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Ascent Solar Technologies Inc (OTCMKTS:ASTI) Can't Catch A Break

Ascent Solar Technologies Inc (OTCMKTS:ASTI) Can't Catch A Break
Written by
Alex Carlson
Published on
May 16, 2016
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Ascent Solar Technologies Inc (OTCMKTS:ASTI) has been a painful investment for investors. Every time the company makes some progress or issues a good press release, shares bounce only temporarily and then resume their downward spiral. Driving shares lower has been endless dilution that has taken the share count from around 18 million shares last year to 294 million shares outstanding as of May 11. Further hurting the company is the overall bearish market sentiment towards any company associated with solar. The question now becomes what's next?Ascent Solar is a developer of thin-film photovoltaic modules using flexible plastic substrate materials that are more versatile and rugged than traditional solar panels. Ascent Solar modules, which were named one of TIME Magazine's 50 best inventions for 2011, can be directly integrated into consumer products and off-grid applications, commercial transportation, automotive solutions, space applications, consumer electronics for portable power and durable off-grid solutions.The latest earnings report showed total net revenue for the first quarter of 2016 was $710,000, compared to $658,000 reported for the same period last year, which was an increase of about 8%. More importantly, net revenue for the period included $687,000 of product sales, compared to $533,000 for the three months ended March 31, 2015, representing a healthy increase of $154,000, or approximately 29%. The increase in product sales is a result of the company's expanded sales channels, growing acceptance of its product offerings, and increased recognition of the EnerPlex brand. Revenue from government research and development contracts decreased by $101,000 during the three months ended March 31, 2016 to $23,000.A problem for ASTI is that revenues are not growing fast enough to keep up with expenses. ASTI reported a net loss of $10.5 million in the first quarter. The only good news is that it was an improvement over the $17.8 million the company lost in the prior year. Ascent Solar stated that "going forward, the company expects the operating expenses to remain relatively flat while the company continues to increase revenue growth." What we dislike about this statement is that it looks like ASTI is going to keep its 119 full-time employees on staff. There appears to be no serious cost cutting taking place and this is a big mistake in our opinion. While we appreciate R&D efforts, engineers are not cheap and are draining ASTI's coffers.To drive revenues, ASTI is counting on Enerplex. Earlier this month, ASTI announced that it secured a new partnership with GoWireless Inc, one of the nation's largest Verizon Authorized Retailers, to carry the EnerPlex line of mobility power products in the retailer's 553 stores. COO Rafael Gutierrez said:

"Our progress with Verizon Authorized Retailers has quickly built a strong revenue baseline for our consumer business; and is a channel which we expect to see strong revenue acceleration in the second half of 2016 and beyond. Over the last 12 months we have validated success with Verizon Wireless Premium Retail Partners, growing from 300 original stores to nearly 500 by Q1 2016; the addition of GoWireless and their 553 stores is further proof of our growth acceleration, both in storefront and revenue."

Currently trading with a market cap of $9 million, it's not looking good for current shareholders. We don't see what's going to get shares moving higher again. ASTI needs to come out with some big news, but even then, we feel that the news will be met with more selling. Every bounce has been a selling opportunity for those that got cheap shares via convertible debt. The sad part is that the company has great technology and could have been a big winner. However, management chose to burn money, not fight the NASDAQ delisting, and issue convertible debt to fund their dream. We just hope this wasn't some sort of master plan to destroy shareholder value and buy the company on the cheap.In looking at the chart and the technicals, it's an ugly situation. We're not sure where the bottom is or where the stock will bounce from. We urge caution and will be updating Insider Financial as soon as we know more. For continuing coverage on ASTI, sign up for our free newsletter today and get our next hot stock pick. One of the best ways to get over a loser is by finding a new winner!Disclosure: We have no position in ASTI and have not been compensated for this article.

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