The new common stock investment is led by TFG Radiant Investment, the company's largest shareholder, and Series A investor Seng Wei Seow.
For the first tranche of the Stock Purchase Agreement, Ascent issues 845,309 common shares each to TFG Radiant and Seow for a fixed per share price of $2.366, a 30% premium over its Friday closing price. In the second tranche the company plans to issue 1,425,000 shares to TFG Radiant at $2.80 a share. The second tranche is expected to close shortly after a special shareholder meeting in October, if shareholders approve the issuance.
TheStreet Ratings team rates ASCENT SOLAR TECHNOLOGIES as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ASCENT SOLAR TECHNOLOGIES (ASTI) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ASCENT SOLAR TECHNOLOGIES's earnings per share declined by 38.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, ASCENT SOLAR TECHNOLOGIES reported poor results of -$6.70 versus -$6.40 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 36.3% when compared to the same quarter one year ago, falling from -$6.43 million to -$8.77 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, ASCENT SOLAR TECHNOLOGIES's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to -$6.51 million or 26.80% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 76.37%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 38.46% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- You can view the full analysis from the report here: ASTI Ratings Report
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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.