Optimist, the IMF Could Help ASTI

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Ascent Solar Technologies, Inc. (OTCMKTS: ASTI) continues to trade strong in recent days. Earlier this year ASTI announced the Company has entered into a real estate Purchase and Sale Agreement (the “Agreement”) with a Colorado limited liability company (the “Purchaser”). Pursuant to the terms of the Agreement, at closing the Company will sell its Thornton, Colorado manufacturing facility (the “Building”) to the Purchaser for a sales price of $13M. The closing of the sale of the Building is subject to customary diligence by the Purchaser and satisfaction of other conditions precedent to closing. The sale of the Building is expected to close in the early part of the 2019 third quarter.

Following closing, the Company will have up to one hundred twenty (120) days of post-closing rent-free occupancy right to allow a smooth transition out of the Building, subject to withholding of $750K from the sales proceeds which shall be released when the Company completely vacates the Building. During this post closing occupancy period, Purchaser shall also pay for all operating costs including taxes, insurance, CAM, utilities, etc. to the extent those costs would not materially change with Seller’s co-occupancy.

Ascent Solar Technologies, Inc. (OTCMKTS: ASTI) bills itself as an ISO 9001-2015 certified company, is a developer of thin-film photovoltaic modules using flexible substrate materials that are more versatile and rugged than traditional solar panels. Ascent Solar modules were named as one of the top 100 technologies in both 2010 and 2015 by R&D Magazine, and one of TIME Magazine’s 50 best inventions for 2011. The technology described above represents the cutting edge of flexible power and can be directly integrated into consumer products and off-grid applications, as well as other aerospace applications. Ascent Solar is headquartered in Thornton, Colorado, where the company’s quality management system has achieved ISO 9001:2015 certification.

ASTI is the developer of award winning thin-film CIGS solar modules that are more flexible, versatile and rugged than traditional solar panels. They use plastic as their substrate rather than glass that’s used by tradition rooftop solar panels. The Company diversified into consumer goods as they could not compete with the low-cost Chinese solar panels in the traditional electricity generating segment.

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On May 30 ASTI announced results for the quarter ended March 31, 2019. Q1-2019 Financial Results: The Company posted net revenue of $215K for Q1 2019, a decline of approximately 43% from the corresponding quarter in 2018 of $378K. Cost of revenue, however, reduced and improved sharply by approximately 67% from $273K in Q1-2017 to $91K in this period due to our primary focus in high-margin Tier-1 specialty PV markets. As a result, loss from operations in this quarter improved sharply by about 55%, down from ($2.1M) in the first quarter of 2018 to ($0.94M) in this period. This was due mainly to the continuous streamlining of our operation and business model. Progressive cost-reduction initiatives in manufacturing and R&D operations as well as lower depreciation and amortization also contributed to the improvement in operational loss. Going forward, the operating expenses are expected to remain manageable at the current level, and should show continued improvement as the Company continues to restructure and streamline its operations in 2019.

Despite loss from operations, the Company reported net profit of $3.24M for the quarter, which included substantial net gain in non-cash items of approximately $4.2M in non-cash interest expense, change in fair value of derivatives and gain/loss on extinguishment of liabilities associated with the outstanding convertible notes. Overall, the bottom line reflected a net positive swing of about $7.7M, from net loss of ($4.4M) in Q1 2018 to net profit $3.24M in current quarter.

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ASTI has little cash and a lot of debt wihch has resulted in signifiacnt dilution here in the past. The Company reported $480k in sales for the 6 months ended June 30, 2018 up from $300k for the same period last year. But ASTI is an exciting story developing in small caps; this is an ex NASDAQ listed company and we all know how these ex big boards love to run. The company is also the developer and manufacturer of state-of-the-art, lightweight and flexible thin-film photovoltaic (PV) solutions and was just selected by the U.S. Department of Energy (DOE) for two exclusive development projects.

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Disclosure: we hold no position in ASTI either long or short and we have not been compensated for this article.

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