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What changed in Ascent Solar Technologies, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Ascent Solar Technologies, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+127 added−157 removedSource: 10-K (2024-02-21) vs 10-K (2023-03-10)

Top changes in Ascent Solar Technologies, Inc.'s 2023 10-K

127 paragraphs added · 157 removed · 94 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

64 edited+21 added−59 removed152 unchanged
Biggest changeModifications to the peak hour pricing policies of utilities, such as to a flat rate, would require PV systems to achieve lower prices in order to compete with the price of electricity from other sources. 14 We anticipate that our PV modules and their use in installations will be subject to oversight and regulation in accordance with national and local ordinances relating to building codes, safety, environmental protection, utility interconnection and metering and related matters.
Biggest changeWe anticipate that our PV modules and their use in installations will be subject to oversight and regulation in accordance with national and local ordinances relating to building codes, safety, environmental protection, utility interconnection and metering and related matters. It is difficult to track the requirements of individual states and design equipment to comply with the varying standards.
Risks inherent to international operations, include, but are not limited to, the following: • Difficulty in procuring supplies and supply contracts abroad; • Difficulty in enforcing agreements in foreign legal systems; • Foreign countries imposing additional withholding taxes or otherwise taxing our foreign income, imposing tariffs or adopting other restrictions on foreign trade and investment, including currency exchange controls; • Inability to obtain, maintain or enforce intellectual property rights; • Risk of nationalization; • Changes in general economic and political conditions in the countries in which we may operate, including changes in the government incentives we might rely on; • Unexpected adverse changes in foreign laws or regulatory requirements, including those with respect to environmental protection, export duties and quotas; • Difficulty with staffing and managing widespread operations; • Trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses, which could increase the prices of our products and make us less competitive in some countries; and • Difficulty of, and costs relating to, compliance with the different commercial and legal requirements of the international markets in which we plan to offer and sell our PV products.
Risks inherent to international operations, include, but are not limited to, the following: • Difficulty in enforcing agreements in foreign legal systems; • Difficulty in procuring supplies and supply contracts abroad; • Foreign countries imposing additional withholding taxes or otherwise taxing our foreign income, imposing tariffs or adopting other restrictions on foreign trade and investment, including currency exchange controls; • Inability to obtain, maintain or enforce intellectual property rights; • Risk of nationalization; • Changes in general economic and political conditions in the countries in which we may operate, including changes in the government incentives we might rely on; • Unexpected adverse changes in foreign laws or regulatory requirements, including those with respect to environmental protection, export duties and quotas; • Difficulty with staffing and managing widespread operations; • Trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses, which could increase the prices of our products and make us less competitive in some countries; and • Difficulty of, and costs relating to, compliance with the different commercial and legal requirements of the international markets in which we plan to offer and sell our PV products.
Our ability to achieve our business, commercialization and expansion objectives will depend on a number of factors, including whether: • We can generate customer acceptance of and demand for our products; • We successfully ramp up commercial production on the equipment installed; • Our products are successfully and timely certified for use in our target markets; • We successfully operate 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; • We raise sufficient capital to enable us to reach a level of sales sufficient to achieve profitability on terms favorable to us; • We are able to successfully design, manufacture, market, distribute and sell our products; • We effectively manage the planned ramp up of our operations; • We successfully develop and maintain strategic relationships with key partners, including OEMs, system integrators and distributors, who deal directly with end users in our target markets; • Our ability to maintain the listing of our common stock on the Nasdaq Capital Market; • 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 • The availability of raw materials.
Our ability to achieve our business, commercialization and expansion objectives will depend on a number of factors, including whether: • We can generate customer acceptance of and demand for our products; • We successfully ramp up commercial production on the equipment installed; • Our products are successfully and timely certified for use in our target markets; • We successfully operate production tools to achieve the efficiencies, throughput and yield necessary to reach our cost targets; 6 • The products we design are saleable at a price sufficient to generate profits; • We raise sufficient capital to enable us to reach a level of sales sufficient to achieve profitability on terms favorable to us; • We are able to successfully design, manufacture, market, distribute and sell our products; • We effectively manage the planned ramp up of our operations; • We successfully develop and maintain strategic relationships with key partners, including OEMs, system integrators and distributors, who deal directly with end users in our target markets; • Our ability to maintain the listing of our common stock on the Nasdaq Capital Market; • 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 • The availability of raw materials.
D781,228 entitled "Pocket-Sized Photovoltaic Based Fully Integrated Portable Power System" (issued March 14, 2017) 8 US Patent No. 9,601,650 entitled "Machine and Process for Continuous, Sequential, Deposition of Semiconductor Solar Absorbers Having Variable Semiconductor Composition Deposited in Multiple Sublayers" (issued March 21, 2017) 9 US Patent No. 9,634,175 entitled "Systems and Methods for Thermally Managing High-Temperature Processes on Temperature Sensitive Substrates" (issued April 25, 2017) 5 10 US Patent No. 9,640,706 entitled "Hybrid Multi-Junction Photovoltaic Cells and Associated Methods" (issued May 2, 2017) 11 US Patent No. 9,640,692 entitled "Flexible Photovoltaic Array with Integrated Wiring and Control Circuitry, and Associated Methods" (issued May 2, 2017) 12 US Patent No. 9,653,635 entitled Flexible High-Voltage Adaptable Current Photovoltaic Modules and Associated Methods (issued May 16, 2017) 13 US Patent No. 9,780,242 entitled “Multilayer Thin-Film Back Contact System for Flexible Photovoltaic Devices on Polymer Substrates” (issued October 3, 2017) 14 US Patent No. 9,929,306 entitled "Array of Monolithically Integrated Thin Film Photovoltaic Cells and Associated Methods" (issued March 27, 2018) Suppliers We rely on several unaffiliated companies to supply certain raw materials used during the fabrication of our PV modules and PV integrated electronics.
D781,228 entitled "Pocket-Sized Photovoltaic Based Fully Integrated Portable Power System" (issued March 14, 2017) 8 US Patent No. 9,601,650 entitled "Machine and Process for Continuous, Sequential, Deposition of Semiconductor Solar Absorbers Having Variable Semiconductor Composition Deposited in Multiple Sublayers" (issued March 21, 2017) 9 US Patent No. 9,634,175 entitled "Systems and Methods for Thermally Managing High-Temperature Processes on Temperature Sensitive Substrates" (issued April 25, 2017) 10 US Patent No. 9,640,706 entitled "Hybrid Multi-Junction Photovoltaic Cells and Associated Methods" (issued May 2, 2017) 11 US Patent No. 9,640,692 entitled "Flexible Photovoltaic Array with Integrated Wiring and Control Circuitry, and Associated Methods" (issued May 2, 2017) 12 US Patent No. 9,653,635 entitled Flexible High-Voltage Adaptable Current Photovoltaic Modules and Associated Methods (issued May 16, 2017) 13 US Patent No. 9,780,242 entitled “Multilayer Thin-Film Back Contact System for Flexible Photovoltaic Devices on Polymer Substrates” (issued October 3, 2017) 14 US Patent No. 9,929,306 entitled "Array of Monolithically Integrated Thin Film Photovoltaic Cells and Associated Methods" (issued March 27, 2018) 4 Suppliers We rely on several unaffiliated companies to supply certain raw materials used during the fabrication of our PV modules and PV integrated electronics.
The solar energy and renewable energy industries are both highly competitive and continually evolving as participants strive to distinguish themselves within their markets and compete with the larger electric power industry. We believe our main sources of competition are other thin film PV manufacturers and companies developing other solar solutions, such as solar thermal and concentrated PV technologies.
The solar energy and renewable energy industries are both highly competitive and continually evolving as 8 participants strive to distinguish themselves within their markets and compete with the larger electric power industry. We believe our main sources of competition are other thin film PV manufacturers and companies developing other solar solutions, such as solar thermal and concentrated PV technologies.
We anticipate that while these large manufacturers may continue to dominate the market with their silicon-based products, thin film manufacturers will likely capture an increasingly larger share of the market, as is evident from the success of First Solar (CdTe). 4 We believe that our modules offer unique advantages.
We anticipate that while these large manufacturers may continue to dominate the market with their silicon-based products, thin film manufacturers will likely capture an increasingly larger share of the market, as is evident from the success of First Solar (CdTe). We believe that our modules offer unique advantages.
Our PV modules contain limited amounts of cadmium sulfide, which is regulated as a hazardous material due to the adverse health effects that may arise from human exposure and is banned in certain countries. We cannot assure you that human or environmental exposure to cadmium sulfide used in our PV modules will not occur.
Our PV modules contain limited amounts of cadmium, which is regulated as a hazardous material due to the adverse health effects that may arise from human exposure and is banned in certain countries. We cannot assure you that human or environmental exposure to cadmium used in our PV modules will not occur.
In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of Sarbanes-Oxley. Our compliance with Section 404 of Sarbanes-Oxley will require we incur substantial accounting expense and expend significant management efforts.
In particular, we must perform system and process 12 evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of Sarbanes-Oxley. Our compliance with Section 404 of Sarbanes-Oxley will require we incur substantial accounting expense and expend significant management efforts.
Provisions in our Certificate of Incorporation and Bylaws, each as amended, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us, 17 or for a change in the composition of our Board of Directors (our “Board”) or management to occur, even if doing so would benefit our stockholders.
Provisions in our Certificate of Incorporation and Bylaws, each as amended, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us, or for a change in the composition of our Board of Directors (our “Board”) or management to occur, even if doing so would benefit our stockholders.
Although our reporting currency is the U.S. dollar, we may conduct 11 business and incur costs in the local currencies of other countries in which we operate, make sales or buy equipment or materials. As a result, we are subject to currency translation risk.
Although our reporting currency is the U.S. dollar, we may conduct business and incur costs in the local currencies of other countries in which we operate, make sales or buy equipment or materials. As a result, we are subject to currency translation risk.
The trading price of our common stock in the future may be affected by a number of factors, including events described in these 15 Risk Factors. In recent years, broad stock market indices, in general, and smaller capitalization and PV companies, in particular, have experienced substantial price fluctuations.
The trading price of our common stock in the future may be affected by a number of factors, including events described in these Risk Factors. In recent years, broad stock market indices, in general, and smaller capitalization and PV companies, in particular, have experienced substantial price fluctuations.
In addition, the Company may be unaware of one or more issued patents that would be infringed by the 12 manufacture, sale or use of a current or future products, or the Company may incorrectly conclude that a third-party patent is invalid, unenforceable or not infringed by its activities.
In addition, the Company may be unaware of one or more issued patents that would be infringed by the manufacture, sale or use of a current or future products, or the Company may incorrectly conclude that a third-party patent is invalid, unenforceable or not infringed by its activities.
Failure to meet these objectives on time and within our planned budget could materially and adversely affect our business, results of operations and financial condition. We may be unable to manage the expansion of our operations and strategic alliances effectively.
Failure to 7 meet these objectives on time and within our planned budget could materially and adversely affect our business, results of operations and financial condition. We may be unable to manage the expansion of our operations and strategic alliances effectively.
We consider PowerFilm Solar, Global Solar, MiaSolé, and Flisom to be our closest competitors in terms of technology in the specialty PV market. Research and Development and Intellectual Property Our technology was initially developed at ITN beginning in 1994.
We consider PowerFilm Solar, Global Solar, and MiaSolé to be our closest competitors in terms of technology in the specialty PV market. Research and Development and Intellectual Property Our technology was initially developed at ITN beginning in 1994.
To the best of our knowledge, we believe we are the only company in the world currently focused on commercial scale production of PV modules using CIGS on a flexible, plastic substrate with monolithic integration.
To the best of our knowledge, we believe we are the only company in the world currently focused on commercial scale production of PV modules using CIGS on a flexible, 1 plastic substrate with monolithic integration.
Our PV modules contain limited amounts of cadmium sulfide and claims of human exposure or future regulations could have a material adverse effect on our business, results of operations and financial condition.
Our PV modules contain limited amounts of cadmium and claims of human exposure or future regulations could have a material adverse effect on our business, results of operations and financial condition.
Competitive Strengths We believe we possess a number of competitive strengths that provide us with an advantage over our competitors. • We are a pioneer in CIGS technology with a proprietary, flexible, lightweight, high efficiency PV thin film product that positions us to penetrate a wide range of attractive high value added markets such as aerospace and agrivoltaics.
Competitive Strengths We believe we possess a number of competitive strengths that provide us with an advantage over our competitors. • We are a pioneer in CIGS technology with a proprietary, flexible, lightweight, high power PV thin film product that positions us to penetrate a wide range of attractive high value added markets such as aerospace and agrivoltaics.
Any such exposure could result in third party claims against us, damage to our reputation and heightened regulatory scrutiny of our PV modules.
Any such exposure could result in third party claims against us, damage to our reputation 10 and heightened regulatory scrutiny of our PV modules.
Alternatively, if the Company fails to regain compliance with the bid price rule prior to the expiration of the initial 180 calendar day period, the Company may be eligible for an additional 180 calendar day compliance period, provided (i) it meets the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on Nasdaq (except for the bid price requirement) and (ii) it provides written notice to Nasdaq of its intention to cure this deficiency during the second compliance period by effecting a reverse stock split, if necessary.
Alternatively, if the Company fails to regain compliance with Rule 5550(a)(2) prior to the expiration of the initial 180 calendar day period, the Company may be eligible for an additional 180 calendar day compliance period, provided (i) it meets the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on The Nasdaq Capital Market (except for the Bid Price Requirement) and (ii) it provides written notice to Nasdaq of its intention to cure this deficiency during the second compliance period by effecting a reverse stock split, if necessary.
Our ability to produce finished unpackaged rolls of CIGS material for shipment worldwide to customers for encapsulation and integration into various products enhances our ability to work with partners internationally and domestically. Markets and Marketing Strategy We target high-value specialty solar markets including aerospace and agrivoltaics applications.
Our ability to produce finished unpackaged rolls of CIGS material for shipment worldwide to customers for encapsulation and integration into various products enhances our ability to work with partners internationally and domestically. Markets and Marketing Strategy We target high-value specialty solar markets including satellites, spacecraft, aerospace and agrivoltaics applications.
We make available free of charge on, or through, our website at www.AscentSolar.com our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the 6 Securities Exchange Act of 1934, as amended (“Exchange Act”) as soon as reasonably practicable after we file these materials with the SEC. 7 Ite m 1A.
We make available free of charge on, or through, our website at www.AscentSolar.com our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”) as soon as reasonably practicable after we file these materials with the SEC. 5 Ite m 1A.
We intend to continue to invest in research and development in order to provide near term improvements to our manufacturing process (including to reduce costs) and products (including improve technology to increase efficiency), as well as to identify next generation technologies relevant to both our existing and potential new markets.
We intend to continue to invest in research and development in order to provide near term improvements to our manufacturing process (including to reduce costs) and products (including improve technology to increase power), as well as to identify next generation technologies relevant to both our existing and potential new markets.
Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. Our December 31, 2022 financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. Our December 31, 2023 financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
For applications where a premium is placed on the weight and profile of the product, our ability to integrate our PV modules into portable packages offers the customer a lightweight and durable solution for all their portable electronics. • Our proven research and development capabilities position us to continue the development of next generation PV modules and technologies.
For applications where a premium is placed on the weight and profile of the product, our ability to integrate our PV modules into portable packages offers the customer a lightweight and durable solution. 2 • Our proven research and development capabilities position us to continue the development of next generation PV modules and technologies.
Employees As of December 31, 2022, we had 60 full-time and 2 part-time employees. Company History We were formed in October 2005 from the separation by ITN of its Advanced Photovoltaic Division and all of that division’s key personnel and core technologies.
Employees As of December 31, 2023, we had 16 full-time and 2 part-time employees. Company History We were formed in October 2005 from the separation by ITN of its Advanced Photovoltaic Division and all of that division’s key personnel and core technologies.
We intend to sell thin-film PV modules for use in portable power systems, defense and portable power systems, transportation, agrivoltaics, space and near space solar panel applications. Our marketing and distribution strategy is to form strategic relationships with distributors, value added resellers and e-commerce to provide a foothold in these target markets.
We intend to sell thin-film PV modules for use in agrivoltaics, space and near space solar panel applications. Our marketing and distribution strategy is to form strategic relationships with distributors, value added resellers and e-commerce to provide a foothold in these target markets.
If at any time during this 180 calendar day period the bid price of the Company’s common stock closes at or above $1.00 per share for a minimum of ten consecutive trading days, the Nasdaq staff would typically provide the Company with a written confirmation of compliance and the matter would be closed.
If at any time during this 180 calendar day period the bid price of the Company’s common stock closes at or above $1.00 per share for a minimum of ten consecutive business days, the Nasdaq staff (the “Staff”) will provide the Company with a written confirmation of compliance and the matter will be closed.
Jeffrey Max, our President and Chief Executive Officer, our other executive officers, and key technical personnel. Our future success also will depend on our ability to attract and retain highly skilled employees, including management, technical and sales personnel.
Paul Warley, our President and Chief Executive Officer, our other executive officers, and key technical personnel. Our future success also will depend on our ability to attract and retain highly skilled employees, including management, technical and sales personnel.
In the event the Company does not regain compliance with the bid price rule prior to the expiration of the initial 180 calendar day period, and if it appears to the Nasdaq staff that the Company will not be able to cure the deficiency, or if the Company is not otherwise eligible, the Nasdaq staff will provide the Company with written notification that its securities are subject to delisting from Nasdaq.
In the event the Company does not regain compliance with Rule 5550(a)(2) prior to the expiration of the initial 180 calendar day period, and if it appears to the Staff that the Company will not be able to cure the deficiency, or if the Company is not otherwise eligible, the Staff will provide the Company with written notification that its securities are subject to delisting from The Nasdaq Capital Market.
Due to the high durability enabled by the monolithic integration employed by our technology, the capability to customize modules into different form factors and what we believe is the industry leading light weight and flexibility provided by our modules, we believe that the potential applications for our products are extensive, including integrated solutions anywhere that may need power generation such as portable power solutions, vehicles in space or in flight or dual-use installations on agricultural land and has developed the following ways to utilize this technology: • High-voltage SuperLight thin-film CIGS PV blankets.
Due to the high durability enabled by the monolithic integration employed by our technology, the capability to customize modules into different form factors and what we believe is the industry leading light weight and flexibility provided by our modules, we believe that the potential applications for our products are extensive, including integrated solutions anywhere that may need power generation such as portable power solutions, vehicles in space or in flight or dual-use installations on agricultural land.
During the years ended December 31, 2022 and 2021 we incurred approximately $5,975,921 and $4,140,319, respectively, in research, development and manufacturing operations costs, which include research and development incurred in customizing products for customers, as well as manufacturing costs incurred while developing our product lines and manufacturing process.
During the years ended December 31, 2023 and 2022 we incurred approximately $3,222,283 and $5,975,921, respectively, in research, development 3 and manufacturing operations costs, which include research and development incurred in customizing products for customers, as well as manufacturing costs incurred while developing our product lines and manufacturing process.
Ascent designs and develops finished products for end users in these areas and collaborates with strategic partners to design and develop custom integrated solutions for products like airships and fixed-wing UAVs.
Ascent designs and develops finished products for end users in these areas and collaborates with strategic partners to design and develop integrated solutions for products like satellites, spacecraft, airships and fixed-wing unmanned aerial vehicles ("UAVs").
We believe the value proposition of Ascent’s proprietary solar technology not only aligns with the needs of customers in our target markets, but also overcomes many of the obstacles other solar technologies face in these unique markets.
We believe the value proposition of Ascent’s proprietary solar technology not only aligns with the needs of customers in our target markets, but also overcomes many of the obstacle’s other solar technologies face in space, aerospace and other markets.
Demand for our products may never develop sufficiently, and our products may never gain market acceptance, if we fail to produce products that compare favorably against competing products on the basis of cost, quality, weight, efficiency and performance.
Our products may never gain sufficient market acceptance, in which case we would be unable to sell our products or achieve profitability. Demand for our products may never develop sufficiently, and our products may never gain market acceptance, if we fail to produce products that compare favorably against competing products on the basis of cost, quality, weight, efficiency and performance.
Our auditors’ report on our December 31, 2022 financial statements expresses an opinion that our capital resources as of the date of their audit 8 report were not sufficient to sustain operations or complete our planned activities for the year 2023 unless we raised additional funds.
Our auditors have expressed substantial doubt about our ability to continue as a going concern. Our auditors’ report on our December 31, 2023 financial statements expresses an opinion that our capital resources as of the date of their audit report were not sufficient to sustain operations or complete our planned activities for the year 2024 unless we raised additional funds.
We cannot assure you that our technology will prove to be commercially viable in accordance with our plan and strategies. Further, we or our strategic partners and licensees may experience operational problems with such technology after its commercial introduction that could delay or defeat the ability of such technology to generate revenue or operating profits.
Further, we or our strategic partners and licensees may experience operational problems with such technology after its commercial introduction that could delay or defeat the ability of such technology to generate revenue or operating profits.
We have to date incurred net losses and may be unable to generate sufficient sales in the future to become profitable. We incurred a net loss of $19,754,705 for the year ended December 31, 2022 and reported an accumulated deficit of $447,537,493 as of December 31, 2022. We expect to incur net losses in the near term.
We have to date incurred net losses and may be unable to generate sufficient sales in the future to become profitable. We incurred a net loss of $17,069,896 for the year ended December 31, 2023 and reported an accumulated deficit of $482,478,436 as of December 31, 2023. We expect to incur net losses in the near term.
In addition, when others control the prosecution, maintenance and enforcement of certain important intellectual property, such as technology licensed to us, the protection and enforcement of the intellectual property rights may be outside of our control.
If we are unable to maintain the proprietary nature of our technologies, we could be materially adversely affected. 9 In addition, when others control the prosecution, maintenance and enforcement of certain important intellectual property, such as technology licensed to us, the protection and enforcement of the intellectual property rights may be outside of our control.
It is difficult to track the requirements of individual states and design equipment to comply with the varying standards. Any new government regulations or utility policies pertaining to PV modules may result in significant additional expenses to us, our business partners and their customers and, as a result, could cause a significant reduction in demand for our PV modules.
Any new government regulations or utility policies pertaining to PV modules may result in significant additional expenses to us, our business partners and their customers and, as a result, could cause a significant reduction in demand for our PV modules.
If we are unable to raise additional capital and generate sufficient revenue to achieve profitability and positive cash flows, we may be unable to satisfy our commitments and may have to discontinue operations. 9 Our business is based on a new technology, and if our PV modules or processes fail to achieve the performance and cost metrics that we expect, then we may be unable to develop demand for our PV modules and generate sufficient revenue to support our operations.
Our business is based on a new technology, and if our PV modules or processes fail to achieve the performance and cost metrics that we expect, then we may be unable to develop demand for our PV modules and generate sufficient revenue to support our operations. Our CIGS on flexible plastic substrate technology is a relatively new technology.
We currently anticipate having substantial international operations that will subject us to a number of risks, including potential unfavorable political, regulatory, labor and tax conditions in foreign countries.
We have agreements with international parties that subject us to a number of risks, including potential unfavorable political, regulatory, labor, legal and tax conditions in foreign countries.
Our CIGS on flexible plastic substrate technology is a relatively new technology. Our business plan and strategies assume that we will be able to achieve certain milestones and metrics in terms of throughput, uniformity of cell efficiencies, yield, encapsulation, packaging, cost and other production parameters.
Our business plan and strategies assume that we will be able to achieve certain milestones and metrics in terms of throughput, uniformity of cell efficiencies, yield, encapsulation, packaging, cost and other production parameters. We cannot assure you that our technology will prove to be commercially viable in accordance with our plan and strategies.
Raw materials from new suppliers may also be less suited for our technology and yield PV modules with lower conversion efficiencies, higher failure rates and higher rates of degradation than PV modules manufactured with the raw materials from our current suppliers. 10 Our products may never gain sufficient market acceptance, in which case we would be unable to sell our products or achieve profitability.
We may be unable to identify new suppliers in a timely manner or on commercially reasonable terms. Raw materials from new suppliers may also be less suited for our technology and yield PV modules with lower conversion efficiencies, higher failure rates and higher rates of degradation than PV modules manufactured with the raw materials from our current suppliers.
By applying CIGS to a flexible plastic substrate, we have developed a PV module that is efficient, lightweight and flexible; with the highest power-to-weight ratio in at-scale commercially available solar. 3 The market for space and near-space solar power application solutions, agrivoltaics, portable power systems, and transportation integrated applications represent a significant premium market for the Company.
In addition, we have provided renewable power solutions for off grid, portable power, transportation, defense, and other markets. By applying CIGS to a flexible plastic substrate, we have developed a PV module that is efficient, lightweight and flexible; with the highest power-to-weight ratio in at-scale commercially available solar.
If we are not able to develop and implement policies and strategies that are effective in each location where we will do business, then our business, results of operations and financial condition could be materially and adversely affected.
If we are not able to develop and implement policies and strategies that are effective in each location where we will do business, then our business, results of operations and financial condition could be materially and adversely affected. 11 Existing regulations and policies and changes to these regulations and policies may present technical, regulatory and economic barriers to the purchase and use of PV products, which may significantly reduce demand for our PV products.
The failure of IT systems or a component of IT systems could, depending on the nature of any such failure, adversely impact our reputation and results of operations.
The failure of IT systems or a component of IT systems could, depending on the nature of any such failure, adversely impact our reputation and results of operations. Risks Relating to our Securities and an Investment in our Common Stock The price of our common stock may continue to be volatile.
Despite our efforts to protect this information, unauthorized parties may attempt to obtain and use information that we regard as proprietary. If we are unable to maintain the proprietary nature of our technologies, we could be materially adversely affected.
Despite our efforts to protect this information, unauthorized parties may attempt to obtain and use information that we regard as proprietary.
Our stockholders may experience significant dilution as a result of shares of our common stock issued pursuant to our existing financing agreements and pursuant to new securities that we may issue in the future.
Our stockholders may experience significant dilution as a result of shares of our common stock that may be issued (i) upon the exercise of our outstanding common stock warrants, (ii) upon the conversion of our outstanding senior secured convertible notes and conversions payable, and (iii) pursuant to new securities that we may issue in the future.
If and when these shares are registered or become eligible for sale to the public market, the market price of our common stock could also decline. We may not be able to maintain our current listing for our common stock on the Nasdaq Capital Market..
If and when these shares are registered or become eligible for sale to the public market, the market price of our common stock could also decline. 13 We may fail to continue to meet the listing standards of The Nasdaq Capital Market Failure to maintain the listing of our common stock with a U.S. national securities exchange could adversely affect the liquidity off our common stock.
Risks Relating to Our Business Our continuing operations will require additional capital which we may not be able to obtain on favorable terms, if at all, or without dilution to our stockholders. Since inception, we have incurred significant losses. We expect to continue to incur net losses in the near term.
Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Risks Relating to Our Business Our continuing operations will require additional capital which we may not be able to obtain on favorable terms, if at all, or without dilution to our stockholders. Since inception, we have incurred significant losses.
We entered into the JDA with TubeSolar, a related party (see “Item 1 Business” for additional detail), and expect to expand our operations abroad 13 in the future and, as a result, we may be subject to the legal, political, social and regulatory requirements and economic conditions of foreign jurisdictions.
We purchased manufacturing equipment in Switzerland and, in the future, may look to expand our operations abroad and, as a result, we may be subject to the legal, political, social and regulatory requirements and economic conditions of foreign jurisdictions.
Product revenues did not result in a positive cash flow for the 2022 year, and are not anticipated to result in a positive cash flow for the next twelve months. During 2022, we entered into multiple financing agreements to fund operations, raising approximately $16 million in net proceeds.
Product revenues did not result in a positive cash flow for the 2023 year, and are not anticipated to result in a positive cash flow for the next twelve months.
For example, the calendar year ended December 31, 2021, our common stock ranged from $10.00 to $485.00, and in 2022, our common stock ranged from $1.50 to $33.00, all prices as adjusted for the reverse stock split.
For example, during the period from January 1, 2023 through December 31, 2023, our common stock ranged from $0.755 to $286.00, and in 2022, our common stock ranged from $300 to $6,600, all prices as adjusted for the reverse stock split.
We operate in these target markets because they have highly specialized needs for power generation and offer attractive pricing due to the significant technological requirements.
Our technology provides renewable power solutions to high-value production and specialty solar markets where traditional rigid solar panels are not suitable, including aerospace, agrivoltaics, and niche manufacturing/construction sectors. We operate in these target markets because they have highly specialized needs for power generation and offer attractive pricing due to the significant technological requirements.
Customers in this market have historically required a high level of durability, high voltage and conversion efficiency from solar module suppliers, and we believe our products are well suited to compete in this premium market. Product History In March 2008, we demonstrated initial operating capacity of our first production line by beginning production trials as an end-to-end integrated process.
Customers in this market have historically required a high level of durability, high voltage and conversion efficiency from solar module suppliers, and we believe our products are well suited to compete in this premium market and will fill a void in the satellite market with a lower cost, lighter module and a product that, if struck by an object in space, will create limited space debris.
In addition, electricity generated by PV systems mostly competes with expensive peak hour electricity, rather than the less expensive average price of electricity.
In addition, electricity generated by PV systems mostly competes with expensive peak hour electricity, rather than the less expensive average price of electricity. Modifications to the peak hour pricing policies of utilities, such as to a flat rate, would require PV systems to achieve lower prices in order to compete with the price of electricity from other sources.
Our ability to achieve profitability depends on a number of factors, including market acceptance of our specialty PV products at competitive prices.
Our ability to achieve profitability depends on a number of factors, including market acceptance of our specialty PV products at competitive prices. If we are unable to raise additional capital and generate sufficient revenue to achieve profitability and positive cash flows, we may be unable to satisfy our commitments and may have to discontinue operations.
For the year ended December 31, 2022, our cash used in operations was $10,506,575. At December 31, 2022, we had cash and equivalents on hand of $11,483,018.
We expect to continue to incur net losses in the near term. For the year ended December 31, 2023, our cash used in operations was $9,536,879. At December 31, 2023, we had cash and equivalents on hand of $1,048,733.
We are likely to issue substantial amounts of additional common stock in connection with our existing secured financing agreements entered into on December 19, 2022.These financing agreements contain variable pricing mechanisms. The number of shares that we will issue pursuant to these agreements fluctuate based on the price of our common stock.
The number of shares that we will issue pursuant to these agreements, therefore, will fluctuate based on the price of our common stock. We currently have 5,596,232 outstanding common stock warrants issued in connection with our December 2022 senior secured convertible note financing with a per share exercise price of $1.76.
In this event, we would expect to receive a written notice from the listing qualifications department of Nasdaq indicating that the Company is not in compliance with the $1.00 minimum bid price requirement. Such notice would not be expected to result in the immediate delisting of the Company’s common stock from Nasdaq.
The Company, therefore, may shortly receive a written notice from Nasdaq indicating that we are not in compliance with minimum stockholders’ equity requirement. Typically, such a notice would have no immediate impact on the listing of the Company’s common stock. Nasdaq would typically provide the Company with 45 calendar days to submit a plan to regain compliance.
Also, if we obtain additional financing involving the issuance of equity securities or securities convertible into equity securities, our existing stockholders’ investment would be further diluted. Such dilution could cause the market price of our common stock to decline, which could impair our ability to raise additional financing.
Such dilution could cause the market price of our common stock to decline, which could impair our ability to raise additional financing. Depending on market liquidity at the time, sales of such newly issued additional shares into the market may cause the trading price of our common stock to fall.
We would expect Nasdaq to provide the Company with 180 calendar days in which to regain compliance.
The Notice indicated that the Company will be provided 180 calendar days (or June 10, 2024) in which to regain compliance.
Our common stock has recently been trading on Nasdaq at a price below $1.00 per share. If the closing bid price of our common stock is less than $1.00 for the 30 consecutive trading days, we will no longer meet this requirement.
The Nasdaq Listing Rules require listed securities to maintain a minimum bid price of $1.00 per share and, based upon the closing bid price of the Company’s common stock for the 30 consecutive business days for the period October 27 through December 8, 2023, the Company no longer meets this requirement.
In such a case, an investor may find it more difficult to dispose of or obtain accurate quotations as to the market value of our common stock, and there can be no assurance that our common stock will be eligible for trading or quotation on any alternative exchanges or markets.
Also, if in the future we were to determine that we need to seek additional equity capital, it could have an adverse effect on our ability to raise capital in the public or private equity markets. In addition, there can be no assurance that our common stock would be eligible for trading on any such alternative exchange or markets.
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Item 1. B usiness Business Overview Ascent Solar Technologies, Inc. (“Ascent” or the "Company") was incorporated on October 18, 2005 from the separation by ITN Energy Systems, Inc.
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Item 1. B usiness Business Overview Ascent Solar Technologies, Inc. (“Ascent” or the "Company") is a solar technology company that manufactures and sells photovoltaic ("PV") solar modules that are flexible, durable, and possess attractive power to weight and power to area performance.
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(“ITN”) of its Advanced Photovoltaic Division and all of that division’s key personnel, core technologies, and certain trade secrets and royalty free licenses to use in connection with the manufacturing, developing marketing, and commercializing Copper-Indium-Gallium-diSelenide (“CIGS”) photovoltaic (“PV”) products.
Added
Product Update During 2023, the Company also continued developing its zinc oxysulfide process. Zinc oxysulfide is used as a Cadmium-free window layer to improve the efficiency of Copper-Indium-Gallium-diSelenide ("CIGS")-based solar cells. The enhanced process will eliminate the usage of Cadmium Sulfide making it a more environmentally friendly process and product.
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We are an American solar technology company that manufactures and sells PV solar modules that are flexible, durable, and possess attractive power to weight and power to area performance. Our technology provides renewable power solutions to high-value production and specialty solar markets where traditional rigid solar panels are not suitable, including aerospace, agrivoltaics, and niche manufacturing/construction sectors.
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Company continued to advance its CIGS-based solar cells resulting in more powerful solar cells. Specifically, the Company's Titan module, which the Company is planning to ship as early as Q1 2024, has 16.5W beginning of life output in AM0 conditions.
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By July 2009, we obtained independent verification by the U.S.
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Using an estimated degradation rate of 0.5% per year (crystalline degrades at an estimated rate of 1% per year), the Titan module has an expected end of life power density of 165w/m2 output. During 2023, the Company also achieved spaceflight heritage for its space PV array products.
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Department of Energy’s National Renewable Energy Laboratory (“NREL”) that our modules of approximately 15 centimeters wide by 30 centimeters long measured 10.4% in conversion efficiency, which, by October 2009, NREL further verified our achievement of a manufacturing milestone of 14.0% cell efficiency as well as a peak efficiency of 11.4% for our CIGS modules.
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Beyond establishment of NASA Technology Readiness Level 9 (TRL9) for the Company’s products, this achievement also validates Ascent’s CIGS material, manufacturing, integration, and quality processes, representing a significant milestone for its space solutions.
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In October 2010, we completed internal qualification testing of a flexible packaging solution which successfully passed the rigorous standard of one thousand (1,000) hours of damp heat testing (85% relative humidity and 85° C temperature) guideline set forth by International Electrotechnical Commission (“IEC”) 61646 standards for performance and long-term reliability of thin film solar modules.
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The market for space and near-space solar power application solutions, agrivoltaics, portable power systems, and transportation integrated applications represent a significant premium market for the Company.
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And in December 2010, we achieved 12.1% module efficiency on the same form factor. In February 2010, three of our product configurations were certified by an independent laboratory on a variety of U.S. Department of Defense (“DOD”) rugged standards known as MIL-STD-810G.
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During 2023, we entered into multiple financing agreements to fund operations, raising approximately $11.2 million in gross proceeds, of which $7.1 million was used to pay down debt and the Company's Series 1B preferred stock.
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In October 2010, we completed full external certification under IEC 61646 at an independent laboratory of a two-meter module. Achieving this certification is required for building integrated photovoltaic (“BIPV”) and building applied photovoltaic (“BAPV”) applications used in commercial, industrial and residential rooftop markets.
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We may issue substantial amounts of additional common stock in connection with the exercise or conversion of our outstanding common stock warrants, senior secured convertible notes, and conversions payable. Certain of these financing agreements contain variable pricing mechanisms.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Pr operties Our principal business office and manufacturing facility is located in a leased space at 12300 Grant Street, Thornton, Colorado 80241. We have approximately 30,000 square feet of fully equipped office space and 70,000 square feet of fully equipped manufacturing space. We consider our office space adequate for our current operations.
Biggest changeItem 2. Pr operties Our principal business office and manufacturing facility is located in a leased space at 12300 Grant Street, Thornton, Colorado 80241. We have approximately 25,000 square feet of fully equipped office space and 50,000 square feet of fully equipped manufacturing space. We consider our office space adequate for our current operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings Details of the Company’s legal proceedings are included in Note 18 to the financial statements within Item 8 of this Annual Report on Form 10-K. Item 4. Mine Saf ety Disclosures Not applicable. 18 PART II
Biggest changeFor additional information on contingencies and legal proceedings, see "Note 17 - Commitments and Contingencies" to our financial statements included in this Annual Report on Form 10-K. Item 4. Mine Saf ety Disclosures Not applicable. 16 PART II
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Item 3. Legal Proceedings From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business.
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Except as noted below, we are not currently a party to any material legal proceedings, the adverse outcome of which, in our management’s opinion, individually or in the aggregate, could have a material adverse effect on the results of our operations or financial position.
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There are no material proceedings in which any of our directors, officers or affiliates or any registered or beneficial stockholder of more than 5% of our common stock is an adverse party or has a material interest adverse to our interest. On August 15, 2023, H.C.
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Wainwright & Co., LLC (“Wainwright”) filed an action against the Company in the New York State Supreme Court in New York County. The complaint alleges a breach by the Company of an investment banking engagement letter entered into in October 2021. The Wainwright engagement letter expired in April 2022 without any financing transaction having been completed.
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The complaint claims that Wainright is entitled, under a “tail provision”, to an 8% fee and 7% warrant coverage on the Company’s $15 million secured convertible note financing. The complaint seeks damages of $1.2 million, 2,169.5 common stock warrants with a per share exercise price of $605, and attorney fees.
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While it is too early to predict the outcome of this legal proceeding or whether an adverse result would have a material adverse impact on our operations or financial position, we believe we have meritorious defenses and intend to defend this legal matter vigorously.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Market Information On August 24, 2022, our common stock began trading on the Nasdaq Capital Market. Our trading symbol is “ASTI.” Holders As of December 31, 2022, the number of record holders of our common stock was 29.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Market Information On August 24, 2022, our common stock began trading on the Nasdaq Capital Market. Our trading symbol is “ASTI.” Holders As of December 31, 2023, the number of record holders of our common stock was 34.
During the years ended December 31, 2022 and 2021, we did not pay any common stock dividends, and we do not expect to declare or pay any dividends in the foreseeable future.
During the years ended December 31, 2023 and 2022, we did not pay any common stock dividends, and we do not expect to declare or pay any dividends in the foreseeable future.
Recent Sales of Unregistered Securities During the year ended December 31, 2022, all sales of unregistered securities by the Company have been previously reported on a Form 8-K or Form 10-Q. Issuer Purchases of Equity Securities We did not repurchase any of our equity securities during the period covered by this Annual Report. Item 6. [ Reserved] 19
Recent Sales of Unregistered Securities During the year ended December 31, 2023, all sales of unregistered securities by the Company have been previously reported on a Form 8-K or Form 10-Q. Issuer Purchases of Equity Securities We did not repurchase any of our equity securities during the period covered by this Annual Report. Item 6. [ Reserved] 17

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOther new pronouncements issued but not effective as of December 31, 2022 are not expected to have a material impact on the Company’s financial statements. 22 Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 Year Ended December 31, 2022 2021 $ Change Revenues Product Revenue 694,286 607,783 86,503 Milestone and engineering 528,500 - 528,500 Total Revenues 1,222,786 607,783 615,003 Costs and Expenses Cost of Revenue 2,011,459 1,902,414 109,045 Research, development and manufacturing operations 5,975,921 4,140,319 1,835,602 Selling, general and administrative 4,736,562 3,297,982 1,438,580 Share-based compensation 5,478,734 - 5,478,734 Depreciation and amortization 75,645 57,314 18,331 Total Costs and Expenses 18,278,321 9,398,029 8,880,292 Loss From Operations (17,055,535 ) (8,790,246 ) (8,265,289 ) Other Income/(Expense) Other Income/(Expense), net 33,100 (169,423 ) 202,523 Interest Expense (2,704,909 ) (1,088,327 ) (1,616,582 ) Change in fair value of derivatives and gain on extinguishment of liabilities - 4,047,993 (4,047,993 ) Total Other Income/(Expense) (2,671,809 ) 2,790,243 (5,462,052 ) Income/(Loss) on Equity Method Investment (27,361 ) - (27,361 ) Net Income/(Loss) (19,754,705 ) (6,000,003 ) (13,754,702 ) Revenues.
Biggest changeSee Note 2 for additional information. 20 Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 Year Ended December 31, 2023 2022 $ Change Revenues Product Revenue 397,886 694,286 (296,400 ) Milestone and engineering 60,374 528,500 (468,126 ) Total Revenues 458,260 1,222,786 (764,526 ) Costs and Expenses Cost of Revenue 1,892,341 2,011,459 (119,118 ) Research, development and manufacturing operations 3,222,283 5,975,921 (2,753,638 ) Selling, general and administrative 5,364,523 4,736,562 627,961 Share-based compensation 2,243,445 5,478,734 (3,235,289 ) Depreciation and amortization 95,238 75,645 19,593 Impairment loss 3,283,715 - 3,283,715 Total Costs and Expenses 16,101,545 18,278,321 (2,176,776 ) Loss From Operations (15,643,285 ) (17,055,535 ) 1,412,250 Other Income/(Expense) Other Income/(Expense), net 747,739 33,100 714,639 Interest Expense (2,174,118 ) (2,704,909 ) 530,791 Total Other Income/(Expense) (1,426,379 ) (2,671,809 ) 1,245,430 Income/(Loss) on Equity Method Investment (232 ) (27,361 ) 27,129 Net Income/(Loss) (17,069,896 ) (19,754,705 ) 2,684,809 Revenues.
The value of the portion of the award that is ultimately expected to vest, net of estimated forfeitures, is recognized as expense on a straight-line basis, over the 21 requisite service period in the Company’s Statements of Operations. Share-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures.
The value of the portion of the award that is ultimately expected to vest, net of estimated forfeitures, is recognized as expense on a straight-line basis, over the requisite service period in the Company’s Statements of Operations. Share-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures.
Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates the fair value of its restricted stock awards as its stock price on the grant date.
Forfeitures are estimated at the time of grant and revised, as necessary, 19 in subsequent periods if actual forfeitures differ from those estimates. The Company estimates the fair value of its restricted stock awards as its stock price on the grant date.
Actual results may differ from these 20 estimates under different assumptions or conditions. We have identified the policies below as critical to our business operations and to the understanding of our financial results: Significant Accounting Policies Inventories: All inventories are stated at the lower of cost or net realizable value, with cost determined using the weighted average method.
Actual results may differ from these estimates under different assumptions or conditions. We have identified the policies below as critical to our business operations and to the understanding of our financial results: 18 Significant Accounting Policies Inventories: All inventories are stated at the lower of cost or net realizable value, with cost determined using the weighted average method.
Convertible Debt: The Company evaluates its convertible debt instruments to determine if there is an embedded derivative or other feature that requires bifurcation from the host contract. Please refer to Note 12 for further discussion on each convertible debt.
Convertible Debt: The Company evaluates its convertible debt instruments to determine if there is an embedded derivative or other feature that requires bifurcation from the host contract. Please refer to Note 10 for further discussion on each convertible debt.
Significant Trends, Uncertainties and Challenges We believe the significant trends, uncertainties and challenges that directly or indirectly affect our financial performance and results of operations include: • Our ability to generate customer acceptance of and demand for our products; • Successful ramping up of commercial production on the equipment installed; • The substantial doubt about our ability to continue as a going concern due to our history of operating losses; • 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, and distributors, who deal directly with end users in our target markets; • Our ability to maintain the listing of our common stock on the Nasdaq Capital Market; • Our ability to maintain effective internal controls over financial reporting; • Our ability to achieve projected operational performance and cost metrics; • Our ability to enter into commercially viable licensing, joint venture, or other commercial arrangements; • Availability of raw materials; and • COVID-19 and the uncertainty around the continued duration and effect of the worldwide pandemic.
Significant Trends, Uncertainties and Challenges We believe the significant trends, uncertainties and challenges that directly or indirectly affect our financial performance and results of operations include: • Our ability to generate customer acceptance of and demand for our products; • Successful ramping up of commercial production on the equipment installed; • The substantial doubt about our ability to continue as a going concern due to our history of operating losses; • 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, and distributors, who deal directly with end users in our target markets; • Our ability to maintain the listing of our common stock on the Nasdaq Capital Market; • Our ability to maintain effective internal controls over financial reporting; • 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.
An undiscounted cash flow analysis is calculated to determine if an impairment exists. If an impairment is determined to exist, any related loss is calculated using the difference between the fair value and the carrying value of the assets.
An undiscounted cash flow analysis is estimated to determine if an impairment exists. If an impairment is determined to exist, any related loss is calculated using the difference between the fair value (estimated using the undiscounted cash flows) and the carrying value of the assets.
Off Balance Sheet Transactions As of December 31, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Off Balance Sheet Transactions As of December 31, 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K. 22
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 year ended December 31, 2022 the Company used $10,506,575 in cash for operations.
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 year ended December 31, 2023 the Company used $9,536,879 in cash for operations.
Additional projected product revenues are not anticipated to result in a positive cash flow position for the year 2023 overall and, as of December 31, 2022, the Company has working capital of $7,470,521. Although the Company has working capital, additional financing will be required for the Company to reach a level of sufficient sales to achieve profitability.
Additional projected revenues are not anticipated to result in a positive cash flow position for the year 2024 overall and, as of December 31, 2023, the Company has working capital deficit of $4,225,559. As such, additional financing will be required for the Company to reach a level of sufficient sales to achieve profitability.
Any adjustments to fair value are treated as gains and losses in fair values of derivatives and are recorded on the Statement of Operations. Please refer to Note 10 for further discussion on embedded derivatives. Revenue Recognition: Product revenue.
Any adjustments to fair value are treated as gains and losses in fair values of derivatives and are recorded on the Statement of Operations. Revenue Recognition: Product revenue.
Research, development and manufacturing operations costs include costs incurred for product development, pre-production and production activities in our manufacturing facility. Research, development and manufacturing operations costs also include costs related to technology development. Research, development and manufacturing operations costs increased by $1,835,602 or 44%, for the year ended December 31, 2022 when compared to the same period in 2021.
Research, development and manufacturing operations costs include costs incurred for product development, pre-production and production activities in our manufacturing facility. Research, development and manufacturing operations costs also include costs related to technology development. Research, development and manufacturing operations costs decreased by $2,753,638 or 46%, for the year ended December 31, 2023 when compared to the same period in 2022.
Our Net Loss was $19,754,705 for the year ended December 31, 2022, compared to Net Loss of $6,000,003 for the year ended December 31, 2021, an increase of $13,754,702. The increase is due to the reasons described above. Liquidity and Capital Resources The Company has continued limited PV production at its manufacturing facility.
Our Net Loss was $17,069,896 for the year ended December 31, 2023, compared to Net Loss of $19,754,705 for the year ended December 31, 2022, a decrease of $2,684,809. The decrease is due to the reasons described above. Liquidity and Capital Resources The Company has continued limited PV production at its manufacturing facility.
This is partially offset by lower repair and maintenance costs in the current period. Management believes our factory is currently significantly under-utilized, and a substantial increase in revenue would result in marginal increases to direct labor and overhead included in the cost of revenues. Research, development and manufacturing operations.
This is partially offset by increased expenses from our asset acquisition of Flisom's manufacturing equipment and employee contract. Management believes our factory is currently significantly under-utilized, and a substantial increase in revenue would result in marginal increases to indirect labor and overhead included in the cost of revenues. Research, development and manufacturing operations.
Statements of Cash Flows Comparison of the Years Ended December 31, 2022 and 2021 For the year ended December 31, 2022, our cash used in operations was $10,506,575 compared to $9,404,443 for the year ended December 31, 2021, an increase of $1,102,132.
Statements of Cash Flows Comparison of the Years Ended December 31, 2023 and 2022 For the year ended December 31, 2023, our cash used in operations was $9,536,879 compared to $10,506,575 for the year ended December 31, 2022, a decrease of $969,696.
Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Management is evaluating the impact of this ASU on the Company’s financial statement presentation.
Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Management adopted ASU 2020-06 on January 1, 2023. Management is evaluating the impact of other new pronouncements issued but not effective as of December 31, 2023.
This change was primarily the result of a decrease purchase of equipment partially offset by a contribution to Ascent Germany. During the year ended December 31, 2022, cash used in operations of $10,506,575 were primarily funded through $18,500,000 in proceeds from issuances of debt and common stock.
This change was primarily the result of the purchase of Flisom's manufacturing equipment in Switzerland. During the year ended December 31, 2023, cash used in operations of $9,536,879 were primarily funded through $11,200,000 in proceeds from issuances of preferred and common stock during 2023 and $13,500,000 in proceeds from the issuance of convertible debt in 2022.
The increase in cost is due primarily to increased operations in the current year as compared to the Company’s restart status in the prior year. Selling, general and administrative. Selling, general and administrative expenses increased by $1,438,580, or 44%, for the year ended December 31, 2022 when compared to the same period in 2021.
Selling, general and administrative expenses increased by $627,961, or 13%, for the year ended December 31, 2023 when compared to the same period in 2022. The increase in costs is due primarily to increased professional services and other administrative expenses.
For the year ended December 31, 2022 we generated $1,222,786 of total revenue, of which, product sales accounted for $694,286 and milestone and engineering revenue accounted for $528,500. As of December 31, 2022, we had an accumulated deficit of approximately $447,537,493.
For the year ended December 31, 2023 we generated $458,260 of total revenue, of which, product sales accounted for $397,886 and milestone and engineering revenue accounted for $60,374. As of December 31, 2023, we had an accumulated deficit of approximately $482,478,436.
Our revenues increased by $615,003, or 101%, for the year ended December 31, 2022 when compared to the same period in 2021. The increase in sales is due primarily to Milestone and engineering revenue from TubeSolar in the current period. Cost of revenues. Cost of revenues is comprised primarily of repair and maintenance, direct labor and overhead expenses.
Total revenues decreased by $764,526, or by 63%, for the year ended December 31, 2023 when compared to the same period in 2022. The decrease in sales is due primarily to Milestone and engineering revenue from TubeSolar in 2022 which was not repeated in the current year.
The increase is primarily the result of scaling up operations during the current year as compared to the Company’s restart status during 2021. For the year ended December 31, 2022, cash used in investing activities was $265,472 compared to cash used in investing activities of $301,522 for the year ended December 31, 2021.
The decrease is primarily the result of the decrease in manufacturing, the redeployment of the Thornton manufacturing facility as a Perovskite research facility, and the restart of limited manufacturing. For the year ended December 31, 2023, cash used in investing activities was $3,877,366 compared to cash used in investing activities of $265,472 for the year ended December 31, 2022.
Our cost of revenues increased by $109,045, or 6% for the year ended December 31, 2022 when compared to the same period in 2021. The increase in cost of revenues is mainly due to the increase in materials and freight, and labor costs as a result of increased production during the current year.
Our cost of revenues decreased by $119,118, or 6% for the year ended December 31, 2023 when compared to the same period in 2022. The decrease in cost of revenues is primarily due to the decrease in manufacturing costs as the Company redeployed it manufacturing facilities to a research facility in March 2023 and restarted limited manufacturing in late 2023.
The increase in costs is due primarily to an increased level of operations in the current period as compared to the Company’s restart status in the prior period. Additionally, the Company incurred a one-time termination expense of approximately $500,000 and $157,000 recognized with the departure of our former CEO and CFO, respectively, in the current period. Share-based compensation.
This increase is partially offset by one-time termination expense of approximately $500,000 and $157,000 recognized with the departure of our former CEO and CFO, respectively, in 2022. Share-based compensation. Share-based compensation expense decreased by $3,235,289 or 59%, for the year ended December 31, 2023 when compared to the same period in 2022.
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Share-based compensation expense increased by $5,478,734 or 100%, for the year ended December 31, 2022 when compared to the same period in 2021. The increase is due primarily to the employment agreements between the Company and its new CEO and CFO and the restricted stock units grants made pursuant to such employment agreements. 23 Other Income.
Added
Additionally, in 2022, the Company had a large order from one customer that was not repeated in 2023. This is partially offset with revenue recognized from fulfilling a supply agreement under the Asset Purchase Agreement executed in April 2023. Cost of revenues. Cost of revenues is comprised primarily of repair and maintenance, direct labor and overhead expenses.
Removed
Other income decreased by $5,462,052 or 196%, for the year ended December 31, 2022 when compared to the same period in 2021.
Added
This is primarily due to a decrease in preproduction and manufacturing activities, as the Company redeployed its Thornton manufacturing facility as a perovskite research facility in March 2023 and restarted limited manufacturing in late 2023. Selling, general and administrative.
Removed
The decline is due primarily to a gain from the change in fair value of derivative liabilities recognized in the prior period and not repeated in the current period and because the Company recognized the remaining discount on convertible debt of approximately $2 million as interest expense upon conversion of these notes in the current period. Net Income/(Loss).
Added
The decrease is primarily due to the employment termination 21 of former CEO in April 2023. The year ended 2022 expense also includes the immediate vesting of 20% of the former CEO's restricted stock units. Impairment loss. The Company recognized an impairment loss of $3,283,715 primarily on the manufacturing assets purchased from Flisom during the year ended December 31, 2023.
Added
The Company did not recognize an impairment loss during the year ended December 31, 2022. Other Income/(Expense). Other expense decreased by $1,245,430 or 47%, for the year ended December 31, 2023 when compared to the same period in 2022. The decline is due primarily to a one-time employment retention credit received and a gain on lease modification.
Added
Additionally, the Company recorded accelerating debt discount as interest expense in the prior year. With the adoption of ASU 2020-06, the accelerated debt discount is now recorded in stockholders' equity. Net Income/(Loss).

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDollar, we may conduct business and incur costs in the local currencies of other countries in which we may operate, make sales and buy materials. As a result, we are subject to currency translation risk. Further, changes in exchange rates between foreign currencies and the U.S.
Biggest changeItem 7A. Quantitative and Qualitat ive Disclosures About Market Risk Foreign Currency Exchange Risk Although our reporting currency is the U.S. Dollar, we may conduct business and incur costs in the local currencies of other countries in which we may operate, make sales and buy materials. As a result, we are subject to currency translation risk.
Dollar could affect our future net sales and cost of sales and could result in exchange losses. 24 Interest Rate Risk Our exposure to market risks for changes in interest rates relates primarily to our cash equivalents and investment portfolio. As of December 31, 2022, our cash equivalents consisted only of operating accounts held with financial institutions.
We hold no significant funds and have no future obligations denominated in foreign currencies as of December 31, 2023. Interest Rate Risk Our exposure to market risks for changes in interest rates relates primarily to our cash equivalents and investment portfolio. As of December 31, 2023, our cash equivalents consisted only of operating accounts held with financial institutions.
Removed
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk Foreign Currency Exchange Risk We hold no significant funds and have no future obligations denominated in foreign currencies as of December 31, 2022. Although our reporting currency is the U.S.
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Further, changes in exchange rates between foreign currencies and the U.S. Dollar could affect our future net sales and cost of sales and could result in exchange losses. We currently do not engage in hedging transactions to reduce our exposure to changes in currency exchange rates, although, we may do so in the future.

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