Ascent Solar Technologies, Inc. Leases Disclosure
NOTE 7. OPERATING LEASES
In September 2020, the Company commenced a operating lease for approximately 100,000 rentable square feet for its manufacturing and operations. The building lease term is for 88 months commencing on September 21, 2020 at a rent of $50,000 per month including taxes, insurance and common area maintenance until December 31, 2020. Beginning January 1, 2021, the rent adjusted to $80,000 per month on a triple net basis and shall increase at an annual rate of 3% per annum until December 31, 2027.
Effective September 1, 2023, the lease was amended to reduce the rentable square feet from 100,000 to approximately 75,000 square feet and the rent and tenant share of expenses decreased in proportion to the reduction in rentable square feet. The Company recorded this as a lease modification in accordance with ASC 842, Leases, and recorded a reduction to the right of use asset and lease liability of $1,292,316 and $1,376,994, respectively. The Company recognized a gain on the lease modification of $84,678, which was recorded as other income in the Statement of Operations.
As of December 31, 2024 and 2023, assets and liabilities related to the Company's lease were as follows:
|
|
As of December 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Operating lease right-of-use assets, net |
|
$ |
1,880,372 |
|
|
$ |
2,364,672 |
|
Current portion of operating lease liability |
|
|
578,153 |
|
|
|
491,440 |
|
Non-current portion of operating lease liability |
|
|
1,464,872 |
|
|
|
2,043,025 |
|
During the years ended December 31, 2024 and 2023 the Company recorded operating lease costs included in Selling, general, and administrative expenses on the Statement of Operations of $761,989 and $961,333, respectively.
Future maturities of the operating lease liability are as follows:
2025 |
|
$ |
792,203 |
|
2026 |
|
|
815,969 |
|
2027 |
|
|
840,449 |
|
Total lease payments |
|
$ |
2,448,621 |
|
Less amounts representing interest |
|
$ |
(405,596 |
) |
Present value of lease liability |
|
$ |
2,043,025 |
|
The remaining weighted average lease term and discount rate of the operating lease is 36 months and 12%, respectively.
During the years ended December 31, 2024 and 2023, the Company recorded short term lease expense of approximately $0 and $326,400, respectively.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.