Ascent Solar Technologies Inc (OTCMKTS:ASTI) has been one of the most disappointing investments for OTC traders this year. Shares have been on a downtrend all year on the back of endless dilution. Long suffering shareholders have been throwing good money after bad with the hopes that a turnaround was finally at hand. With its market cap now just a tad over $1 million, ASTI demands a closer look.
For those not familiar with Ascent Solar, it’s a former NASDAQ Big Board that got kicked down to the OTC Markets after being unable to maintain its listing. Based in Colorado, the company is a developer of thin-film photovoltaic modules with substrate materials that can be more flexible and affordable than most traditional solar panels. Ascent Solar modules can be directly integrated into standard building materials, aerospace applications, consumer electronics for portable power or configured as stand-alone modules for large scale terrestrial deployment.
Many shareholders were hoping the bottom was in back in September when the company announced new funding. ASTI completed a private placement for $1.35 million of the Company’s newly designated Series J 10% Convertible Preferred Stock. Pursuant to the Agreement, shares of the Series J Preferred Stock, including the amount of any accrued and unpaid dividends thereon, will be convertible at the option of the Investor into common stock at a fixed conversion price of $0.015 per share. At closing, the Company issued a total of 225 shares of Series J Preferred Stock to the investor in exchange for gross proceeds of $225,000. The Company will issue an additional 1,125 shares of Series J Preferred Stock in exchange for gross proceeds of $1,125,000 in five subsequent closings scheduled to occur in October and November 2016.
Besides dilution, ASTI has been dropping after the company reported disappointing Q3 results. Total net revenue booked for the third quarter of 2016 was $453K while the company posted a net operating loss of $5.5 million. For the first nine months of 2016, ASTI posted net losses of $20.18 million. In the same period last year, ASTI posted $20.88 million in losses. The company’s core problem is that costs are still out of control and revenues are not growing fast enough. CEO Victor Lee tried to put a positive spin on all this when he said:
“We are focused on improving our results as we head into the final period of this year. On the back of the poor second quarter showing, we are confident that the worst is behind us as we continue to streamline our business model and further execute our growth plan. Given the continuous expansion of our retail footprint, particularly with the increased penetration of our distribution effort to now more than 1,500 Verizon Wireless authorized retail stores, we remain optimistic on the opportunities ahead for growth.”
The deal with Verizon Wireless is indeed a bright spot for the company. Last month, the company announced that it secured a new partnership with Cellular Sales of Knoxville, which is one of the Nation’s largest Verizon Wireless Authorized Retailers. The retailer will carry the EnerPlex line of mobility power products throughout their 560-store footprint. This expands EnerPlex’s penetration into the Verizon Wireless Authorized Retailer market; now over 1,600 stores nationwide. Ascent’s Head of Sales Joe Kigin said:
“Over the last 18 months we have validated success with Verizon Wireless Premium Retail Partners, growing from 300 original stores to over 1,000 by the first half of 2016. The addition of CSOK’s channel within the Verizon Wireless Premium Retailers network is further proof of our acceleration, in terms of both storefront outlets and revenue growth potential. This partnership will allow us to build a strong revenue baseline for our consumer business, and is a channel which we expect to see strong revenue traction heading into 2017.”
Currently trading with a market cap of $1.38 million, ASTI has great technology and great products. The problem is that it’s been badly mismanaged and racked up cumulative losses of $378 million over the course of its history. We’re hoping Q4 numbers are better and that sales start ramping up and costs get under control. If not, the best bet for shareholders is that the board takes action and puts the company and its technology up for sale. Ascent’s technology is worth a lot more than its current market cap and that should give shareholders some reassurance given where the stock is currently trading. We will be updating our subscribers as soon as we know more. For the latest updates on ASTI, sign up below!
Disclosure: We have no position in ASTI and have not been compensated for this article.