Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and the notes to those financial statements appearing elsewhere in this Form 10-Q and our audited financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024 which was filed with the SEC on March 31, 2025. This discussion and analysis contains statements of a forward-looking nature relating to future events or our future financial performance. As a result of many factors, our actual results may differ materially from those anticipated in these forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should carefully read the "Risk Factors" section of this Quarterly Report and of our Annual Report on Form 10-K for the year ended December 31, 2024 to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitled "Forward-Looking Statements."

Overview

We are a solar technology company that manufactures and sells PV solar modules that are flexible, durable, and possess attractive power to weight and power to area performance. Our technology provides renewable power solutions to high-value production and specialty solar markets where traditional rigid solar panels are not suitable, including space power beaming, aerospace, satellites, near earth orbiting vehicles, fixed wing UAV, aquatic terrestrial, and agrivoltaics. We operate in these target markets because they have highly specialized needs for power generation and offer attractive pricing due to the significant technological requirements.

We believe the value proposition of Ascent's proprietary solar technology not only aligns with the needs of customers in our target markets, but also overcomes many of the obstacle's other solar technologies face in space, aerospace and other markets. Ascent designs and develops finished products for end users in these areas and collaborates with strategic partners to design and develop integrated solutions for products like satellites, spacecraft, airships and UAV. Ascent sees significant overlap in the needs of end users across some of these markets and believes it can achieve economies of scale in sourcing, development, and production in commercializing products for these customers.

The integration of Ascent's solar modules into space, near space, and aeronautic vehicles with ultra-lightweight and flexible solar modules is an important market opportunity for the Company. Customers in this market have historically required a high level of durability, high voltage and conversion efficiency from solar module suppliers, and we believe our products are well suited to compete in this premium market and will fill a void in the satellite market with a lower cost, lighter module and a product that, if struck by an object in space, will create limited space debris.

For the nine months ended September 30, 2025, we generated $61,134 of total revenue. As of September 30, 2025, we had an accumulated deficit of $497,370,043.

Due to the high durability enabled by the monolithic integration employed by our technology, the capability to customize modules into different form factors and what we believe is the industry leading light weight and flexibility provided by our modules, we believe that the potential applications for our products are extensive, including integrated solutions anywhere that may need power generation such as power beaming solutions, vehicles in space or in flight or dual-use installations on agricultural land.

Commercialization and Manufacturing Strategy

We manufacture our products by affixing a thin CIGS layer to a flexible, plastic substrate using a large format, roll-to-roll process that permits us to fabricate our flexible PV modules in an integrated sequential operation. We use proprietary monolithic integration techniques which enable us to form complete PV modules with little to no costly back-end assembly of inter-cell connections. Traditional PV manufacturers assemble PV modules by bonding or soldering discrete PV cells together. This manufacturing step typically increases manufacturing costs and, at times, proves detrimental to the overall yield and reliability of the finished product. By reducing or eliminating this added step, using our proprietary monolithic integration techniques, we believe we can achieve cost savings in, and increase the reliability of, our PV modules.

We plan to continue the development of our current PV technology to increase module efficiency, improve our manufacturing tooling and process capabilities and reduce manufacturing costs.

Significant Trends, Uncertainties and Challenges

We believe the significant trends, uncertainties and challenges that directly or indirectly affect our financial performance and results of operations include:

Basis of Presentation:The accompanying unaudited condensed financial statements have been derived from the accounting records of Ascent Solar Technologies, Inc. as of September 30, 2025 and December 31, 2024, and the results of operations for the three and nine months ended September 30, 2025 and 2024.

Critical Accounting Policies and Estimates

Critical accounting policies used in reporting our financial results are reviewed by management on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Processes used to develop these estimates are evaluated on an ongoing basis. Estimates are based on historical experience and various other assumptions that are believed to be reasonable for making judgments about the carrying value of assets and liabilities. Actual results may differ as outcomes from assumptions may change.

The Company's significant accounting policies were described in Note 2 to the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes to our accounting policies as of September 30, 2025.

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024

Total Revenues.Our total revenues increased by $19,999, or 234%, for the three months ended September 30, 2025 when compared to the same period in 2024. This is primarily due to more orders in the current period compared to prior period.

Cost of revenue.Cost of revenues is primarily comprised of repair and maintenance, material costs, and direct labor and overhead expenses. Our Cost of revenues increased by $12,195, or 16%, for the three months ended September 30, 2025 when compared to the same period in 2024. This increase is primarily due to the increase in sales.

Research, development and manufacturing operations.Research, development and manufacturing operations costs include costs incurred for product development, pre-production and production activities in our manufacturing facility. Research, development and manufacturing operations costs also include costs related to technology development. Research, development and manufacturing operations costs increased by $17,038, or 3%, for the three months ended September 30, 2025 when compared to the same period in 2024. This is primarily due to an increase in research and development cost as the Company continued to focused on product and technology improvements in the current period.

Selling, general and administrative.Selling, general and administrative expenses decreased by $213,580, or 18% for the three months ended September 30, 2025 compared to the same period in 2024. This decrease is primarily due to lower personnel and professional service costs incurred in the current period compared to the prior period.

Share-based compensation. Share-based compensation expense decreased by $94,968 or 27% for the three months ended September 30, 2025 when compared to the same period in 2024. The decrease is primarily due to less RSU awards and stock option being expensed for the three months ended September 30, 2025.

Other Income/Expense.Other expense was $54,582 for the three months ended September 30, 2025, compared to other income of $571,324 for the same period in 2024, a decrease of $625,906. This decrease is primarily due to a decrease in other income, partially offset by decreased interest expense. During three months ended September 30, 2024, the other income included gain on settlement of liabilities, and the reversal of a Swiss liability.

Net Loss.Our Net Loss increased by $330,773, or 20%, for the three months ended September 30, 2025 compared to the same period in 2024 due primarily to the items mentioned above.

Comparison of the Nine Months Ended September 30, 2025 and 2024

Total Revenues.Our total revenues increased by $19,241, or 46%, for the nine months ended September 30, 2025 when compared to the same period in 2024. This is primarily due to more orders in the current period compared to prior period.

Cost of revenue.Cost of revenues is primarily comprised of repair and maintenance, material costs, and direct labor and overhead expenses. Our Cost of revenues decreased by $5,993, or 4%, for the nine months ended September 30, 2025 when compared to the same period in 2024. This decrease is primarily due to lower overhead expenses in the current year.

Research, development and manufacturing operations.Research, development and manufacturing operations costs include costs incurred for product development, pre-production and production activities in our manufacturing facility. Research, development and manufacturing operations costs also include costs related to technology development. Research, development and manufacturing operations costs increased by $78,397, or 5%, for the nine months ended September 30, 2025 when compared to the same period in 2024. This is primarily due to an increase in research and development cost as the Company continued to focused on product and technology improvements in the current period.

Selling, general and administrative.Selling, general and administrative expenses decreased by $894,383, or 23% for the nine months ended September 30, 2025 compared to the same period in 2024. This decrease is primarily due to lower personnel and professional service costs incurred in the current period compared to the prior period.

Share-based compensation. Share-based compensation expense increased by $75,823 or 9% for the nine months ended September 30, 2025 when compared to the same period in 2024. The increase is primarily due to Company's option grant to employees, directors, and advisory board in August 2024 and June 2025, partially offset by less RSU expenses in current period.

Other Income/Expense.Other income was $42,789 for the nine months ended September 30, 2025, compared to other expense of $579,439 for the same period in 2024, an increase of $622,228. The increase is due primarily to the warrant settlement expense to terminate warrant agreements with certain investors in prior period that did not repeat in current period and decreased interest expense as the December 2022 convertible debt and bridge loans were repaid in 2024. These changes

were partially offset by decreased other income in the current year as, during the nine months ended September 30, 2024, other income included a gain on settlement of liabilities, and the reversal of a Swiss liability.

Net Loss.Our Net Loss decreased by $1,913,103, or 25%, for the nine months ended September 30, 2025 compared to the same period in 2024 due primarily to the items mentioned above.

Liquidity and Capital Resources

The Company continues to build industrial scale production capabilities in its Thornton facility and focus on its research and development activities to improve its PV products. The Company does not expect that sales revenue and cash flows will be sufficient to support operations and cash requirements until it has fully implemented its strategy of selling high value PV products and manufacturing at full industrial scale. During the nine months ended September 30, 2025 the Company used $5,097,082 in cash for operations.

Additionally, projected total revenues are not anticipated to result in a positive cash flow position for the year overall and, as of September 30, 2025, and while the Company has working capital of $504,071, Management believes that additional financing will be required for the Company to reach a level of sufficient sales to achieve profitability.

The Company continues to accelerate sales and marketing efforts related to its specialty PV application strategies through expansion of its sales and distribution channels. The Company also continues activities to secure additional financing through strategic or financial investors, but there is no assurance the Company will be able to raise additional capital on acceptable terms or at all. If the Company's revenues do not increase rapidly, and/or additional financing is not obtained, the Company will be required to significantly curtail operations to reduce costs and/or sell assets. Such actions would likely have an adverse impact on the Company's future operations.

As a result of the Company's recurring losses from operations, and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding the Company's ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to the Company's ability to continue as a going concern.

Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Statements of Cash Flows Comparison of the nine months ended September 30, 2025 and 2024

For the nine months ended September 30, 2025, our cash used in operations was $5,097,082 compared to $6,897,159 for the nine months ended September 30, 2024, a decrease of $1,800,077. This decrease is due primarily to timing of cash outflows and decreased expenses. The nine months ended September 30, 2025 net cash used in operations of $5,097,082 were primarily funded from 2024 and 2025 financing agreements. For the nine months ended September 30, 2025, cash used in investing activities was $107,015 compared to $421 used in investing activities in the prior period. The increase was primarily due to the purchase of a cost investment and fixed assets. For the nine months ended September 30, 2025, our cash provided by financing activities was $4,127,372 compared to $9,570,393 in the prior period, a decrease of $5,443,021. Cash provided by financing activities in 2025 was primarily derived from the selling common stock under the ATM agreement and a public offering partially offset by the bridge loan repayments. During the nine months ended September 30, 2024, cash provided by financing activities was primarily derived from a public offering, a series of bridge loans, and common stock sales from our ATM agreement partially offset by the loan repayments, warrant repurchase, and repayment of conversions payables associated with a December 2022 offering.

Off Balance Sheet Transactions

As of September 30, 2025, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Smaller Reporting Company Status

We are a "smaller reporting company" meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or

(ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. As a smaller reporting company, we may rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and smaller reporting companies have reduced disclosure obligations regarding executive compensation.