Item 1.01 Entry into a Material Definitive Agreement.
Offering of Series1A Convertible Preferred Stock – Second
Tranche Closing
As previously disclosed, on September 22, 2020, Ascent Solar Technologies,
Inc., a Delaware corporation (the “Company”) entered into a securities purchase agreement (“Series 1A SPA”)
with Crowdex Investments, LLC, a private investor (“Crowdex”), for the private placement of up to $5,000,000 of the
Company’s newly designated Series 1A Convertible Preferred Stock (“Series 1A Preferred Stock”).
The Company sold 2,000 shares of Series 1A Preferred Stock to Crowdex
in exchange for $2,000,000 of gross proceeds at an initial First Tranche closing under the Series 1A SPA on September 22, 2020.
The Series 1A SPA also provided for the Company to sell an additional 3,000 shares of Series 1A Preferred Stock to Crowdex in exchange
for $3,000,000 of gross proceeds at a Second Tranche closing initially scheduled for November 20, 2020.
As previously disclosed, on November 27, 2020, the Company issued
to Crowdex a $500,000 unsecured convertible promissory note (“Crowdex Note”) in a private placement and received $500,000
of gross proceeds from the offering of the Crowdex Note.
On December 31, 2020, the Company sold 500 shares of Series 1A Preferred
Stock to Crowdex in exchange for the cancellation of the Crowdex Note issued on November 27, 2020. There were no additional cash
proceeds from this closing. The Company and Crowdex also amended the Series 1A SPA to reduce Crowdex’s Tranche 2 closing
commitment from $3 million to $500,000.
On January 4, 2021, the Company entered into a new securities purchase
agreement (“Series 1A Tranche 2 SPA”) with TubeSolar AG, a developer of photovoltaic thin-film tubes to enable additional
application opportunities in solar power generation compared to conventional solar modules (“TubeSolar”). TubeSolar
is a public company headquartered in Augsburg, Germany, whose shares are listed on XETRA (primary market Dusseldorf, Germany).
Pursuant to the Series 1A Tranche 2 SPA, the Company sold 2,500
shares of Series 1A Preferred Stock to TubeSolar and received $2,500,000 of gross proceeds on January 5, 2021. The proceeds of
the Second Tranche closing of Series 1A Preferred Stock will be used for the Company’s general corporate purposes.
There are no registration rights applicable to the Series 1A Preferred
Stock.
Following the Second Tranche closing, the Company has 3,800 shares
of Series 1A Preferred Stock outstanding. As previously reported, in November 2020 Crowdex converted 1,200 shares of Series 1A
Preferred Stock into 12,000,000,000 shares of Common Stock.
Terms of the Series 1A Preferred Stock
In September 2020, the Company filed a Certificate of Designations
of Preferences, Rights and Limitations of Series 1A Preferred Stock (“Certificate of Designation”) with the Secretary
of State of the State of Delaware.
Rank
The Certificate of Designation provides that the Series 1A Preferred
Stock ranks senior to the common stock with respect to dividends and rights upon liquidation.
Dividends
Holders of the Series 1A Preferred Stock will not be entitled to
any fixed rate of dividends. If the Company pays a dividend or otherwise makes a distribution or distributions payable on shares
of Common Stock, then the Company shall pay such dividend or make such distribution to the holders of the Series 1A Preferred Stock
in such amounts as each share of Series 1A Preferred Stock would have been entitled to receive if such share of Series 1A Preferred
Stock was converted into shares of Common Stock at the time of payment of such stock dividend or distribution.
Conversion Rights
Shares of the Series 1A Preferred Stock will be convertible at the
option of the holder into common stock at a fixed conversion price equal to $0.0001.
Redemption
There is no scheduled or mandatory redemption for the Series 1A
Preferred Stock. There is no redemption for the Series 1A Preferred Stock exercisable (i) at the option of the Investor, or (ii)
at the option of the Company.
Liquidation Value
Upon our liquidation, dissolution or winding up, holders of Series
1A Preferred Stock will be entitled to be paid out of our assets, prior to the holders of our common stock, an amount equal to
$1,000 per share plus any accrued but unpaid dividends (if any) thereon.
Voting Rights
On any matter presented to the stockholders of the Company for their
action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting),
each holder of outstanding shares of Series 1A Preferred Stock shall be entitled to cast the number of votes equal to the number
of whole shares of Common Stock into which the outstanding shares of Series 1A Preferred Stock held by such holder are convertible
as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions
of the Series 1A Preferred Stock, holders of Series 1A Preferred Stock shall vote together with the holders of Common Stock as
a single class and on an as-converted to Common Stock basis.
The Series 1A Preferred Stock is convertible into shares of Common
Stock at a conversion price of $0.0001 per common share. Holders of the Series 1A Preferred Stock generally shall vote together
with the holders of Common Stock as a single class and on an as-converted to Common Stock basis on any matter presented to the
stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent
of stockholders in lieu of meeting).
Pursuant to the conversion and voting terms of the Series 1A Preferred
Stock described above, Crowdex (as the current holder of 1,300 shares of Series 1A Preferred Stock and 12 billion shares of Common
Stock) and Tube (as the current holder of 2,500 shares of Series 1A Preferred Stock) each would be entitled to cast 25 billion
votes on any matter to be considered by stock holders for approval at any meeting of stockholders of the Company (or by written
consent of stockholders in lieu of meeting). The Company has approximately 18.1 billion shares of Common Stock currently outstanding.
Accordingly, each of Crowdex and Tube currently would be able to cast approximately 45% of the votes entitled to vote at any meeting
of stockholders of the Company (or written consent of stockholders in lieu of meeting). Crowdex and Tube, therefore, currently
will be able to exert significant influence on all matters requiring stockholder approval, including the election of directors
and other significant corporate transactions.
* * * * * *
The foregoing description of the Series 1A
Preferred Stock and related securities purchase agreements is a summary and is qualified in its entirety by reference to the documents
attached hereto as Exhibits, which documents are incorporated herein by reference.