Item 1.01 Entry into a Material Definitive Agreement.
Exchange of Outstanding Promissory Notes for Unsecured Convertible Note
On May 2, 2019, Ascent Solar Technologies, Inc., a Delaware corporation (the “Company”), entered into a securities exchange agreement (the “Exchange Agreement”) with Baybridge Capital Fund, L.P. (“Investor”).
Pursuant to the terms of the Exchange Agreement, Investor agreed to surrender and exchange one outstanding promissory note with a principal balance of $349,650.00. In exchange, the Company issued to Investor one unsecured convertible note with a principal amount of $450,000 (the “Exchange Note”).
Terms of the Exchange Note
The Exchange Note will mature on May 2, 2020. Principal and interest on the Exchange Note will be payable in a lump sum on May 2, 2020.
The Exchange Note 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 Note.
The Exchange Note contains standard and customary events of default including but not limited to: (i) failure to make payments when due under the Exchange Note, and (ii) bankruptcy or insolvency of the Company.
Investor shall have the right, from and after the date of issuance of the Exchange Note and then at any time until the Exchange Note is 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 $0.002, 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 Note is not secured.
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The foregoing descriptions of the Exchange Agreement and the Exchange Note are a summary and are qualified in their entirety by reference to the documents attached hereto as Exhibits 10.1 and 10.2, which documents are incorporated herein by reference.