Resistance to technology adoption seems to be the reason why Ascent Solar Technologies, Inc. (OTCMKTS:ASTI) has failed to take off in the years 2017 and 2018. Though the company shows a substantial amount of patents, which could be very valuable if the solar business becomes trendy again, yet the market keeps pushing the share price back.
Let’s catch up with ASTI’s business model. The company is based in Thornton, Colorado. Ascent Solar Technologies, Inc. is a developer of thin-film photovoltaic modules with substrate materials that are more flexible, versatile, and rugged than traditional solar panels. Ascent Solar modules can be directly integrated into consumer products and off-grid applications along with aerospace and building integrated applications.
The strong financial results reported for the Q3 2017 affirm our belief that we should see a turn around in the share price in 2018. The net revenue of $0.242 million represents approximately 868% quarter-on-quarter growth. The growth is explained with the successful shipments to a newly established OEM client for the development of the Energizer® PowerKeep™ line of solar products. The improved revenue in the quarter came with an improvement of 41% in the losses from operations as compared to the losses during the same period last year ($5.54 million). The cost reduction initiatives in both R&D and manufacturing operations are major factors behind this performance. Please keep in mind that ASTI said that these efforts will continue in 2018.
That’s not all. The company is also working on its solvency and liquidity ratios. Current liabilities were reduced from $19.45 million as of the period ended December 31, 2016, to about $11.01 million as of the quarter ended September 30, 2017. Finally, cash on hand is equal to $1.08 million as of September 30, 2017, as compared to $0.13 million on December 31, 2017.
A lot was said regarding the good performance of the company, but we need to highlight the optimism about the year 2018:
“We are optimistically looking forward to a stronger 2018, as our high-value PV market focus begins to take shape. We look forward to updating our shareholders as we make continued progress.” commented Victor Lee, President and CEO of Ascent Solar Technologies, Inc.
It is not a secret that the operating performance of solar companies has tied relations with the US Government. In line with this rationale, we always look for contacts with Government officials. In this case, we found Senator Gardner’s request to visit Ascent Solar. Keep in mind that he is on the Senate Energy & Natural Resource Committee and is the Chairman of the Senate Energy Subcommittee. As a result of this visit, we commenced wondering whether the company is planning to operate outside Colorado. Check the following commentary:
“As the only remaining US-based thin-film CIGS solar manufacturer, we have the ability to integrate our solar in places where other solar cannot go. We are eager to continue to demonstrate our unique capabilities in efforts to provide our solar technology for government projects moving forward.” said Victor Lee, President and CEO of Ascent Solar.
There is more. In November 2017, the company announced the availability of its newest innovative product, the Ascent XD™12 USB Solar Charger, on Amazon.com:
When new products hit the market, it is mandatory to revise the future implications on the top of the P&L. Thus, we will need to study closely the Q4 2017 revenues. Furthermore, in 2018, we will appreciate guidance from the company regarding the sales of Ascent XD™12 USB Solar Charger. It may surprise the market.
In addition to the launch of the USB Solar Charger, some months later, the company also announced, in February, the availability of a new innovative product, the Ascent XD™48 Solar Charger, on Amazon.com. Taking into account the stock volume generated with the announcement of the new features were appreciated:
“Built in the United States with Ascent Solar’s proprietary Extreme CIGS solar technology, the rugged, weather-resistant construction withstands shocks, drops, damage and even minor punctures to power through the harshest conditions. This award winning technology allows the solar charger to provide power from dawn to dusk, even in overcast or cloudy conditions. The Ascent XD48’s compact design conveniently fits in your bag or backpack, allowing you to carry unlimited solar power everywhere.” Source
If these new announcements don’t make the stock price take off, we don’t know what will do it. Maybe, market participants are waiting for the revenues of the next quarter, which should be released soon.
New clients and companies are willing to work with ASTI
It is one of the features that should be studied here. Many partners and new clients are signing agreements with ASTI. The most recent is the Japan Aerospace Exploration Agency, which placed an order – whose price was not given – comprising of small area test cells and 19.5cm x 30cm monolithically-integrated modules.
Additionally, the agreement signed with Raven Concealment Systems, a leading provider of discreet and efficient solutions, was remarkable. Thanks to the new contract, Ascent Solar will have access to Raven’s extensive range of Channel and End-User customers. In our opinion, the company is really positioned in the market and has already built recognition. Check the following words from the new client:
“We are very excited to be partnering with a trailblazing company like Ascent Solar, and proud to help supply their products to the US marketplace,” said Michael Goerlich, owner, Raven Concealment Systems.
Finally, it is worth mentioning that the contract is signed with German Aerospace Center for further testing to develop custom PV products designed specifically for DLR’s upcoming solar array deployment system. As per our opinion, ASTI should have something quite unique when it has non-US clients knocking the door.
“We have been gaining traction in the deep space community, in part because we have a unique, lightweight and flexible product, but also because our monolithic integration offers greater design latitude that traditional crystalline products do not. We have demonstrated the ability to adjust the physical dimensions of our modules to meet the need of customers, and with unique deployment schemes employed by DLR, correctly sizing our solution to accommodate proper stowage and deployment is critical.” Source
As said, be sure to check the next financial statements to be released in 2018. The market has not reacted to this fantastic news, but it may do when traders commence counting the new revenues. As seen, the reasons to believe in the company are numerous.
Currently trading with a market cap of $7.5 million, ASTI is an exciting story among small caps. With an asset/liability ratio under one, it is time for the company to recontact shareholders and debtholders. Some investors restructured promissory notes in 2017 and we could see shareholders providing more financing in August 2017. However, these transactions may not be sufficient. Thus, the market is expecting a recapitalization program. In our view, it will provide more oxygen to the company to continue growing.
To sum up, amidst the bad stock performance, ASTI is heading in the right direction.
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Disclosure: We have no position in ASTI and have not been compensated for this article. We have previously been compensated a fee of seven thousand five hundred usd regarding ASTI by a non affliated third party, Upstate Webwriters, Inc. This agreement has since expired.
Image courtesy of Jan Tik via Flickr