Item 1.01 Entry into a Material Definitive Agreement.
Exchange of Outstanding Promissory Notes for Unsecured Convertible Note
On March 11, 2019, Ascent Solar Technologies, Inc., a Delaware corporation (the “Company”), entered into two securities exchange agreements (the “Exchange Agreements”) with Baybridge Capital Fund, L.P. (“Investor”).
Pursuant to the terms of the Exchange Agreements, Investor agreed to surrender and exchange two outstanding promissory notes with principal balances of (i) $123,816.67 (including accrued interest), and (ii) $127,280.00 (including accrued interest). In exchange, the Company issued to Investor two unsecured convertible notes with a principal amount of (i) $160,000 and (ii) $150,000 (together the “Exchange Notes”).
Terms of the Exchange Notes
The Exchange Notes will mature on March 11, 2020. Principal and interest on the Exchange Notes will be payable in a lump sum on March 11, 2020.
The Exchange Notes will bear interest at a rate of 12% per annum. The interest rate increases to 18% in the event of a default under the Exchange Notes.
The Exchange Notes contain standard and customary events of default including but not limited to: (i) failure to make payments when due under the Exchange Notes, and (ii) bankruptcy or insolvency of the Company.
Investor shall have the right, from and after the date of issuance of the Exchange Notes and then at any time until the Exchange Notes are fully paid, to convert any outstanding and unpaid principal and interest into shares of Common Stock at a variable conversion price equal to the lesser of (i) a price equal to $0.003, or (ii) 65% of the lowest closing bid price for the shares over the prior five trading days.
Conversion to shares of Common Stock may not be issued pursuant to the Exchange Notes if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 4.99% of the outstanding shares of Common Stock.
The Exchange Notes are not secured.
Offering of Unsecured Non-Convertible Note
On March 11, 2019, the Company also issued to Investor a $60,000 aggregate principal amount non-convertible promissory note (“Non-Convertible Note”).
The Company has received $50,000 of gross proceeds from the offering of the Non-Convertible Note.
Terms of Non-Convertible Note
The aggregate principal amount of Non-Convertible Note (together with accrued interest) will mature on September 11, 2019.
Non-Convertible Note bears interest at a rate of 12% per annum. The interest rate increases to 18% in the event of a default under Non-Convertible Note.
Non-Convertible Note contains standard and customary events of default including but not limited to: (i) failure to make payments when due under the Non-Convertible Note, and (ii) bankruptcy or insolvency of the Company.
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The foregoing descriptions of the Exchange Agreements, the Exchange Notes and the Non-Convertible Note are a summary and are qualified in their entirety by reference to the documents attached hereto as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5, which documents are incorporated herein by reference.