Quarterly Report (10-q)

Date : 05/29/2019 @ 8:59PM
Source : Edgar (US Regulatory)
Stock : Ascent Solar Technologies Inc (PK) (ASTI)
Quote : 0.0002  0.0001 (100.00%) @ 8:41PM

Quarterly Report (10-q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________ 
FORM 10-Q
______________________________________________________
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2019
or
o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from             to             
Commission File No. 001-32919
______________________________________________________ 
Ascent Solar Technologies, Inc.
(Exact name of registrant as specified in its charter)
 _______________________________________________________
Delaware
 
20-3672603
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
12300 Grant Street, Thornton, CO
 
80241
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number including area code: 720-872-5000  
_________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of exchange on which registered
Common
ASTI
OTC

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x     No   o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     x   Yes     o   No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:



Large accelerated filer
 
o
  
Accelerated filer
 
o
Non-accelerated filer
 
x

  
Smaller reporting company
 
x
 
 
 
 
Emerging growth company
 
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
As of May 28, 2019 , there were 580,889,727 shares of our common stock issued and outstanding.
ASCENT SOLAR TECHNOLOGIES, INC.
Quarterly Report on Form 10-Q
Quarterly Period Ended March 31, 2019
Table of Contents
 
 
 
 
Item 1.
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes “forward-looking statements” that involve risks and uncertainties. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future net sales or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historical information and, in particular, appear under headings including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” When used in this Quarterly Report, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” “foresees,” “likely,” “may,” “should,” “goal,” “target,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon information available to us on the date of this Quarterly Report.

These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, among



other things, the matters discussed in this Quarterly Report in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Factors you should consider that could cause these differences are:
Our limited operating history and lack of profitability;
Our ability to develop demand for, and sales of, our products;
Our ability to attract and retain qualified personnel to implement our business plan and corporate growth strategies;
Our ability to develop sales, marketing and distribution capabilities;
Our ability to successfully develop and maintain strategic relationships with key partners, including OEMs, system integrators, distributors, retailers and e-commerce companies, who deal directly with end users in our target markets;
The accuracy of our estimates and projections;
Our ability to secure additional financing to fund our short-term and long-term financial needs;
Our ability to maintain the listing of our common stock on the OTCBB Market;
The commencement, or outcome, of legal proceedings against us, or by us, including ongoing ligation proceedings;
Changes in our business plan or corporate strategies;
The extent to which we are able to manage the growth of our operations effectively, both domestically and abroad, whether directly owned or indirectly through licenses;
The supply, availability and price of equipment, components and raw materials, including the elements needed to produce our photovoltaic modules;
Our ability to expand and protect the intellectual property portfolio that relates to our consumer electronics, photovoltaic modules and processes;
Our ability to implement remediation measures to address material weaknesses in internal control;
General economic and business conditions, and in particular, conditions specific to consumer electronics and the solar power industry; and
Other risks and uncertainties discussed in greater detail in the section captioned "Risk Factors."

There may be other factors that could cause our actual results to differ materially from the results referred to in the forward-looking statements. We undertake no obligation to publicly update or revise forward-looking statements to reflect subsequent events or circumstances after the date made, or to reflect the occurrence of unanticipated events, except as required by law.

References to “we,” “us,” “our,” “Ascent,” “Ascent Solar” or the “Company” in this Quarterly Report mean Ascent Solar Technologies, Inc.




PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements
CONSOLIDATED BALANCE SHEETS
(unaudited)
 
 
March 31,
2019
 
December 31,
2018
ASSETS (substantially pledged)
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
 
$
50,907

 
$
18,159

Trade receivables, net of allowance of $45,794 and $45,644, respectively
 
55,616

 
165,160

Inventories, net
 
677,920

 
660,791

Prepaid expenses and other current assets
 
182,422

 
138,369

Total current assets
 
966,865

 
982,479

Property, Plant and Equipment:
 
36,621,187

 
36,621,187

Less accumulated depreciation and amortization
 
(32,256,329
)
 
(32,207,829
)
 
 
4,364,858

 
4,413,358

Other Assets:
 
 
 
 
Patents, net of accumulated amortization of $381,385 and $363,533, respectively
 
846,708

 
862,429

Other non-current assets
 
33,123

 
34,061

 
 
879,831

 
896,490

Total Assets
 
$
6,211,554

 
$
6,292,327

LIABILITIES AND STOCKHOLDERS’ DEFICIT
 
 
 
 
Current Liabilities:
 
 
 
 
Accounts payable
 
$
1,915,926

 
$
2,318,655

Related party payables
 
270,052

 
270,740

Accrued expenses
 
1,714,667

 
1,562,435

Accrued interest
 
1,224,772

 
1,198,279

Notes payable
 
1,516,530

 
1,516,530

Current portion of long-term debt
 
354,885

 
349,093

Secured promissory notes, net of discount of $2,672,928 and $2,824,365, respectively
 
4,379,969

 
3,447,380

Promissory notes, net of discounts of $55,000 and $104,583, respectively
 
1,121,937

 
1,239,854

Convertible notes, net of discounts of $665,631 and $394,011, respectively
 
1,990,805

 
1,852,722

Embedded derivative liability
 
5,118,128

 
10,114,452

Total current liabilities
 
19,607,671

 
23,870,140

Long-term debt, net of current portion
 
4,938,046

 
5,028,969

Accrued Warranty Liability
 
27,839

 
29,114

Total Liabilities
 
24,573,556

 
28,928,223

Commitments and Contingencies
 

 

Stockholders’ Deficit:
 
 
 
 
Series A preferred stock, $.0001 par value; 750,000 shares authorized as of March 31, 2019 and December 31, 2018; 48,100 and 60,756 shares issued and outstanding as of March 31, 2019 and December 31, 2018 ($663,121 and $822,620 Liquidation Preference, respectively)
 
5

 
6

Common stock, $0.0001 par value, 20,000,000,000 shares authorized as of March 31, 2019 and December 31, 2018; 322,543,901 and 63,537,885 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
 
32,255

 
6,354

Additional paid in capital
 
396,896,969

 
395,889,712

Accumulated deficit
 
(415,291,231
)
 
(418,531,968
)
Total stockholders’ deficit
 
(18,362,002
)
 
(22,635,896
)
Total Liabilities and Stockholders’ Deficit
 
$
6,211,554

 
$
6,292,327

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

ASCENT SOLAR TECHNOLOGIES, INC.


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 
 
 
 
 
 
For the Three Months Ended March 31,
 
 
2019
 
2018
Revenues
 
$
215,384

 
$
377,511

Costs and Expenses
 
 
 
 
Cost of revenues (exclusive of depreciation shown below)
 
91,436

 
273,028

Research, development and manufacturing operations (exclusive of depreciation shown below)
 
489,063

 
1,173,035

Selling, general and administrative (exclusive of depreciation shown below)
 
508,375

 
934,591

Depreciation and amortization
 
66,352

 
101,712

Total Costs and Expenses
 
1,155,226

 
2,482,366

Loss from Operations
 
(939,842
)
 
(2,104,855
)
Other Income/(Expense)
 
 
 
 
Interest Expense
 
(2,826,248
)
 
(1,343,730
)
Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net
 
7,006,827

 
(984,461
)
Total Other Income/(Expense)
 
4,180,579

 
(2,328,191
)
Net Income (Loss)
 
$
3,240,737

 
$
(4,433,046
)
 
 
 
 
 
Net Income (Loss) Per Share (Basic)
 
$
0.02

 
$
(0.40
)
Net Income (Loss) Per Share (Diluted)
 
$
0.001

 
$
(0.40
)
Weighted Average Common Shares Outstanding (Basic)
 
139,241,521

 
10,996,379

Weighted Average Common Shares Outstanding (Diluted)
 
3,591,903,040

 
10,996,379



The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

ASCENT SOLAR TECHNOLOGIES, INC.


CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
Three Months Ended March 31, 2019
(unaudited)

 
 
Common Stock
 
Series A Preferred Stock
 
Additional
Paid-In
Capital
 
Accumulated
Deficit
 
Total
Stockholders’
Equity (Deficit)
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Balance, December 31, 2018
 
63,537,885

 
$
6,354

 
60,756

 
$
6

 
$
395,889,712

 
$
(418,531,968
)
 
$
(22,635,896
)
Interest and Dividend Expense paid with Common Stock
 
17,938,692

 
1,794

 

 

 
83,817

 

 
85,611

Conversion of St.George Note into Common Shares
 
58,503,244

 
5,850

 

 

 
100,900

 

 
106,750

Conversion of Global Ichiban Note into Common Shares
 
9,595,327

 
960

 

 

 
114,040

 

 
115,000

Conversion of BayBridge Note into Common Shares
 
46,461,277

 
4,646

 

 

 
85,854

 

 
90,500

Conversion of Bellridge Note into Common Shares
 
36,166,781

 
3,617

 

 

 
61,999

 

 
65,616

Conversion of PowerUp Note into Common Shares
 
90,340,694

 
9,034

 

 

 
173,466

 

 
182,500

Conversion of Series A Preferred Stock into Common Stock
 
1

 

 
(12,656
)
 
(1
)
 
1

 

 

Loss on Extinguishment of Liabilities
 

 

 

 

 
382,834

 

 
382,834

Stock based compensation
 

 

 

 

 
4,346

 

 
4,346

Net Loss
 

 

 

 

 

 
3,240,737

 
3,240,737

Balance, March 31, 2019
 
322,543,901

 
$
32,255

 
48,100

 
$
5

 
$
396,896,969

 
$
(415,291,231
)
 
$
(18,362,002
)


CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
Three Months Ended March 31, 2018
(unaudited)

 
 
Common Stock
 
Series A Preferred Stock
 
Additional
Paid-In
Capital
 
Accumulated
Deficit
 
Total
Stockholders’
Equity (Deficit)
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Balance, December 31, 2017
 
9,606,677

 
$
961

 
60,756

 
$
6

 
$
387,292,174

 
$
(402,495,476
)
 
$
(15,202,335
)
Interest and Dividend Expense paid with Common Stock
 
81,242

 
8

 

 

 
20,709

 

 
20,717

Conversion of St.George Note into Common Shares
 
187,500

 
19

 

 

 
74,981

 

 
75,000

Conversion of Global Ichiban Note into Common Shares
 
2,450,980

 
245

 

 

 
1,249,755

 

 
1,250,000

Conversion of BayBridge Note into Common Shares
 
411,765

 
41

 

 

 
104,959

 

 
105,000

Loss on Extinguishment of Liabilities
 

 

 

 

 
433,375

 

 
433,375

Stock based compensation
 

 

 

 

 
14,324

 

 
14,324

Net Loss
 

 

 

 

 

 
(4,433,046
)
 
(4,433,046
)
Balance, March 31, 2018
 
12,738,164

 
$
1,274

 
60,756

 
$
6

 
$
389,190,277

 
$
(406,928,522
)
 
$
(17,736,965
)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



3

ASCENT SOLAR TECHNOLOGIES, INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 
 
For the Three Months Ended
 
 
 
March 31,
 
 
 
2019
 
2018
 
Operating Activities:
 
 
 
 
 
Net Income (loss)
 
$
3,240,737

 
$
(4,433,046
)
 
Adjustments to reconcile net income (loss) to net cash used in operating activities:
 
 
 
 
 
Depreciation and amortization
 
66,352

 
101,712

 
Stock based compensation
 
4,346

 
14,324

 
Amortization of financing costs
 
14,856

 
3,333

 
Non-cash interest expense
 
984,829

 
222,648

 
Amortization of debt discount
 
1,360,322

 
1,011,109

 
Bad debt expense
 
130

 

 
Write off Enerplex Patents
 

 
59,153

 
Warranty reserve
 
(1,275
)
 
(6,345
)
 
Change in fair value of derivatives and loss on extinguishment of liabilities, net
 
(7,006,827
)
 
984,461

 
Changes in operating assets and liabilities:
 
 
 
 
 
Accounts receivable
 
109,414

 
(1,326
)
 
Inventories
 
(17,129
)
 
(36,465
)
 
Prepaid expenses and other current assets
 
(47,171
)
 
(29,852
)
 
Accounts payable
 
(323,710
)
 
244,975

 
Related party payable
 
(688
)
 
5,927

 
Accrued expenses
 
301,693

 
258,837

 
Accrued interest
 
152,232

 
105,811

 
Net cash used in operating activities
 
(1,161,889
)
 
(1,494,744
)
 
Investing Activities:
 
 
 
 
 
Patent activity costs
 
(2,131
)
 
(6,502
)
 
Net cash used in investing activities
 
(2,131
)
 
(6,502
)
 
Financing Activities:
 
 
 
 
 
Proceeds from debt
 
1,201,768

 
1,530,000

 
Repayment of debt
 

 
(30,261
)
 
Payment of debt financing costs
 
(5,000
)
 

 
Net cash provided by financing activities
 
1,196,768

 
1,499,739

 
Net change in cash and cash equivalents
 
32,748

 
(1,507
)
 
Cash and cash equivalents at beginning of period
 
18,159

 
89,618

 
Cash and cash equivalents at end of period
 
$
50,907

 
$
88,111

 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Cash Flow Information:
 
 
 
 
 
Cash paid for interest
 
$
20,741

 
$
106,617

 
Cash paid for income taxes
 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Cash Transactions:
 
 
 
 
 
Non-cash conversions of preferred stock and convertible notes to equity
 
$
645,977

 
$
1,430,000

 
Non-cash financing costs
 
$
10,800

 
$

 
Interest converted to principal
 
$
171,152

 
$
96,120

 
Initial embedded derivative liabilities
 
$
2,229,187

 
$
1,151,162

 
Promissory notes converted to convertible notes
 
$
235,000

 
$

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

ASCENT SOLAR TECHNOLOGIES, INC.


NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION
Ascent Solar Technologies, Inc. (“Ascent”) was incorporated on October 18, 2005 from the separation by ITN Energy Systems, Inc. (“ITN”) of its Advanced Photovoltaic Division and all of that division’s key personnel and core technologies. ITN, a private company incorporated in 1994, is an incubator dedicated to the development of thin film, photovoltaic (“PV”), battery, fuel cell and nano technologies. Through its work on research and development contracts for private and governmental entities, ITN developed proprietary processing and manufacturing know how applicable to PV products generally, and to Copper-Indium-Gallium-diSelenide (“CIGS”) PV products in particular. ITN formed Ascent to commercialize its investment in CIGS PV technologies. In January 2006, in exchange for 102,800 shares of common stock of Ascent, ITN assigned to Ascent certain CIGS PV technologies and trade secrets and granted to Ascent a perpetual, exclusive, royalty free worldwide license to use, in connection with the manufacture, development, marketing and commercialization of CIGS PV to produce solar power, certain of ITN’s existing and future proprietary and control technologies that, although non-specific to CIGS PV, Ascent believes will be useful in its production of PV modules for its target markets. Upon receipt of the necessary government approvals and pursuant to novation in early 2007, ITN assigned government funded research and development contracts to Ascent and also transferred the key personnel working on the contracts to Ascent.
Currently, the Company is focusing on integrating its PV products into high value markets such as aerospace, satellites, near earth orbiting vehicles, and fixed-wing unmanned aerial vehicles (UAV). The value proposition of Ascent’s proprietary solar technology not only aligns with the needs of customers in these industries, but also overcomes many of the obstacles other solar technologies face in these unique markets. Ascent has the capability to design and develop finished products for end users in these areas as well as collaborate with strategic partners to design and develop custom integrated solutions for products like fixed-wing UAVs. Ascent sees significant overlap of the needs of end users across some of these industries and can achieve economies of scale in sourcing, development, and production in commercializing products for these customers.

NOTE 2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been derived from the accounting records of Ascent Solar Technologies, Inc., Ascent Solar (Asia) Pte. Ltd., and Ascent Solar (Shenzhen) Co., Ltd. (collectively, "the Company") as of March 31, 2019 and December 31, 2018 , and the results of operations for the three months ended March 31, 2019 and 2018 . Ascent Solar (Shenzhen) Co., Ltd. is wholly owned by Ascent Solar (Asia) Pte. Ltd., which is wholly owned by Ascent Solar Technologies, Inc. All significant inter-company balances and transactions have been eliminated in the accompanying consolidated financial statements.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 .


5

ASCENT SOLAR TECHNOLOGIES, INC.


NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies were described in Note 3 to the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . There have been no significant changes to our accounting policies as of March 31, 2019 .

Recently Adopted or to be Adopted Accounting Policies
    
In February 2016, the FASB issued ASU No. 2016-02,  Leases (Topic 842) . ASU 2016-02 requires lessees to recognize all leases, including operating leases, on the balance sheet as a lease asset or lease liability, unless the lease is a short-term lease. ASU 2016-02 also requires additional disclosures regarding leasing arrangements. ASU 2016-02 is effective for interim periods and fiscal years beginning after December 15, 2018, and early application is permitted. The Company has evaluated the adoption of this guidance and has determined there is no material impact on its consolidated financial statements because the Company does not have any leases at the date of the adoption.
    
In July 2017, the FASB issued ASU No. 2017-11 Part I, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) . ASU 2017-11 Part I changes the classification analysis of certain equity linked financial instruments with down round features. ASU 2017-11 Part I is effective, for public business entities, for interim periods and fiscal years beginning after December 15, 2018, and early application is permitted. The adoption of this guidance did not have a material impact on its consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07,  Compensation-Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting , which simplifies the accounting for share-based payments to non-employees by aligning it with the accounting for share-based payments to employees, with specified exceptions. This standard is effective for the Company in the first quarter of 2020, and early adoption is permitted. The Company expects the adoption of this standard will not have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13,  Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements of fair value measurements. This standard is effective for the Company in the first quarter of 2020, and early adoption is permitted. The Company is currently evaluating the impact of the effect adoption of this standard will have on its consolidated financial statements.

Other new pronouncements issued but not effective as of March 31, 2019 are not expected to have a material impact on the Company’s consolidated financial statements.

NOTE 4. LIQUIDITY, CONTINUED OPERATIONS, AND GOING CONCERN    

During the three months ended March 31, 2019 and the year ended December 31, 2018 , the Company entered into multiple financing agreements to fund operations. Further discussion of these transactions can be found in Notes 8, 9, 10, 11, 12, and 16.

The Company has continued limited PV production at its manufacturing facility. 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 product strategy. During the three months ended March 31, 2019 the Company used  $1,161,889  in cash for operations. The Company's primary significant long term cash obligation consists of a note payable of  $5,292,931  to a financial institution secured by a mortgage on its headquarters and manufacturing building in Thornton, Colorado. Total payments of approximately $693,611 , including principal and interest, will come due in the remainder of 2019.

On April 12, 2019, the Company entered into an agreement for the sale of its Thornton, Colorado building at a gross sales price of $13 million .  The closing of the transaction, which is subject to customary closing conditions, is expected to close in the third quarter of 2019.

Additional projected product revenues are not anticipated to result in a positive cash flow position for the next twelve months overall and, as of March 31, 2019 , the Company has negative working capital. As such, cash liquidity sufficient for the next twelve months will require additional financing.




6

ASCENT SOLAR TECHNOLOGIES, INC.


The Company continues to accelerate sales and marketing efforts related to its consumer and military solar products and specialty PV application strategies through expansion of its sales and distribution channels. The Company has begun activities related to securing 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. The Company has scaled down its operations, due to cash flow issues, and does not expect to ramp up until significant financing is obtained.

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

NOTE 5. PROPERTY, PLANT AND EQUIPMENT

The following table summarizes property, plant and equipment as of March 31, 2019 and December 31, 2018 :
 
 
 
As of March 31,
 
As of December 31,
 
 
2019
 
2018
Building
 
$
5,828,960

 
$
5,828,960

Furniture, fixtures, computer hardware and computer software
 
489,421

 
489,421

Manufacturing machinery and equipment
 
30,302,806

 
30,302,806

Depreciable property, plant and equipment
 
36,621,187

 
36,621,187

Less: Accumulated depreciation and amortization
 
(32,256,329
)
 
(32,207,829
)
Net property, plant and equipment
 
$
4,364,858

 
$
4,413,358


The Company analyzes its long-lived assets for impairment, both individually and as a group, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

Depreciation expense for the three months ended March 31, 2019 and 2018 was $48,500 and $58,736 , respectively. Depreciation expense is recorded under “Depreciation and amortization expense” in the Condensed Consolidated Statements of Operations.

NOTE 6. INVENTORIES
Inventories, net of reserves, consisted of the following at March 31, 2019 and December 31, 2018 :
 
 
 
As of March 31,
 
As of December 31,
 
 
2019
 
2018
Raw materials
 
$
677,920

 
$
660,791

Work in process
 

 

Finished goods
 

 

Total
 
$
677,920

 
$
660,791


NOTE 7. NOTES PAYABLE

On February 24, 2017 , the Company entered into an agreement with a vendor to convert the balance of their account into three notes payable in the aggregate amount of $765,784 . The notes bear interest of 6% per annum and matured on February 24, 2018 ; all outstanding principal and accrued interest is due and payable upon maturity. On June 5, 2018, the Company entered into another agreement with the same vendor to convert the balance of their account into a fourth note payable with a principal amount of $308,041 , this note also bears interest at a rate of 6% per annum, and matured on July 31, 2018 . As of March 31, 2019 , the Company had not made any payments on these notes; the total outstanding principal and accrued interest were $1,073,825 and $112,988 , respectively, and the note is due upon demand.

7

ASCENT SOLAR TECHNOLOGIES, INC.


On June 30, 2017 , the Company entered into an agreement with a vendor to convert the balance of their account into a note payable in the amount of $250,000 . The note bears interest of 5% per annum and matured on February 28, 2018 . As of March 31, 2019 , the Company had not made any payments on this note, the accrued interest was $21,883 , and the note is due upon demand.

On September 30, 2017 , the Company entered into a settlement agreement with a customer to convert the credit balance of their account into a note payable in the amount of $215,234 . The note bears interest of 5% per annum and matured on September 30, 2018 . The Company has not made the monthly payments of $18,426 that were to commence on October 30, 2017 ; as of March 31, 2019 , the company had paid principal of $22,529 and interest of $897 , and the note is due upon demand. The remaining principal and interest balances, as of March 31, 2019 , were $192,705 and $14,214 , respectively.

NOTE 8. DEBT

On February 8, 2008 , the Company acquired a manufacturing and office facility in Thornton, Colorado, for approximately $5.5 million. The purchase was financed by a promissory note, deed of trust and construction loan agreement (the “Construction Loan”) with the Colorado Housing and Finance Authority (“CHFA”), which provided the Company borrowing availability of up to $7.5 million for the building and building improvements. In 2009 , the Construction Loan was converted to a permanent loan pursuant to a Loan Modification Agreement between the Company and CHFA (the “Permanent Loan”). The Permanent Loan, collateralized by the building, has an interest rate of 6.6% and the principal will be amortized through its term to February 2028 . Further, pursuant to certain negative covenants in the Permanent Loan, the Company may not, among other things, without CHFA’s prior written consent (which by the terms of the deed of trust is subject to a reasonableness requirement): create or incur additional indebtedness (other than obligations created or incurred in the ordinary course of business); merge or consolidate with any other entity; or make loans or advances to the Company’s officers, shareholders, directors or employees.

On November 1, 2016 , the Company and the CHFA agreed to modify the original agreement described above with the addition of a forbearance period. Per the modification agreement, no payments of principal and interest shall be due under the note during the forbearance period commencing on November 1, 2016 and continuing through April 1, 2017 . The amount of interest that should have been paid by the Company during the forbearance period in the total amount of $180,043 was added to the outstanding principal balance of the note. As a result, on May 1, 2017 , the principal balance of the note was $5,704,932 . Commencing on May 1, 2017 , the monthly payments of principal and interest due under the note resumed at $57,801 , and the Company shall continue to make such monthly payments over the remaining term of the note ending in February 2028 .

On August 24, 2018 , the Company and the CHFA agreed to modify the original agreement with an additional forbearance period. Per the modification agreement, no payments of principal shall be due under the note during the forbearance period commencing on June 1, 2018 and continuing through November 30, 2018 . For each month of forbearance, partial interest of $15,000 per month was paid, and the remaining unpaid interest of the forbearance period of $84,187 was added to the outstanding principal balance of the note. As a result, on December 1, 2018 , the principal balance of the note will be $5,434,042 and monthly payments of principal and interest of $57,801 will resume, continuing through the remaining term of the note ending in February 2028 .

The outstanding principal balance of the Permanent Loan was $5,292,931 and $5,378,062 as of March 31, 2019 and December 31, 2018 , respectively.

As of March 31, 2019 , remaining future principal payments on long-term debt are due as follows:

2019
$
263,962

2020
$
372,843

2021
$
398,209

2022
$
425,301

2023
$
454,235

Thereafter
$
3,378,381

 
$
5,292,931


As of March 31, 2019 , the Company had not made its regularly monthly payments and five months of payments were outstanding in the Company's Accounts Payable. The Accounts Payable balance was $289,004 as of March 31, 2019 , representing $141,112 in loan principal and $147,892 in loan interest.

8

ASCENT SOLAR TECHNOLOGIES, INC.


On April 12, 2019, the Company entered into an agreement for the sale of its Thornton, Colorado building at a gross sales price of $13 million .  The closing of the transaction, which is subject to customary closing conditions, is expected to close in the third quarter of 2019.

NOTE 9. SECURED PROMISSORY NOTE

The following table provides a summary of the activity of the Company's secured notes:
 
 
Global Ichiban
 
St. George
 
Total
Secured Notes Principal Balance at December 31, 2017
 
$
4,557,227

 
$

 
$
4,557,227

New notes
 
1,935,000

 
1,315,000

 
3,250,000

Note conversions
 
(1,426,000
)
 

 
(1,426,000
)
Interest converted to principal
 
140,518

 

 
140,518

Note assignments
 
(250,000
)
 

 
(250,000
)
Secured Notes Principal Balance at December 31, 2018
 
4,956,745

 
1,315,000

 
6,271,745

Less: remaining discount
 
(2,012,698
)
 
(811,667
)
 
(2,824,365
)
Secured Notes, net of discount, at December 31, 2018
 
2,944,047

 
503,333

 
3,447,380

New notes
 

 
725,000

 
725,000

Note conversions
 
(115,000
)
 

 
(115,000
)
Interest converted to principal
 
171,152

 

 
171,152

Secured Notes Principal Balance at March 31, 2019
 
5,012,897

 
2,040,000

 
7,052,897

Less: remaining discount
 
(1,608,345
)
 
(1,064,583
)
 
(2,672,928
)
Secured Notes, net of discount, at March 31, 2019
 
$
3,404,552

 
$
975,417

 
$
4,379,969



Global Ichiban Secured Promissory Notes

On November 30, 2017 , the Company, entered into a note purchase and exchange agreement with Global Ichiban Ltd. ("Global"), for the private placement of up to $2,000,000 of the Company’s secured convertible promissory notes in exchange for $2,000,000 of gross proceeds in several tranches through June 2018, The closing of each tranche is conditioned upon the Company having an average daily trading volume for its Common Stock of at least $50,000 for the 20 trading day period preceding such future tranche closing dates.

Pursuant to the terms of the note purchase and exchange agreement, the Company and Global also agreed to exchange certain outstanding securities held by the Global for additional notes. As of November 30, 2017 , Global surrendered for cancellation (i) its outstanding promissory note dated September 13, 2017 ( $3,359,539 principal and accrued interest), (ii) its outstanding promissory note dated October 31, 2017 ( $252,466 principal and accrued interest), and (iii) its 400 shares of outstanding Series J Preferred Stock ( $445,222 of capital and accrued dividends). In exchange, the Company issued to Global $4,057,227 aggregate principal amount of additional Notes.

All principal and accrued interest on the notes are redeemable at any time, in whole or in part, at the option of Global. The redemption amount may be paid in cash or converted into shares of common stock at a variable conversion price equal to the lowest of (i) 85% of the average VWAP for the shares over the prior 5 trading days, (ii) the closing bid price for the shares on the prior trading day, or (iii) $2.00 per share, at the option of the Company.

The notes may not be converted, and shares of common stock may not be issued pursuant to the notes, if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 9.99% of the outstanding shares of common stock.

Of the notes issued on November 30, 2017 , $3,359,539 aggregate principal amount will mature on December 15, 2020 . Principal and interest was originally to be payable in 36 equal monthly installments of $111,585 beginning January 15, 2018 . As of March 31, 2019 , principal of $1,541,000 was converted into 13,081,603 shares of common stock, and $311,670 of interest was converted to principal. The remaining note is payable in 22 equal monthly installments of $107,990 beginning February 15, 2019 . The Company has not made the payments as outlined in the agreement, this note is due upon demand.


9

ASCENT SOLAR TECHNOLOGIES, INC.


The following table summarizes the conversion activity of this note:

Conversion Period
Principal Converted
Interest Converted
Common Shares Issued
Q1 2018
$
1,250,000

$

2,450,981

Q2 2018
$
176,000

$

1,035,295

Q1 2019
$
115,000

$

9,595,327

 
$
1,541,000

$

13,081,603


Of the notes issued on November 30, 2017 , $697,688 aggregate principal amount matured on November 30, 2018 . Principal and interest on these notes are due upon demand.

The $2,000,000 aggregate principal amount of notes, issued in eight tranches, will mature on the first anniversary of the respective issuance date. Principal and interest will be payable upon maturity; for the maturity dates that have passed, the note is due upon demand. As of March 31, 2019 , the closing dates, closing amounts, and maturity dates on completed note tranches are as follows:

Closing Date
Closing Amount
Maturity Date
11/30/2017
$
250,000

11/30/2018
12/28/2017
$
250,000

12/28/2018
1/11/2018
$
250,000

1/11/2019
1/25/2018
$
250,000

1/25/2019
2/8/2018
$
250,000

2/8/2019
2/21/2018
$
250,000

2/21/2019
3/7/2018
$
250,000

3/7/2019
3/21/2018
$
250,000

3/21/2019


On July 6, 2018 , the Company issued an additional, promissory note to Global, pursuant to the note purchase and exchange agreement dated November 30, 2017 . In accordance with the agreement, the Company issued a note with a principal balance of $135,000 in exchange for gross proceeds of $120,000 . This note matures on July 6, 2019 . Principal and interest on this note are payable at maturity. The original issue discount of $15,000 will be allocated to interest expense, ratably, over the life of the note. This note is not redeemable in stock.

On October 2, 2018 , the Company issued an additional promissory note to Global, pursuant to the note purchase and exchange agreement dated November 30, 2017 . In accordance with the agreement, the Company issued a note with a principal balance of $150,000 in exchange for gross proceeds of $125,000 . This note matures on October 2, 2019 . Principal and interest on this note are payable at maturity. The original issue discount of $25,000 will be allocated to interest expense, ratably, over the life of the note. This note is redeemable in stock, at the discretion of the Company, under the same conversion terms described above.

On October 18, 2018 , Global sold one of its notes to another investor. As a result of this sale, $250,000 in principal and $26,466 of accrued interest were assigned to the new investor and is no longer considered secured debt. Please refer to Note 11 for further discussion of this assignment. This note is redeemable in stock, at the discretion of the Company, under the same conversion terms described above.

On October 22, 2018 , the Company issued an additional promissory note to Global, pursuant to the note purchase and exchange agreement dated November 30, 2017 . In accordance with the agreement, the Company issued a note with a principal balance of $150,000 in exchange for gross proceeds of $125,000 . This note matures on October 22, 2019 . Principal and interest on this note are payable at maturity. The original issue discount of $25,000 will be allocated to interest expense, ratably, over the life of the note.




10

ASCENT SOLAR TECHNOLOGIES, INC.


All the notes issued in accordance with the note purchase and exchange agreement dated November 30, 2017 are secured by a security interest on substantially all of the Company’s assets, bear interest at a rate of 12% per annum and contain standard and customary events of default including but not limited to: (i) failure to make payments when due under the notes, and (ii) bankruptcy or insolvency of the Company. There are no registration rights applicable to the notes.

As of March 31, 2019 , the aggregate principal and interest balance of the Notes were $5,012,897 and $432,254 , respectively.

Pursuant to a number of factors outlined in ASC Topic 815,  Derivatives and Hedging , the conversion option in the notes were deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. The fair value measurements rely primarily on Company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the notes approximates management’s estimate of the fair value of the embedded derivative liability based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions identified below.

The following table summarizes the derivative liability transactions for these notes:

Derivative Liability Balance as of December 31, 2018
$
3,533,861

Change in fair value of derivative liability
(1,858,961
)
Derivative Liability Balance as of March 31, 2019
$
1,674,900


Due to the varying terms and varying issue dates, the tranches of this instrument were broken into five separate instruments for valuation purposes.

1)
The first valuation was done on the November 30, 2017 note with term of three years. The derivative value of this note was $1,764,068 as of December 31, 2018 .
2)
The second valuation was done on the group of notes dated November 30, 2017 , that had a term of one year. The derivative value of this group of notes was $418,965 as of December 31, 2018 .
3)
The third valuation was done on the note dated December 28, 2017 , which had a term of one year. The derivative value of this note was $150,126 on December 31, 2018 .
4)
The fourth valuation was done for the notes dated in the first quarter of 2018, which had a term of one year . The derivative value of this note was $900,757 on December 31, 2018 .
5)
The fifth valuation was done for the notes dated in the fourth quarter of 2018, which had a term of one year . The derivative value of this note was $299,945 on December 31, 2018 .

The derivative liability associated with the notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At March 31, 2019 , the Company conducted a fair value assessment of the embedded derivative associated with the three valuation groups discussed above.

1) For the November 30, 2017 3yr note: Management conducted a fair value assessment with the following assumptions: annual volatility of  63% , present value discount rate of  12% , and a dividend yield of  0% as of March 31, 2019 . As a result of the fair value assessment, the Company recorded a net gain of $522,328 as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of  $1,241,740  as of  March 31, 2019 .
2)
For the November 30, 2017 1yr notes: Management conducted a fair value assessment with the following assumptions: annual volatility of  72% present value discount rate of  12% and a dividend yield of  0% as of March 31, 2019 . As a result of the fair value assessment, the Company recorded a net gain of $296,790 as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of  $122,175  as of  March 31, 2019 .
3)
For the December 28, 2017 1yr note: Management conducted a fair value assessment with the following assumptions: annual volatility of  72% , present value discount rate of  12% , and a dividend yield of  0% as of March 31, 2019 . As a result of the fair value assessment, the Company recorded a net gain of $106,347 as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of  $43,779  as of  March 31, 2019 .

11

ASCENT SOLAR TECHNOLOGIES, INC.


4)
For the first quarter 2018 1yr notes: Management conducted a fair value assessment with the following assumptions: annual volatility of  72% , present value discount rate of  12% , and a dividend yield of  0% as of March 31, 2019 . As a result of the fair value assessment, the Company recorded a net gain of $638,085 as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of  $262,672  as of  March 31, 2019 .
5)
For the fourth quarter 2018 1yr notes: Management conducted a fair value assessment with the following assumptions: annual volatility of  50% , present value discount rate of  12% , and a dividend yield of  0% as of March 31, 2019 . As a result of the fair value assessment, the Company recorded a net gain of $295,411 as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of  $4,534  as of  March 31, 2019 .

The total cumulative net gain for the three months ended March 31, 2019 was $1,858,961 to reflect a total derivative liability of $1,674,900 as of March 31, 2019 .


St. George Secured Convertible Notes

On May 8, 2018 , the Company, entered into a note purchase agreement with St. George Investments LLC ("St. George"), for the private placement of a $575,000 secured convertible promissory note. The Company received $500,000 in aggregate proceeds for the note in two tranches and recorded and original issue discount of $50,000 and debt financing costs of $25,000 . The original issue discount and the financing costs will be recognized as interest expense, ratably, over the life of the note. The note bears interest at a rate of 10% per annum and matures on May 9, 2019 . All unredeemed principal and accrued interest is payable upon maturity. The note contains standard and customary events of default including but not limited to: (i) failure to make payments when due under the note, and (ii) bankruptcy or insolvency of the Company. In the event of default the interest rate increases to 22% per annum. The note is secured by a junior security interest on the Company's headquarters building, located in Thornton, Colorado. There are no registration rights applicable to this agreement.

Beginning in early November 2018, St. George shall have the option to require the Company to redeem all or a portion of the amounts outstanding under the note. The Company may pay the requested redemption amounts in cash or in the form of shares of common stock (subject to certain specified equity conditions). Payments in the form of Common Stock shall be calculated using a variable conversion price equal to (i) 60% of the average of the two lowest closing bid prices for the shares over (ii) the prior ten day trading period immediately preceding the redemption.

On November 5, 2018 , the Company entered into a second securities purchase agreement with St. George, for the private placement of a $1,220,000 secured convertible promissory note ("Company Note"). On November 7, 2018 , the Company received $200,000 of gross proceeds from the offering of the Company Note. In addition, the Company received additional consideration for the Company Note in the form of eight separate promissory notes of St. George (the “Investor Notes”) having an aggregate principal amount of $800,000 . The Company may receive additional cash proceeds of up to an aggregate of $800,000 through cash payments made from time to time by St George of principal and interest under the eight Investor Notes. The aggregate principal amount of the Company Note is divided into nine tranches, which tranches correspond to (i) the cash funding received on November 5, 2018 and (ii) the principal amounts of the eight Investor Notes. As of March 31, 2019 , the Company had received an additional $400,000 in proceeds and had recorded $1,220,000 in principal related to the Company and Investor Notes. The Company recorded original issue discounts of $200,000 and debt financing costs of $20,000 , which will be recognized as interest expense, ratably, over the life of the note. As of March 31, 2019 , the closing dates, closing amounts, and proceeds on completed Note tranches are as follows:


12

ASCENT SOLAR TECHNOLOGIES, INC.


Closing Date
Closing Amount
Proceeds
11/7/2018
$
260,000

$
200,000

11/19/2018
$
120,000

$
100,000

11/30/2018
$
120,000

$
100,000

12/7/2018
$
120,000

$
100,000

12/17/2018
$
120,000

$
100,000

1/3/2019
$
120,000

$
100,000

1/17/2019
$
120,000

$
100,000

1/30/2019
$
120,000

$
100,000

2/8/2019
$
120,000

$
100,000


The Notes bear interest at a rate of 10% per annum and matures on November 5, 2019 . All unredeemed principal and accrued interest is payable upon maturity. The Notes contain standard and customary events of default including but not limited to: (i) failure to make payments when due under the note, and (ii) bankruptcy or insolvency of the Company. In the event of default the interest rate increases to 22% per annum. The Notes are secured by a security interest on the Company's headquarters building, located in Thornton, Colorado. There are no registration rights applicable to this agreement.

Beginning in early May 2019, St. George shall have the option to redeem all or a portion of the amounts outstanding under the Company Note. At St. George's option, redemption amounts are payable by the Company in cash or in the form of shares of the common stock. Conversions into common stock shall be calculated using a variable conversion price equal to 60% of the average of the two lowest closing bid price for the shares over the prior ten day trading period immediately preceding the conversion.

On March 13, 2019 , the Company entered into a third securities purchase agreement with St. George, for the private placement of a $365,000 secured convertible promissory note ("Third Note"). The Company may receive $300,000 in proceeds under the Third Note, and as of March 13, 2019 , the Company had received $200,000 and had recorded $245,000 in principal related to the Third Note. The Company recorded original issue discounts of $40,000 and debt financing costs of $5,000 , which will be recognized as interest expense, ratably, over the life of the note. As of March 31, 2019 , the closing dates, closing amounts, and proceeds on completed Note tranches are as follows:

Closing Date
Closing Amount
Proceeds
3/15/2019
$
125,000

$
100,000

3/22/2019
$
120,000

$
100,000


The Note bears interest at a rate of 10% per annum and matures on March 13, 2020 . All unredeemed principal and accrued interest is payable upon maturity. The Notes contain standard and customary events of default including but not limited to: (i) failure to make payments when due under the note, and (ii) bankruptcy or insolvency of the Company. In the event of default the interest rate increases to 22% per annum. The Notes are secured by a security interest on the Company's headquarters building, located in Thornton, Colorado. There are no registration rights applicable to this agreement.

Beginning in early September 2019, St. George shall have the option to redeem all or a portion of the amounts outstanding under the Company Note. At St. George's option, redemption amounts are payable by the Company in cash or in the form of shares of the common stock. Conversions into common stock shall be calculated using a variable conversion price equal to 60% of the average of the two lowest closing bid price for the shares over the prior 10 day trading period immediately preceding the conversion.

Shares of common stock may not be issued pursuant to these notes if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 9.99% of the outstanding shares of common stock.

As of March 31, 2019 , the aggregate principal and interest balance of the Notes were $2,040,000 and $87,885 , respectively.





13

ASCENT SOLAR TECHNOLOGIES, INC.


Pursuant to a number of factors outlined in ASC Topic 815,  Derivatives and Hedging , the conversion option in the notes were deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. The fair value measurements rely primarily on Company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the notes approximates management’s estimate of the fair value of the embedded derivative liability based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions identified below.

The following table summarizes the derivative liability transactions for these notes:

Derivative Liability Balance as of December 31, 2018
$
3,292,692

Additional derivative liability on new notes
1,467,197

Change in fair value of derivative liability
(2,471,594
)
Derivative Liability Balance as of March 31, 2019
$
2,288,295


Due to the varying terms and varying issue dates, the tranches of this instrument were broken into three separate instruments for valuation purposes.

1)
The first valuation was done on the May 8, 2018 note with term of one year. The derivative value of this note was $1,568,730 as of December 31, 2018 .
2)
The second valuation was done on the November 5, 2018 notes with term of one year. The derivative value of this note was $1,723,962 as of December 31, 2018 . For the tranches of this note that were received in Q1 2019, the Company conducted an initial valuation. Although the notes were entered into at various dates, we used a weighted average date of January 22, 2019 for a combined valuation purpose. Management's analysis, using the following assumptions: annual volatility of  79% , present value discount rate of  12% , and a dividend yield of  0% , resulted in a fair value of the embedded derivative associated with these Notes of $469,686 as of January 22, 2019. The fair value of the derivative was greater than the face value at issuance and the difference of $69,686 was charged to interest expense at issuance. The remaining debt discount of $400,000 will be charged to interest expense ratably over the life of the note.
3)
The third valuation was done on the March 13, 2019 notes with a term of one year. For the Q1 2019 tranches received, the Company conducted an initial valuation. Although the notes were entered into at various dates, we used a weighted average issuance date of March 18, 2019 for a combined valuation purpose. Management's analysis, using the following assumptions: annual volatility of  80% , present value discount rate of  12% , and a dividend yield of  0% , resulted in a fair value of the embedded derivative associated with these Notes of $997,511 as of March 18, 2019. The fair value of the derivative was greater than the face value at issuance and the difference of $797,511 was charged to interest expense at issuance. The remaining debt discount of $200,000 will be charged to interest expense ratably over the life of the note.

The derivative liability associated with the notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At March 31, 2019 , the Company conducted a fair value assessment of the embedded derivative associated with the two valuation groups discussed above.

1)
For the May 2018 note: Management conducted a fair value assessment with the following assumptions: annual volatility of  35% , present value discount rate of  12% , and a dividend yield of  0% as of March 31, 2019 . As a result of the fair value assessment, the Company recorded a gain of $1,291,447 as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of  $277,283  as of  March 31, 2019 .
2)
For the November 5, 2018 notes: Management conducted a fair value assessment with the following assumptions: annual volatility of  92% , present value discount rate of  12% , and a dividend yield of  0% as of March 31, 2019 . As a result of the fair value assessment, the Company recorded a gain of $607,408 as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of  $1,586,240  as of  March 31, 2019 .
3)
For the March 13, 2019 notes: Management conducted a fair value assessment with the following assumptions: annual volatility of  82% , present value discount rate of  12% , and a dividend yield of  0% as of March 31, 2019 . As a result of the fair value assessment, the Company recorded a gain of $572,739 as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of  $424,772  as of  March 31, 2019 .

14

ASCENT SOLAR TECHNOLOGIES, INC.



The total cumulative net loss for the three months ended March 31, 2019 was $2,471,594 to reflect a total derivative liability of $2,288,295 as of March 31, 2019 .

Subsequent to the date of this report, the Company conducted additional secured transactions with St. George. Please refer to Note 15 for more information.

NOTE 10. PROMISSORY NOTES

The following table provides a summary of the activity of the Company's non-convertible, unsecured, promissory notes:

 
Investor 1
Investor 2
Total
Promissory Notes Principal Balance at December 31, 2017
$
494,437

$
200,000

$
694,437

New notes

850,000

850,000

Notes exchanged

(200,000
)
(200,000
)
Promissory Notes Principal Balance at December 31, 2018
494,437

850,000

1,344,437

Less: remaining discount

(104,583
)
(104,583
)
Promissory Notes, net of discount, at December 31, 2018
$
494,437

$
745,417

$
1,239,854

New notes

67,500

67,500

Notes exchanged

(235,000
)
(235,000
)
Promissory Notes Principal Balance at March 31, 2019
494,437

682,500

1,176,937

Less: remaining discount

(55,000
)
(55,000
)
Promissory Notes, net of discount, at March 31, 2019
$
494,437

$
627,500

$
1,121,937


Offering of Unsecured, Non-Convertible Notes to Investor 1

During October 2016, the Company received $420,000 from a private investor "Investor 1". These funds, along with $250,000 of additional funding, were rolled into a promissory note, executed on January 17, 2017 , in the amount of $700,000 issued with a discount of $30,000 which was charged to interest expense ratably over the term of the note. The note bears interest at 12% per annum and matures on July 17, 2017 . Principal and interest on this note were payable at maturity. This note is not convertible into equity shares of the Company and is unsecured.

On June 30, 2017, the Company and Investor 1 agreed to a 12 month payment plan on the balance of this promissory note. Interest will continue to accrue on this note at 12% per annum and payments of approximately $62,000 will be made monthly beginning in July 2017. The Company has not made all the payments according to this payment plan, and the note is payable upon demand.

As of March 31, 2019 , $205,563 of principal and $45,414 of interest had been paid on this note. The outstanding principal and accrued interest balances on the note as of March 31, 2019 were $494,437 and $101,089 , respectively.


Offering of Unsecured, Non-Convertible Notes to Investor 2

On June 6, 2018 , the Company initiated a second non-convertible, unsecured promissory note with Investor 2 for an aggregate principal amount of $315,000 . The promissory note was issued with an original issue discount of $55,000 , which will be recorded as interest expense ratably over the term of the note, resulting in proceeds to the company of $260,000 , that was received in several tranches between February 2018 and April 2018. This note bears interest at 12% per annum and matures on June 6, 2019 . All principal and interest is payable upon maturity. As of March 31, 2019 , the remaining principal and interest on on this note were $315,000 and $36,420 , respectively.

On July 24, 2018 , the Company initiated a third non-convertible, unsecured promissory note with Investor 2 for an aggregate principal amount of $115,000 . The promissory note was issued with an original issue discount of $27,500 , which will be recorded as interest expense ratably over the term of the note, resulting in proceeds to the company of $87,500 , which was received in several tranches between May 2018 and June 2018. This note bears interest at 12% per annum and matures on January 24, 2019 . Please see exchange note below.

15

ASCENT SOLAR TECHNOLOGIES, INC.


On September 10, 2018 , the Company initiated a fourth non-convertible, unsecured promissory note with Investor 2 for an aggregate principal amount of $120,000 . The promissory note was issued with an original issue discount of $20,000 , which will be recorded as interest expense ratably over the term of the note, resulting in proceeds to the company of $100,000 , which was received in several tranches between June 2018 and September 2018. This note bears interest at 12% per annum and matures on March 10, 2019 . Please see exchange note below.

On December 31, 2018 , the Company initiated a fifth non-convertible, unsecured promissory note with Investor 2 for an aggregate principal amount of $300,000 . The promissory note was issued with an original issue discount of $75,000 , which will be recorded as interest expense ratably over the term of the note, resulting in proceeds to the company of $225,000 , which was received in several tranches between September 2018 and December 2018. This note bears interest at 12% per annum and matures on June 30, 2019 . All principal and interest is payable upon maturity. As of March 31, 2019 , the remaining principal and interest on on this note were $300,000 and $13,954 , respectively.

On March 11, 2019 , the Company initiated a sixth non-convertible, unsecured promissory note with Investor 2 for an aggregate principal amount of $60,000 . The promissory note was issued with an original issue discount of $10,000 , which will be recorded as interest expense ratably over the term of the note, resulting in proceeds to the company of $50,000 , which was received in several tranches between January 2019 and March 2019. This note bears interest at 12% per annum and matures on September 11, 2019 . All principal and interest is payable upon maturity. As of March 31, 2019 , the remaining principal and interest on on this note were $60,000 and $847 , respectively.

Exchange of Promissory Notes for Convertible Notes

On March 11, 2019, the Company entered into two new securities exchange agreements with Investor 2. Pursuant to the terms of the exchange agreements, Investor 2 agreed to surrender and exchange two promissory notes in exchange for two convertible notes. The first promissory note had a principal balance of $115,000 and an accrued interest balance of $10,607 ; and the second promissory note has a principal balance of $120,000 and an accrued interest balance of $7,829 . See Note 11 for further discussion on the new convertible notes.

As of March 31, 2019 , the aggregate outstanding principal and interest for Investor 2 was $682,500 and $51,254 , respectively. Also, as of March 31, 2019 , Investor 2 had provided the Company with an additional $7,500 in proceeds which had not yet been documented into a note.

Subsequent to the date of this report, the Company conducted additional transactions with promissory notes. Please refer to Note 15 for more information.


























16

ASCENT SOLAR TECHNOLOGIES, INC.


NOTE 11. CONVERTIBLE NOTES

The following table provides a summary of the activity of the Company's unsecured, convertible, promissory notes:
 
Principal Balance 12/31/2017
New Notes
Notes assigned or exchanged
Notes converted
Principal Balance 12/31/2018
Less: Discount Balance
Net Principal Balance 12/31/18
October 2016 Notes
$
330,000

$

$

$

$
330,000

$

$
330,000

St. George Notes
1,705,833



(606,600
)
1,099,233

(96,177
)
1,003,056

BayBridge Notes
565,000


270,000

(772,500
)
62,500

(62,100
)
400

Bellridge Notes

150,000

550,000

(245,000
)
455,000

(123,360
)
331,640

Power Up Notes

225,000



225,000

(110,621
)
114,379

EMA Note

75,000



75,000

(1,753
)
73,247

 
$
2,600,833

$
450,000

$
820,000

$
(1,624,100
)
$
2,246,733

$
(394,011
)
$
1,852,722


 
Principal Balance 12/31/2018
New Notes
Notes assigned or exchanged
Notes converted
Principal Balance 3/31/2019
Less: Discount Balance
Net Principal Balance 3/31/19
October 2016 Notes
$
330,000

$

$

$

$
330,000

$

$
330,000

St. George Notes
1,099,233



(106,750
)
992,483


992,483

BayBridge Notes
62,500


310,000

(90,500
)
282,000

(269,500
)
12,500

Bellridge Notes
455,000



(65,615
)
389,385

(64,359
)
325,026

Power Up Notes
225,000

107,000


(182,500
)
149,500

(104,547
)
44,953

EMA Note
75,000


(75,000
)




Widjaja Note

330,000



330,000

(164,725
)
165,275

GS Capital Notes

108,068

75,000


183,068

(62,500
)
120,568

 
$
2,246,733

$
545,068

$
310,000

$
(445,365
)
$
2,656,436

$
(665,631
)
$
1,990,805




October 2016 Convertible Notes

On October 5, 2016 , the Company entered into a securities purchase agreement with a private investor for the private placement of $330,000 principal amount of convertible notes. At Closing, the Company sold and issued $330,000 principal amount of convertible notes in exchange for $330,000 of gross proceeds.

The convertible notes matured on December 31, 2017 and bear interest at a rate of 6% per annum, subject to increase to 24% per annum upon the occurrence and continuance of an event of default. Principal and accrued interest on the convertible notes is payable upon demand, the default interest rate has not been designated by the investor.




17

ASCENT SOLAR TECHNOLOGIES, INC.


All principal and accrued interest on the convertible notes is convertible at any time, in whole or in part, at the option of the investor, into shares of common stock at a variable conversion price equal to 80% of the lowest closing bid price of the Company’s common stock for the fifteen consecutive trading day period prior to the conversion date. After the six month anniversary of the issuance of any convertible note, the conversion price for such note shall thereafter be equal to 50% of the lowest closing bid price of the Company’s common stock for the fifteen consecutive trading day period prior to the conversion date.

The convertible notes contain standard and customary events of default including but not limited to: (i) failure to make payments when due under the convertible notes; and (ii) bankruptcy or insolvency of the Company.

Outstanding principal and accrued interest on the convertible notes were $330,000 and $49,885 , respectively as of March 31, 2019 .

Pursuant to a number of factors outlined in ASC Topic 815,  Derivatives and Hedging , the conversion option in the convertible notes were deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. As of December 31, 2018 , the fair value of the derivative liability was $876,481 .

The following table summarizes the derivative liability transactions for this note:

Derivative Liability Balance as of December 31, 2018
$
876,481

Additional derivative liability on new notes

Change in fair value of derivative liability
(481,408
)
Derivative Liability Balance as of March 31, 2019
$
395,073


The derivative liability associated with the convertible notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At March 31, 2019 , the Company conducted a fair value assessment of the embedded derivative associated with the convertible notes. As a result of the fair value assessment, the Company recorded a $481,408 gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations for the three months ended March 31, 2019 , to properly reflect the fair value of the embedded derivative of $395,073 as of March 31, 2019 .

The fair value measurements rely primarily on company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the convertible notes approximates management’s estimate of the fair value of the embedded derivative liability at  March 31, 2019  based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions: annual volatility of  72% , present value discount rate of  12% , and dividend yield of  0% .


St. George Convertible Note

On September 8, 2017 , the Company entered into a securities purchase agreement with St. George Investments, LLC ("St. George") for the private placement of $1,725,000 principal amount of the Company’s original issue discount convertible notes.
On September 11, 2017 , the Company sold and issued a $1,725,000 principal convertible note to St. George in exchange for $1,500,000 of gross proceeds, and paid $20,000 in financing costs. The original issue discount of $225,000 , and the financing costs, will be charged to interest expense, ratably, over the life of the note.

This note matured on March 11, 2019 . The note does not bear interest in the absence of an event of default. The note is due upon demand and an interest rate has not been designated by St. George.

For the first six months after the issuance of the convertible note, the Company will make a monthly cash repayment on the note of approximately $96,000 . Thereafter, St. George may request that the Company make monthly partial redemptions of the note up to $150,000 per month. If St. George does not request the full $150,000 redemption amount in any one month, the unused portion of such monthly redemption amount can be added to future monthly redemption amounts; however, in no event, can the amount requested for any one month exceed $275,000 .


18

ASCENT SOLAR TECHNOLOGIES, INC.


Redemption amounts are payable by the Company in cash. Beginning ten months after the issuance of the convertible note, cash redemption payments by the Company will be subject to a 15% redemption premium. The Company recorded an estimated cash premium of $172,500 , at inception, which has been charged to interest, ratably, over the life of the note.

Beginning six months after the issuance of the convertible note, the Company also has the option (subject to customary equity conditions) to pay redemption amounts in the form of shares of common stock. Payments in the form of shares would be calculated using a variable conversion price equal to the lower of (i) 85% of the average VWAP for the shares over the prior five trading days or (ii) the closing bid price for the shares on the prior trading day.

On May 1, 2018 , effective as of April 3, 2018 , in lieu of making the December 2017 through March 2018 cash payments, the the Company agreed to amend the variable conversion price formula outlined in the securities purchase agreement. As amended, payments in the form of shares would be calculated using a variable conversion price equal to the lower of (i) 60% of the lowest VWAP for the shares during the prior five trading days or (ii) the closing bid price for the shares on the prior trading day.

All principal and accrued interest on the convertible note is convertible at any time, in whole or in part, at the option of St. George into shares of common stock at a fixed conversion price of $4.00 per share.

The convertible note contains standard and customary events of default including but not limited to: (i) failure to make payments when due under the Note; and (ii) bankruptcy or insolvency of the Company. Upon the occurrence of an event of default, the convertible note will begin to bear interest at the rate of 22% per annum. In addition, upon the occurrence of an event of default, St. George has the option to increase the outstanding balance of the convertible note by 25% . The default provisions have not been designated by St. George.

In connection with the closing under the securities purchase agreement, the Company issued 37,500 unregistered shares of common stock to St. George as an origination fee. The closing stock price on the date of close was $1.70 resulting in an interest expense of $63,750 being recorded as of the date of close.

The convertible note may not be converted, and shares of common stock may not be issued pursuant to the convertible note 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.

As of March 31, 2019 , cash payments of $191,667 had been made on the convertible note, and $713,350 had been converted into 74,352,901 shares of the Company's common stock. The remaining balance on the note was $992,483 as of March 31, 2019 . The following table summarizes the conversion activity of this note:

Conversion Period
Principal Converted
Common Shares Issued
Q1 2018
$
75,000

187,500

Q2 2018
$
316,600

2,082,778

Q3 2018
$
102,500

3,142,333

Q4 2018
$
112,500

10,437,046

Q1 2019
$
106,750

58,503,244

 
$
713,350

74,352,901



Pursuant to a number of factors outlined in ASC Topic 815,  Derivatives and Hedging , the conversion option in the convertible note was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible note issuance and appropriately recorded that value as a derivative liability. As of December 31, 2018 , the derivative liability was  $1,060,000 .

The following table summarizes the derivative liability transactions for this note:

Derivative Liability Balance as of December 31, 2018
$
1,060,000

Change in fair value of derivative liability
(909,567
)
Derivative Liability Balance as of March 31, 2019
$
150,433


19

ASCENT SOLAR TECHNOLOGIES, INC.


The derivative liability associated with the convertible note is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At March 31, 2019 , the Company conducted a fair value assessment of the embedded derivative associated with the convertible note. As a result of the fair value assessment, the Company recorded a $909,567 gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations for the three months ended March 31, 2019 , to properly reflect the fair value of the embedded derivative of $150,433 as of March 31, 2019 .

The fair value measurements rely primarily on company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the convertible note approximates management’s estimate of the fair value of the embedded derivative liability at  March 31, 2019  based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions: annual volatility of  52% , present value discount rate of  12% , and dividend yield of  0% .


BayBridge Convertible Note

On September 7, 2018 , the Company, entered into an securities exchange agreement (“Exchange Agreement 2”) with Baybridge.

Pursuant to the terms of Exchange Agreement 2, BayBridge agreed to surrender and exchange an outstanding promissory note with a principal balance of $200,000 , plus accrued interest of $16,800 , for a convertible note with an aggregate principal amount of $270,000 and an original issue discount of $53,200 (“Exchange Note 2”).

Exchange Note 2 is unsecured, has no applicable registration rights, bears interest at a rate of 12% per annum, matures on September 7, 2019 and 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. Principal and interest are payable upon maturity.

BayBridge shall have the right, from and after the date of issuance of Exchange Note 2, and then at any time until Exchange Note 2 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 $0.15 , or (ii) 70% of the lowest traded price for the shares over the prior five trading days.

As of March 31, 2019 , Exchange Note 2 had been converted in full.

On March 11, 2019 , as described in Note 10, the Company, entered into two additional securities exchange agreements (“Exchange Agreements 3 & 4”) with Baybridge.

Pursuant to the terms of Exchange Agreement 3, BayBridge agreed to surrender and exchange an outstanding promissory notes with a principal balance of $115,000 , plus accrued interest of $10,607 , for a convertible note with an aggregate principal amount of $150,000 and an original issue discount of $24,393 (“Exchange Note 3”).

Pursuant to the terms of Exchange Agreement 4, BayBridge agreed to surrender and exchange an outstanding promissory notes with a principal balance of $120,000 , plus accrued interest of $7,829 , for a convertible note with an aggregate principal amount of $160,000 and an original issue discount of $32,171 (“Exchange Note 4”).

Exchange Notes 3 & 4 are unsecured, have no applicable registration rights, bear interest at a rate of 12% per annum, mature on March 11, 2020 and contain 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. Principal and interest are payable upon maturity.

BayBridge shall have the right, from the date of issuance of Exchanges Note 3 & 4, and then at any time until Exchange Notes 3 & 4 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 $0.15 , or (ii) 70% of the lowest traded price for the shares over the prior five trading days.

Conversion to shares of common stock may not be issued pursuant to Exchange Notes 3 & 4 if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 9.99% of the outstanding shares of common stock.


20

ASCENT SOLAR TECHNOLOGIES, INC.


As of March 31, 2019 , aggregate principal of $298,000 and interest of $7,581 had been converted into 63,409,004 shares of common stock and no cash payments of principal or interest had been made on these exchange notes. Exchange Note 2 had been converted in full. The principal and accrued interest balances on Exchange Notes 3 & 4, as of March 31, 2019 , were $282,000 and $4,494 , respectively.

The following table summarizes the conversion activity of these notes:

Conversion Period
Principal Converted
Interest Converted
Common Shares Issued
Q4 2018
$
207,500

$
4,303

16,008,198

Q1 2019
$
90,500

$
3,278

47,400,806

 
$
298,000

$
7,581

63,409,004


Pursuant to a number of factors outlined in ASC Topic 815,  Derivatives and Hedging , the conversion options in these notes were deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability.

The following table summarizes the derivative liability transactions for these notes:

Derivative Liability Balance as of December 31, 2018
$
113,846

Additional derivative liability on new notes
310,640

Change in fair value of derivative liability
(134,553
)
Liability extinguished
(113,846
)
Derivative Liability Balance as of March 31, 2019
$
176,087


At December 31, 2018 , the derivative liability associated with Exchange Note 2 was $113,846 . During the three months ended March 31, 2019 , Exchange Note 2 had been fully converted and the remaining derivative liability of $113,846 was recorded as a gain to "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations.

The conversion options in Exchange Notes 3 & 4 were deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At March 11, 2019 , the derivative liability associated with Exchange Notes 3 & 4 was $310,640 . The fair value of the derivative was greater than the face value at issuance and the difference of $57,204 was charged to interest expense at issuance. The remaining debt discount of $253,436 will be charged to interest expense ratably over the life of the note.

The derivative liability associated with these notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At  March 31, 2019 , the Company conducted a fair value assessment of the embedded derivative associated with the Exchange Notes 3 & 4. As a result of the fair value assessment, the Company recorded a $134,553 gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations for the three months ended March 31, 2019 to properly reflect the fair value of the embedded derivative of  $176,087  as of  March 31, 2019 .

The fair value measurements rely primarily on company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with Exchange Notes 3 & 4 approximates management’s estimate of the fair value of the embedded derivative liability at  March 31, 2019  based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions: annual volatility of  69% , present value discount rate of  12% and dividend yield of  0% .






21

ASCENT SOLAR TECHNOLOGIES, INC.


Bellridge Convertible Notes

On July 25, 2018 , as described in Note 11, the Company, entered into a securities exchange agreement (the “Exchange Agreement”) with Bellridge Capital, LP ("Bellridge"). Pursuant to the terms of the Exchange Agreement, the investor agreed to surrender and exchange a promissory note with a principal balance of $275,000 and accrued interest of $20,071 . In exchange, the Company issued to the investor an unsecured convertible note with an aggregate principal amount of $300,000 (the “Exchange Note”). The original issue discount of $4,929 was charged to interest expense upon issuance. The Exchange Note is not secured, bears interest at a rate of 12% per annum, and will matured on January 25, 2019 ; principal and interest on the Exchange Note are due upon demand. The investor shall have the right, from and after the date of issuance of this note and then at any time until the note is fully paid, to convert any outstanding and unpaid principal into shares of the Company's common stock at a variable conversion price equal to the lesser of (i) a price equal to $0.20 , or (ii) 80% of the lowest traded price for the shares over the prior ten trading days.

On September 14, 2018 , the “Company, issued a new $150,000 convertible note in a private placement to Bellridge. The note is not secured, contains no registration rights, bears interest at a rate of 12% per annum, will mature on September 14, 2019 , and contains standard and customary events of default including but not limited to: (i) failure to make payments when due under the note, and (ii) bankruptcy or insolvency of the Company. All principal and interest on the note are due upon maturity. Bellridge shall have the option to convert all or a portion of the amounts outstanding under the note, into shares of the Company's common stock. Conversions into common stock shall be calculated using a variable conversion price equal to the lesser of (i) $0.20 or (ii) 70% of the lowest closing bid price for the shares over the prior five day trading period immediately preceding the conversion.

On October 18, 2018 , as discussed in Note 9, Global assigned one of its notes to Bellridge. The note had an outstanding principal balance of $250,000 and an accrued interest balance of $26,466 . The note matures on October 18, 2019 , and all principal and interest is due upon maturity. The principal and accrued interest on the note are redeemable at any time, in whole or in part, at the option of Bellridge. The redemption amount may be paid in cash or converted into shares of common stock at a variable conversion price equal to the lowest of (i) 85% of the average VWAP for the shares over the prior five trading days, (ii) the closing bid price for the shares on the prior trading day, or (iii) $0.20 per share, at the option of the Company.
 
Shares of common stock may not be issued pursuant to any of these 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.

As of March 31, 2019 , an aggregate principal of $310,615 and interest of $10,611 , on the Bellridge convertible notes had been converted into 49,966,214 shares of common stock and no cash payments of principal or interest had been made. The aggregate principal and accrued interest balances as of March 31, 2019 were $389,385 and $49,155 , respectively. The following table summarizes the conversion activity of these notes:

Conversion Period
Principal Converted
Interest Converted
Common Shares Issued
Q3 2018
$
137,500

$
2,104

3,715,476

Q4 2018
$
107,500

$
4,000

7,554,399

Q1 2019
$
65,615

$
4,507

38,696,339

 
$
310,615

$
10,611

49,966,214



Pursuant to a number of factors outlined in ASC Topic 815,  Derivatives and Hedging , the conversion option in these convertible notes were deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At December 31, 2018 , the derivative liability associated with these notes was $486,279 .

The following table summarizes the derivative liability transactions for this note:

Derivative Liability Balance as of December 31, 2018
$
486,279

Liability extinguished
(43,521
)
Change in fair value of derivative liability
(376,119
)
Derivative Liability Balance as of March 31, 2019
$
66,639



22

ASCENT SOLAR TECHNOLOGIES, INC.


The derivative liability associated with these notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At  March 31, 2019 , the Company conducted a fair value assessment of the embedded derivative associated with the notes. As a result of the fair value assessment, the Company recorded a $376,119 gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations for the three months ended March 31, 2019 to properly reflect the fair value of the embedded derivative of  $66,639  as of  March 31, 2019 .

The fair value measurements rely primarily on Company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the notes approximates management’s estimate of the fair value of the embedded derivative liability at  March 31, 2019  based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions: annual volatility between 72% and 49% , present value discount rate of  12% , and dividend yield of  0% .


PowerUp Convertible Notes

On August 1, 2018 , the Company, entered into a securities purchase agreement with Power Up Lending Group LTD, for the private placement of a $130,000 convertible note . This note is unsecured, bears interest at a rate of 8% per annum, and matures on August 1, 2019 ; principal and interest is due upon maturity. In the event of default, the interest rate per annum increases to 22% .

Beginning in February 2019, Power Up shall have the option to convert all or a portion of the amounts outstanding under the convertible note, into shares of the Company's common stock. Conversions into common stock shall be calculated using a variable conversion price equal to 65% of the average of the three lowest closing bid prices for the shares over the prior ten day trading period immediately preceding the conversion. As of March 31, 2019 , this note had been converted in full.

On September 4, 2018 , the Company entered into a second securities purchase agreement with Power Up, for the private placement of a second convertible note with a principal value of $52,500 . This note is unsecured, bears interest at a rate of 8% per annum, and matures on September 4, 2019 ; principal and interest is due upon maturity. In the event of default, the interest rate per annum increases to 22% .

Beginning in March 2019, Power Up shall have the option to convert all or a portion of the amounts outstanding under the convertible note, into shares of the Company's common stock. Conversions into common stock shall be calculated using a variable conversion price equal to 65% of the average of the three lowest trading prices for the shares over the prior ten day trading period immediately preceding the conversion. As of March 31, 2019 , this note had been converted in full.

On October 17, 2018 , the Company entered into a third securities purchase agreement with Power Up, for the private placement of a third convertible note with a principal value of $42,500 . This note is unsecured, bears interest at a rate of 8% per annum, and matures on October 16, 2019 ; principal and interest is due upon maturity. In the event of default, the interest rate per annum increases to 22% .

Beginning in April 2019, Power Up shall have the option to convert all or a portion of the amounts outstanding under the convertible note, into shares of the Company's common stock. Conversions into common stock shall be calculated using a variable conversion price equal to 65% of the average of the three lowest trading prices for the shares over the prior ten day trading period immediately preceding the conversion.

On February 14, 2019 , the Company entered into a fourth securities purchase agreement with Power Up, for the private placement of a third convertible note with a principal value of $54,500 . This note is unsecured, bears interest at a rate of 8% per annum, and matures on February 14, 2020 ; principal and interest is due upon maturity. In the event of default, the interest rate per annum increases to 22% .

Beginning in August 2019, Power Up shall have the option to convert all or a portion of the amounts outstanding under the convertible note, into shares of the Company's common stock. Conversions into common stock shall be calculated using a variable conversion price equal to 65% of the average of the three lowest trading prices for the shares over the prior ten day trading period immediately preceding the conversion.




23

ASCENT SOLAR TECHNOLOGIES, INC.


On March 7, 2019 , the Company entered into a fifth securities purchase agreement with Power Up, for the private placement of a third convertible note with a principal value of $52,500 . This note is unsecured, bears interest at a rate of 8% per annum, and matures on March 7, 2020 ; principal and interest is due upon maturity. In the event of default, the interest rate per annum increases to 22% .

Beginning in September 2019, Power Up shall have the option to convert all or a portion of the amounts outstanding under the convertible note, into shares of the Company's common stock. Conversions into common stock shall be calculated using a variable conversion price equal to 65% of the average of the three lowest trading prices for the shares over the prior ten day trading period immediately preceding the conversion.

Shares of common stock may not be issued pursuant to any of these 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.

As of March 31, 2019 , $182,500 of principal and $7,300 of interest had been converted into 95,014,902 shares of common stock and no cash payments of principal or interest had been made. The aggregate principal and accrued interest balances as of March 31, 2019 were $149,500 and $3,103 , respectively. The following table summarizes the conversion activity of these notes:

Conversion Period
Principal Converted
Interest Converted
Common Shares Issued
Q1 2019
$
182,500

$
7,300

95,014,902

 
$
182,500

$
7,300

95,014,902


Pursuant to a number of factors outlined in ASC Topic 815,  Derivatives and Hedging , the conversion option in the first note was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At December 31, 2018 , the derivative liability associated with these notes was $511,137 .

The following table summarizes the derivative liability transactions for this note:

Derivative Liability Balance as of December 31, 2018
$
511,137

Additional derivative liability on new notes
130,653

Liability extinguishment
(417,591
)
Change in fair value of derivative liability
(31,240
)
Derivative Liability Balance as of March 31, 2019
$
192,959


During the three months ended March 31, 2019 , the first and second notes had been fully converted and the remaining derivative liability of $417,591 was recorded as a gain to "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations.

The conversion option in the fourth note was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At February 14, 2019 , the derivative liability associated with the fourth note was $43,788 .

The conversion option in the fifth note was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At March 7, 2019 , the derivative liability associated with the second note was $86,865 . The fair value of the derivative was greater than the face value at issuance and the difference of $34,365 was charged to interest expense at issuance. The remaining debt discount of $52,500 will be charged to interest expense ratably over the life of the note.






24

ASCENT SOLAR TECHNOLOGIES, INC.


The derivative liability associated with these notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At  March 31, 2019 , the Company conducted a fair value assessment of the embedded derivative associated with the notes. As a result of the fair value assessment, the Company recorded a $31,240 gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations for the three months ended March 31, 2019 to properly reflect the fair value of the embedded derivative of  $192,959  as of  March 31, 2019 .

The fair value measurements rely primarily on company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the convertible notes approximates management’s estimate of the fair value of the embedded derivative liability at  March 31, 2019  based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions: annual volatility between  69% and 71% , present value discount rate of  12% , and dividend yield of  0% .


EMA Convertible Note

On August 29, 2018 , the Company, entered into a securities purchase agreement with EMA Financial, LLC, for the private placement of a $75,000 convertible note. The note is unsecured, bears interest at a rate of 8% per annum, and matures on May 29, 2019 ; principal and interest is due upon maturity. In the event of default, the interest rate per annum increases to 22% .

Beginning in March 2019, EMA shall have the option to convert all or a portion of the amounts outstanding under the note, into shares of the Company's Common Stock. Conversions into Common Stock shall be calculated using a variable conversion price equal to 65% of the average of the three lowest closing bid prices for the shares over the prior ten day trading period immediately preceding the conversion.

Shares of common stock may not be issued pursuant to the note 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.

On February 22, 2019, EMA assigned this note to GS Capital (see below). Per the terms of this agreement, $75,000 of principal and $2,909 of accrued interest were sold to the new investor and the Company paid $27,268 to EMA as a pre-payment penalty.

Pursuant to a number of factors outlined in ASC Topic 815,  Derivatives and Hedging , the conversion option in the note was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At December 31, 2018 , the derivative liability associated with the note was $240,156 .

The following table summarizes the derivative liability transactions for this note:

Derivative Liability Balance as of December 31, 2018
$
240,156

Liability extinguishment
(240,156
)
Derivative Liability Balance as of March 31, 2019
$


During the three months ended March 31, 2019 , the note had been fully converted and the remaining derivative liability of $240,156 was recorded as a gain to "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations.


Widjaja Convertible Note

On January 11, 2019 , the Company entered into a note purchase with Jason Widjaja (“Widjaja”), for the private placement of a $330,000 convertible promissory note, in exchange for $330,000 of gross proceeds. The note is unsecured, bears interest at 12% per annum, matures on January 11, 2020 , and contains standard and customary events of default including but not limited to: (i) failure to make payments when due under the note, and (ii) bankruptcy or insolvency of the Company. Principal and interest on the note will be payable upon maturity.


25

ASCENT SOLAR TECHNOLOGIES, INC.


At any time after inception of the note, until fully paid, Widjaja shall have the option to convert all or a portion of amounts outstanding under the note into shares of the Company's common stock. Conversions into common stock shall be calculated using a variable conversion price equal to 80% of the lowest closing bid price for the shares over the prior five trading days immediately preceding the conversion date.

There are no registration rights applicable to the note. Shares of common stock may not be issued pursuant to the note if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 19.99% of the outstanding shares of the Company's common stock.

As of March 31, 2019 , no principal and no interest had been converted into shares of common stock and no cash payments of principal or interest had been made. The aggregate principal and accrued interest balances as of March 31, 2019 were $330,000 and $8,571 , respectively.

Pursuant to a number of factors outlined in ASC Topic 815,  Derivatives and Hedging , the conversion option in the first note was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability.

The following table summarizes the derivative liability transactions for this note:

Derivative Liability Balance as of December 31, 2018
$

Additional derivative liability on new notes
219,634

Change in fair value of derivative liability
(93,463
)
Derivative Liability Balance as of March 31, 2019
$
126,171


The conversion option in the Widjaja note was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At January 11, 2019 , the derivative liability associated with the Widjaja note was $219,634 .

The derivative liability associated with these notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At  March 31, 2019 , the Company conducted a fair value assessment of the embedded derivative associated with the notes. As a result of the fair value assessment, the Company recorded a $93,463 gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations for the three months ended March 31, 2019 to properly reflect the fair value of the embedded derivative of  $126,171  as of  March 31, 2019 .

The fair value measurements rely primarily on company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the convertible notes approximates management’s estimate of the fair value of the embedded derivative liability at  March 31, 2019  based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions: annual volatility of 73% , present value discount rate of  12% , and dividend yield of  0% .


GS Capital Convertible Note

On February 22, 2019 , the Company sold and issued to GS Capital Partners, LLC (“GS”) a $108,068 aggregate principal amount unsecured convertible promissory note in exchange for $75,000 of gross proceeds, $5,800 in financing costs, and $27,268 of premium associated with the assignment of the EMA note (see above). The note is unsecured, bears interest at 8% per annum, matures on February 22, 2020 , and contains standard and customary events of default including but not limited to: (i) failure to make payments when due under the note, and (ii) bankruptcy or insolvency of the Company. Principal and interest on the note will be payable upon maturity.

At any time after inception of the note until fully paid, GS shall have the option to convert all or a portion of amounts outstanding under the note into shares of the Company's common stock. Conversions into common stock shall be calculated using a variable conversion price equal to 65% of the average of the three lowest closing bid price for the shares over the prior ten day trading period immediately preceding the conversion.

26

ASCENT SOLAR TECHNOLOGIES, INC.


There are no registration rights applicable to the note. Shares of common stock may not be issued pursuant to the note 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 the Company's common stock.

On February 22, 2019, GS purchased $75,000 in convertible notes, plus accrued interest, from EMA. The terms of the note remain the same.

As of March 31, 2019 , no principal and no interest had been converted into shares of common stock and no cash payments of principal or interest had been made. The aggregate principal and accrued interest balances as of March 31, 2019 were $183,068 and $4,394 , respectively.

Pursuant to a number of factors outlined in ASC Topic 815,  Derivatives and Hedging , the conversion option in the first note was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability.

The following table summarizes the derivative liability transactions for this note:

Derivative Liability Balance as of December 31, 2018
$

Additional derivative liability on new notes
101,063

Derivative liability assigned
240,156

Change in fair value of derivative liability
(293,647
)
Derivative Liability Balance as of March 31, 2019
$
47,572



The conversion option in the GS note was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At January 11, 2019 , the derivative liability associated with the GS note was $101,063 . The fair value of the derivative was greater than the face value at issuance and the difference of $26,063 was charged to interest expense at issuance. The remaining debt discount of $75,000 will be charged to interest expense ratably over the life of the note.

The derivative liability assigned to GS from EMA, at February 22, 2019, was $240,156 .

The derivative liability associated with these notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At  March 31, 2019 , the Company conducted a fair value assessment of the embedded derivative associated with the notes. As a result of the fair value assessment, the Company recorded a $293,647 gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations for the three months ended March 31, 2019 to properly reflect the fair value of the embedded derivative of  $47,572  as of  March 31, 2019 .

The fair value measurements rely primarily on company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the convertible notes approximates management’s estimate of the fair value of the embedded derivative liability at  March 31, 2019  based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions: annual volatility between 35% and 70% , present value discount rate of  12% , and dividend yield of  0% .

Subsequent to the date of this report, the Company conducted additional transactions with convertible notes. Please refer to Note 15 for more information.








27


NOTE 12. SERIES A PREFERRED STOCK

In June 2013, the Company entered into a Securities Purchase Agreement with an investor to sell an aggregate of $750,000 shares of Series A Preferred Stock at a price of $8.00 per share, resulting in gross proceeds of $6,000,000 . This purchase agreement included warrants to purchase up to 13,125 shares of common stock of the Company. The transfer of cash and securities took place incrementally, the first closing occurring on June 17, 2013 with the transfer of 125,000 shares of Series A Preferred Stock and a warrant to purchase 2,187 shares of common stock for $1,000,000 . The final closings took place in August 2013, with the transfer of 625,000 shares of Series A Preferred Stock and a warrant to purchase 10,938 shares of common stock for $5,000,000 .

Holders of Series A Preferred Stock are entitled to cumulative dividends at a rate of 8% per annum when and if declared by the Board of Directors in its sole discretion. The dividends may be paid in cash or in the form of common stock (valued at 10% below market price, but not to exceed the lowest closing price during the applicable measurement period), at the discretion of the Board of Directors. The dividend rate on the Series A Preferred Stock is indexed to the Company's stock price and subject to adjustment. In addition, the Series A Preferred Stock contains a make-whole provision whereby, conversion or redemption of the preferred stock within 4 years of issuance will require dividends for the full four year period to be paid by the Company in cash or common stock (valued at 10% below market price, but not to exceed the lowest closing price during the applicable measurement period). This make-whole provision expired in June 2017.

The Series A Preferred Stock may be converted into shares of common stock at the option of the Company if the closing price of the common stock exceeds $232 , as adjusted, for twenty consecutive trading days, or by the holder at any time. The Company has the right to redeem the Series A Preferred Stock at a price of $8.00 per share, plus any accrued and unpaid dividends, plus the make-whole amount (if applicable). At March 31, 2019 , the preferred shares were not eligible for conversion to common shares at the option of the Company. The holder of the preferred shares may convert to common shares at any time, at no cost, at a ratio of 12,656 preferred shares into 1 common share (subject to standard ratable anti-dilution adjustments). Upon any conversion (whether at the option of the Company or the holder), the holder is entitled to receive any accrued but unpaid dividends.
 
Except as otherwise required by law (or with respect to approval of certain actions), the Series A Preferred Stock shall have no voting rights. Upon any liquidation, dissolution or winding up of the Company, after payment or provision for payment of debts and other liabilities of the Company, the holders of Series A Preferred Stock shall be entitled to receive, pari passu with any distribution to the holders of common stock of the Company, an amount equal to $8 per share of Series A Preferred Stock plus any accrued and unpaid dividends.

During the three months ended March 31, 2019 , 12,656 shares Series A Preferred Stock, plus $70,527 of accrued dividends were converted into 1 share and 9,795,396 shares of the Company's common stock, respectively. As of March 31, 2019 , there were 48,100 shares of Series A Preferred Stock outstanding and accrued and unpaid dividends of $283,131 .

NOTE 13. STOCKHOLDERS’ EQUITY (DEFICIT)

Common Stock

Reverse Stock Split

On July 19, 2018, the Company, filed a Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware to effect a reverse stock split of the Company’s common stock, at a ratio of one-for-one thousand (the “Reverse Stock Split”).

The Certificate of Amendment provides that the Reverse Stock Split became effective as of 5:00 p.m. Eastern Time on July 20, 2018 (the “Effective Time”), at which time every thousand shares of the Company’s issued and outstanding Common Stock were automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. The Certificate of Amendment provides that in the event a stockholder would otherwise be entitled to receive a fraction of a share of Common Stock, such stockholder shall receive one whole share of Common Stock in lieu of such fractional share and no fractional shares shall be issued.

Immediately following the Reverse Stock Split, the Company had approximately 19 million shares of Common Stock issued and outstanding. The number of authorized shares of the Company’s Common Stock remains at 20 billion . The number of shares of the Company’s Series A preferred stock outstanding was not affected by the Reverse Stock Split. However, the number of shares of Common Stock into which each outstanding share of Series A preferred stock is convertible will be adjusted proportionately as a result of the Reverse Stock Split. All outstanding RSUs, stock options, warrants and rights to purchase shares of Common Stock was adjusted proportionately.

28

ASCENT SOLAR TECHNOLOGIES, INC.


Trading of the Company’s Common Stock continued on the OTC Marketplace on a split-adjusted basis on July 23, 2018.

At March 31, 2019 , the Company had 20 billion shares of common stock, $0.0001 par value, authorized for issuance. Each share of common stock has the right to one vote. As of March 31, 2019 , the Company had 322,543,901 shares of common stock outstanding. The Company has not declared or paid any dividends related to the common stock through March 31, 2019 .

Preferred Stock

At March 31, 2019 , the Company had 25,000,000 shares of preferred stock, $0.0001 par value, authorized for issuance. Preferred stock may be issued in classes or series. Designations, powers, preferences, rights, qualifications, limitations and restrictions are determined by the Company’s Board of Directors.  The following table summarizes the designations, shares authorized, and shares outstanding for the Company's Preferred Stock:

Preferred Stock Series Designation
Shares Authorized
Shares Outstanding
Series A
750,000

48,100

Series B-1
2,000


Series B-2
1,000


Series C
1,000


Series D
3,000


Series D-1
2,500


Series E
2,800


Series F
7,000


Series G
2,000


Series H
2,500


Series I
1,000


Series J
1,350


Series J-1
1,000


Series K
20,000



Series A Preferred Stock

Refer to Note 12 for Series A Preferred Stock activity.

Series B-1, B-2, C, D, D-1, E, F, G, H, I, J, J-1, and K Preferred Stock

There were no transactions involving the Series B-1, B-2, C, D, D-1, H, I, J, J-1, or K during the three months ended March 31, 2019 .

NOTE 14. EQUITY PLANS AND SHARE-BASED COMPENSATION

Share-Based Compensation: The Company measures share-based compensation cost at the grant date based on the fair value of the award and recognizes this cost as an expense over the grant recipients’ requisite service periods for all awards made to employees, officers, directors and consultants.

The share-based compensation expense recognized in the Consolidated Statements of Operations was as follows:  
 
 
For three months ended March 31,
 
For three months ended March 31,
 
 
2019
 
2018
Research and development
 
$

 
$
454

Selling, general and administrative
 
$
4,346

 
$
13,870

Total share-based compensation cost
 
$
4,346

 
$
14,324



29

ASCENT SOLAR TECHNOLOGIES, INC.


The following table presents share-based compensation expense by type: