Ascent Solar Technologies, Inc. (OTCMKTS:ASTID) Falls Back Down

On Monday Ascent Solar Technologies, Inc. (OTCMKTS:ASTI) made a massive jump in the right direction and as a result added close to 39% to their value for a close at $0.104. In our previous article, however, we warned you that although the surge was truly impressive there was nothing supporting it and that without a catalyst the company might be unable to keep its gains.

And yesterday ASTI did exactly that – the company corrected by 8.8% and dropped down to $0.095 on over 2.9 million traded shares. The loss in share price could have been even bigger with the stock sitting at $0.08 minutes before the closing bell. 

On June 2 the 1-for-20 reverse split performed by ASTI became effective and on that day their stock opened at 59 cents per share. Unable to support such prices the company watched as its  shares began rapidly wiping huge chunks of their value. Is there a chance that the ticker could form a more prolonged recovery?

Well, the biggest red flag hanging above ASTI is the potential dilution of the common stock, after all this was the main reason for the reverse split. In the first five months of the year the outstanding shares of the company had more than doubled, growing from 155 million to around 340 million. Following the reverse split the authorized amount of shares remained the same at 450 million shares, which will allow the company to accommodate even more conversions of its various series of preferred convertible stock.

The fact that ASTI are actually registering more and more series of preferred stock doesn’t make the picture any better. At the end of April they sold 2000 shares of a newly designated Series G preferred stock, convertible into common shares at a pre-split fixed price of $0.05, while on June 9 the company submitted a filing detailing a new securities purchase agreement for $2.5 million that involved the newly designated Series H preferred stock. Each Series H share can be converted into common shares at a 30% discount that could become a 40% discount in the occurrence of certain “Triggering Events”.

At least ASTI have been able to drastically improve their cash position compared to what the company reported at the end of the first quarter. According to the quarterly as of March 31 ASTI had:

• $350 thousand cash
• $9.7 million total current assets
• $15.1 million total current liabilities
• $710 thousand revenues
• $10.5 million net loss

It remains to be seen if the results for the next quarter will show enough improvement to offset the negative effects of the potential conversions. 

In early trading today ASTI are down by another 7.1% trading at $0.0882 per share.