style="font-family:Times New Roman;font-size:10pt;">
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
__________________________________________________
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this
registration statement and from time to time thereafter.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, check the following box. x
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
o
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act.
The Registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933, as amended, or until the registration statement shall become
effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be
changed. These securities may not be sold until the related
registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.
This prospectus relates to the offer and sale of up to
30,000,000 shares of common stock of Ascent Solar Technologies,
Inc. by Redwood Management, LLC, or Redwood Management or the
selling stockholder. We are not selling any securities under this
prospectus and we will not receive any proceeds from the sale of
shares by the selling stockholder.
This prospectus includes 2,640,000 shares of common stock
issuable in connection with a committed equity line purchase
agreement dated November 10, 2015 that we entered into with the
selling stockholder. See “The Committed Equity Line Transaction”
for a description of that agreement and “Selling Stockholder” for
additional information regarding the selling stockholder.
The selling stockholder may sell the shares of common stock
described in this prospectus in a number of different ways and at
varying prices. See “Plan of Distribution” for more information
about how the selling stockholder may sell the shares of common
stock being registered pursuant to this prospectus. The selling
stockholder is an “underwriter” within the meaning of Section
2(a)(11) of the Securities Act of 1933, as amended (the “Securities
Act”).
Our common stock is traded on the NASDAQ Capital Market under
the symbol “ASTI.” On November 27, 2015, the last reported sale
price of our common stock on the NASDAQ Capital Market was $0.1229
per share.
Our principal executive offices are located at 12300 North Grant
Street, Thornton, Colorado 80241.
These are speculative securities. Investing in these securities
involves significant risks. You should purchase these securities
only if you can afford a complete loss of your investment. See
“Risk Factors” beginning on page 6.
We may amend or supplement this prospectus from time to time by
filing amendments or supplements as required. You should read the
entire prospectus and any amendments or supplements carefully
before you make your investment decision.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this prospectus is [●] , 2015
You should rely only on the information contained or
incorporated by reference in this prospectus or a prospectus
supplement. We have not authorized any other person to provide you
with different information. If anyone provides you with different
or inconsistent information, you should not rely on it. You should
not assume that the information appearing in this prospectus, any
prospectus supplement or any document incorporated by reference is
accurate as of any date other than its date, regardless of the time
of delivery of the prospectus or prospectus supplement or any sale
of securities. Our business, financial condition, results of
operations and prospects may have changed since those dates.
This summary highlights information contained in this
prospectus. While we believe that this summary highlights some of
the most important information about Ascent Solar Technologies,
Inc. and this offering, you should read this entire prospectus and
the documents incorporated by reference carefully, including “Risk
Factors,” before deciding to invest in our securities. In this
prospectus, references to “we,” “us,” “our,” “Ascent,” “Ascent
Solar” or the “Company” mean Ascent Solar Technologies, Inc.
We are a development stage company formed in October 2005 to
commercialize flexible photovoltaic (“PV”) modules using
proprietary technology. Our technology was initially developed at
ITN Energy Systems, Inc. beginning in 1994 and subsequently
assigned and licensed to us. Our proprietary manufacturing process
deposits multiple layers of materials, including a thin film of
highly efficient copper-indium-gallium-diselenide (“CIGS”)
semiconductor material, on a flexible, lightweight, high tech
plastic substrate using a roll-to-roll manufacturing process and
then laser patterns the layers to create interconnected PV cells,
or PV modules, in a process known as monolithic integration.
We believe that our technology and manufacturing process, which
results in a lighter, flexible module package, provides us with
unique market opportunities relative to both the crystalline
silicon (“c-Si”) based PV manufacturers that currently lead the PV
market, as well as other thin film PV manufacturers that use
substrate materials such as glass, stainless steel or other metals
that can be heavier and more rigid than plastics.
We believe that the use of CIGS on a flexible, durable,
lightweight, high tech plastic substrate will allow for unique and
seamless integration of our PV modules into a variety of electronic
products, building materials, defense, transportation and space
applications, as well as other products and applications that may
emerge.
In February 2012, we began to reposition our business model with
an immediate focus on developing downstream consumer products. In
June 2012, we launched our EnerPlex™ line of consumer products, and
introduced our first product, the Surfr™, under the EnerPlex brand.
The Surfr™ is a battery and solar case for the Apple® iPhone® 4/4S
smart phone, featuring our ultra-light CIGS thin film technology
integrated directly into the case.
The case incorporates our ultra-light and thin PV module into a
sleek, protective iPhone® 4/4S case, along with a thin, life
extending, battery. The charger adds minimal weight and size to an
iPhone® smartphone, yet provides supplemental charging when needed.
In August of 2012, we announced the launch of the second version of
the Surfr™ for the Samsung® Galaxy S® III, which provides 85%
additional battery life.
In December 2012, we launched the EnerPlex Kickr™ and EnerPlex
Jumpr™ product series. The Kickr IV is an extremely portable,
compact and durable solar charging device, approximately seven
inches by seven inches when folded, and weighs less than half a
pound. The Kickr IV provides 6.5 watts of regulated power that can
help charge phones, digital cameras, and other small USB enabled
devices. The Kickr IV is ideal for outdoor activities such as
camping, hiking and mountain climbing as well as daily city use. To
complement the Kickr IV, we also released the Jumpr series of
portable power banks in December of 2012. The Jumpr series provides
a compact power storage solution for those who need to take the
power of the sun with them while on the go.
During 2013, our EnerPlex brand rapidly expanded with the
addition of two new product series as well as over fifteen new
products. In the beginning of 2013, we introduced further additions
to the Jumpr line of portable power banks; releasing the Jumpr Mini
and Jumpr Stack in August and the Jumpr Max in September. The
latest additions to the Kickr line of portable solar chargers, the
Kickr I and Kickr II, were introduced in August 2013. Furthermore,
in October 2013, we released our first series of solar integrated
backpacks, the Packr, for consumer use. The Packr is a fashion
forward and functional pack perfect for charging mobile electronic
devices while on the go. Also in October 2013, we introduced the
Surfr battery and solar case for the Samsung Galaxy S® 4, and in
December 2013, we introduced the Surfr battery and solar case for
Apple’s iPhone® 5. In January 2015, we introduced the Surfr battery
and solar case for Apple's iPhone® 6. In addition, we added an
assortment of useful accessories to our product lines, all of which
can be integrated into the EnerPlex ecosystem of products; such as
the LED wand which can be easily plugged into a Jumpr power bank to
provide hours of light, or the Travel Adaptor, which enables
consumers to charge up their Jumpr power banks from a traditional
outlet anywhere in the world. During 2014, we introduced the Jumpr
Slate 10K and 5K, which are thin lithium polymer portable power
banks.
We continue to aggressively pursue new distribution channels for
the EnerPlex brand. These activities have led to placement in a
variety of high-traffic ecommerce venues such as www.walmart.com,
www.bestbuy.com, www.amazon.com,
www.newegg.comas well as many others including our own
e-commerce platform at www.goenerplex.com. The April 2013 placement
of EnerPlex products at Fry’s Electronics, a US West Coast consumer
electronics retailer, represented our first domestic retail
presence. EnerPlex products are carried in all of Fry’s 34 stores
across 9 states. Each store is provided with EnerPlex branded
merchandising assets to highlight the uniqueness of our product
lines. In February 2015, we announced that our EnerPlex products
would be available in over 300 Verizon Wireless stores through our
retail partner The Cellular Connection. We believe this
multi-faceted strategy will give the EnerPlex™ brand the broadest
exposure for the amount of investment and make our products
immediately available to large numbers of consumers. In the third
quarter of 2015, EnerPlex expanded its presence to 456 total TCC
Verizon Wireless Premium retailers, adding 156 stores.
During the first quarter of 2015, we reached an agreement with
EVINE Live, one of the premier home shopping networks with TV
programming that reaches over 87 million US homes, to begin selling
EnerPlex products during their broadcasts. During the second
quarter of 2015, EnerPlex launched the Generatr S100 and select
other products exclusively with EVINE, and in the third quarter of
2015, the Generatr 1200 launched exclusively with EVINE for a
limited period.
During the second quarter of 2015, EnerPlex launched its
products into two world recognized retailers; including over 100
The Sports Authority stores nationwide, in addition to launching in
select Cabela’s, “The World’s Foremost Outfitter”, stores and via
Cabela’s online catalog. Internationally, EnerPlex products became
available in the United Kingdom via the brand’s launch with 172
Maplin’s stores throughout the country. Subsequent to the close of
the third quarter of 2015, EnerPlex launched with GovX, the premier
online shopping destination for military, law enforcement and
government agencies.
We continue to design and manufacture PV integrated consumer
electronics as well as portable power applications for commercial
and military users. Due to the high durability of our products due
to the monolithic integration employed by our technology, the
capability to customize modules into different form factors and the
industry leading light weight and flexibility provided by our
modules, we believe that the potential applications for our
products are numerous.
Since inception, we have incurred significant losses. We expect
to continue to incur net losses in the near term. For the year
ended December 31, 2014, our cash used in operations was $28.1
million. For the nine months ended September 30, 2015, our cash
used in operations was $17.5 million. At September 30, 2015, we had
cash and equivalents of $619,000.
We do not expect that sales revenue and cash flows will be
sufficient to support operations and cash requirements until we
have fully implemented our new consumer products strategy.
Additional projected product revenues are not anticipated to result
in a positive cash flow position for 2016 overall. We continue to
accelerate sales and marketing efforts related to our consumer
products strategy through increased hiring and expansion of our
sales channel. We will need to raise additional capital in order to
continue our current level of operations throughout 2016. There is
no assurance that we will be able to raise such capital on
acceptable terms or at all. If our revenues do not increase
rapidly, and/or additional financing is not obtained, we will be
required to significantly curtail operations to reduce costs and/or
sell assets. Such actions would likely have an adverse impact on
our future operations.
We are incorporated under the laws of Delaware. Our principal
business office is located at 12300 North Grant Street, Thornton,
Colorado 80241, and our telephone number is (720) 872-5000. Our
website address is
www.ascentsolar.com. Information contained on
our website or any other website does not constitute part of this
prospectus.
On November 10, 2015, we entered into a committed equity line
purchase agreement (the “Purchase Agreement”) with Redwood
Management, LLC (the “Selling Stockholder”). In connection with the
Purchase Agreement, we entered into a Registration Rights Agreement
(the “Registration Rights Agreement”) with the Selling Stockholder,
pursuant to which we agreed to file this registration
statement.
Under the terms and subject to the conditions of the Purchase
Agreement, at our option, we have the right to sell to the Selling
Stockholder, and the Selling Stockholder is obligated to purchase
from us, up to $32,200,000 of our common stock (the “Committed
Equity Line”), subject to certain limitations, from time to time,
over the 36-month period commencing on the date that the
registration statement of which this prospectus forms a part is
declared effective by the Securities and Exchange Commission (the
“SEC”).
We will not issue any shares of common stock pursuant to the
Purchase Agreement unless and until our stockholders approve the
potential issuance of the common stock thereunder in accordance
with applicable Nasdaq listing rules. We intend to seek such
approval at a special meeting to be held in December 2015. If our
stockholders do not vote to approve such issuances of our shares in
accordance with such rule, then no shares of common stock will be
issued pursuant to the Purchase Agreement.
From time to time, we may direct the Selling Stockholder, at its
sole discretion and subject to certain conditions, to purchase an
amount (the “Purchase Amount”) of shares of common stock up to the
lesser of (i) $1,000,000 (calculated using the per share price
described below) or (ii) 300% of the average daily trading volume
of our common stock over the preceding ten trading day period. The
maximum amount of any Purchase Amount may be increased, subject to
the Selling Stockholder’s approval. The per share purchase price
for shares of common stock to be sold by us under the Purchase
Agreement shall be fixed at 80% of the average of the two lowest
volume weighted average prices (“VWAPs”) of our common stock for
the ten consecutive trading day period prior to each specific
purchase date.
We may not direct the Selling Stockholder to purchase shares of
common stock more frequently than once each ten business days. Our
sales of shares of common stock to the Selling Stockholder under
the Purchase Agreement are limited to no more than the number of
shares that would result in the beneficial ownership by the Selling
Stockholder and its affiliates, at any single point in time, of
more than 4.99% of our then outstanding shares of common stock. At
the Selling Stockholder’s option, the cap may be raised or lowered
to any other percentage not in excess of 9.99%, except that any
increase will only be effective upon 61 days’ prior notice to us.
We have the right to terminate the Purchase Agreement at any time,
at no cost or penalty.
As consideration for entering into the Purchase Agreement, we
have agreed to issue to the Selling Stockholder 2,640,000 shares of
our common stock (the “Commitment Shares”). The Commitment Shares
will be issued to the Selling Stockholder in four tranches of
500,000 shares each and one tranche of 640,000 shares, at an
interval of every 15 calendar days commencing upon the later of (i)
the date that the registration statement of which this prospectus
forms a part is declared effective by the SEC and (ii) stockholder
approval of the issuance of shares of our common stock pursuant to
the Purchase Agreement in accordance with applicable Nasdaq listing
rules.
As of November 27, 2015, there were 96,263,993 shares of our
common stock outstanding, of which 90,082,630 shares were held by
non-affiliates. Although the Purchase Agreement provides that we
may sell up to $32,200,000 of our common stock to the Selling
Stockholder, only 30,000,000 shares of our common stock are being
offered under this prospectus, which includes the 2,640,000
Commitment Shares and 27,360,000 shares that may be issued to the
Selling Stockholder in the future under the Purchase Agreement. If
we elect to issue and sell more than the 30,000,000 shares offered
under this prospectus to the Selling Stockholder, which we have the
right, but not the obligation, to do, we must first register for
resale under the Securities Act any such additional shares, which
could cause additional substantial dilution to our
stockholders.
The number of shares ultimately offered for resale by the
Selling Stockholder is dependent upon the number of shares we sell
to the Selling Stockholder under the Purchase Agreement. The
Selling Stockholder will determine when and how it will sell the
common stock it purchases under the Purchase Agreement and which
are offered in this prospectus. The Selling Stockholder should be
considered an “underwriter” under the Securities Act.
Issuances of our common stock in this offering will not affect
the rights or privileges of our existing stockholders, except that
the economic and voting interests of each of our existing
stockholders will be diluted as a result of any such issuance.
Although the number of shares of common stock that our existing
stockholders own will not decrease, the shares owned by our
existing stockholders will represent a smaller percentage of our
total outstanding shares after any such issuance to the Selling
Stockholder.
This prospectus includes 30,000,000 shares of common stock
issuable in connection with the Purchase Agreement (including the
Commitment Shares).
This prospectus and the documents incorporated by reference into
it contain forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).
Forward-looking statements are those that predict or describe
future events or trends and that do not relate solely to historical
matters. You can generally identify forward-looking statements as
statements containing the words “believe,” “expect,” “may,” “will,”
“could,” “would,” “anticipate,” “intend,” “estimate,” “project,”
“plan,” “continue,” “assume” or other similar expressions, although
not all forward-looking statements contain these identifying words.
All statements contained in this prospectus regarding our plans,
objectives, goals, strategies, future events, future net sales or
performance, capital expenditures, projected financial position,
potential future revenues, projected costs, financing needs, plans
or intentions relating to acquisitions, plans for the
commercialization of our products, business trends and results that
might be obtained by pursuing management's current plans and
objectives are forward-looking statements. Forward-looking
statements include, but are not necessarily limited to, those
relating to:
You should not place undue reliance on our forward-looking
statements because the matters they describe are subject to known
and unknown risks, uncertainties and other unpredictable factors,
many of which are beyond our control. Our forward-looking
statements are based on the information currently available to us
and speak only as of the date on the cover of this prospectus. New
risks and uncertainties arise from time to time, and it is
impossible for us to predict these matters or how they may affect
us. Over time, our actual results, performance or achievements will
likely differ from the anticipated results, performance or
achievements that are expressed or implied by our forward-looking
statements, and such differences might be significant and
materially adverse to our investors. We have no duty to, and do not
intend to, update or revise the forward-looking statements in this
prospectus after the date of this prospectus except to the extent
required by the federal securities laws. You should consider all
risks and uncertainties disclosed in our filings with the SEC
described in the sections of this prospectus entitled “Information
Incorporated by Reference” and “Where You Can Find More
Information,” all of which are accessible on the SEC's website at
www.sec.gov
An investment in our securities involves a high degree of risk
and many uncertainties discussed in the section entitled “Risk
Factors” in our annual report on Form 10-K for the year ended
December 31, 2014, which is incorporated by reference into this
prospectus. You should carefully consider the risk factors before
purchasing our securities. If one or more of the possibilities
described as risks actually occurs, our operating results and
financial condition would likely suffer and the trading price of
our securities could fall, causing you to lose some or all of your
investment in the securities we are offering.
We have a limited history of operations, have not generated
significant revenue from operations and have had limited production
of our products.
We have a limited operating history and have generated limited
revenue from operations. Currently, we are producing consumer
oriented products in quantities necessary to meet current demand.
Under our current business plan, we expect losses to continue until
annual revenues and gross margins reach a high enough level to
cover operating expenses. We are utilizing contract manufacturers
in Asia for components and for final assembly of finished goods.
Our ability to achieve our business, commercialization and
expansion objectives will depend on a number of factors, including
whether:
Each of these factors is critical to our success, and
accomplishing each of these tasks may take longer or cost more than
expected, or may never be accomplished. It also is likely that
problems we cannot now anticipate will arise. If we cannot overcome
these problems, our business, results of operations and financial
condition could be materially and adversely affected.
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 applicable to common stockholders of
$51.4 million for the year ended December 31, 2014 and $35.2
million for the nine months ended September 30, 2015. We reported
an accumulated deficit of $334.5 million as of September 30, 2015.
We expect to incur net losses in the near term. Our ability to
achieve profitability depends on a number of factors, including
market acceptance of our consumer oriented 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.
Our EnerPlex line of consumer oriented products exposes us to
many new risks and uncertainties.
Following the appointment of our new President and CEO in
February 2012, we repositioned our business model with an immediate
focus into developing downstream consumer products. In 2012, we
launched our EnerPlex brand line of consumer products, and
introduced the first product under the EnerPlex brand with a solar
assisted mobile phone charger incorporating our CIGS PV thin film
technology. This new line of consumer oriented products exposes us
to many risks and uncertainties that are new to our business.
We have limited experience in the design, manufacture,
marketing, distribution and sale of consumer oriented products. Our
ability to be successful with our line of consumer oriented
products will depend on a number of factors, including whether:
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. 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. 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. If we are unable to achieve
our targets on time and within our planned budget, then we may not
be able to develop adequate demand for our PV modules, and our
business, results of operations and financial condition could be
materially and adversely affected.
Our failure to further refine our technology and develop and
introduce improved PV products could render our PV modules
uncompetitive or obsolete and reduce our net sales and market
share.
Our success requires us to invest significant financial
resources in research and development to keep pace with
technological advances in the solar energy industry. However,
research and development activities are inherently uncertain, and
we could encounter practical difficulties in commercializing our
research results. Our expenditures on research and development may
not be sufficient to produce the desired technological advances, or
they may not produce corresponding benefits. Our PV modules may be
rendered obsolete by the technological advances of our competitors,
which could harm our results of operations and adversely impact our
net sales and market share.
Failure to expand our manufacturing capability successfully at
our facilities would adversely impact our ability to sell our
products into our target markets and would materially and adversely
affect our business, results of operations and financial
condition.
Our growth plan calls for production and operation at our
facility and at contract manufacturers in Asia. Successful
operations will require substantial engineering and manufacturing
resources and are subject to significant risks, including risks of
cost overruns, delays and other risks, such as geopolitical unrest
that may cause us not be able to successfully operate in other
countries. Furthermore, we may never be able to operate our
production processes in high volume or at the volumes projected,
make planned process and equipment improvements, attain projected
manufacturing yields or desired annual capacity, obtain timely
delivery of components, or hire and train
the additional employees and management needed to scale our
operations. 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.
We will need to significantly expand our operations and form
beneficial strategic alliances in order to reduce manufacturing
costs through economies of scale and partnerships, secure contracts
of commercially material amounts with reputable customers and
capture a meaningful share of our target markets. To manage the
expansion of our operations and alliances, we will be required to
improve our operational and financial systems, oversight,
procedures and controls and expand, train and manage our growing
employee base. Our management team will also be required to
maintain and cultivate our relationships with partners, customers,
suppliers and other third parties and attract new partners,
customers and suppliers. In addition, our current and planned
operations, personnel, facility size and configuration, systems and
internal procedures and controls, even when augmented through
strategic alliances, might be inadequate or insufficient to support
our future growth. If we cannot manage our growth effectively, we
may be unable to take advantage of market opportunities, execute
our business strategies or respond to competitive pressures,
resulting in a material and adverse effect to our business, results
of operations and financial condition.
We depend on a limited number of third party suppliers for key
raw materials, and their failure to perform could cause
manufacturing delays and impair our ability to deliver PV modules
to customers in the required quality and quantity and at a price
that is profitable to us.
Our failure to obtain raw materials and components that meet our
quality, quantity and cost requirements in a timely manner could
interrupt or impair our ability to manufacture our products or
increase our manufacturing cost. Most of our key raw materials are
either sole sourced or sourced by a limited number of third party
suppliers. As a result, the failure of any of our suppliers to
perform could disrupt our supply chain and impair our operations.
Many of our suppliers are small companies that may be unable to
supply our increasing demand for raw materials as we implement our
planned expansion. 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.
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. For the year
ended December 31, 2014, our cash used in operations was $28.1
million. For the nine months ended September 30, 2015, our cash
used in operations was $17.5 million. At September 30, 2015, we had
cash and equivalents of $619,000.
Although we have commenced production at our manufacturing
facility, we do not expect that sales revenue and cash flows will
be sufficient to support operations and cash requirements until we
have fully implemented our new consumer products strategy.
Additional projected product revenues are not anticipated to result
in a positive cash flow position for the year 2016 overall. The
Company will need to raise additional capital in order to continue
our current level of operations throughout 2016.
To the extent that we may need to raise additional capital in
the future, there is no assurance that we will be able to raise
additional capital on acceptable terms or at all. If we raise
additional funds through the issuance of equity or convertible debt
securities, the percentage ownership of our existing stockholders
could be significantly diluted, and these newly issued securities
may have rights, preferences or privileges senior to those of
existing stockholders. If we raise additional funds through debt
financing, which may involve restrictive covenants, our ability to
operate our business may be restricted. If adequate funds are not
available or are not available on acceptable terms, if and when
needed, our ability to fund our operations, take advantage of
unanticipated opportunities, develop or enhance our
products, expand capacity or otherwise respond to competitive
pressures could be significantly limited, and our business, results
of operations and financial condition could be materially and
adversely affected.
In addition, the terms of a loan we obtained from the Colorado
Housing and Finance Authority (“CHFA”) in connection with our
purchase and improvement of our Thornton, Colorado facility contain
covenants that limit our ability, without the consent of CHFA, to
create or incur additional indebtedness (other than obligations
created or incurred in the ordinary course of business such as
working capital financing); merge or consolidate with any other
entity; or make loans or advances to our officers, shareholders,
directors or employees. The presence of these covenants gives CHFA
the ability to bar us from engaging in certain transactions in the
future that we may determine are necessary or advisable to meet our
business objectives, including debt offerings and acquisitions of
or by other companies. If CHFA were to withhold its written consent
under these or other circumstances, we could be forced to prepay
such loans at a premium, which could adversely affect our business,
results of operations and financial condition.
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. Demand
for our products also will depend on our ability to develop and
maintain successful relationships with key partners, including
distributors, retailers, OEMs, system integrators and value added
resellers. If our products fail to gain market acceptance as
quickly as we envision or at all, our business, results of
operations and financial condition could be materially and
adversely affected.
We are targeting emerging markets for a significant portion of
our planned product sales. These markets are new and may not
develop as rapidly as we expect, or may not develop at all.
Our target markets include consumer electronics, portable power,
defense, transportation, space and near space, and building applied
photovoltaic (“BAPV”) and building integrated photovoltaic (“BIPV”)
markets. Although certain areas of these markets have started to
develop, some of them are in their infancy. We believe these
markets have significant long term potential; however, some or all
of these markets may not develop and emerge as we expect. If the
markets do develop as expected, there may be other products that
could provide a superior product or a comparable product at lower
prices than our products. If these markets do not develop as we
expect, or if competitors are better able to capitalize on these
markets our revenues and product margins may be negatively
affected.
Failure to consummate strategic relationships with key partners
in our various target market segments, such as consumer
electronics, defense and portable power, transportation, space and
near space, and the respective implementations of the right
strategic partnerships to enter these various specified markets,
could adversely affect our projected sales, growth and
revenues.
We intend to sell thin-film PV modules for use in consumer
electronics, portable power systems, defense and portable power
systems, transportation, space and near space solar panel
applications. Our marketing and distribution strategy is to form
strategic relationships with distributors, retailers and value
added resellers as well as direct to consumer kiosks and e-commerce
to provide a foothold in these target markets. If we are unable to
successfully establish working relationships with such market
participants or if, due to cost, technical or other factors, our
products prove unsuitable for use in such applications; our
projected revenues and operating results could be adversely
affected.
If sufficient demand for our products does not develop or takes
longer to develop than we anticipate, we may be unable to grow our
business, generate sufficient revenue to attain profitability or
continue operations.
The solar energy industry is at a relatively early stage of
development, and the extent to which PV modules, including our own,
will be widely adopted is uncertain. While pure PV solutions is not
our short term primary
market, if PV technology proves unsuitable for widespread
adoption or if demand for PV modules fails to develop sufficiently,
long term we may be unable to grow our business, generate
sufficient sales to attain profitability or continue operations.
Many factors, of which several are outside of our control, may
affect the viability of widespread adoption of PV technology and
demand for PV modules.
We face intense competition from other manufacturers of
thin-film PV modules and other companies in the solar energy
industry.
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.
Many of our existing and potential competitors have
substantially greater financial, technical, manufacturing and other
resources than we do. A competitor’s greater size provides them
with a competitive advantage because they often can realize
economies of scale and purchase certain raw materials at lower
prices. Many of our competitors also have greater brand name
recognition, established distribution networks and large customer
bases. In addition, many of our competitors have well-established
relationships with our current and potential partners and
distributors and have extensive knowledge of our target markets. As
a result of their greater size, these competitors may be able to
devote more resources to the research, development, promotion and
sale of...
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