
Financing Activities:
|
|
|
|
|
|
||||
Payment of debt financing costs
|
|
(20,000
|
)
|
|
(40,000
|
)
|
|
||
Repayment of debt
|
|
(1,785,597
|
)
|
|
(211,648
|
)
|
|
||
Proceeds from the issuance of promissory notes
|
|
2,865,000
|
|
|
300,000
|
|
|
||
Proceeds from convertible notes
|
|
1,500,000
|
|
|
2,000,000
|
|
|
||
Proceeds from Committed Equity Line
|
|
—
|
|
|
1,056,147
|
|
|
||
Proceeds from issuance of stock and warrants
|
|
9,010,000
|
|
|
10,405,000
|
|
|
||
Net cash provided by financing activities
|
|
11,569,403
|
|
|
13,509,499
|
|
|
||
Net change in cash and cash equivalents
|
|
952,083
|
|
|
(233,630
|
)
|
|
||
Cash and cash equivalents at beginning of period
|
|
130,946
|
|
|
326,217
|
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
1,083,029
|
|
|
$
|
92,587
|
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
1,120,350
|
|
|
$
|
267,666
|
|
|
Non-Cash Transactions:
|
|
|
|
|
|
||||
Non-cash conversions of preferred stock and convertible notes to equity
|
|
$
|
10,914,988
|
|
|
$
|
9,236,810
|
|
|
Make-whole provision on convertible preferred stock
|
|
$
|
257,152
|
|
|
$
|
—
|
|
|
Non-cash financing costs
|
|
$
|
2,500
|
|
|
$
|
—
|
|
|
Accounts payable converted to notes payable
|
|
$
|
1,637,260
|
|
|
$
|
—
|
|
|
Accounts payable forgiven related to sale of EnerPlex
|
|
$
|
1,031,726
|
|
|
$
|
—
|
|
|
Interest converted to principal
|
|
$
|
104,199
|
|
|
$
|
—
|
|
|
Common shares issued for commitment fee
|
|
$
|
63,750
|
|
|
$
|
—
|
|
|
|
|
As of September 30,
|
|
As of December 31,
|
||||
|
|
2017
|
|
2016
|
||||
Building
|
|
$
|
5,828,960
|
|
|
$
|
5,828,960
|
|
Furniture, fixtures, computer hardware and computer software
|
|
489,421
|
|
|
489,421
|
|
||
Manufacturing machinery and equipment
|
|
30,306,793
|
|
|
30,300,391
|
|
||
Net depreciable property, plant and equipment
|
|
36,625,174
|
|
|
36,618,772
|
|
||
Manufacturing machinery and equipment in progress
|
|
20,688
|
|
|
20,688
|
|
||
Property, plant and equipment
|
|
36,645,862
|
|
|
36,639,460
|
|
||
Less: Accumulated depreciation and amortization
|
|
(31,873,054
|
)
|
|
(30,983,448
|
)
|
||
Net property, plant and equipment
|
|
$
|
4,772,808
|
|
|
$
|
5,656,012
|
|
|
|
As of September 30,
|
|
As of December 31,
|
||||
|
|
2017
|
|
2016
|
||||
Raw materials
|
|
$
|
736,721
|
|
|
$
|
832,806
|
|
Work in process
|
|
8,193
|
|
|
635,130
|
|
||
Finished goods
|
|
322,142
|
|
|
1,101,880
|
|
||
Total
|
|
$
|
1,067,056
|
|
|
$
|
2,569,816
|
|
|
|
||
2017
|
$
|
82,375
|
|
2018
|
343,395
|
|
|
2019
|
366,757
|
|
|
2020
|
391,709
|
|
|
2021
|
418,358
|
|
|
Thereafter
|
3,941,599
|
|
|
|
$
|
5,544,193
|
|
Conversion Period
|
Preferred Series E Shares Converted
|
Value of Series E Preferred Shares (inclusive of accrued dividends)
|
Common Shares Issued
|
||||
Q4 2015
|
478
|
|
$
|
481,500
|
|
250,000
|
|
Q1 2016
|
1,220
|
|
1,239,436
|
|
1,132,000
|
|
|
Q2 2016
|
365
|
|
381,414
|
|
7,979,568
|
|
|
Q3 2016
|
523
|
|
548,896
|
|
21,973,747
|
|
|
Q4 2016
|
94
|
|
101,018
|
|
13,089,675
|
|
|
Q1 2017
|
15
|
|
16,248
|
|
8,289,962
|
|
|
Q2 2017
|
35
|
|
38,886
|
|
134,927,207
|
|
|
Q3 2017
|
70
|
|
76,814
|
|
129,314,677
|
|
|
|
2,800
|
|
$
|
2,884,212
|
|
316,956,836
|
|
Conversion Period
|
Preferred Series F Shares Converted
|
Value of Series F Preferred Shares (inclusive of accrued dividends)
|
Common Shares Issued
|
||
Q1 2016
|
2,168
|
$
|
2,188,298
|
|
2,183,992
|
Q2 2016
|
3,234
|
3,300,931
|
|
6,649,741
|
|
Q3 2016
|
1,262
|
1,315,743
|
|
81,917,364
|
|
Q4 2016
|
176
|
185,118
|
|
27,276,005
|
|
Q3 2017
|
20
|
20,000
|
|
18,181,818
|
|
|
6,860
|
$
|
7,010,090
|
|
136,208,920
|
Conversion Period
|
Preferred Series G Shares Converted
|
Value of Series G Preferred Shares (inclusive of accrued dividends)
|
Common Shares Issued
|
|||
Q4 2016
|
892
|
|
929,895
|
|
245,726,283
|
|
Q1 2017
|
372
|
|
397,970
|
|
327,718,386
|
|
Q2 2017
|
526
|
|
575,096
|
|
1,337,776,821
|
|
|
1,790
|
|
$
|
1,902,961
|
|
1,911,221,490
|
•
|
The Company agreed to redeem for cash all secured convertible notes of the Company held by the holder no later than
September 1, 2017
.
|
•
|
The Company affirmed that the current balance of owed principal and accrued and unpaid interest to the holder is
$1,790,214
as of May 2, 2017.
|
•
|
The redemption price for such secured convertible notes shall be
120%
(if redeemed on or prior to August 15, 2017) or
125%
(if redeemed after August 15, 2017) of the then outstanding principal, plus any accrued and unpaid interest.
|
•
|
During the month of May 2017, the Holder agreed to limit its conversions of outstanding Company secured convertible notes to
$50,000
per calendar week of principal/interest.
|
•
|
During the months of June, July and August 2017, the holder agreed to limit its conversions of outstanding Company secured convertible notes to
$75,000
per calendar week of principal/interest.
|
•
|
During the months of May, June, July and August 2017, the holder agreed that all outstanding Company secured convertible notes shall bear interest at the normal stated rate of
10%
, rather than default rate of
24%
.
|
•
|
All conversions during the months of May, June, July and August 2017 will be at the “triggering event” discount conversion price as stated in the secured convertible notes, and will continue at the “triggering event” discount price until, if and when the notes are redeemed.
|
•
|
Should the Company fail to redeem for cash all secured convertible notes on or before
September 1, 2017
, default interest and normal stated interest will accrue from the date of execution of this agreement.
|
Conversion Period
|
Exchange Convertible Notes Converted
|
Common Shares Issued
|
||
Q3 2016
|
$
|
15,000
|
|
1,470,588
|
Q4 2016
|
91,563
|
|
13,346,274
|
|
Q1 2017
|
70,000
|
|
50,503,662
|
|
Q2 2017
|
37,535
|
|
86,987,428
|
|
Q3 2017
|
118,536
|
|
282,228,524
|
|
|
$
|
332,634
|
|
434,536,476
|
Conversion Period
|
Preferred Series K Shares Converted
|
Value of Series K Preferred Shares
|
Common Shares Issued
|
||||
Q2 2017
|
3,200
|
|
$
|
3,200,000
|
|
800,000,000
|
|
Q3 2017
|
3,000
|
|
$
|
3,000,000
|
|
750,000,000
|
|
|
6,200
|
|
$
|
6,200,000
|
|
1,550,000,000
|
|
Preferred Stock Series Designation
|
Shares Outstanding
|
|
Series A
|
60,756
|
|
Series F
|
140
|
|
Series J
|
1,075
|
|
Series K
|
2,810
|
|
|
|
For the three months ended September 30,
|
|
For the nine months ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Share-based compensation cost included in:
|
|
|
|
|
|
|
|
|
||||||||
Research and development
|
|
$
|
659
|
|
|
$
|
29,502
|
|
|
$
|
17,557
|
|
|
$
|
154,786
|
|
Selling, general and administrative
|
|
12,147
|
|
|
121,294
|
|
|
91,160
|
|
|
553,990
|
|
||||
Total share-based compensation cost
|
|
$
|
12,806
|
|
|
$
|
150,796
|
|
|
$
|
108,717
|
|
|
$
|
708,776
|
|
|
|
For the three months ended September 30,
|
|
For the nine months ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Type of Award:
|
|
|
|
|
|
|
|
|
||||||||
Stock Options
|
|
$
|
12,806
|
|
|
$
|
58,271
|
|
|
$
|
82,388
|
|
|
$
|
295,229
|
|
Restricted Stock Units and Awards
|
|
—
|
|
|
92,525
|
|
|
26,329
|
|
|
413,547
|
|
||||
Total share-based compensation cost
|
|
$
|
12,806
|
|
|
$
|
150,796
|
|
|
$
|
108,717
|
|
|
$
|
708,776
|
|
|
|
For the nine months ended September 30,
|
|
|
2016
|
Expected volatility
|
|
115%
|
Risk free interest rate
|
|
1%
|
Expected dividends
|
|
—
|
Expected life (in years)
|
|
5.8
|
•
|
our ability to generate customer acceptance of and demand for our products;
|
•
|
successful ramping up of commercial production on the equipment installed;
|
•
|
our products are successfully and timely certified for use in our target markets;
|
•
|
successful operating of production tools to achieve the efficiencies, throughput and yield necessary to reach our cost targets;
|
•
|
the products we design are saleable at a price sufficient to generate profits;
|
•
|
our ability to raise sufficient capital to enable us to reach a level of sales sufficient to achieve profitability on terms favorable to us;
|
•
|
effective management of the planned ramp up of our domestic and international operations;
|
•
|
our ability to successfully develop and maintain strategic relationships with key partners, including OEMs, system integrators, distributors, retailers and e-commerce companies, who deal directly with end users in our target markets;
|
•
|
our ability to maintain the listing of our common stock on the OTCBB Market;
|
•
|
our ability to implement remediation measures to address material weaknesses in control;
|
•
|
our ability to achieve projected operational performance and cost metrics;
|
•
|
our ability to enter into commercially viable licensing, joint venture, or other commercial arrangements; and
|
•
|
availability of raw materials.
|
1.
|
Net product revenues were approximately
$242,000
for the three months ended
September 30, 2017
compared to
$437,000
for the three months ended
September 30, 2016
, a decrease of
$195,000
. The decrease in product sales is largely the result of our sale of the EnerPlex brand of products.
|
2.
|
The Company did not have any revenues attributable to government research and development contracts during the three months ended
September 30, 2017
, compared to
$16,000
during the three months ended
September 30, 2016
.
|
1.
|
Personnel and facility related expenses decreased approximately
$363,000
as compared to the
third
quarter of 2016. The decrease in personnel related costs was primarily due to a reduction in headcount.
|
2.
|
Consulting and contract services decreased approximately
$5,000
compared to the
third
quarter of 2016. The decrease in expense as compared to the
third
quarter of 2016 was primarily attributed to the reduced number of contractors during the quarter ended
September 30, 2017
.
|
3.
|
Materials and equipment related expenses, increased approximately
$20,000
compared to the
third
quarter of 2016. The decrease in expense was primarily due to the reserve against WIP inventory as a result of our focus transition from the consumer electronics market to high-value PV markets.
|
1.
|
Personnel and facility related costs decreased approximately
$436,000
during the three months ended
September 30, 2017
as compared to the three months ended
September 30, 2016
. The overall decrease in personnel related costs was primarily due a lower headcount for the three months ended
September 30, 2017
as compared to the three months ended
September 30, 2016
.
|
2.
|
Marketing and related expenses decreased approximately
$529,000
during the three months ended
September 30, 2017
as compared to the three months ended
September 30, 2016
. The decrease in Marketing and related expenses is due to reduced marketing, advertising, and promotional activities during the third quarter of 2016 as compared to the first quarter of 2016 which is the direct result of changing our main focus from the consumer electronics market to higher-value PV markets.
|
3.
|
Consulting and contract services decreased approximately
$52,000
during the three months ended
September 30, 2017
as compared to the three months ended
September 30, 2016
. The decrease was a result of decreased consulting expenses related to our financing efforts.
|
4.
|
Legal expenses decreased approximately
$116,000
during the three months ended
September 30, 2017
as compared to the three months ended
September 30, 2016
. The primary reasons for the decrease is due to reductions in both legal expenses related to our patents and general legal expenses related to financing efforts as compared to the quarter ended
September 30, 2016
.
|
5.
|
Bad debt and settlement expenses decreased approximately
$75,000
during the three months ended
September 30, 2017
as compared to the three months ended
September 30, 2016
. During the quarter we recorded payments and settlements against existing reserves which were offset by additional reserves for customers whose accounts were greater than 120 days overdue.
|
6.
|
Public company expenses decreased approximately
$26,000
during the three months ended
September 30, 2017
as compared to the three months ended
September 30, 2016
. The decrease is mostly due to a decrease in public relations expense.
|
1.
|
Interest expense decreased approximately
$891,000
as compared the
third
quarter of 2016. The decrease is primarily due to an decrease of non-cash interest expense amortization of debt discounts related to convertible debt, promissory notes, and Preferred Stock.
|
2.
|
Other expense, net increased approximately
$58,000
. This increase primarily results from a $15,000 loss on sale of assets in the three months ended
September 30, 2016
, compared to a $42,000 gain on sale of assets for the three months ended
September 30, 2016
.
|
3.
|
Warrant expense increased by approximately
$336,000
as compared to the
third
quarter of 2016. This increase is due to the issuance of warrants during the three months ended
September 30, 2017
, related to redemption and settlement agreements.
|
4.
|
Gains and losses on change in fair value of derivatives and on extinguishment of liabilities, net improved to a
$2,151,000
gain during the
third
quarter of 2017 as compared to a
$4,500,000
loss the
third
quarter of 2016. The improvement of
$6,652,000
in this non-cash item is attributable to a gain of
$2,593,000
on the change in fair value of our embedded derivative instruments during the three months ended
September 30, 2017
and a decrease in the loss from extinguishment of liabilities of
$4,059,000
, related to conversions and redemptions of certain convertible notes and preferred stock, for the three months ended
September 30, 2017
as compared to the the three months ended
September 30, 2016
|
|
|
Decrease (Increase)
to Net Loss
For the Three
Months Ended
September 30, 2017 Compared to the Three Months Ended
September 30, 2016
|
||
Revenues
|
|
(211,000
|
)
|
|
Cost of Revenue
|
|
797,000
|
|
|
Research, development and manufacturing operations
|
|
|
||
Materials and Equipment Related Expenses
|
|
(19,000
|
)
|
|
Personnel Related Expenses
|
|
354,000
|
|
|
Consulting and Contract Services
|
|
5,000
|
|
|
Facility Related Expenses
|
|
9,000
|
|
|
Other Miscellaneous Costs
|
|
(1,000
|
)
|
|
Selling, general and administrative expenses
|
|
|
||
Personnel, administrative, and facility Related Expenses
|
|
436,000
|
|
|
Marketing Related Expenses
|
|
529,000
|
|
|
Legal Expenses
|
|
116,000
|
|
|
Public Company Costs
|
|
26,000
|
|
|
Consulting and Contract Services
|
|
52,000
|
|
|
Bad debt expense
|
|
73,000
|
|
|
Settlement expense
|
|
2,000
|
|
|
Depreciation and Amortization Expense
|
|
113,000
|
|
|
Other Income / (Expense)
|
|
|
||
Interest Expense
|
|
891,000
|
|
|
Other Income/Expense
|
|
(58,000
|
)
|
|
Warrant Expense
|
|
(336,000
|
)
|
|
Non-Cash Change in Fair Value of Derivatives and Gain/Loss on Extinguishment of Liabilities, net
|
|
6,652,000
|
|
|
Decrease (Increase) to Net Loss
|
|
$
|
9,430,000
|
|
1.
|
Net product revenues were approximately
$548,000
for the
nine
months ended
September 30, 2017
compared to
$1,370,000
for the
nine
months ended
September 30, 2016
, a decrease of
$822,000
. The decrease in product sales is largely the result of our sale of the Enerplex brand of products.
|
2.
|
The Company did not have any revenues attributable to government research and development contracts during the
nine
months ended
September 30, 2017
, compared to
$48,000
during the
nine
months ended
September 30, 2016
.
|
1.
|
Personnel and facility related expenses decreased approximately
$1,219,000
as compared to the
nine
months ended
September 30, 2016
. The decrease in personnel related costs was primarily due to a reduction in headcount.
|
2.
|
Consulting and contract services decreased approximately
$20,000
compared to the
nine
months ended
September 30, 2016
. The decrease in expense as compared to the
nine
months ended was primarily attributed to the reduced number of contractors during the
nine
months ended
September 30, 2017
.
|
3.
|
Materials and equipment related expenses decreased approximately
$63,000
compared to the
nine
months ended
September 30, 2016
. The decrease in expense was primarily due to the reserve against WIP inventory as a result of our focus transition from the consumer electronics market to high-value PV markets.
|
1.
|
Personnel and facility related costs decreased approximately
$1,742,000
during the
nine
months ended
September 30, 2017
as compared to the
nine
months ended
September 30, 2016
. The overall decrease in personnel related costs was primarily due a lower headcount for the
nine
months ended
September 30, 2017
as compared to the
nine
months ended
September 30, 2016
.
|
2.
|
Marketing and related expenses decreased approximately
$1,685,000
during the
nine
months ended
September 30, 2017
as compared to the
nine
months ended
September 30, 2016
. The decrease in Marketing and related expenses is due to reduced marketing, advertising, and promotional activities during the
nine
months ended as compared to the
nine
months ended
September 30, 2016
which is the direct result of changing our main focus from the consumer electronics market to higher-value PV markets.
|
3.
|
Consulting and contract services increased approximately
$55,000
during the
nine
months ended
September 30, 2017
as compared to the
nine
months ended
September 30, 2016
. The increase was the result of a marketing campaign that began during the nine months ended
September 30, 2017
.
|
4.
|
Legal expenses decreased approximately
$432,000
during the
nine
months ended
September 30, 2017
as compared to the
nine
months ended
September 30, 2016
. The primary reasons for the decrease is due to reductions in both legal expenses related to our patents and general legal expenses related to financing efforts as compared to the
nine
months ended
September 30, 2016
.
|
5.
|
Bad debt expense decreased approximately
$246,000
during the
nine
months ended
September 30, 2017
as compared to the
nine
months ended
September 30, 2016
. During the
nine
months ended
September 30, 2017
, we recorded payments and settlements against existing reserves which were offset by additional reserves for customers whose accounts were greater than 120 days overdue.
|
6.
|
Public company expenses decreased approximately
$122,000
during the
nine
months ended
September 30, 2017
as compared to the
nine
months ended
September 30, 2016
. The decrease is mostly due to a decrease in public relations expense.
|
7.
|
Settlement expenses for the
nine
months ended
September 30, 2017
were approximately
$164,000
. These expenses consisted of a settlement of $23,000 related to an alleged Proposition 65 violation and a settlement of $141,000 with a former EnerPlex customer regarding a return of product.
|
1.
|
Interest expense decreased
$305,000
as compared the
nine
months ended
September 30, 2016
. The decrease is primarily due to an decrease of non-cash interest expense and amortization of debt discounts related to convertible and promissory notes and Preferred Stock.
|
2.
|
Other income, net increased
$489,000
. This increase is comprised of an increase in gain on sale of assets of
$1,125,000
, primarily related to the transfer of the EnerPlex IP, offset by induced conversion costs of
$636,000
on several of the financial instruments.
|
3.
|
Warrant expense increased by approximately
$336,000
as compared to the
nine
months ended
September 30, 2016
. This increase is due to the issuance of warrants during the
nine
months ended
September 30, 2017
, related to redemption and settlement agreements.
|
4.
|
Gains and losses on change in fair value of derivatives and on extinguishment of liabilities, net was a gain of
$3,753,000
for the
nine
months ended
September 30, 2017
an increase of
$11,682,000
compared to the net loss of
$7,929,000
for the
nine
months ended
September 30, 2016
. The change in this non-cash item is the result of an increase of
$7,816,000
in the gain on change in the fair value of our embedded derivative instruments during the
nine
months ended
September 30, 2017
compared to the
nine
months ended
September 30, 2016
, and an decrease of
$3,866,000
on loss on extinguishment of liabilities related to conversions of certain convertible notes and preferred stock in the same comparative periods.
|
|
|
Decrease (Increase)
to Net Loss
For the Nine
Months Ended
September 30, 2017 Compared to the Nine Months Ended
September 30, 2016
|
||
Revenues
|
|
(870,000
|
)
|
|
Cost of Revenue
|
|
2,446,000
|
|
|
Research, development and manufacturing operations
|
|
|
||
Materials and Equipment Related Expenses
|
|
62,000
|
|
|
Personnel Related Expenses
|
|
1,164,000
|
|
|
Consulting and Contract Services
|
|
20,000
|
|
|
Facility Related Expenses
|
|
55,000
|
|
|
Other Miscellaneous Costs
|
|
1,000
|
|
|
Inventory impairment costs
|
|
(364,000
|
)
|
|
Selling, general and administrative expenses
|
|
|
||
Personnel, Administrative, and Facility Related Expenses
|
|
1,742,000
|
|
|
Marketing Related Expenses
|
|
1,685,000
|
|
|
Legal Expenses
|
|
432,000
|
|
|
Public Company Costs
|
|
122,000
|
|
|
Bad Debt Expense
|
|
246,000
|
|
|
Consulting and Contract Services
|
|
(55,000
|
)
|
|
Settlement Expenses
|
|
(164,000
|
)
|
|
Depreciation and Amortization Expense
|
|
2,168,000
|
|
|
Other Income / (Expense)
|
|
|
||
Interest Expense
|
|
305,000
|
|
|
Other Income/Expense
|
|
489,000
|
|
|
Warrant Expense
|
|
(336,000
|
)
|
|
Non-Cash Change in Fair Value of Derivatives and Gain/Loss on Extinguishment of Liabilities, net
|
|
11,682,000
|
|
|
Decrease (Increase) to Net Loss
|
|
$
|
20,830,000
|
|
|
|
|
|
Payments by Year
|
|||||||||||||
Contractual Obligation
|
|
Total
|
|
Less than 1 year
|
1-3 Years
|
3-5 Years
|
More than 5 Years
|
||||||||||
Long Term Debt
|
|
$
|
7,874,857
|
|
|
$
|
693,611
|
|
$
|
2,080,832
|
|
$
|
2,080,832
|
|
$
|
3,019,582
|
|
Purchase Obligations
|
|
$
|
368,697
|
|
|
368,697
|
|
|
|
|
|||||||
|
|
$
|
8,243,554
|
|
|
$
|
1,062,308
|
|
$
|
2,080,832
|
|
$
|
2,080,832
|
|
$
|
3,019,582
|
|
•
|
The Company was understaffed and did not have sufficiently trained resources with the technical expertise to research and account for the Company's complex capitalization and multiple complex capital raising and equity transactions. This deficiency arose primarily from staff turnover including the Company’s failure to more quickly replace its Director of Financial Planning and Reporting, who left the Company for a new position in November, 2016.
|
•
|
Accounting for the Company's convertible debt and preferred stock transactions was lacking for the preparation of the December 31, 2016 financial statements. Many of the special accounting issues specific to debt and equity financing have become increasingly complex and time-consuming, and require extensive expertise to ensure that the accounting and reporting are accurate and in accordance with applicable standards. Given the numerous complex convertible equity financing transactions engaged in by the Company during 2016, the relevant accounting standards require the calculation, monitoring, recalculation and “marking to market” of a wide variety of derivative securities instruments that are deemed to arise from such financing transactions. These complex derivatives calculations are used in order to calculate the intrinsic value of the financial instruments and affect the short term embedded derivative liabilities line item on the Company’s balance sheet and in the change in fair value of derivatives and gain/loss on extinguishment of liabilities line item on the Company’s consolidated statement of operations. As the calculations in question relate to non-cash transactions, there was no impact on the Company's cash, current assets, revenues, operating results, or cash flows. The control deficiencies described above created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis.
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In March 2017, the Company hired a Director of Financial Planning and Reporting with the technical expertise to research and account for the Company's complex capital raising and financial transactions. In addition, the Company will be evaluating its personnel needs and other resources to ensure appropriate staffing and enhance its research and technical accounting knowledge base.
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The Company will design and implement additional procedures in order to assure that the Director, Financial Planning and Reporting and other audit/accounting personnel are more involved with the Company’s financing activities to monitor and earlier identify accounting issues that may be raised by the Company’s ongoing financing activities.
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ASCENT SOLAR TECHNOLOGIES, INC.
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By:
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/
S
/ VICTOR LEE
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Lee Kong Hian (aka Victor Lee)
President and Chief Executive Officer
(Principal Executive Officer, Principal Financial Officer, Chief Accounting Officer, and Authorized Signatory)
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10.1
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10.2
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10.3
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10.4
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10.5
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10.6
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10.7
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31.1*
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31.2*
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32.1*
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32.2*
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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*
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Filed herewith.
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