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 September 30, ~~2017~~2019



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:

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of ~~November 10, 2017,~~December 2, 2019, there were ~~8,931,765,830~~4,187,161,650 shares of our common stock issued and outstanding.

ASCENT SOLAR TECHNOLOGIES, INC.

Quarterly Report on Form 10-Q

Quarterly Period Ended September 30, ~~2017~~2019

Table of Contents




PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (unaudited)	41
	Condensed Consolidated Balance Sheets - ~~For the Nine Months Ended~~as of September 30, ~~2017~~2019 and ~~the Year Ended~~ December 31, ~~2016~~2018 (unaudited)	41
	Condensed ~~and~~ Consolidated Statements of Operations - For the Three and Nine Months Ended September 30, ~~2017~~2019 and September 30, ~~2016~~2018 (unaudited)	52
	Condensed Consolidated Statements of Changes in Stockholder's Deficit - for the Three and Nine Months Ended September 30, 2019 and September 30, 2018 (unaudited)	3
	Condensed Consolidated Statements of Cash Flow - For the Nine Months Ended September 30, ~~2017~~2019 and September 30, ~~2016~~2018 (unaudited)	65
	Notes to Condensed Consolidated Financial Statements (unaudited)	76
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3130
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4137
Item 4.	Controls and Procedures	4237
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	4439
Item 1A.	Risk Factors	4439
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4439
Item 3.	Defaults Upon Senior Securities	4439
Item 4.	Mine Safety Disclosures	4439
Item 5.	Other Information	4439
Item 6.	Exhibits	4439
SIGNATURES		45
~~EXHIBIT INDEX~~		4640

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

~~ASCENT SOLAR TECHNOLOGIES, INC.~~

CONDENSED CONSOLIDATED BALANCE SHEETS

~~(Unaudited)~~

(unaudited)

September 30,
2017 December 31,
2016
ASSETS
Current Assets:
Cash and cash equivalents $ 1,083,029
$ 130,946
Trade receivables, net of allowance for doubtful accounts of $48,201 and $60,347, respectively 24,809
549,204
Inventories, net 1,067,056
2,569,816
Prepaid expenses and other current assets 394,511
983,796
Total current assets 2,569,405
4,233,762
Property, Plant and Equipment 36,645,862
36,639,460
Less accumulated depreciation and amortization (31,873,054 ) (30,983,448 )
4,772,808
5,656,012
Other Assets:
Patents, net of accumulated amortization of $386,538 and $169,626, respectively 1,502,576
1,647,505
Other non-current assets 56,750
77,562
1,559,326
1,725,067
Total Assets $ 8,901,539
$ 11,614,841
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable $ 631,263
$ 4,902,471
Related party payables 201,616
214,903
Accrued expenses 1,480,733
1,469,684
Current portion of long-term debt 337,791
243,113
Notes Payable 1,587,760
—
Promissory Notes, net of discount of $2,627,529 and zero, respectively 1,535,912
1,430,000
Current portion of litigation settlement —
339,481
Series E preferred stock, net of discount of $63,640 —
56,360
Series F preferred stock 140,001
160,001
Series G preferred stock, net of discount of $699,674 —
408,326
July 2016 convertible notes, net of discount of $1,634,357 —
1,159,610
Series I exchange notes, net of discount of $199,474 —
26,597
Series J preferred stock 1,075,000
1,350,000
October 2016 convertible notes, net of discount of $66,000 and $264,000 respectively 264,000
66,000
St. George convertible note, net of discount and cash payment premium of $817,506 and zero, respectively 1,079,994

Tertius Financial Group promissory notes, net of discount of $59,658 —
542,808
Short term embedded derivative liabilities 2,412,212
6,578,154
Make-whole dividend liability 264,289
500,176
Total current liabilities 11,010,571
19,447,684
Long-Term Debt 5,206,403
5,281,776
Series K preferred stock 2,810,000
—
Accrued Warranty Liability 105,102
176,457
Commitments and Contingencies (Notes 4 & 23)

Mezzanine Equity:
Series J-1 preferred stock: 700 shares authorized; zero and 700 and issued and outstanding as of September 30, 2017 and December 31, 2016, respectively —
700,000
Stockholders’ Deficit:
Series A preferred stock, $.0001 par value; 750,000 shares authorized and issued; 60,756 shares and 125,044 shares outstanding as of September 30, 2017 and December 31, 2016, respectively ($746,550 and $1,500,528 Liquidation Preference) 6
13
Common stock, $0.0001 par value, 20,000,000,000 shares authorized; 8,717,859,917 and 554,223,320 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively 871,786
55,422
Additional paid in capital 385,479,540
369,886,065
Accumulated deficit (396,581,869 ) (383,932,576 )
Total stockholders’ deficit (10,230,537 ) (13,991,076 )
Total Liabilities, Mezzanine Equity and Stockholders’ Deficit $ 8,901,539
$ 11,614,841



	September 30, 2019			December 31, 2018
ASSETS (substantially pledged)
Current Assets:
Cash and cash equivalents	$	24,505		$	18,159
Trade receivables, net of allowance of $45,362 and $45,644, respectively	22,403			165,160
Inventories, net	684,390			660,791
Prepaid expenses and other current assets	164,325			138,369
Total current assets	895,623			982,479
Property, Plant and Equipment:	32,911,969			36,621,187
Less accumulated depreciation and amortization	(28,632,301		)	(32,207,829		)
	4,279,668			4,413,358
Other Assets:
Patents, net of accumulated amortization of $408,612 and $363,533, respectively	826,711			862,429
Other non-current assets	—			34,061
	826,711			896,490
Total Assets	$	6,002,002		$	6,292,327
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable	$	1,457,378		$	2,318,655
Related party payables	460,000			270,740
Accrued expenses	1,510,558			1,562,435
Accrued interest	1,775,647			1,198,279
Notes payable	1,506,530			1,516,530
Current portion of long-term debt	—			349,093
Mortgage	5,917,315			—
Secured promissory notes, net of discount of $1,341,915 and $2,824,365, respectively	5,830,982			3,447,380
Promissory notes, net of discounts of $30,000 and $104,583, respectively	954,437			1,239,854
Convertible notes, net of discounts of $853,672 and $394,011, respectively	2,004,241			1,852,722
Embedded derivative liability	7,064,541			10,114,452
Total current liabilities	28,481,629			23,870,140
Long-term debt, net of current portion	—			5,028,969
Accrued Warranty Liability	24,861			29,114
Total Liabilities	28,506,490			28,928,223
Commitments and Contingencies	—			—
Stockholders’ Deficit:
Series A preferred stock, $.0001 par value; 750,000 shares authorized as of September 30, 2019 and December 31, 2018; 48,100 and 60,756 shares issued and outstanding as of September 30, 2019 and December 31, 2018 ($691,571 and $822,620 Liquidation Preference, respectively)	5			6
Common stock, $0.0001 par value, 20,000,000,000 shares authorized as of September 30, 2019 and December 31, 2018; 2,856,539,850 and 63,537,885 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	285,654			6,354
Additional paid in capital	397,674,171			395,889,712
Accumulated deficit	(420,464,318		)	(418,531,968		)
Total stockholders’ deficit	(22,504,488		)	(22,635,896		)
Total Liabilities and Stockholders’ Deficit	$	6,002,002		$	6,292,327

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

Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

~~(Unaudited)~~(unaudited)

For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2017 2016 2017 2016

Products, net $ 242,055
$ 436,708
$ 547,792
$ 1,369,823
Government contracts —
15,966
—
48,396
Revenues $ 242,055
$ 452,674
$ 547,792
$ 1,418,219
Costs and Expenses:
Cost of revenues (exclusive of depreciation shown below) 535,258
1,332,153
2,323,125
4,769,059
Research, development and manufacturing operations (exclusive of depreciation shown below) 1,311,944
1,660,203
3,829,918
5,131,969
Inventory impairment costs —
—
363,758
—
Selling, general and administrative (exclusive of depreciation shown below) 1,341,850
2,576,297
4,511,944
8,519,993
Depreciation and amortization 310,207
422,971
1,012,183
3,180,529
Total Costs and Expenses 3,499,259
5,991,624
12,040,928
21,601,550
Loss from Operations (3,257,204 ) (5,538,950 ) (11,493,136 ) (20,183,331 )
Other Income/(Expense)
Other Income/(Expense), net (15,053 ) 42,789
564,093
75,122
Interest expense (898,916 ) (1,789,599 ) (5,137,975 ) (5,442,591 )
Warrant Expense (335,739 ) —
(335,739 ) —
Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net 2,151,478
(4,500,151 ) 3,753,465
(7,928,578 )
Total Other Income/(Expense) 901,770
(6,246,961 ) (1,156,156 ) (13,296,047 )
Net Loss $ (2,355,434 ) $ (11,785,911 ) $ (12,649,292 ) $ (33,479,378 )

Net Loss Per Share (Basic and diluted) $ (0.0003 ) $ (0.1457 ) $ (0.0026 ) $ (0.9350 )
Weighted Average Common Shares Outstanding (Basic and diluted) 8,062,351,305
80,896,300
4,806,752,298
35,806,147




	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues	$	338,373		$	32,001		$	628,124		$	512,473
Costs and Expenses
Cost of revenues	74,271			—			282,825			503,609
Research, development and manufacturing operations	460,775			516,782			1,078,842			2,389,863
Selling, general and administrative	633,566			607,784			1,545,852			2,243,925
Depreciation and amortization	58,154			91,104			185,163			289,324
Total Costs and Expenses	1,226,766			1,215,670			3,092,682			5,426,721
Loss from Operations	(888,393		)	(1,183,669		)	(2,464,558		)	(4,914,248		)
Other Income/(Expense)
Other Income, net	6,000			13,144			842,500			13,144
Interest Expense	(1,907,895		)	(1,730,717		)	(6,740,340		)	(5,279,259		)
Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net	1,510,883			3,284,736			6,430,048			2,599,870
Total Other Income/(Expense)	(391,012		)	1,567,163			532,208			(2,666,245		)
Net Loss	$	(1,279,405	)	$	383,494		$	(1,932,350	)	$	(7,580,493	)

Net Loss Per Share (Basic and Diluted)	$	(0.001	)	$	0.20		$	(0.003	)	$	(0.45	)
Weighted Average Common Shares Outstanding (Basic and Diluted)	1,457,404,260			22,739,044			705,196,069			16,827,420

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

Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~CHANGES IN STOCKHOLDERS’ DEFICIT

~~(Unaudited)~~(unaudited)

For the Three Months Ended September 30, 2019

Nine Months Ended
September 30,
2017 2016
Operating Activities:
Net loss $ (12,649,292 ) $ (33,479,378 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 1,012,183
3,180,529

Share based compensation 108,717
708,776

Warrant expense 335,739
—

Realized gain on sale of assets (1,199,606 ) —

Amortization of financing costs to interest expense 73,018
125,902

Write down of previously capitalized inventory 363,758
—

Non-cash interest expense 1,273,087
298,149

Amortization of debt discount 3,656,430
4,437,611

Change in fair value of derivatives and (gain)/loss on extinguishment of liabilities, net (3,753,465 ) 7,928,578

Inducement conversion costs 635,514
—

Bad debt expense 514
246,116

Changes in operating assets and liabilities:
Accounts receivable 545,481
1,506,462

Inventories 1,139,001
813,735

Prepaid expenses and other current assets 493,008
497,325

Accounts payable (1,469,670 ) 382,738

Related party payable (13,287 ) —

Accrued expenses (850,314 ) 238,768

Accrued litigation settlement (339,481 ) (401,268 )
Warranty reserve (71,355 ) (34,834 )
Net cash used in operating activities (10,710,020 ) (13,550,791 )
Investing Activities:
Purchase of property, plant and equipment (6,402 ) (40,262 )
Proceeds from the sale of assets 150,000
—

Patent activity costs (50,898 ) (152,076 )
Net cash provided by/(used in) investing activities 92,700
(192,338 )
Financing Activities:
Payment of debt financing costs (20,000 ) (40,000 )
Repayment of debt (1,785,597 ) (211,648 )
Proceeds from the issuance of promissory notes 2,865,000
300,000

Proceeds from convertible notes 1,500,000
2,000,000

Proceeds from Committed Equity Line —
1,056,147

Proceeds from issuance of stock and warrants 9,010,000
10,405,000

Net cash provided by financing activities 11,569,403
13,509,499

Net change in cash and cash equivalents 952,083
(233,630 )
Cash and cash equivalents at beginning of period 130,946
326,217

Cash and cash equivalents at end of period $ 1,083,029
$ 92,587

Supplemental Cash Flow Information:
Cash paid for interest $ 1,120,350
$ 267,666

Non-Cash Transactions:
Non-cash conversions of preferred stock and convertible notes to equity $ 10,914,988
$ 9,236,810

Make-whole provision on convertible preferred stock $ 257,152
$ —

Non-cash financing costs $ 2,500
$ —

Accounts payable converted to notes payable $ 1,637,260
$ —

Accounts payable forgiven related to sale of EnerPlex $ 1,031,726
$ —

Interest converted to principal $ 104,199
$ —

Common shares issued for commitment fee $ 63,750
$ —



	Common Stock			Series A Preferred Stock			Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balance, June 30, 2019	696,089,337	$	69,609	48,100	$	5	$	397,258,622		$	(419,184,913	)	$	(21,856,677	)
Interest and Dividend Expense paid with Common Stock	89,313,372	8,932		—	—		7,393			—			16,325
Conversion of St.George Note into Common Shares	457,222,223	45,722		—	—		43,278			—			89,000
Conversion of BayBridge Note into Common Shares	605,769,231	60,577		—	—		25,423			—			86,000
Conversion of Bellridge Note into Common Shares	474,484,128	47,448		—	—		41,552			—			89,000
Conversion of Power Up Note into Common Shares	155,824,176	15,582		—	—		(982		)	—			14,600
Conversion of GS Capital Note into Common Shares	311,168,154	31,117		—	—		26,601			—			57,718
Stock issued for fees	66,669,229	6,667		—	—		1,098			—			7,765
Loss on Extinguishment of Liabilities	—	—		—	—		271,186			—			271,186
Net Loss	—	—		—	—		—			(1,279,405		)	(1,279,405		)
Balance at September 30, 2019	2,856,539,850	$	285,654	48,100	$	5	$	397,674,171		$	(420,464,318	)	$	(22,504,488	)

For the Three Months Ended September 30, 2018



	Common Stock			Series A Preferred Stock			Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balance, June 30, 2018	18,994,561	$	1,900	60,756	$	6	$	393,838,518		$	(410,459,463	)	$	(16,619,039	)
Interest and Dividend Expense paid with Common Stock	310,656	31		—	—		30,398			—			30,429
Conversion of St.George Note into Common Shares	3,142,332	314		—	—		102,186			—			102,500
Conversion of BayBridge Note into Common Shares	1,426,025	143		—	—		51,857			—			52,000
Conversion of Bellridge Note into Common Shares	3,660,498	366		—	—		137,134			—			137,500
Conversion of Note Payable into Common Shares	2,004,169	200		—	—		356,542			—			356,742
Loss on Extinguishment of Liabilities	—	—		—	—		601,433			—			601,433
Stock based compensation	—	—		—	—		3,476			—			3,476
Adjustment for RSS	—	—		—	—		(2,625		)	—			(2,625		)
Net Income	—	—		—	—		—			383,494			383,494
Balance at September 30, 2018	29,538,241	$	2,954	60,756	$	6	$	395,118,919		$	(410,075,969	)	$	(14,954,090	)

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

Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(unaudited)

For the Nine Months Ended September 30, 2019



	Common Stock			Series A Preferred Stock					Additional Paid-In Capital		Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares		Amount			Additional Paid-In Capital		Accumulated Deficit			Total Stockholders’ Equity (Deficit)
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	118,531,773	11,853		—		—			98,489		—			110,342
Conversion of St.George Note into Common Shares	602,361,830	60,236		—		—			194,834		—			255,070
Conversion of Global Ichiban Note into Common Shares	9,595,327	960		—		—			114,040		—			115,000
Conversion of BayBridge Note into Common Shares	790,692,046	79,069		—		—			185,931		—			265,000
Conversion of Bellridge Note into Common Shares	573,601,030	57,360		—		—			144,640		—			202,000
Conversion of Power Up Note into Common Shares	291,431,537	29,143		—		—			210,457		—			239,600
Conversion of GS Capital Note into Common Shares	327,651,670	32,765		—		—			39,953		—			72,718
Stock issued for fees	79,136,751	7,914		—		—			7,911		—			15,825
Conversion of Series A Preferred Stock into Common Stock	1	—		(12,656	)	(1		)	1		—			—
Loss on Extinguishment of Liabilities	—	—		—		—			767,453		—			767,453
Stock based compensation	—	—		—		—			20,750		—			20,750
Net Loss	—	—		—		—			—		(1,932,350		)	(1,932,350		)
Balance at September 30, 2019	2,856,539,850	$	285,654	48,100		$	5		$	397,674,171	$	(420,464,318	)	$	(22,504,488	)

For the Nine Months Ended September 30, 2018



	Common Stock			Series A Preferred Stock			Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
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	427,721	43		—	—		57,193			—			57,236
Conversion of St.George Note into Common Shares	5,412,610	541		—	—		493,559			—			494,100
Conversion of Global Ichiban Note into Common Shares	3,486,274	349		—	—		1,425,651			—			1,426,000
Conversion of BayBridge Note into Common Shares	4,237,792	424		—	—		564,576			—			565,000
Conversion of Bellridge Note into Common Shares	3,660,498	366		—	—		137,134			—			137,500
Conversion of Note Payable into Common Shares	2,004,169	200		—	—		356,542			—			356,742
Conversion of Series K Preferred Stock into Common Shares	702,500	70		—	—		2,809,930			—			2,810,000
Loss on Extinguishment of Liabilities	—	—		—	—		1,959,963			—			1,959,963
Stock based compensation	—	—		—	—		24,822			—			24,822
Adjustment for RSS	—	—		—	—		(2,625		)	—			(2,625		)
Net Loss	—	—		—	—		—			(7,580,493		)	(7,580,493		)
Balance at September 30, 2018	29,538,241	$	2,954	60,756	$	6	$	395,118,919		$	(410,075,969	)	$	(14,954,090	)

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

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ASCENT SOLAR TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)



	For the Nine Months Ended
	September 30,
	2019			2018
Operating Activities:
Net Income (loss)	$	(1,932,350	)	$	(7,580,493	)
Adjustments to reconcile net (loss) to net cash used in operating activities:
Depreciation and amortization	185,163			289,324
Stock based compensation	20,750			24,822
Realized loss (gain) on sale of assets	(842,500		)	(14,000		)
Amortization of financing costs	24,639			21,750
Non-cash interest expense	2,023,031			935,190
Amortization of debt discount	3,675,795			3,690,823
Bad debt expense	(302		)	(8,868		)
Write off Enerplex Patents	—			59,153
Warranty reserve	(4,253		)	(9,702		)
Change in fair value of derivatives and loss on extinguishment of liabilities, net	(6,430,048		)	(2,599,870		)
Changes in operating assets and liabilities:
Accounts receivable	143,059			(16,340		)
Inventories	(23,599		)	68,759
Prepaid expenses and other current assets	1,766			247,919
Accounts payable	(494,883		)	965,175
Related party payable	189,260			(2,827		)
Accrued interest	951,184			398,098
Accrued expenses	(51,880		)	487,690
Net cash used in operating activities	(2,565,168		)	(3,043,397		)
Investing Activities:
Purchase of property, plant and equipment	(6,393		)	—
Proceeds from sale of assets	842,500			14,000
Patent activity costs	(9,361		)	(9,705		)
Net cash used in investing activities	826,746			4,295
Financing Activities:
Proceeds from debt	1,762,268			3,102,500
Repayment of debt	(10,000		)	(89,686		)
Payment of debt financing costs	(7,500		)	(5,500		)
Net cash provided by financing activities	1,744,768			3,007,314
Net change in cash and cash equivalents	6,346			(31,788		)
Cash and cash equivalents at beginning of period	18,159			89,618
Cash and cash equivalents at end of period	$	24,505		$	57,830

Supplemental Cash Flow Information:
Cash paid for interest	$	28,484		$	308,542
Cash paid for income taxes	$	—		$	—


Non-Cash Transactions:
Non-cash conversions of preferred stock and convertible notes to equity	$	1,259,741		$	5,843,954
Non-cash financing costs	$	10,800		$	25,000
Accounts payable converted to notes payable	$	—		$	308,041
Interest converted to principal	$	171,152		$	140,355
Common shares issued for fees	$	15,825		$	—
Initial embedded derivative liabilities	$	3,781,186		$	2,736,724
Promissory notes exchanged for convertible notes	$	850,000		$	511,871

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

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ASCENT SOLAR TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~(Unaudited)~~

NOTE 1. ORGANIZATION

Ascent Solar Technologies, Inc. (“Ascent”) was incorporated on October 18, 2005 from the separation of ITN Energy Systems, Inc's (“ITN”) 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 5,140 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~~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)~~, military, and emergency preparedness.~~. 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.

~~Sale of EnerPlex Brand~~

In February 2017, Ascent announced the sale of our EnerPlex brand and related intellectual properties and trademarks associated with EnerPlex to our battery product supplier, Sun Pleasure Co. Limited (“SPCL”), in an effort to better allocate its resources and to continue to focus on its core strength in the high-value specialty PV market. Following the transfer, Ascent will no longer produce or sell Enerplex-branded consumer products. Ascent will also supply solar PV products to SPCL, supporting the continuous growth of EnerPlex™ with Ascent’s proprietary and award-winning thin-film solar technologies and products.

~~Ascent continues to design and manufacture its own line of PV integrated consumer electronics, as well as portable power applications for commercial, military, and emergency management.~~

~~Increase of Authorized Common Stock~~

On March 16, 2017, 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 increase the number of authorized shares of Common Stock from 2,000,000,000 to 20,000,000,000 at a par value of $0.0001. The Certificate of Amendment was approved at the Company’s Special Meeting of Stockholders March 16, 2017.

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 September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, and the results of operations for the three and nine months ended September 30, ~~2017~~2019 and ~~2016.~~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 ~~condensed~~ consolidated financial statements.

The accompanying, unaudited, condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, these interim financial statements do not include all of the information and footnotes typically found in U.S. GAAP audited annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included. The Condensed Consolidated Balance Sheet at December 31, ~~2016~~2018 has been derived from the audited financial statements as of that date but does not include all of the information and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~.2018. These condensed consolidated financial statements and notes should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~.2018.

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 and nine months ended September 30, ~~2017~~2019 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017~~.2019.

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, ~~2016~~.2018. There have been no significant changes to our accounting policies as of September 30, ~~2017.~~2019.

~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~. The update will establish a comprehensive revenue recognition standard for virtually all industries in GAAP. ASU 2014-09 will change the amount and timing of revenue and cost recognition, implementation, disclosures and documentation. In August 2015, the FASB issued ASU No. 2015-14, ~~Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date.~~ ~~The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all entities by one year. ASU 2014-09 is now effective for the Company in fiscal year 2018. The Company continues~~Recently Adopted or to ~~evaluate ASU 2014-09, but does not believe it will have a material effect on the Company’s consolidated financial statements.~~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 ~~is currently evaluating the impact, if any, that~~has evaluated the adoption of this guidance ~~will have~~and has determined there is no material impact on its consolidated financial ~~statements.~~statements because the Company does not have any leases at the date of the adoption.

~~In May 2017, the FASB issued ASU No. 2017-09,~~ ~~Compensation - Stock Compensation (Topic 718)~~. ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 is effective for interim periods and fiscal years beginning after December 15, 2017, and early application is permitted. The Company is currently evaluating the impact, if any, that the adoption of this guidance will have on its consolidated financial statements.

In July 2017, the FASB issued ASU No. 2017-11 Part I, Earnings Per Share (Topic 260), Distinguishing Liabilities fromEquity (Topic 480), Derivatives and Hedging (Topic 815). ASU 2017-11 Part I changes the classification analysis of certain ~~equity-linked~~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 because the Company did not have equity linked financial instruments where down round features were the only feature causing them to be classified as liabilities.

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ASCENT SOLAR TECHNOLOGIES, INC.

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 ~~if any, that~~of the effect adoption of this ~~guidance~~standard will have on its consolidated financial statements.

~~The Series J Preferred Stock was reclassified from mezzanine equity in the 2016 financial information~~Other new pronouncements issued but not effective as of September 30, 2019 are not expected to ~~conform to the 2017 presentation in liabilities. Such reclassifications had no effect~~have a material impact on the ~~net loss.~~

The Series K Preferred Stock was reclassified from current liabilities to non-current liabilities to better align with the redemption features of the instrument. Such reclassification had no effect on the net loss.Company’s consolidated financial statements.

NOTE 4. LIQUIDITY, ~~AND~~ CONTINUED OPERATIONS, AND GOING CONCERN

During the nine months ended September 30, ~~2017~~2019 and the year ended December 31, ~~2016,~~2018, the Company entered into multiple financing agreements to fund operations. Further discussion of these transactions can be found in Notes 89 through 2011, and Note 15 of the financial statements presented as of, and for, the nine months ended, September 30, ~~2017,~~2019, and in Notes 8, 9, ~~through 20~~10, 11, 12, and 14 of the financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

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 nine months ended September 30, ~~2017~~2019 the Company used ~~$10.7 million~~$2,565,168 in cash for operations.

The Company's primary significant long term cash obligation consists of a note payable of ~~$5.5 million~~$5,917,315, inclusive of interest, to a financial institution secured by a mortgage on its headquarters and manufacturing building in Thornton, Colorado. ~~Total payments of approximately $0.2 million, including principal~~The note is currently in default and ~~interest, will come due in~~ the ~~remainder of 2017.~~entire outstanding balance is classified as a current liability.

The Company is currently marketing it's Thornton, Colorado property to prospective buyers.

Additional projected product revenues are not anticipated to result in a positive cash flow position for the ~~year 2017~~next twelve months overall and, as of September 30, ~~2017,~~2019, the Company has negative working capital. As such, cash liquidity sufficient for the ~~year ending December 31, 2017~~next twelve months will require additional financing.

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 September 30, ~~2017~~2019 and December 31, ~~2016~~:2018:


	As of September 30,			As of December 31,			As of September 30,			As of December 31,
	2017			2016			2019			2018
Building	$	5,828,960		$	5,828,960		$	5,828,960		$	5,828,960
Furniture, fixtures, computer hardware and computer software	489,421			489,421			489,421			489,421
Manufacturing machinery and equipment	30,306,793			30,300,391			26,593,588			30,302,806
Net depreciable property, plant and equipment	36,625,174			36,618,772
Manufacturing machinery and equipment in progress	20,688			20,688
Property, plant and equipment	36,645,862			36,639,460
Depreciable property, plant and equipment							32,911,969			36,621,187
Less: Accumulated depreciation and amortization	(31,873,054		)	(30,983,448		)	(28,632,301		)	(32,207,829		)
Net property, plant and equipment	$	4,772,808		$	5,656,012		$	4,279,668		$	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.

During the nine months ended September 30, 2019, the Company disposed of certain redundant machinery and equipment. This machinery and equipment was fully depreciated and the Company realized a gain of $842,500 from these sales.

Depreciation expense for the three ~~and nine~~ months ended September 30, ~~2017~~2019 and 2018 was ~~$266,489~~$45,585 and ~~$889,605, respectively, compared to depreciation~~$52,319, respectively. Depreciation expense ~~of $384,738 and $3,106,948~~ for the ~~three and~~ nine months ended September 30, ~~2016,~~2019 and 2018 was $140,083 and $169,621, respectively. Depreciation expense is recorded under “Depreciation and amortization expense” in the unaudited Condensed Consolidated Statements of Operations.

NOTE 6. INVENTORIES

Inventories, net of reserves, consisted of the following at September 30, ~~2017~~2019 and December 31, ~~2016~~2018:

As of September 30, As of December 31,
2017 2016
Raw materials $ 736,721
$ 832,806
Work in process 8,193
635,130
Finished goods 322,142
1,101,880
Total $ 1,067,056
$ 2,569,816

The Company analyzes its inventory for impairment, both categorically and as a group, whenever events or changes in circumstances indicate that the carrying amount of the inventory may not be recoverable. During the nine months ended September 30, 2017, the Company impaired $363,758 of inventory.

~~Inventory amounts are shown net of allowance of $506,961 and $736,663 for the nine months ended September 30, 2017 and the year ended December 31, 2016, respectively.~~



	As of September 30,		As of December 31,
	2019		2018
Raw materials	$	684,390	$	660,791
Work in process	—		—
Finished goods	—		—
Total	$	684,390	$	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 September 30, 2019, the Company had not made any payments on these notes; the total outstanding principal and accrued interest were $1,073,825 and $147,336, respectively, and the note is due upon demand.

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 September 30, 2019, the Company had not made any payments on this note, the accrued interest was $28,151, 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 September 30, 2019, the company had paid principal of $32,529 and interest of $897, and the note is due upon demand. The remaining principal and interest balances, as of September 30, 2019, were $182,705 and $19,376, respectively.

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ASCENT SOLAR TECHNOLOGIES, INC.

NOTE 8. DEBT

On February 8, 2008, the Company acquired a manufacturing and office facility in Thornton, Colorado, for approximately ~~$5.5 million~~.$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~~$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 ~~January~~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. ~~The outstanding principal balance of the Permanent Loan was~~ ~~$5,544,193~~ ~~and $5,704,932 as of~~ ~~September 30, 2017~~ ~~and December 31, 2016, respectively.~~

On November 1, 2016, the Company and the ~~CFHA~~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 ~~shall be~~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 onin February 1, 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 ~~September 30, 2017~~,the note will be $5,434,042 and monthly payments of principal and interest of $57,801 will resume, continuing through the remaining ~~future principal payments on long-term debt are due as follows:~~

2017 $ 82,375
2018 343,395
2019 366,757
2020 391,709
2021 418,358
Thereafter 3,941,599
$ 5,544,193

~~NOTE 8. NOTES PAYABLE~~term of the note ending in February 2028.

On ~~February 24, 2017, the Company~~August 2, 2019, CHFA entered into an agreement ~~with~~to assign the note to Iliad Research and Trading, L.P., a ~~vendor~~Utah limited liability partnership ("IRT"). This agreement closed on September 11, 2019, and IRT paid a total of $5,885,148 to ~~convert~~CHFA to assume the note. The payment amount consisted of $5,405,666 principal and $479,482 interest and fees. Interest will accrue on the note at the default interest rate of 10.5%.

The outstanding principal balance of ~~their account into three notes payable in~~ the ~~aggregate amount~~note was $5,885,148 and $5,378,062 as of ~~$765,784. The notes bear interest of 6% per annum~~September 30, 2019 and ~~mature on February 24, 2018; all outstanding principal and accrued interest is due and payable upon maturity.~~ December 31, 2018, respectively.

As of September 30, ~~2017,~~2019, the Company had not made any payments ~~on these notes~~to IRT and the accrued interest on the note was ~~$27,823.~~$32,167. Since the loan is in default, the entire outstanding balance is classified as a current liability on the Company's September 30, 2019 Balance Sheet.

The Company is currently marketing it's Thornton, Colorado property to prospective buyers.

On February 27, 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 $49,500. The note bears interest of 6% per annum and matures on September 27, 2017; all outstanding principal and accrued interest is due and payable upon maturity. On September 27, 2017, the Company paid the note, plus $1,725 in accrued interest, in full.

~~On March 23, 2017,~~

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ASCENT SOLAR TECHNOLOGIES, INC.

NOTE 9. SECURED PROMISSORY NOTE

The following table provides a summary of the ~~Company entered into an agreement with a vendor to convert~~activity of the balance of their account into a note payable in the amount of $356,742. The note bears interest of 5% per annum and matures on October 23, 2017; all outstanding principal and accrued interest is due and payable upon maturity. As of September 30, 2017, the Company had not made any payments on the note and the accrued interest was $9,334. Subsequent to September 30, 2017, the maturity date on this note was extended. Please see ~~Note 25~~ ~~for more detail.~~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	—			845,000			845,000
Note conversions	(115,000		)	—			(115,000		)
Interest converted to principal	171,152			—			171,152
Secured Notes Principal Balance at September 30, 2019	5,012,897			2,160,000			7,172,897
Less: remaining discount	(995,249		)	(346,666		)	(1,341,915		)
Secured Notes, net of discount, at September 30, 2019	$	4,017,648		$	1,813,334		$	5,830,982

Global Ichiban Secured Promissory Notes

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 matures on February 28, 2018; all outstanding principal and accrued interest is due and payable upon maturity. As of September 30, 2017, the Company had not made any payments on these notes and the accrued interest was $3,151.

~~On September~~November 30, 2017, the Company, entered into a ~~settlement~~note purchase and exchange 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 matures on September 30, 2018. Monthly payments of $18,426 commence on October 30, 2017.

~~NOTE 9. PROMISSORY NOTES~~

~~Tertius Financial Group Notes and Exchange~~

~~On August 29, 2016, the Company entered into a note purchase agreement with Tertius Financial Group Pte.~~Global Ichiban Ltd. ("~~TFG”~~Global"), for the private placement of ~~$330,000~~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. During the remainder of 2017, the Company issued to Global $500,000 aggregate principal amount in additional Notes.

Of the notes issued in 2017, $3,359,539 principal amount will mature on December 15, 2020. The remaining principal matured on November 30, 2017 and December 31, 2018. Principal and interest was originally to be payable in 36 equal monthly installments of $111,585 beginning January 15, 2018. The remaining principal of $1,197,688 matured on November 30, 2017 and December 31, 2018.

During 2018, the company issued to Global $1,935,000 aggregate principal amount in additional notes, in exchange for additional proceeds of $1,870,000. The aggregate original issue ~~discount~~discounts of $65,000 will be allocated to interest expense, ratably, over the life of the note. These notes were issued with ~~an original~~ maturity ~~date of November 26, 2016. The notes bear interest of 6% per annum~~dates between January 11, 2019 and October 22, 2019.

All principal and accrued interest on the notes are ~~payable upon maturity.~~redeemable at any time, in whole or in part, at the option of Global. The ~~notes are unsecured and not convertible into equity shares of the Company.~~

On December 6, 2016, the Company issued a new $600,000 original issue discount note to TFG in exchange for (i) $200,000 of additional gross proceeds and (ii) cancellation of the existing outstanding $330,000 note. The new TFG note bears interest at a rate of 6% per annum and matures on December 31, 2017. Principal and interest on the new TFG note is payable at maturity. Following the transaction, the outstanding balance of the new note was $602,000 (including accrued and unpaid interest) with a discount of $60,000 as of December 31, 2016.

~~On January 19, 2017, the Company issued 333,333,333 shares of unregistered common stock in a private placement to TFG pursuant to a Securities Purchase Agreement (the “SPA”).~~

Pursuant to the SPA, the Company issued the 333,333,333 shares to TFG in exchange for cancellation of its $600,000 promissory note (including accrued interest of approximately $4,340) that was issued by the Company on December 6, 2016. The SPA does not provide any registration rights for the shares issued to TFG.

~~TFG is a Singapore based entity controlled and 50% owned by Ascent’s President & CEO, Victor Lee, and owns less than 4% of the Company's outstanding shares at September 30, 2017.~~

~~Offering of Unsecured Promissory Notes~~

Between December 2016 and April 2017, the Company initiated eleven non-convertible, unsecured promissory notes with a private investor with varying principal amounts aggregating to $3,400,000. The promissory notes bear interest of 12% per annum and mature six months from the respective dates of issuance, ranging from June 2, 2017 to October 21, 2017. Unlessredemption amount may be paid in ~~advance, the principal and interest of these promissory notes are payable upon maturity. The notes are not convertible~~cash or converted into ~~equity shares of the Company and are unsecured.~~

Between June and August, 2017, eight of the promissory notes described above matured. The Company and the private investor agreed to pay the interest accrued on these notes, as of the maturity dates, and extend the notes another three months without the Company being in default. Through August 30, 2017, $143,148 interest was paid.

On September 13, 2017, the Company and the investor entered into a Promissory Note Exchange Agreement. Pursuant to the agreement, the Investor exchanged and canceled the eleven outstanding promissory notes (with an aggregate principal and accrued interest of $3,504,199) for one new promissory note having a principal amount of $3,504,199.

The new note has a term of 36 months, bears interest at a rate of 12% per annum, and calls for monthly installment payments of $116,390 commencing on October 13, 2017. The Company has the option to pay monthly installment amounts in the form of shares of common ~~stock. Payments in the form of shares would be calculated using~~stock at a variable conversion price equal to the lowest of (i) 85% of the average VWAP for the shares over the prior ~~five~~5 trading days, (ii) the closing bid price for the shares on the prior trading day, or (iii) ~~$0.004~~$2.00 per ~~share.~~ share, at the option of the Company.

The ~~Company~~notes may not ~~make payments in the form of~~be converted, and shares of ~~Common Stock~~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 ~~9.9%~~9.99% of the outstanding shares of ~~Common Stock.~~common stock.

Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

On October 22, 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 the assignment. This note is redeemable in stock, at the discretion of the Company, under the same conversion terms described above.

The following table summarizes the conversion activity of these notes:



Conversion Period	Principal 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

Since conversions began in the first quarter of 2018, the interest associated with conversions has been added back into the principal of the notes. The following table summarizes the activity of adding the interest to principal:



Period	Interest converted to Principal
Q1 2018	$	96,281
Q2 2018	$	44,237
Q1 2019	$	171,152
	$	311,670

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.

Payments on these notes have not occurred in accordance with the agreement and, as of the date of this filing, these notes are due upon demand. As of September 30, ~~2017~~2019, the aggregate principal and ~~December 31, 2016~~interest balance of the ~~outstanding principal balance on the promissory notes was $3,504,199~~Notes were $5,012,897 and ~~$1,010,000,~~$733,852, respectively. ~~The accrued interest outstanding on these notes was $19,585 as of September 30, 2017.~~

Pursuant to a number of factors outlined in ASC Topic 815, Derivatives and Hedging, the conversion option in the ~~new promissory note was~~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. ~~On September 13, 2017, the derivative liability associated with the promissory note was $2,702,601.~~

The derivative liability associated with the promissory note is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At September 30, 2017, the Company conducted a fair value assessment of the embedded derivative associated with the promissory note. As a result of the fair value assessment, the Company recorded a $887,037 gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Condensed Consolidated Statements of Operations, for the three months ended September 30, 2017, to properly reflect the fair value of the embedded derivative of $1,815,564 as of September 30, 2017.

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 ~~Series E Preferred Stock~~notes approximates management’s estimate of the fair value of the embedded derivative liability ~~at September 30, 2017~~ 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	(422,392		)
Derivative Liability Balance as of September 30, 2019	$	3,111,469

The aggregate derivative value of the notes was $3,533,861 as of December 31, 2018. This value is based was derived from Management's fair value assessment using the the following assumptions: annual volatility range between of ~~63%~~56% to 65%, present value discount rate of 12%, and a dividend yield of 0%.

~~Offering~~

Table of ~~Unsecured, Non-Convertible~~Contents

ASCENT SOLAR TECHNOLOGIES, INC.

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. During 2019, Management conducted quarterly fair value assessment of the embedded derivative associated with the notes using the following assumptions: annual volatility range of 42% to 72%, present value discount rate of 12%, and a dividend yield of 0%. As a result of the fair value assessments, the Company recorded a net loss of $446,746 for three months ended September 30, 2019, and an aggregate net gain of $422,392 for the nine months ended September 30, 2019, 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 $3,111,469 as of September 30, 2019.

St. George Secured Convertible Notes

~~During October 2016,~~On May 8, 2018, the Company, ~~received $420,000 from a separate private investor. These funds, along with $250,000 of additional funding, were rolled~~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 ~~executed on January 17, 2017,~~ in ~~the amount of $700,000 issued with a~~two tranches and recorded and original issue discount of ~~$30,000 which~~$50,000 and debt financing costs of $25,000. The original issue discount and the financing costs will be ~~charged to~~recognized as interest expense, ratably, over the ~~term~~life of the note. The note bears interest at 12% per annum and matures on July 17, 2017. Principal and interest on this note are payable at maturity. This note is not convertible into equity shares of the Company and is unsecured.

On ~~June 30, 2017,~~November 5, 2018, the Company ~~and~~entered into a second securities purchase agreement with St. George, for the private ~~investor agreed~~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 ~~a 12 month payment plan~~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 ~~balance~~principal amounts 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 eight Investor Notes. As of September 30, 2017, $143,759 of principal and $43,544 of interest had been paid on this note. The outstanding principal and accrued interest balances on the note as of September 30, 2017 were $556,241 and $13,695, respectively.

~~During April 2017,~~2019, the Company ~~initiated a non-convertible, unsecured promissory note with a private investor for $103,000~~had received an additional $400,000 in ~~exchange for~~ proceeds and had recorded $1,220,000 in principal related to the Company and Investor Notes. The Company recorded original issue discounts of ~~$100,000. The discount~~$200,000 and debt financing costs of ~~$3,000~~$20,000, which will be ~~charged to~~recognized as interest expense, ratably, over the ~~term~~life of the note. ~~The~~As of September 30, 2019, the closing dates, closing amounts, and proceeds on completed Note tranches are as follows:



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

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 ~~bears~~("Third Note"). The Company recorded original issue discounts of $60,000 and debt financing costs of $5,000, which will be recognized as interest expense, ratably, over the life of the note. As of September 30, 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
4/4/2019	$	120,000	$	100,000

These Notes bear interest at a rate of 10% per annum and ~~matures on October 6, 2017. As~~mature twelve months from the date of ~~September 30, 2017, the~~issuance. All unredeemed principal and accrued interest ~~outstanding on~~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 ~~promissory~~ note, ~~was $103,000~~ and ~~$5,064, respectively. Subsequent to September 30, 2017, this note was exchanged for common shares. See~~ ~~Note 25~~ ~~for more information.~~

During May 2017, the Company initiated a non-convertible, unsecured promissory note with a private investor for $125,000 . The promissory note bears interest of 12% per annum and matures on September 8, 2017. On September 8, 2017, the Company redeemed this note in full, for cash.

~~NOTE 10. 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(ii) bankruptcy or insolvency of the Company. In the event of default the interest rate increases to 22% per annum. The ~~transfer of cash and securities took place incrementally,~~Notes are secured by a security interest on the ~~first closing occurring on June 17, 2013 with the transfer of 125,000 shares of Series A Preferred Stock and a warrant~~Company's headquarters building, located in Thornton, Colorado. There are no registration rights applicable 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.this agreement.

~~Holders~~

Table of ~~Series A Preferred Stock~~Contents

ASCENT SOLAR TECHNOLOGIES, INC.

Beginning six months from the date of issuance, 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 ~~entitled to cumulative dividends at a rate of 8% per annum when and if declared~~payable by the ~~Board of Directors in its sole discretion. The dividends may be paid~~Company 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).

~~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 20 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 September 30, 2017, 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 1 preferred share 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 and also any make-whole amount (if applicable). See Note 19. Make-Whole Dividend Liability.

On October 6, 2016, the Series A Holder entered into an exchange agreement (the “Exchange Agreement”) with Adar Bays. Pursuant to the exchange agreement, beginning December 5, 2016, Adar Bays has the option to exchange, from time to time, all or any portion of the October 2016 Convertible Notes (see Note 17) for outstanding shares of Series A Preferred Stock from the Series A Holder.

As of September 30, 2017, Adar Bays had elected to exchange all outstanding October 2016 Convertible Notes, in accordance with the exchange agreement, resulting in the exchange of 104,785 shares of Series A Preferred Stock. As of September 30, 2017, Adar Bays had also converted their 104,785 shares of Series A Preferred Stock, and the related make whole dividend, which resulted in the issuance of 173,946,250 shares of common stock.

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 $8.00 per share of Series A Preferred Stock plus any accrued and unpaid dividends.

~~As of September 30, 2017, there were 60,756 shares of Series A Preferred Stock outstanding.~~

~~NOTE 11. SERIES E PREFERRED STOCK AND THE COMMITTED EQUITY LINE~~

~~Series E Preferred Stock~~

~~On November 4, 2015, the Company entered into a securities purchase agreement with a private investor to issue 2,800 shares of Series E Preferred Stock in exchange for $2,800,000.~~

~~Shares of the Series E Preferred Stock (including the amount of any accrued and unpaid dividends thereon) are convertible, at the option of the holder,~~ Conversions into common stock atshall be calculated using a variable conversion price equal to ~~80%~~60% of the average of the two lowest ~~VWAPs~~closing bid price for the shares over the prior 10 day trading period immediately preceding the conversion.

Shares of ~~the Company's~~ common stock ~~for the ten consecutive trading day period prior~~may not be issued pursuant to these notes if, after giving effect to the conversion ~~date. If certain defined default events occur,~~or issuance, the ~~conversion price~~holder together with its affiliates would ~~thereafter be reduced (and only reduced), to equal 70%~~beneficially own in excess of 9.99% of the ~~average of the two lowest VWAPs of the Company's common stock for the twenty consecutive trading day period prior to the conversion date.~~

The private investor had available to them a new conversion price beginning on June 9, 2016 as a result of the Series H Preferred Stock transaction further described in Note 14. Shares of the Series E Preferred Stock are now convertible, at the option of the private investor, into common stock at a variable conversion price equal to 70% of (i) the lowest VWAP of our common stock for the ten consecutive trading day period prior to the conversion date or (ii) the lowest closing bid price of our common stock for the ten consecutive trading day period prior to the conversion date. The following table summarizes the conversion activity of the Series E Preferred Stock:

Conversion Period Preferred Series E Shares Converted Value of Series E Preferred Shares (inclusive of accrued dividends) Common Shares Issued
Q4 2015 478
$ 481,500
250,000
Q1 2016 1,220
1,239,436
1,132,000
Q2 2016 365
381,414
7,979,568
Q3 2016 523
548,896
21,973,747
Q4 2016 94
101,018
13,089,675
Q1 2017 15
16,248
8,289,962
Q2 2017 35
38,886
134,927,207
Q3 2017 70
76,814
129,314,677
2,800
$ 2,884,212
316,956,836

Holders of the Series E Preferred Stock will be entitled to dividends in the amount of 7% per annum. During the nine months ended September 30, 2017, the holder converted dividends in the amount of $11,948 on the Series E Preferred Stock, resulting in the issuance of 25,160,171outstanding shares of common stock. ~~On September 30, 2017, the Company paid $2,013 in cash.~~

The Company has issued 18,000 shares of common stock to the private investor as a commitment fee relating to the Series E Preferred Stock. Costs associated with the Series E Preferred Stock, such as legal fees and commitment shares are capitalized and reported as deferred financing costs on the Condensed Consolidated Balance Sheets. The total gross debt issuance cost incurred by the Company related to the Series E Preferred Stock was $104,000. These debt issuance costs will be recognized as additional interest expense over the life of the Series E Preferred Stock.

As of September 30, ~~2017, all outstanding shares~~2019, no principal or interest had been paid or converted, and the aggregate principal and interest balance of ~~Series E Preferred Stock, along with all accrued dividends, had either been converted or redeemed.~~the Notes were $2,040,000 and $197,551, respectively.

Pursuant to a number of factors outlined in ASC Topic 815, Derivatives and Hedging, the conversion option in the ~~Series E Preferred Stock was~~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, 2016 the fair value of the derivative liability was $140,748.~~

At September 30, 2017, the Company recorded the reduction of the remaining embedded derivative associated with the Series E Preferred Stock of $121,390 as a gain in the "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Condensed Consolidated Statements of Operations for the three months ended September 30, 2017. The net gain recorded for the nine months ended September 30, 2017 was $140,748, to properly reflect the elimination of the embedded derivative as of September 30, 2017.

~~The Committed Equity Line~~

On November 10, 2015, the Company and the private investor entered into a committed equity line purchase agreement (the "CEL"). Under the terms and subject to the conditions of the CEL purchase agreement, at its option the Company has the right to sell to the private investor, and the private investor is obligated to purchase from the Company, up to $32.2 million of the Company’s common stock, subject to certain limitations, from time to time, over the 36-month period commencing on December 18, 2015, the date that the registration statement was declared effective by the SEC.

From time to time, the Company may direct the private investor, at its sole discretion and subject to certain conditions, to purchase an amount of shares of common stock up to the lesser of (i) $1,000,000 or (ii) 300% of the average daily trading volume of the Company’s common stock over the preceding ten trading day period. The per share purchase price for shares of common stock to be sold by the Company under the CEL purchase agreement shall be equal to 80% of the average of the two lowest VWAPs of the common stock for the ten consecutive trading day period prior to the purchase date. As of September 30, 2017, the Company had directed the private investor to purchase 3,056,147 of common stock which resulted in the issuance of 1,368,000 shares of common stock

The Company may not direct the private investor to purchase shares of common stock more frequently than once each ten business days. The Company’s sales of shares of common stock to the private investor under the CEL purchase agreement are limited to no more than the number of shares that would result in the beneficial ownership by the private investor and its affiliates, at any single point in time, of more than 9.99% of the Company’s then outstanding shares of common stock.

As consideration for entering into the CEL purchase agreement, the Company agreed to issue to the private investor 132,000 shares of common stock (the “Commitment Shares”). The Commitment Shares were issued to the private investor commencing upon the date that the registration statement was declared effective by the SEC.

~~NOTE 12. SERIES F PREFERRED STOCK~~

On January 19, 2016, the Company entered into a securities purchase agreement with a private investor for the sale of $7,000,000 of the Company’s newly designated Series F 7% Convertible Preferred Stock (the “Series F Preferred Stock”).

On January 20, 2016, the Company sold and issued 7,000 shares of Series F Preferred Stock to the private investor. The aggregate purchase price of the Series F Preferred shares was $7,000,000. On January 20, 2016, the private investor paid $500,000 to the Company. The remaining $6,500,000 was paid by the private investor to the Company in 14 weekly increments of $500,000 or $250,000 beginning January 25, 2016 and ending April 28, 2016.

Shares of the Series F Preferred Stock (including the amount of any accrued and unpaid dividends thereon) are convertible, at the option of the holder, into common stock at a fixed conversion price equal to $5.00 per share. If certain defined default events occur, the conversion price would thereafter be reduced (and only reduced), to equal 70% of the average of the two lowest VWAPs of our common stock for the twenty consecutive trading day period prior to the conversion date.

If requested by the private investor, the Company will make weekly redemptions of shares of Series F Preferred Stock (including any accrued and unpaid dividends thereon). If the redemption price is paid by the Company in cash, the number of shares to be redeemed in each weekly increment is 250 shares of Series F Preferred Stock, and the redemption price is a price per share equal to $1,250 plus any accrued but unpaid dividends thereon.

The Company has the option to make such redemption payments in shares of common stock provided certain specified equity conditions are satisfied at the time of payment. The number of shares of common stock to be issued would be calculated using a per share price equal to 80% of the one lowest VWAP of our common stock for the ten consecutive trading day period prior to the payment date. For redemption payments made in shares of common stock, the Company will redeem either (i) 250 shares of Series F Preferred Stock or (ii) such greater number of shares of Series F Preferred Stock (and also including any accrued and unpaid dividends) that would result upon redemption in the issuance of a number of shares of common stock equal to 12% of the aggregate composite trading volume for the Company’s common stock during the preceding calendar week.

The private investor had available to them a new conversion price beginning on June 9, 2016 as a result of the Series H Preferred Stock transaction further described in Note 14. Shares of the Series F Preferred Stock are now convertible, at the option of the private investor, into common stock at a variable conversion price equal to 70% of (i) the lowest VWAP of our common stock for the ten consecutive trading day period prior to the conversion date or (ii) the lowest closing bid price of our common stock for the ten consecutive trading day period prior to the conversion date.

~~Amendment of Outstanding Series F Preferred Stock Conversion Price~~

On October 5, 2016, the Company filed a Certificate of Amendment to the Certificate of Designations of Preferences, Rights and Limitations of Series F Preferred Stock with the Secretary of State of the State of Delaware. The Certificate of Amendment amends the conversion price at which the Series F Preferred Stock can be converted into shares of common stock. The Company had approximately $336,000 of Series F Preferred Stock remaining outstanding as of October 5, 2016.

As amended, the conversion price will now be equal to the lowest of (i) 50% of the lowest weighted average price (“VWAP”) of our common stock for the ten consecutive trading day period prior to the conversion date or (ii) 50% of the lowest closing bid price of our common stock for the ten consecutive trading day period prior to the conversion date. If certain “Triggering Events” specified in the terms of the Series F Preferred Stock occur, then the conversion price of the Series F Preferred Stock shall be thereafter reduced, and only reduced, to equal 50% of the average of the lowest traded price of the common stock for the twenty consecutive trading day period prior to the conversion date.

~~The following table summarizes the conversion activity of the Series F Preferred Stock:~~

Conversion Period Preferred Series F Shares Converted Value of Series F Preferred Shares (inclusive of accrued dividends) Common Shares Issued
Q1 2016 2,168 $ 2,188,298
2,183,992
Q2 2016 3,234 3,300,931
6,649,741
Q3 2016 1,262 1,315,743
81,917,364
Q4 2016 176 185,118
27,276,005
Q3 2017 20 20,000
18,181,818
6,860 $ 7,010,090
136,208,920

Holders of the Series F Preferred Stock are entitled to dividends in the amount of 7% per annum. During the quarter ended September 30, 2017, the Company did not pay any dividends or issue any shares in relation to accrued dividends.

The Company classified the Series F Preferred Stock as a liability pursuant to ASC 480 on the closing date due to the structure of the financing agreement, whereby the Company has an unconditional obligation that the Company may settle by issuing a variable number of common shares with a monetary value that is fixed and known at inception. There are 140 shares of Series F Preferred Stock, representing a value of $140,000, outstanding as of September 30, 2017.

~~Pursuant to a number of factors outlined in ASC Topic 815,~~ ~~Derivatives and Hedging~~, the conversion option in the Series F Preferred Stock 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 closing, a derivative liability and a corresponding debt discount in the amount of $1,666,000 were recorded. The debt discount will be charged to interest expense ratably over the life of the Series F Preferred Stock.

The derivative liability associated with the Series F Preferred Stock is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At September 30, 2017, the Company conducted a fair value assessment of the embedded derivative associated with the Series F Preferred Stock. As a result of the fair value assessment, the Company recorded a $298,534 gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Condensed Consolidated Statements of Operations, for the three months ended September 30, 2017. The net gain recorded for the nine months ended September 30, 2017 was $212,977, to properly reflect the fair value of the embedded derivative of $42,347 as of September 30, 2017.

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 ~~Series F Preferred Stock~~notes approximates management’s estimate of the fair value of the embedded derivative liability ~~at September 30, 2017~~ 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	1,752,197
Change in fair value of derivative liability	(2,897,211		)
Derivative Liability Balance as of September 30, 2019	$	2,147,678

The aggregate derivative value of the notes was $3,292,692 as of December 31, 2018. This value is was derived from Management's fair value assessment using the the following assumptions: annual volatility range between of ~~75%~~56% to 71%, present value discount rate of 12%, and a dividend yield of 0%.

~~NOTE 13. SERIES G PREFERRED STOCK~~

On April 29, 2016, the Company entered into a securities purchase agreement with private investors to issue 2,000 shares of Series G Preferred Stock for $2,000,000. At Closing, the Company issued a total of 500 shares of Series G Preferred Stock to the private investors in exchange for $500,000. The Company issued an additional 1,500 shares of Series G Preferred Stock to the private investors during the months of May and June 2016, which resulted in additional gross proceeds to the Company of $1,500,000.

Holders of the Series G Preferred Stock will be entitled to dividends in the amount of 10% per annum. One year after issuance, the Company is required to redeem for cash all or any portion of the outstanding shares of the Series G Preferred Stock at a price per share equal to $1,000 plus any accrued but unpaid dividends thereon.

~~Assignment of Series G Preferred Stock~~

Beginning September 19, 2016, the two private investors (the “Series G Sellers”) entered into assignment agreements with accredited investors (the “Series G Purchasers”). Under the terms of the assignment agreements, the Series G Sellers may sell all 2,000 outstanding shares of Series G Preferred Stock to the Series G Purchasers for a purchase price of $1,000 per share of Series G Preferred Stock (plus the amount of any accrued and unpaid dividends thereon). As of September 30, 2017, the Series G Sellers had sold 1,835 shares of Series G Preferred Stock, representing a value of $1,835,000, to the Series G Purchasers.

On September 21, 2016, the Company filed a Certificate of Amendment to the Certificate of Designations of Preferences, Rights and Limitations of Series G Preferred Stock with the Secretary of State of the State of Delaware. The Certificate of Amendment amends the conversion price at which the Series G Preferred Stock can be converted into shares of common stock. Shares of the Series G Preferred Stock (including the amount of any accrued and unpaid dividends thereon) were previously convertible at the option of the private investors into common stock at a fixed conversion price of $1.00 per share. As amended, the conversion price is equal to the lowest of (i) $0.045, (ii) 70% of the lowest volume weighted average price of the Company’s common stock for the ten consecutive trading day period prior to the conversion date or (iii) 70% of the lowest closing bid price of the Company’s common stock for the ten consecutive trading day period prior to the conversion date. The following table summarizes the conversion activity of the Series G Preferred Stock:

Conversion Period Preferred Series G Shares Converted Value of Series G Preferred Shares (inclusive of accrued dividends) Common Shares Issued
Q4 2016 892
929,895
245,726,283
Q1 2017 372
397,970
327,718,386
Q2 2017 526
575,096
1,337,776,821
1,790
$ 1,902,961
1,911,221,490

Holders of the Series G Preferred Stock will be entitled to dividends in the amount of 10% per annum. During the nine months ended September 30, 2017, the Company converted dividends in the amount of $49,096 on the Series G Preferred Stock, resulting in the issuance of 114,854,745 shares of common stock.

On June 29, and June 30, 2017, the Company redeemed the remaining 210 outstanding shares, and the related accrued dividends for cash payments in the amount of $232,440. Due to international wire cut off times, $182,715 of that amount was not actually paid until July 3, 2017, and the resulting liability is included in accounts payable on the Condensed Consolidated Balance Sheet for the six months ended September 30, 2017.

~~As of September 30, 2017, all Series G Preferred Stock Shares, and the related accrued dividends, had either been converted or redeemed.~~

~~Pursuant to a number of factors outlined in ASC Topic 815,~~ ~~Derivatives and Hedging~~, the conversion option in the Series G Preferred Stock 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, 2016 the fair value of the derivative liability was $361,831 and was $219,347 prior to the redemption.

At June 30, 2017, the Company recorded the reduction of the remaining embedded derivative associated with the Series G Preferred Stock of $219,347 as a gain in the "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Condensed Consolidated Statements of Operations for the three months ended September 30, 2017. The net gain recorded for the nine months ended September 30, 2017 was $361,831, to properly reflect the elimination of the embedded derivative as of September 30, 2017.

~~Conversion Inducement and Disposal Price Guarantee~~

On January 17, 2017, one of the Series G Preferred Stock holders (“Holder A”) requested a conversion of 100 shares of Series G Preferred Stock, $100,000 face value, including accrued dividends of $6,416.67 for a total conversion value of $106,416.67 into common stock of the Company at a conversion price of $0.00112 which would have resulted in the issuance of 95,014,884 shares of common stock. At the date of the request the Company did not have enough authorized shares to execute the conversion request and therefore entered into an agreement with Holder A to honor the conversion price of $0.00112 and issue the 95,014,884 shares of common stock upon the increase of the authorized common shares of the Company. The actual conversion occurred on March 17, 2017 which would have been a conversion price of $0.00168. In conjunction with the conversion price agreement the Company agreed to provide a minimum disposal price guarantee to the Holder A of $0.003 on the tranche of 95,014,884 shares. If Holder A fails to dispose of these shares at $0.003 or above the Company will issue additional shares of common stock to make up the difference between the minimum disposal price of $0.003 and the price that Holder A disposed of the shares.

During the nine months ended September 30, 2017, in accordance with ASC 470-20-40-16, the Company recorded expense of $79,179 related to the conversion inducement and expense of $134,566 related to the disposal price guarantee. The amount related to the disposal price guarantee was also recorded as a corresponding liability in the Condensed Consolidated Balance Sheet as of September 30, 2017.

On June 29, 2017, the Company and Holder A agreed to settle the disposal price guarantee liability in cash instead of shares of the Company's common stock. The liability will be paid in three equal monthly installments commencing on June 30, 2017. As of September 30, 2017, the Company had repaid the liability in full.

~~NOTE 14. SERIES H PREFERRED STOCK AND JULY 2016 CONVERTIBLE NOTES~~

~~Series H Preferred Stock~~

On June 9, 2016, the Company entered into a securities purchase agreement with a private investor to issue 2,500 shares of Series H Preferred Stock for $2,500,000. The Company received gross proceeds of $250,000 at Closing. Additional gross proceeds of $580,000 were received by the Company through July 7, 2016. The Company agreed to exchange outstanding Series H Preferred Stock for Senior Secured Convertible Notes (“July 2016 Notes”) on July 13, 2016. At the date of the exchange, the Company had sold and issued 830 shares of Series H Preferred Stock to the private investor in exchange for $830,000 of gross proceeds. Refer to the section below for details of the exchange.

~~July 2016 Convertible Notes~~

On July 13, 2016, the Company entered into a securities purchase agreement (the “Note SPA”) with the private investor for the private placement of up to $2,082,600 of the Company’s 4% Original Issue Discount Senior Secured Convertible Promissory Notes (the “July 2016 Convertible Notes”). On July 13, 2016, the Company sold and issued $364,000 principal amount of notes to the investor in exchange for $350,000 of gross proceeds. The Company sold and issued the remaining $1,718,600 principal amount of July 2016 Convertible Notes to the investor in exchange for $1,650,000 of gross proceeds in weekly tranches between July and September 2016.

The Company and the private investor also entered into an Exchange Agreement dated July 13, 2016 (the “Exchange Agreement”). Under the terms of the Exchange Agreement, the outstanding shares of Series H Preferred Stock (approximately $833,000 of capital and accrued dividends) were canceled. In exchange, the Company issued to the private investor approximately $866,000 of July 2016 Convertible Notes. There were 830 shares of Series H Preferred Stock outstanding as of the date of the Exchange Agreement.

Unless earlier converted or prepaid, all of the July 2016 Convertible Notes will mature July 13, 2017 (the “Maturity Date”). The July 2016 Convertible Notes bear interest at a rate of 10% per annum, subject to increase to 24% per annum upon the occurrence and continuance of an event of default. Principal on the July 2016 Convertible Notes is payable on the Maturity Date. Interest on the July 2016 Convertible Notes is payable quarterly. Principal and interest are payable in cash or, if specified equity conditions are met, shares of Common Stock.

The July 2016 Convertible Notes are secured by a security interest in substantially all of the Company’s assets. The subsidiaries of the Company have guaranteed the Company’s obligations under the July 2016 Convertible Notes.

The July 2016 Convertible Notes contain standard and customary events of default including but not limited to: (i) failure to make payments when due under the July 2016 Convertible Notes; (ii) bankruptcy or insolvency of the Company; and (iii) failure to file a registration statement by October 9, 2016.

On October 10, 2016 the Company had not been successful in filing the registration statement triggering an event of default per the July 2016 Note Agreement. Upon default the interest rate increases to 24% per annum and the holder of the July 2016 Notes has the option to accelerate the Note and demand cash payment of the Mandatory Default Amount consisting of a 25% premium of the principal balance plus any accrued and unpaid interest. The Company began accruing interest at the rate of 24% on October 10, 2016.

~~Forbearance and Settlement Agreement on July 2016 Convertible Notes~~

On May 5, 2017, the Company entered into a Forbearance and Settlement Agreement ("Forbearance Agreement") with a holder of certain secured convertible notes that are in default due to various triggering events. The holder and the Company agreed to forbear from taking any action provided for under the secured convertible notes in exchange for the following terms provided in this agreement:

~~The Company agreed to redeem for cash all secured convertible notes of the Company held by the holder no later than September 1, 2017.~~

~~The Company affirmed that the current balance of owed principal and accrued and unpaid interest to the holder is $1,790,214 as of May 2, 2017.~~

The redemption price for such secured convertible notes shall be 120% (if redeemed on or prior to August 15, 2017) or 125% (if redeemed after August 15, 2017) of the then outstanding principal, plus any accrued and unpaid interest.

~~During the month of May 2017, the Holder agreed to limit its conversions of outstanding Company secured convertible notes to $50,000 per calendar week of principal/interest.~~

~~During the months of June, July and August 2017, the holder agreed to limit its conversions of outstanding Company secured convertible notes to $75,000 per calendar week of principal/interest.~~

During the months of May, June, July and August 2017, the holder agreed that all outstanding Company secured convertible notes shall bear interest at the normal stated rate of 10%, rather than default rate of 24%.

All conversions during the months of May, June, July and August 2017 will be at the “triggering event” discount conversion price as stated in the secured convertible notes, and will continue at the “triggering event” discount price until, if and when the notes are redeemed.

Should the Company fail to redeem for cash all secured convertible notes on or before September 1, 2017, default interest and normal stated interest will accrue from the date of execution of this agreement.

All principal and accrued interest on the July 2016 Convertible Notes are convertible at any time, in whole or in part, at the option of the private investor, into shares of Common Stock at a variable conversion price equal to the lowest of (i) $0.045 (the “Fixed Conversion Price”), (ii) 70% of the lowest volume weighted average price (“VWAP”) of the Company's common stock for the ten consecutive trading day period prior to the conversion date or (iii) 70% of the lowest closing bid price of the Company's common stock for the ten consecutive trading day period prior to the conversion date. If certain defined triggering events occur, the conversion price would thereafter be reduced (and only reduced), to equal 60% of the lower of (i) the lowest closing bid price of the Company's common stock for the thirty consecutive trading day period prior to the conversion date or (ii) the lowest VWAP of the the Company's common stock for the thirty consecutive trading day period prior to the conversion date. In addition, on the 90th day and also on the 180th day from the date of the Note SPA, the private investor may reset the Fixed Conversion Price to thereafter be equal to the VWAP of the Common Stock for such day or if such 90th or 180th day is not a trading day, then the VWAP for the immediately preceding trading day. The following table summarizes the conversion activity on the principal of the July 2106 Convertible Notes:

Conversion Period July 2016 Convertible Notes Converted (exclusive of interest) Common Shares Issued
Q4 2016 $ 152,460
64,000,000
Q1 2017 1,017,732
959,704,543
Q2 2017 682,235
1,865,043,998
$ 1,852,427
2,888,748,541

In addition to the $1,852,427 in principal conversions, $3,960 of interest had been converted as of September 30, 2017. As of September 30, 2017, with $1,096,600 of principal payments, $400,017 of interest payments, and $219,320 of redemption penalty payments, the July 2016 Convertible notes had been redeemed in full. The difference in the accrued interest and the paid interest, due to the terms of the settlement agreement, was a favorable $26,966 and was credited to interest expense upon full redemption of the instrument.

~~Pursuant to a number of factors outlined in ASC Topic 815,~~ ~~Derivatives and Hedging~~, the conversion option in the July 2016 Convertible Notes 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, 2016 the fair value of the derivative liability was $3,733,348.

On August 31, 2017, the Company recorded the reduction of the remaining embedded derivative associated with the July 2016 Convertible Notes of $31,444 as a gain in the "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Condensed Consolidated Statements of Operations for the three months ended September 30, 2017. The net gain recorded for the nine months ended September 30, 2017 was $3,733,348, to properly reflect the elimination of the embedded derivative as of August 31, 2017.

~~NOTE 15. SERIES I PREFERRED STOCK AND EXCHANGE CONVERTIBLE NOTES~~

~~Series I Preferred Stock~~

On July 26, 2016, the Company entered into a securities purchase agreement with a private investor for the placement of approximately 536 of the Company’s Series I Preferred Stock. At Closing, the Company issued a total of 536 shares of Series I Preferred Stock to the private investor in exchange for the cancellation of an outstanding $536,000 promissory note (including accrued interest) of the Company held by the private investor.

On September 13, 2016, the private investor (the “Series I Seller”) entered into an assignment agreement with an accredited investor (the “Series I Purchaser”). Under the terms of the assignment agreements, the Series I Seller may sell all 326 outstanding shares of Series I Preferred Stock to the Series I Purchaser for a purchase price of $1,000 per share of Series I Preferred Stock (plus the amount of any accrued and unpaid dividends thereon). In September and October 2016, the Series I Seller sold all 326 shares of Series I Preferred Stock, representing a value of $332,633, to the Series I Purchaser.

On September 13, 2016, the Company agreed to exchange outstanding Series I Preferred Stock for convertible notes (“Exchange Convertible Notes”) and as of December 31, 2016 the Series I Purchaser had exchanged all 326 shares of Series I Preferred Stock and no shares were outstanding. Refer to the section below for details of the exchange.

~~Series I Exchange Convertible Notes~~

On September 13, 2016, the Company and the investor entered into an Exchange Agreement (the “Exchange Agreement”). Under the terms of the Exchange Agreement, the investor has the right, from time to time, to surrender to the Company for cancellation and exchange any shares of Series I Preferred Stock it acquires pursuant to the Assignment Agreement. Any surrendered shares of Series I Preferred Stock would be exchanged for newly issued Exchange Convertible Notes. The principal amount of Exchange Convertible Notes to be issued in exchange shall be equal to (i) $1,000 for each share of Series I Preferred Stock surrendered for exchange plus (ii) the amount of any dividends accrued and unpaid on such Series I Preferred Stock surrendered for exchange. During the year ended December 31, 2016, the investor exercised their option to exchange 326 Series I Preferred Shares, representing a value of $332,633, resulting in the creation of $332,633 of Exchange Convertible Notes.

Unless earlier converted or prepaid, all of the Exchange Convertible Notes will mature one year after issuance. The Exchange Convertible Notes bear interest at a rate of 10% per annum, subject to increase to 24% per annum upon the occurrence and continuance of an event of default (as described below). Principal and interest on the Exchange Convertible Notes is payable on the maturity date or upon any earlier conversion. Principal and interest are payable in cash or, if specified equity conditions are met, shares of common stock.

All principal and accrued interest on the Exchange Convertible Notes are 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 the lowest of (i) the lowest closing bid price of our common stock for the ten consecutive trading day period prior to the conversion date or (ii) 70% of the lowest VWAP of our common stock for the ten consecutive trading day period prior to the conversion date. The following table summarizes the conversion activity of the Exchange Convertible Notes, which were converted in full as of September 30, 2017:

Conversion Period Exchange Convertible Notes Converted Common Shares Issued
Q3 2016 $ 15,000
1,470,588
Q4 2016 91,563
13,346,274
Q1 2017 70,000
50,503,662
Q2 2017 37,535
86,987,428
Q3 2017 118,536
282,228,524

$ 332,634
434,536,476

~~As of September 30, 2017, $10,268 of interest accumulated on the Exchange Convertible Notes had been converted and the remaining interest balance of $5,255 had been paid in cash.~~

~~Pursuant to a number of factors outlined in ASC Topic 815,~~ ~~Derivatives and Hedging~~, the conversion option in the Exchange Convertible Notes 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, 2016 the fair value of the derivative liability was $196,617.

On July 31, 2017, the Company recorded the reduction of the remaining embedded derivative associated with the Exchange Convertible Notes of $130,656 as a gain in the "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Condensed Consolidated Statements of Operations for the three months ended September 30, 2017. The net gain recorded for the nine months ended September 30, 2017 was $196,617, to properly reflect the elimination of the embedded derivative as of July 31, 2017.

~~NOTE 16. SERIES J PREFERRED STOCK AND SERIES J-1 PREFERRED STOCK~~

~~Series J Preferred Stock~~

On September 19, 2016, the Company entered into a securities purchase agreement with one accredited investor for the private placement of $1,350,000 of the Company’s newly designated Series J Convertible Preferred Stock (“Series J Preferred Stock”). As of September 30, 2017, the Company had issued 1,350 shares of Series J Preferred Stock in exchange for proceeds of $$1,350,000.

On March 29, 2017, the accredited investor (the “Series J Seller”) entered into an assignment agreement with a private investor (the “Series J Purchaser”). Under the terms of the assignment agreement, the Series J Seller may sell 250 outstanding shares of Series J Preferred Stock to the Series J Purchaser for a purchase price of $1,000 per share of Series J Preferred Stock (plus the amount of any accrued and unpaid dividends thereon). As of September 30, 2017, the Series J Seller had sold 250 shares of Series J Preferred Stock, representing a value of $250,000, to the Series J Purchaser.

Holders of the Series J Preferred Stock are entitled to dividends in the amount of 10% per annum. Shares of the Series J Preferred Stock (including the amount of any accrued and unpaid dividends thereon) are convertible at the option of the holder into common stock at a fixed conversion price of $0.015 per share. As of September 30, 2017, no shares of the Series J Preferred Stock had been converted at the fixed conversion price; 275 shares of Series J Preferred Stock were converted under conversion inducement offers. (See Conversion Inducement Offers discussion below).

There are no registration rights applicable to the Series J Preferred Stock. Accordingly, any shares of Common Stock issued upon conversion of the Series J Preferred Stock are restricted and can only be sold in compliance with Rule 144 or in accordance with another exemption from registration.

One year after issuance, the Company is required to redeem for cash all or any portion of the outstanding shares of the Series J Preferred Stock at a price per share equal to $1,000 plus any accrued but unpaid dividends thereon. There were 1,075 shares of Series J Preferred Stock outstanding as of September 30, 2017, representing a value of $1,075,000 and accrued dividends were $106,299.

~~Conversion Inducement Offers~~

On March 24, 2017, the Company offered to lower the conversion price, applicable to 100 shares of Series J Preferred Stock. The reduced conversion rate was $0.00147 calculated by giving a 30% discount on the day’s closing bid price resulting in the issuance of 71,636,432 shares of common stock. In accordance with ASC 470-20, the Company recorded a conversion expense of $142,155 related to the inducement offer.

On March 29, 2017, the Company offered to lower the conversion price, applicable to 120 shares of Series J Preferred Stock. The reduced conversion rate was $0.00105 calculated by giving a 30% discount to the lowest closing bid price in a ten day look back period resulting in the issuance of 125,429,895 shares of common stock. In accordance with ASC 470-20, the Company recorded a conversion expense of $186,640 related to the inducement offer.

On May 8, 2017, the Company offered to lower the conversion price, applicable to 50 shares of Series J Preferred Stock. The reduced conversion rate was $0.00028 calculated by giving a 30% discount to the lowest closing bid price in a ten day look back period resulting in the issuance of 189,484,143. In accordance with ASC 470-20, the Company recorded a conversion expense of $92,974 related to the inducement offer.

As a result of these inducement offers, the Company re-evaluated the classification of the Series J Preferred Stock in the financial statements. Upon original issuance, in accordance with ASC 480-10, the instrument was classified as temporary mezzanine equity in the Company's Consolidated Balance Sheets. Due to the inducement offers described above, the Company no longer believes the original classification is still applicable and has restated the Series J Preferred Stock as a liability on the Consolidated Balance Sheets.

In addition, the Company re-evaluated the embedded conversion feature of the Series J Preferred Stock. Upon original issuance, the embedded conversion feature was determined to not require bifurcation, in accordance with ASC 815-10. Due to the inducement offers described above, the Company no longer believes the embedded conversion feature should remain unbifurcated.

~~Pursuant to a number of factors outlined in ASC Topic 815,~~ ~~Derivatives and Hedging~~, the conversion option in the Series J Preferred Stock, post inducement offers, 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 24, 2017, the fair value of the derivative liability was $705,024 .

The derivative liability associated with the ~~Series J Preferred Stock~~notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. ~~At September 30, 2017, the Company~~During 2019, Management conducted aquarterly fair value assessment of the embedded derivative associated with the ~~Series J Preferred Stock.~~notes using the following assumptions: annual volatility range of 35% to 82%, present value discount rate of 12%, and a dividend yield of 0%. As a result of the fair value ~~assessment,~~assessments, the Company recorded a ~~489,064~~net gain of $790,750 for three months ended September 30, 2019, and an aggregate net gain of $2,897,211 for the nine months ended September 30, 2019, as "Change in fair value of derivatives and gain/~~(loss)~~loss on extinguishment of liabilities, net" in the ~~Condensed~~ Consolidated Statements of Operations ~~for the three months ended September 30, 2017. The net gain recorded for the nine months ended September 30, 2017 was $686,699,~~ to properly reflect the fair value of the embedded derivative of ~~$18,325~~$2,147,678 as of September 30, ~~2017.~~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 Series J Preferred Stock approximates management’s estimate of the fair value of the embedded derivative liability at September 30, 2017 based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions: annual volatility of 21% , present value discount rate of 12% and dividend yield of 0%.

~~Series J-1 Preferred Stock~~

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ASCENT SOLAR TECHNOLOGIES, INC.

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 principal	—		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 principal	—		530,000			530,000
Notes exchanged	—		(850,000		)	(850,000		)
Promissory Notes Principal Balance at September 30, 2019	494,437		530,000			1,024,437
Less: remaining discount	—		(70,000		)	(70,000		)
Promissory Notes, net of discount, at September 30, 2019	$	494,437	$	460,000		$	954,437

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 ~~October 14, 2016,~~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 the payments according to this payment plan, and the note is payable upon demand.

As of September 30, 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 September 30, 2019 were $494,437 and $130,836, respectively.

Offering of Unsecured, Non-Convertible Notes to Investor 2

On June 6, 2018, the Company initiated a 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 was 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 matured on June 6, 2019. On May 2, 2019, the Company entered into a securities ~~purchase~~exchange agreement with ~~a private investor~~Investor 2 to ~~issue 1,000 shares of Series J-1 Preferred Stock for $1,000,000. The Company issued a total of 700 shares of Series J-1 Preferred Stock to the private investor~~surrender and exchange this promissory note in exchange for ~~gross proceeds~~a convertible note. The promissory note had a principal balance of ~~$700,000.~~$315,000 and an accrued interest balance of $39,890. See Note 11 for further discussion on the new convertible notes.

~~Shares~~On July 24, 2018, the Company initiated a 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 was recorded as interest expense ratably over the term of the ~~Series J-1 Preferred Stock (including~~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 matured on January 24, 2019. On March 11, 2019, the Company entered into a securities exchange agreement with Investor 2 to surrender and exchange this promissory note in exchange for a convertible note. The promissory note had a principal balance of $115,000 and an accrued interest balance of $10,607. See Note 11 for further discussion on the new convertible notes.

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ASCENT SOLAR TECHNOLOGIES, INC.

On September 10, 2018, the Company initiated a non-convertible, unsecured promissory note with Investor 2 for an aggregate principal amount of ~~any accrued and unpaid dividends thereon) may be converted, at~~$120,000. The promissory note was issued with an original issue discount of $20,000, which was recorded as interest expense ratably over the ~~option~~term of the ~~holder,~~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 matured on March 10, 2019. March 11, 2019, the Company entered into ~~common stock at~~ a ~~fixed conversion price~~securities exchange agreement with Investor 2 to surrender and exchange this promissory note in exchange for a convertible note. The promissory note had a principal balance of ~~$0.0125 per share. Holders~~$120,000 and an accrued interest balance of $7,829. See Note 11 for further discussion on the new convertible notes.

On December 31, 2018, the Company initiated a 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 was recorded as interest expense ratably over the term of the ~~Series J-1 Preferred Stock~~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 matured on June 30, 2019. On August 22, 2019, the Company entered into a securities exchange agreement with Investor 2 to surrender and exchange this promissory note in exchange for a convertible note. The promissory note had a principal balance of $300,000 and an accrued interest balance of $28,353. See Note 11 for further discussion on the new convertible notes

On March 11, 2019, the Company initiated a 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 was 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 matured on September 11, 2019. All principal and interest is payable upon maturity. As of September 30, 2019, the remaining principal and interest on on this note were $60,000 and $4,507, respectively.

On May 14, 2019, the Company initiated a non-convertible, unsecured promissory note with Investor 2 for an aggregate principal amount of $100,000. The promissory note was issued with an original issue discount of $25,000, which will be ~~entitled~~recorded as interest expense ratably over the term of the note, resulting in proceeds to ~~dividends~~the company of $75,000, which was received in several tranches between March 2019 and May 2019. This note bears interest at 12% per annum and matures on October 11, 2019. All principal and interest is payable upon maturity. As of September 30, 2019, the remaining principal and interest on on this note were $100,000 and $5,109, respectively.

On July 8, 2019, the Company initiated a non-convertible, unsecured promissory note with Investor 2 for an aggregate principal amount of ~~10% per annum. One year after issuance,~~$125,000. The promissory note was issued with an original issue discount of $25,000, which will be recorded as interest expense ratably over the ~~Company is required to redeem for cash all or any portion~~term of the ~~outstanding shares~~note, resulting in proceeds to the company of ~~Series J-1 Preferred Stock~~$100,000. This note bears interest at ~~a price~~12% per ~~share equal to $1,000 plus any accrued but unpaid dividends thereon.~~annum and matures on January 8, 2020. All principal and interest is payable upon maturity. As of September 30, 2019, the remaining principal and interest on on this note were $125,000 and $3,500, respectively.

On August ~~10, 2017,~~8, 2019, the Company initiated a non-convertible, unsecured promissory note with Investor 2 for an aggregate principal amount of $65,000. 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 $45,000. This note bears interest at 12% per annum and matures on February 8, 2020. All principal and interest is payable upon maturity. As of September 30, 2019, the ~~investor entered~~remaining principal and interest on on this note were $65,000 and $1,148, respectively.

On September 9, 2019, the Company initiated a non-convertible, unsecured promissory note with Investor 2 for an aggregate principal amount of $150,000. The promissory note was issued with an original issue discount of $40,000, which will be recorded as interest expense ratably over the term of the note, resulting in proceeds to the company of $110,000, which was received in several tranches during September 2019. This note bears interest at 12% per annum and matures on March 9, 2020. All principal and interest is payable upon maturity. As of September 30, 2019, the remaining principal and interest on on this note were $150,000 and $1,393, respectively.

Between August 22, 2019 and September 27, 2019, the Company received $30,000 proceeds from Investor 2, which had not yet been documented into a ~~redemption agreement whereby the~~note. The Company ~~agreed to redeem $700,000 face value~~is accruing interest on these funds at a rate of ~~Series J-1 Preferred Stock plus~~12% per annum and has accrued ~~dividends~~$50 as of ~~$55,306 by issuing 500 million shares of common stock and a warrant to purchase 250 million shares of common stock.~~September 30, 2019.

~~The warrant is exerciseable, at a fixed exercise price~~As of ~~$0.003, on~~September 30, 2019, the issuance date through the first anniversary of the issuance date. The Warrant may not be exercised if, after giving effect to the exercise, the holder of the Warrant, together with its affiliates, would beneficially own in excess of 9.99% of theaggregate outstanding ~~shares of common stock.~~principal and interest for Investor 2 was $530,000 and $14,314, respectively.

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ASCENT SOLAR TECHNOLOGIES, INC.

NOTE ~~17. OCTOBER 2016~~11. CONVERTIBLE NOTES ~~AND EXCHANGE OF SERIES A PREFERRED STOCK~~

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	—		—		270,000		(207,500		)	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
	$	2,035,833	$	450,000	$	820,000	$	(1,059,100	)	$	2,246,733	$	(394,011	)	$	1,852,722



	Principal Balance 12/31/2018		New Notes/Adjustments			Notes assigned or exchanged			Notes converted			Principal Balance 9/30/2019		Less: Discount Balance			Net Principal Balance 9/30/2019
October 2016 Notes	$	330,000	$	—		$	—		$	—		$	330,000	$	—		$	330,000
St. George Notes	1,099,233		(172,500		)	—			(255,070		)	671,663		—			671,663
BayBridge Notes	62,500		—			1,160,000			(265,000		)	957,500		(658,333		)	299,167
Bellridge Notes	455,000		—			—			(202,000		)	253,000		—			253,000
Power Up Notes	225,000		149,500			—			(239,600		)	134,900		(61,263		)	73,637
EMA Note	75,000		—			(75,000		)	—			—		—			—
Widjaja Note	—		330,000			—			—			330,000		(54,909		)	275,091
GS Capital Notes	—		178,568			75,000			(72,718		)	180,850		(79,167		)	101,683
	$	2,246,733	$	485,568		$	1,160,000		$	(1,034,388	)	$	2,857,913	$	(853,672	)	$	2,004,241

October 2016 Convertible Notes

On October 5, 2016, the Company entered into a securities purchase agreement with a private investor ~~(“Adar Bays”)~~ for the private placement of $330,000 principal amount of ~~October 2016 Convertible Notes.~~convertible notes. At Closing, the Company sold and issued $330,000 principal amount of ~~October 2016 Convertible Notes to Adar Bays~~convertible notes in exchange for $330,000 of gross proceeds.

~~Unless earlier converted or prepaid, the October 2016 Convertible Notes will mature~~The convertible notes matured on December 31, 2017 ~~(the “Maturity Date”). The October 2016 Convertible Notes~~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 (as described below).~~default. Principal and accrued interest on the ~~October 2016 Convertible Notes~~convertible notes is payable onupon demand, the ~~Maturity Date.~~default interest rate has not been designated by the investor.

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ASCENT SOLAR TECHNOLOGIES, INC.

All principal and accrued interest on the ~~October 2016 Convertible Notes are~~convertible notes is convertible at any time, in whole or in part, at the option of ~~Adar Bays,~~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 ~~October 2016 Convertible Note,~~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 ~~October 2016 Convertible Notes~~convertible notes contain standard and customary events of default including but not limited to: (i) failure to make payments when due under the ~~October 2016 Convertible Notes;~~convertible notes; and (ii) bankruptcy or insolvency of the Company.

Outstanding principal and accrued interest on the ~~October 2016 Convertible Notes~~convertible notes were $330,000 and ~~$19,800,~~$59,950, respectively as of September 30, ~~2017.~~2019.

Pursuant to a number of factors outlined in ASC Topic 815, Derivatives and Hedging, the conversion option in the ~~October 2016 Convertible Notes~~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 closing, a derivative liability and a corresponding debt discount in the amount of $330,000 was recorded. The fair value of the derivative was greater than the face value at issuance and the difference of $341,000 was charged to interest expense at issuance. The remaining debt discount will be charged to interest expense ratably over the life of the October 2016 Convertible Notes. As of December 31, 2016, the fair value of the derivative liability was $544,746.

The derivative liability associated with the October 2016 Convertible Notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At September 30, 2017, the Company conducted a fair value assessment of the embedded derivative associated with the October 2016 Convertible Notes. As a result of the fair value assessment, the Company recorded a 451,480 gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Condensed Consolidated Statements of Operations for the three months ended September 30, 2017. The net gain recorded for the nine months ended September 30, 2017 was $251,545, to properly reflect the fair value of the embedded derivative of $293,201 as of September 30, 2017.

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 ~~October 2016 Convertible Notes~~notes approximates management’s estimate of the fair value of the embedded derivative liability ~~at September 30, 2017~~ 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 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	(423,744		)
Derivative Liability Balance as of September 30, 2019	$	452,737

As of December 31, 2018, the fair value of the derivative liability was $876,481. This value is was derived from Management's fair value assessment using the the following assumptions: annual volatility of ~~69%~~63%, present value discount rate of 12%, and a dividend yield of 0%.

~~Exchange~~The derivative liability associated with the note is subject to revaluation on a quarterly basis to reflect the market value change of ~~Outstanding Series A Preferred Stock for Convertible Notes~~

~~In 2013,~~the embedded conversion option. During 2019, Management conducted quarterly fair value assessment of the embedded derivative associated with the notes using the following assumptions: annual volatility range of 44% to 72%, present value discount rate of 12%, and a dividend yield of 0%. As a result of the fair value assessments, the Company ~~completed private placement~~recorded a net loss of $20,605 for three months ended September 30, 2019, and an aggregate net loss of $423,744 for the nine months ended September 30, 2019, as "Change in fair value of derivatives and gain/loss on extinguishment of liabilities, net" in the Consolidated Statements of Operations to ~~one accredited investor (the “Series A Holder”) of its Series A Convertible Preferred Stock. Prior to~~properly reflect the ~~exchange agreement described below the Company had 165,541 shares of Series A Preferred Stock that remained outstanding as of October 6, 2016.~~

On October 6, 2016, the Series A Holder entered into an exchange agreement (the “Exchange Agreement”) with Adar Bays. Pursuant to the exchange agreement, beginning December 5, 2016, Adar Bays has the option to exchange, from time to time, all or any portionfair value of the ~~October 2016 Convertible Notes for outstanding shares~~embedded derivative of ~~Series A Preferred Stock from the Series A Holder.~~

As of March 31, 2017, Adar Bays had elected to exchange all outstanding October 2016 Convertible Notes, in accordance with the exchange agreement, and the Series A Holder held $330,000 of the October 2016 Convertible Notes.

~~NOTE 18. SERIES K PREFERRED STOCK~~

On February 8, 2017, the Company, entered into a securities purchase agreement (“Series K SPA”) with a private investor (“Investor”), for the private placement of up to $20,000,000 of the Company’s newly designated Series K Convertible Preferred Stock (“Series K Preferred Stock”).

Per the terms of the Series K SPA, the Company was scheduled to sell 1,000 shares of Series K Preferred Stock to Investor in exchange for $1,000,000 of gross proceeds on or before each of (i) February 24, 2017, (ii) March 27, 2017, (iii) April 27, 2017, (iv) May 27, 2017 and (v) June 27, 2017. The Company was also scheduled to sell 15,000 shares of Series K Preferred Stock to Investor in exchange for $15,000,000 of gross proceeds on or before July 27, 2017. As of September 30, 2017, the Company had sold 9,010 shares of Series K Preferred Stock in exchange for $9,010,000 in cash proceeds from the private investor. Although actual closings have varied from the original schedule, the Company expects to receive the full funding amount outlined above in various tranches. The following summarizes the closings and proceeds received$452,737 as of September 30, ~~2017:~~

Closing Period Preferred Series K Shares Purchased Closing Amount
Q1 2017 150
$ 150,000
Q2 2017 4,100
4,100,000
Q3 2017 4,760
$ 4,760,000
9,010
$ 9,010,000

The Series K Preferred Stock ranks senior to the Company’s common stock in respect to dividends and rights upon liquidation. The Series K Preferred Stock will not have voting rights and the holders of the Series K Preferred Stock will not be entitled to any fixed rate of dividends.2019.

The shares of the Series K Preferred Stock will be convertible at the option of the holder into common stock at a fixed conversion price equal to $0.004. At no time may the Series K Preferred Stock be converted if the number of shares of common stock to be received by Investor pursuant to such conversion, when aggregated with all other shares of common stock then beneficially (or deemed beneficially) owned by Investor, would result in Investor beneficially owning more than 19.99% of all common stock then outstanding. The following table summarizes the conversion activity of Series K Preferred Stock:

Conversion Period Preferred Series K Shares Converted Value of Series K Preferred Shares Common Shares Issued
Q2 2017 3,200
$ 3,200,000
800,000,000
Q3 2017 3,000
$ 3,000,000
750,000,000
6,200
$ 6,200,000
1,550,000,000

As of September 30, 2017, the investor owned approximately 18% of the Company's outstanding common stock and there are 2,810 shares of Series K Preferred Stock Outstanding, representing a value of $2,810,000.

The Company is required to redeem for cash any outstanding shares of the Series K Preferred Stock at a price per share equal to $1,000 plus any accrued but unpaid dividends (if any) thereon on the fifth anniversary of the date of the original issue of such shares.

Upon our liquidation, dissolution or winding up, holders of Series K 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.

Upon issuance, in accordance with ASC 480-10, the Series K Preferred Stock was classified as a liability on the Consolidated Balance Sheets. Pursuant to a number of factors outlined in ASC Topic 815, the conversion option in the Series K Preferred Stock was deemed to not require bifurcation or separate accounting treatment.

~~NOTE 19. ST. GEORGE CONVERTIBLE NOTE~~St. George Convertible Note

On September 8, 2017, the Company entered into a securities purchase agreement with St. George Investments, LLC ~~(“Investor”~~("St. George"), for the private placement of $1,725,000 principal amount of the Company’s ~~Original Issue Discount Convertible Promissory Notes.~~original issue discount convertible notes.

On September 11, 2017, the Company sold and issued a $1,725,000 principal ~~amount of the~~ convertible ~~notes~~note to ~~the Investor~~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 ~~fee,~~costs, will be charged to interest expense, ratably, over the life of the note.

~~Unless earlier converted or prepaid, the convertible notes will mature~~This note matured on March 11, 2019. The ~~notes do~~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 ~~notes,~~convertible note, the Company will make a monthly cash repayment on the ~~notes~~note of approximately $96,000. Thereafter, ~~the Investor~~St. George may request that the Company make monthly partial redemptions of the note up to $150,000 per month. If ~~the Investor~~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. But~~amounts; however, in no event, can the amount requested ~~by the Investor~~ for any one month exceed $275,000.

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ASCENT SOLAR TECHNOLOGIES, INC.

Redemption amounts are payable by the Company in cash. Beginning ten months after the issuance of the convertible ~~notes,~~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. During the three months ended September 30 ,2019, the Company reversed the estimated cash payment premium of $172,500, due to the possibility of payment in cash being extremely unlikely.

Beginning six months after the issuance of the convertible ~~notes,~~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 ~~Notes are~~convertible note is convertible at any time, in whole or in part, at the option of ~~the Investor~~St. George into shares of ~~Common Stock~~common stock at a fixed conversion price of ~~$0.004~~$4.00 per share.

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

In connection with the closing under the ~~Note SPA,~~securities purchase agreement, the Company issued ~~37,500,000~~37,500 unregistered shares of common stock to ~~the Investor~~St. George as an origination fee. The closing stock price on the date of close was ~~$0.0017~~$1.70 resulting in an interest expense of $63,750 being recorded as of the date of close.

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

As of September 30, 2019, cash payments of $191,667 had been made on the convertible note, and $861,670 had been converted into 531,575,123 shares of the Company's common stock. The remaining balance on the note was $671,663 as of September 30, 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
Q2 2019	59,320		86,636,364
Q3 2019	89,000		457,222,222
	$	861,670	618,211,487

Pursuant to a number of factors outlined in ASC Topic 815, Derivatives and Hedging, the conversion option in the ~~Convertible Promissory Notes~~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 closing, a derivative liability and a corresponding debt discount in the amount of $468,095 was recorded.~~

The derivative liability associated with the Convertible Promissory Notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At September 30, 2017, the Company conducted a fair value assessment of the embedded derivative associated with the October 2016 Convertible Notes. As a result of the fair value assessment, the Company recorded a $225,319 gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017, to properly reflect the fair value of the embedded derivative of $242,776 as of September 30, 2017.

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 Promissory Notes~~notes approximates management’s estimate of the fair value of the embedded derivative liability ~~at September 30, 2017~~ based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions identified below.

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ASCENT SOLAR TECHNOLOGIES, INC.

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	(975,258		)
Derivative Liability Balance as of September 30, 2019	$	84,742

As of December 31, 2018, the derivative liability was $1,060,000. This value is was derived from Management's fair value assessment using the the following assumptions: annual volatility of ~~74%~~52%, present value discount rate of 12%, and a dividend yield of 0%.

The derivative liability associated with the note is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. During 2019, Management conducted quarterly fair value assessment of the embedded derivative associated with the notes using the following assumptions: annual volatility range of 44% to 52%, present value discount rate of 12%, and a dividend yield of 0%. As a result of the fair value assessments, the Company recorded a net gain of $405,034 for three months ended September 30, 2019, and an aggregate net gain of $975,258for the nine months ended September 30, 2019, 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 $84,742 as of September 30, 2019.

~~NOTE 20. MAKE-WHOLE DIVIDEND LIABILITY~~

~~In June 2013,~~

BayBridge Convertible Note

On September 7, 2018, the Company, entered into an securities exchange agreement (“Exchange Agreement 2”) BayBridge Capital Fund LP ("BayBridge).

Pursuant to the terms of Exchange Agreement 2, BayBridge agreed to surrender and exchange an outstanding promissory note with a ~~Series A Preferred Stock Purchase Agreement. Holders~~principal balance of ~~Series A Preferred Stock are entitled to cumulative dividends~~$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 ~~8.0%~~12% per annum, ~~with~~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 ~~dividend rate being indexed~~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 ~~Company's stock~~lesser of (i) a price ~~and subject~~equal to ~~adjustment. Conversion~~$0.15, or ~~redemption~~(ii) 70% of the ~~Series A Preferred Stock within 4 years~~lowest traded price for the shares over the prior five trading days.

As of ~~issuance requires~~September 30, 2019, Exchange Note 2 had been converted in full.

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

Pursuant to the ~~holders, whereby dividends~~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 ~~full four year period are~~terms of Exchange Agreement 4, BayBridge agreed to ~~be paid~~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”).

On May 2, 2019, as described in ~~cash or common stock (valued at 10% below market price)~~Note 10, the Company, entered into an additional securities exchange agreements (“Exchange Agreement 5”) with Baybridge.

Pursuant to the terms of Exchange Agreement 5, BayBridge agreed to surrender and exchange an outstanding promissory notes with a principal balance of $315,000, plus accrued interest of $37,872, for a convertible note with an aggregate principal amount of $450,000 and an original issue discount of $97,128 (“Exchange Note 5”).

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ASCENT SOLAR TECHNOLOGIES, INC.

On August 22, 2019, as described in Note 10, the Company, entered into an additional securities exchange agreements (“Exchange Agreement 6”) with Baybridge.

Pursuant to the terms of Exchange Agreement 6, BayBridge agreed to surrender and exchange an outstanding promissory notes with a principal balance of $300,000, plus accrued interest of $23,400, for a convertible note with an aggregate principal amount of $400,000 and an original issue discount of $76,600 (“Exchange Note 6”).

The ~~Company concluded~~Exchange Notes are unsecured, have no applicable registration rights, bear interest at a rate of 12% per annum, mature twelve months from the ~~make-whole dividends should be characterized as embedded derivatives under ASC 815. The make-whole dividends were expensed at the time~~date of issuance, and ~~recorded~~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 the date of issuance of the Exchange Notes, and then at any time until the Exchange Notes are fully paid, to convert any outstanding and unpaid principal and interest into shares of common stock at a variable conversion price equal to the lesser of (i) a price equal to $0.0005, or (ii) 65% 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 the Exchange Notes if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 4.99% of the outstanding shares of common stock.

As of September 30, 2019, aggregate principal of $472,500 and interest of $11,921 had been converted into 821,478,573 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 through 6, as ~~"Make-whole dividend liability"~~of September 30, 2019, were $957,500 and $40,062, 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
Q2 2019	88,500		2,079		141,822,223
Q3 2019	86,000		2,261		616,247,346
	$	472,500	$	11,921	821,478,573

Pursuant to a number of factors outlined in ASC Topic 815, Derivatives and Hedging, the conversion option in the ~~Condensed Consolidated Balance Sheets.~~

~~The fair~~notes were deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of ~~these dividend liabilities, which are indexed to~~ the ~~Company's common stock, must be evaluated at each period end.~~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 ~~determination~~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	$	113,846
Additional derivative liability on new notes	1,376,670
Change in fair value of derivative liability	(423,893		)
Liability extinguished	(152,301		)
Derivative Liability Balance as of September 30, 2019	$	914,322

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ASCENT SOLAR TECHNOLOGIES, INC.

At December 31, 2018, the derivative liability associated with Exchange Note 2 was $113,846. This value is was derived from Management's fair value assessment using the the following assumptions: annual volatility of 74%, present value discount rate of 12%, and a dividend yield of 0%. During the first quarter of 2019, Exchange Note 2 was converted in full and the derivative liability balance of $113,846 was written off as a gain as "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 ~~forecasting~~bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance based on the following assumptions: annual volatility of 67%, present value discount rate of 12%, and a dividend yield of 0%, 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 conversion option in Exchange Note 5 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 based on the following assumptions: annual volatility of 68% present value discount rate of 12%, and a dividend yield of 0%, and appropriately recorded that value as a derivative liability. At May 2, 2019, the derivative liability associated with Exchange Note 5 was $499,685. The fair value of the derivative was greater than the face value at issuance and the difference of $150,035 was charged to interest expense at issuance. The remaining debt discount of $349,650 will be charged to interest expense ratably over the life of the note.

The conversion option in Exchange Note 6 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 based on the following assumptions: annual volatility of 64% present value discount rate of 12%, and a dividend yield of 0%, and appropriately recorded that value as a derivative liability. At May 2, 2019, the derivative liability associated with Exchange Note 6 was $566,345. The fair value of the derivative was greater than the face value at issuance and the difference of $323,400 was charged to interest expense at issuance. The remaining debt discount of $242,945 will be charged to interest expense ratably over the life of the note.

The derivative liability associated with the Exchange Notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. During 2019, Management conducted quarterly fair value assessment of the embedded derivative associated with the notes using the following assumptions: annual volatility range of 46% and 69%, present value discount rate of 12%, and a dividend yield of 0%. As a result of the fair value assessments, the Company recorded a net gain of $384,436 for three months ended September 30, 2019, and an aggregate net gain of $423,893 for the nine months ended September 30, 2019, 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 $914,322 as of September 30, 2019.

Bellridge Convertible Notes

On July 25, 2018, 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. This Exchange Note was fully converted during the nine months ended September 30, 2019.

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ASCENT SOLAR TECHNOLOGIES, INC.

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 September 30, 2019, an aggregate principal of $447,000 and interest of $24,265, on the Bellridge convertible notes had been converted into 647,170,163 shares of common stock and no cash payments of principal or interest had been made. The aggregate principal and accrued interest balances as of September 30, 2019 were $253,000 and $55,514, 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
Q2 2019	47,385		3,875		68,142,087
Q3 2019	89,000		9,779		529,061,862
	$	447,000	$	24,265	647,170,163

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 this note:



Derivative Liability Balance as of December 31, 2018	$	486,279
Liability extinguished	(43,521		)
Change in fair value of derivative liability	(408,132		)
Derivative Liability Balance as of September 30, 2019	$	34,626

At December 31, 2018, the derivative liability associated with these notes was $486,279. This value is was derived from Management's fair value assessment using the the following assumptions: annual volatility range between 40% and 74%, present value discount rate of 12%, and a dividend yield of 0%. During the first quarter of 2019, the exchange note was converted in full and the derivative liability balance of $43,521 was written off as a gain as "Change in fair value of derivatives and gain/loss on extinguishment of liabilities, net" in the Consolidated Statements of Operations.

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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. During 2019, Management conducted quarterly fair value assessment of the embedded derivative associated with the notes using the following assumptions: annual volatility range of 41% and 72%, present value discount rate of 12%, and a dividend yield of 0%. As a result of the fair value assessments, the Company recorded a net gain of $150,833 for three months ended September 30, 2019, and an aggregate net gain of $408,132 for the nine months ended September 30, 2019, 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 $34,626 as of September 30, 2019.

PowerUp Convertible Notes

During 2018, the Company entered into three securities purchase agreements with Power Up Lending Group, LTD ("Power Up"), for the private placement of three convertible notes with an aggregate principal amount of $225,000.

On February 14, 2019, the Company entered into a fourth securities purchase agreement with Power Up, for the private placement of a fourth convertible note with a principal value of $54,500.

On March 7, 2019, the Company entered into a fifth securities purchase agreement with Power Up, for the private placement of a fifth convertible note with a principal value of $52,500.

On May 3, 2019, the Company entered into a sixth securities purchase agreement with Power Up, for the private placement of a sixth convertible note with a principal value of $42,500.

These notes are unsecured, bear interest at a rate of 8% per annum, and mature on twelve months following the date of issuance; principal and interest is due upon maturity. In the event of default, the interest rate per annum increases to 22%.

Beginning in six months after issuance, 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 September 30, 2019, the three 2018 notes had been converted in full. The aggregate principal and interest converted was $239,600 and $9,000, respectively, into 297,994,634 shares of common stock. No cash payments of principal or interest had been made. The aggregate principal and accrued interest balances as of September 30, 2019 were $134,900 and $7,193, 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
Q2 2019	42,500		1,700		47,155,556
Q3 2019	14,600		—		155,824,176
	$	239,600	$	9,000	297,994,634

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ASCENT SOLAR TECHNOLOGIES, INC.

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	222,593
Liability extinguishment	(511,137		)
Change in fair value of derivative liability	(89,997		)
Derivative Liability Balance as of September 30, 2019	$	132,596

At December 31, 2018, the derivative liability associated with these notes was $511,137. This value is was derived from Management's fair value assessment using the the following assumptions: annual volatility range between 70% to 76%, present value discount rate of 12%, and a dividend yield of 0%. During the first half of 2019, the three December 2018 notes were converted in full and the derivative liability balance of $511,137 was written off as a gain as "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 based on the following assumptions: annual volatility of 65%, present value discount rate of 12%, and a dividend yield of 0%, 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 based on the following assumptions: annual volatility of 67%, present value discount rate of 12%, and a dividend yield of 0%, and appropriately recorded that value as a derivative liability. At March 7, 2019, the derivative liability associated with the fifth 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.

The conversion option in the sixth 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 based on the following assumptions: annual volatility of 69%, present value discount rate of 12%, and a dividend yield of 0%, and appropriately recorded that value as a derivative liability. At May 3, 2019, the derivative liability associated with the sixth note was $91,940. The fair value of the derivative was greater than the face value at issuance and the difference of $49,440 was charged to interest expense at issuance. The remaining debt discount of $42,500 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. During 2019, Management conducted quarterly fair value assessment of the embedded derivative associated with the notes using the following assumptions: annual volatility range of 46% to 71%, present value discount rate of 12%, and a dividend yield of 0%. As a result of the fair value assessments, the Company recorded a net gain of $41,327 for three months ended September 30, 2019, and an aggregate net gain of $89,997 for the nine months ended September 30, 2019, 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 $132,596 as of September 30, 2019.

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.

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ASCENT SOLAR TECHNOLOGIES, INC.

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.

At December 31, 2018, the derivative liability associated with the note was $240,156. This value is was derived from Managements fair value assessment using the the following assumptions: annual volatility of 87%, present value discount rate of 12%, and a dividend yield of 0%. On February 22, 2019, this derivative value was assigned to GS Capital (see below).

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



Derivative Liability Balance as of December 31, 2018	$	240,156
Liability assigned	(240,156		)
Derivative Liability Balance as of June 30, 2019	$	—

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.

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 September 30, 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 September 30, 2019 were $330,000 and $28,425, respectively.

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ASCENT SOLAR TECHNOLOGIES, INC.

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	(77,774		)
Derivative Liability Balance as of September 30, 2019	$	141,860

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 based on the following assumptions: annual volatility of 64%, present value discount rate of 12%, and a dividend yield of 0%, 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 this note is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. During 2019, Management conducted quarterly fair value assessment of the embedded derivative associated with the notes using the following assumptions: annual volatility range of 43% to 73%, present value discount rate of 12%, and a dividend yield of 0%. As a result of the fair value assessments, the Company recorded a net gain of $6,843 for three months ended September 30, 2019, and an aggregate net gain of $77,774 for the nine months ended September 30, 2019, 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 $141,860 as of September 30, 2019.

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). On August 26, 2019, the Company sold and issued to GS, an additional unsecured convertible promissory note in the the amount of $70,500.

These notes are unsecured, bear interest at 8% per annum, matures twelve months from the date of issuance, and 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. Principal and interest on the note will be payable upon maturity. There are no registration rights applicable to the note.

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.

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

As of September 30, 2019, principal of $72,718 and interest of $5,047 had been converted into 352,747,428 shares of common stock and no cash payments of principal or interest had been made. The aggregate principal and accrued interest balances as of September 30, 2019 were $180,850 and $6,044, respectively.

The following table summarizes the conversion activity of these notes:



Conversion Period	Principal Converted		Interest Converted		Common Shares Issued
Q2 2019	$	15,000	$	763	$	17,321,692
Q3 2019	$	57,718	$	4,284	$	335,425,736
	$	72,718	$	5,047	$	352,747,428

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ASCENT SOLAR TECHNOLOGIES, INC.

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	210,092
Derivative liability assigned	240,156
Change in fair value of derivative liability	(405,737		)
Derivative Liability Balance as of September 30, 2019	$	44,511

The conversion option in the February 2019 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 based on the following assumptions: annual volatility of 66%, present value discount rate of 12%, and a dividend yield of 0%, 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 (see above).

The conversion option in the August 2019 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 based on the following assumptions: annual volatility of 64%, present value discount rate of 12%, and a dividend yield of 0%, and appropriately recorded that value as a derivative liability. At August 26, 2019, the derivative liability associated with the GS note was $109,029. The fair value of the derivative was greater than the face value at issuance and the difference of $44,029 was charged to interest expense at issuance. The remaining debt discount of $65,000 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. During 2019, Management conducted quarterly fair value assessment of the embedded derivative associated with the notes using the following assumptions: annual volatility range of 35% and 70%, present value discount rate of 12%, and a dividend yield of 0%. As a result of the fair value assessments, the Company recorded a net gain of $208,446 for three months ended September 30, 2019, and an aggregate net gain of $405,737 for the nine months ended September 30, 2019, 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 $44,511 as of September 30, 2019.

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 ~~volatility, expected average annual return~~ and subject to adjustment.

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 September 30, 2019, the preferred shares were not eligible for conversion ~~date.~~ 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 nine months ended September 30, ~~2017, the fair value~~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 ~~make-whole liability decreased $0.25 million from the fair value at December 31, 2016 as a result of the conversion activity described below.~~

Company's common stock, respectively. As of ~~March 31, 2017, a Preferred Series A holder had converted 104,785~~September 30, 2019, there were 48,100 shares of Series A Preferred Stock ~~and the related make whole dividend of $419,140, which resulted in the issuance of 173,946,250 shares of common stock.~~

~~On June 17, 2017, the make-whole dividend reached maturity. As such, the Company began accruing additional dividends on the Series A Preferred Stock.~~

~~As of September 30, 2017, there were 60,756 shares of Series A~~ outstanding and ~~the Company was entitled to redeem the outstanding Series A preferred shares for $486,048, plus~~accrued and unpaid dividends of ~~$264,289, payable in cash or common shares.~~$306,771.

NOTE ~~21.~~13. STOCKHOLDERS’ ~~DEFICIT~~EQUITY (DEFICIT)

Common Stock

At September 30, ~~2017,~~2019, the Company had ~~20,000,000,000~~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 September 30, ~~2017,~~2019, the Company had ~~8,717,859,917~~2,856,539,850 shares of common stock outstanding. The Company has not declared or paid any dividends related to the common stock through September 30, ~~2017.~~2019.

Preferred Stock

At September 30, ~~2017,~~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 Outstanding~~
~~Series A~~	~~60,756~~
~~Series F~~	~~140~~
~~Series J~~	~~1,075~~
~~Series K~~	~~2,810~~



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	—

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ASCENT SOLAR TECHNOLOGIES, INC.

Series A Preferred Stock

Refer to Note 10 ~~descriptions of~~12 for Series A Preferred ~~Stock.~~Stock activity.

Series B-1, B-2, C, D, D-1, E, F, ~~Preferred Stock~~

~~Refer to~~ ~~Note 12~~ ~~descriptions of Series F Preferred Stock.~~

~~Series~~G, H, I, J, ~~Preferred Stock~~

~~Refer to~~ ~~Note 16~~ ~~descriptions of Series J Preferred Stock.~~

~~Series~~J-1, and K Preferred Stock

~~Refer to~~ ~~Note 18~~ ~~descriptions of~~

There were no transactions involving the Series B-1, B-2, C, D, D-1, H, I, J, J-1, or K ~~Preferred Stock.~~

~~Warrants~~

~~On July 24, 2017,~~during the Company issued a warrant for 250 million shares of common stock, in connection with a settlement agreement with a consultant. The warrant is exerciseable at a fixed exercise price of $0.004, on the issuance date through the first anniversary of the issuance date. The warrant may not be exercised if, after giving effect to the exercise, the holder, together with its affiliates, would beneficially own in excess of 9.99% of the Company's outstanding shares of common stock.

The Company conducted a fair value assessment of the warrant upon issuance using a Black Scholes model with the following inputs: stock price on the date of issuance of $0.0007, stock volatility of 234%, and a risk free rate of 1.23%. Using these parameters, the Company calculated a fair value of $88,937 and recorded a corresponding expense on the Company's consolidated and condensed statement of operations.

On August 10, 2017, the Company issued a warrant for 250 million shares of common stock in connection with a preferred stock redemption agreement. The warrant is exerciseable, at a fixed exercise price of $0.003, on the issuance date through the first anniversary of the issuance date. The Warrant may not be exercised if, after giving effect to the exercise, the holder, together with its affiliates, would beneficially own in excess of 9.99% of the Company's outstanding shares of common stock.

The Company conducted a fair value assessment of the warrant upon issuance using a Black Scholes model with the following inputs: stock price on the date of issuance of $0.0015, stock volatility of 230%, and a risk free rate of 1.22%. Using these parameters, the Company calculated a fair value of $246,803 and recorded a corresponding expense on the Company's consolidated and condensed statement of operations.nine months ended September 30, 2019.

NOTE ~~22.~~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 ~~Condensed~~ Consolidated Statements of Operations was as follows:

For the three months ended September 30, For the nine months ended September 30,
2017 2016 2017 2016
Share-based compensation cost included in:
Research and development $ 659
$ 29,502
$ 17,557
$ 154,786
Selling, general and administrative 12,147
121,294
91,160
553,990
Total share-based compensation cost $ 12,806
$ 150,796
$ 108,717
$ 708,776

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

For the three months ended September 30, For the nine months ended September 30,
2017 2016 2017 2016
Type of Award:
Stock Options $ 12,806
$ 58,271
$ 82,388
$ 295,229
Restricted Stock Units and Awards —
92,525
26,329
413,547
Total share-based compensation cost $ 12,806
$ 150,796
$ 108,717
$ 708,776



	For nine months ended September 30,		For nine months ended September 30,
	2019		2018
Research and development	$	—	$	642
Selling, general and administrative	$	20,750	$	24,180
Total share-based compensation cost	$	20,750	$	24,822

Stock Options: The Company recognized share-based compensation expense for stock options of ~~approximately $82,000~~$20,750 to officers, directors and employees for the nine months ended September 30, ~~2017~~2019 related to stock option awards, ~~ultimately expected to vest. The weighted average~~reduced for estimated ~~fair value of employee stock options granted~~forfeitures; there was no expense recorded for the ~~nine~~three months ended September 30, ~~2016 was~~ ~~$1.20~~ ~~per share, and there~~2019. There were no ~~stock options granted~~option grants during the nine months ended September 30, ~~2017~~2019 or September 30, 2018.~~. Fair value was calculated using the Black-Scholes Model with the following assumptions:~~



		~~For the nine months ended September 30,~~
		~~2016~~
~~Expected volatility~~		~~115%~~
~~Risk free interest rate~~		1%
~~Expected dividends~~		—
~~Expected life (in years)~~		~~5.8~~

Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate of return is based on the yield of U.S. Treasury bonds with a maturity equal to the expected term of the award. Historical data is used to estimate forfeitures within the Company’s valuation model. The Company’s expected life of stock option awards is derived from historical experience and represents the period of time that awards are expected to be outstanding.

As of September 30, ~~2017, total compensation cost related to non-vested~~2019, there were no unvested stock ~~options not yet recognized was~~ ~~$44,000~~ ~~which is expected to be recognized over a weighted average period~~options. As of ~~approximately~~ ~~1.5~~ ~~years,~~ ~~66,607~~September 30, 2019, 97 shares were vested ~~or expected to vest in the future at a weighted average exercise price of~~ ~~$39.61~~, and ~~195,218~~120 shares remained available for future grants under the Option Plan.

The following table summarizes stock option activity within the Stock Option Plan



	Stock Option Shares		Weighted Average Remaining Contractual Life in Years
Outstanding at December 31, 2017	195		7.32
Granted	—
Exercised	—
Canceled	(85	)
Outstanding at December 31, 2018	110		5.18
Granted	—
Exercised	—
Canceled	(13	)
Outstanding at September 30, 2019	97		4.94
Exercisable at September 30, 2019	97		4.94

Restricted Stock: ~~In addition to the stock options discussed above, the~~The Company did not recognized share-based compensation expense related to restricted stock grants of ~~$26,000~~for the nine months ended September 30, ~~2017~~.2019 or for the year ended December 31, 2018. There were no restricted stock grants for the ~~nine months ended~~ ~~September 30, 2017, and the weighted average estimated fair value of restricted stock grants for the~~ ~~nine~~ ~~months~~periods ended September 30, ~~2016 was~~ ~~$2.00~~ ~~per share.~~2019 and December 31, 2018.

As of September 30, ~~2017,~~2019, there was no unrecognized share-based compensation expense from unvested restricted stock, no shares were expected to vest in the future, and ~~518,388~~496 shares remained available for future grants under the Restricted Stock Plan.

NOTE 15. SUBSEQUENT EVENTS

~~NOTE 23. RELATED PARTY TRANSACTIONS~~

Offering of Convertible Note (Note 11)

On ~~August 29, 2016,~~October 22, 2019, the Company entered into a ~~note purchase~~securities exchange agreement with ~~Tertius Financial Group Pte. Ltd. ("TFG”) for~~Bellridge Capital. Pursuant to the ~~private placement of $330,000~~terms of the ~~Company’s original issue discount~~exchange agreement, Bellridge agreed to surrender outstanding promissory notes, with an ~~original maturity date~~aggregate balance of ~~November 26, 2016. The notes bear interest of 6% per annum and~~$277,342 including principal and ~~interest on the notes are payable upon maturity. The notes are unsecured and not convertible into equity shares of the Company.~~

~~On December 6, 2016,~~interest. In exchange, the Company issued ~~a new $600,000 original issue discount~~an unsecured convertible note to ~~TFG in exchange for (i) $200,000~~Bellridge with a principal amount of ~~additional gross proceeds and (ii) cancellation of the existing outstanding $330,000 note. The new TFG~~$450,000.

This note bears interest at a rate of 6%10% per annum, ~~and~~ matures on ~~December 31, 2017. Principal~~October 22, 2020, and contains standard and customary events of default. In the event of default, the interest rate increased to 18% per annum. All principal and interest ~~on the new TFG note~~ is ~~payable at~~due upon maturity. ~~Following the transaction, the outstanding balance of the new note was $602,000 (including accrued and unpaid interest) with a discount of $60,000 as of December 31, 2016.~~

~~On January 19, 2017,~~At any time following the ~~Company issued 333,333,333~~issuance of this note, Bellridge has the right, until the note is paid in full, to convert any outstanding and unpaid principal and interest into shares ~~of unregistered common stock in a private placement to TFG pursuant to a Securities Purchase Agreement (the “SPA”).~~

~~TFG is a Singapore based entity controlled and 50% owned by Ascent’s President & CEO, Victor Lee, and owns less than 4%~~ of the Company's ~~outstanding~~common stock at a variable conversion price equal to the lesser of (i) a price equal to $0.0005, or (ii) 70% of the lowest closing bid price for shares ~~at September 30, 2017.~~over the prior five trading days.

~~All related party transactions were approved by our independent board~~

Conversions of ~~directors.~~Convertible Notes (Note 11)

~~NOTE 24. COMMITMENTS AND CONTINGENCIES~~

~~The Company is subject~~Subsequent to various legal proceedings, both asserted and unasserted, that arise in the ordinary course of business. The Company cannot predict the ultimate outcome of such legal proceedings or in certain instances provide reasonable ranges of potential losses. However, as of the date of this report, the Company believes that none of these claims will have a material adverse effect on its consolidated financial position or results of operations. In the event of unexpected subsequent developments and given the inherent unpredictability of these legal proceedings, there can be no assurance that the Company’s assessment of any claim will reflect the ultimate outcome, and an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s consolidated financial position or results of operations in particular quarterly or annual periods.

On October 21, 2011, the Company was notified that a complaint claiming $3.0 million for an investment banking fee (the “Lawsuit”) was filed by Jefferies & Company, Inc. (“Jefferies”) against the Company in New York State Supreme Court in the County of New York. In December 2010, Ascent and Jefferies entered into an engagement agreement (the “Fee Agreement”) pursuant to which Jefferies was hired to act as the Company's financial advisor in relation to certain potential transactions. In addition, Jefferies claimed an award for attorney's fees and prejudgment interest in the approximate amount of $1.2 million.

On April 16, 2014, the parties settled the lawsuit where the Company agreed to pay Jefferies a total of $2.0 million in equal installments over 40 months. The Company paid $339,481 during the nine months ended September 30, 2017.

The Company records a liability in its financial statements for costs related to claims, including settlements and judgments, where the Company has assessed that a loss is probable and an amount can be reasonably estimated. The Company accrued $1.7 million, the net present value of the $2.0 million settlement, as of December 31, 2013. As of September 30, 2017, the settlement had been redeemed in full and there was no remaining accrued litigation settlement, recorded as a current liability in the Condensed Consolidated Balance Sheets.

~~NOTE 25. SUBSEQUENT EVENTS~~

~~Update on Series F Preferred Stock~~

~~As of November 10, 2017,~~ an additional ~~30 shares of Series F Preferred Stock, with a value of $30,000, were~~$24,000 in principal for St. George was converted into ~~33,333,333~~240,000,000 shares of common stock.

~~Updates on Notes Payable~~

~~On October 23, 2017, the Company amended its promissory note with a vendor whose note is discussed in~~ ~~Note. 8. The note matured on October 23, 2017 and was due and payable as of this date. The amendment extended the note's maturity~~Subsequent to ~~November 6, 2017. As of~~ the date of this ~~filing, the Company is waiting to hear from the vendor on how they wish to proceed with payment.~~

~~Updates on Promissory Notes~~

~~On October 6, 2017, the Company and its investor entered into a Promissory Note Exchange Agreement to convert a promissory note with a~~report, an additional $16,900 in principal, ~~balance of $103,000 and~~plus accrued interest ~~of $5,233 in to common shares. Per the terms of the agreement the promissory note~~and deposit fees, for BayBridge was ~~canceled and 72,500,000 shares were issued.~~

On October 13, 2017, the Company made its first monthly redemption on the September 13, 2017 promissory note. This redemption was fulfilled in shares of common stock. The redemption amount of $116,390, consisting of $81,348 principal and $35,042 interest, resulted in the issuance of 93,786,866converted into 175,047,423 shares of common stock.

~~On October 31, 2017,~~Subsequent to the Company issued a $250,000 promissory note to an accredited investor. On November 2, 2017, the Company received $250,000 of gross proceeds. The note matures on January 31, 2018, bears interest at a rate of 12% per annum, from date of ~~funding, is unsecured and not convertible~~this report, an additional $267,000 in principal, plus accrued interest, for Bellridge was converted into 464,037,300 shares of ~~equity. All principal and interest on the note are payable upon maturity.~~common stock.

~~Update on St. George Convertible Note~~Subsequent to the date of this report, an additional $10,400 in principal, plus accrued interest and deposit fees, for Power Up was converted into 160,000,000 shares of common stock.

~~On October 8, 2017 and November 8, 2017,~~Subsequent to the ~~Company issued two cash payments~~date of ~~$95,833 each,~~this report, $11,350 in ~~accordance with the terms~~principal, plus accrued interest, for GS Capital was converted into 120,697,800 shares of ~~the St. George Convertible Note. Following this payment, the remaining principal balance on the note was $1,533,333.~~common stock.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and the notes to those financial statements appearing elsewhere in this Form 10-Q. This discussion and analysis contains statements of a forward-looking nature relating to future events or our future financial performance. As a result of many factors, our actual results may differ materially from those anticipated in these forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Overview

We are a company formed to commercialize flexible ~~photovoltaic~~PV modules using our proprietary technology. For the ~~three and~~ nine months ended September 30, ~~2017~~,2019, we generated ~~$242,055 and $547,792~~$628,124 of revenue. Our revenue of $628,124 from product sales ~~respectively.~~accounted for 100% of total revenue, we did not have any revenue generated from government research and development contracts during the three months ended September 30, 2019. As of September 30, 2019, we had an accumulated deficit of approximately $420 million.

In ~~2012, we transitioned our business model adding~~January 2017, Ascent was awarded a ~~second business focused on developing~~contract to supply high-voltage SuperLight thin-film CIGS PV ~~integrated consumer electronics. In June of 2012, we launched our~~blankets. These 50W, fully laminated, flexible blankets were manufactured using a new ~~line of consumer products under~~process that was optimized for high performance in near-space conditions at elevated temperatures, and are custom designed for easy modular integration into series and parallel configurations to achieve the ~~EnerPlex™ brand,~~desired voltage and ~~introduced our first product, the Surfr™ battery and a solar case~~current required for the Apple® iPhone® 4/4S smart phone featuring our ultra-light CIGS thin film technology integrated directly into the case. The case incorporates our ultra-light and thin PV module into a sleek, protective iPhone 4/4S case, along with a thin, life extending, battery. The charger adds minimal weight and bulk to the iPhone, yet provides supplemental charging when needed.such application.

In December 2012, we launched the EnerPlex Kickr™ and EnerPlex Jumpr™ product series. The Kickr IV is an extremely portable, compact and durable solar charging device, approximately seven inches by seven inches when folded, and weighs less than half a pound. The Kickr IV provides 6.5 watts of regulated power that can help charge phones, digital cameras, and other small USB enabled devices. The Kickr IV is ideal for outdoor activities such as camping, hiking and mountain climbing as well as daily city use. To complement the Kickr IV, we also released the Jumpr™ series of portable power banks. The Jumpr™ series provides a compact power storage solution for those who need to take the power of the sun with them on the go. Throughout 2014, EnerPlex released multiple additions to the Jumpr line of products: including the Jumpr Stack 3,6 & 9, innovative batteries equipped with tethered micro-USB and Apple Lightning cables and revolutionary Stack & Charge design, enabling batteries to be charged simultaneously when they are placed on top of one another. Also released in 2014 were the Jumpr Slate series, products which push the boundaries of how thin batteries can be, the Jumpr Slate 10k, at less than 7mm thick was the thinnest lithium polymer battery available when it was released. The Jumpr Slate 5k and 5k Lightning each come with a tethered micro-USB and Lightning cable respectively; freeing consumers from worrying about toting extra cables with them while on the move.

Throughout 2013, we aggressively pursued new distribution channels for the EnerPlex™ brand; these activities have led to placement in a variety of high-traffic ecommerce venues such as www. walmart.com, www.brookstone.com, www.newegg.com as well as many others including our own e-commerce platform at www.goenerplex.com. The April 2013 placement of EnerPlex products at Fry’s Electronics, a US West Coast consumer electronics retailer, represented our first domestic retail presence. EnerPlex products are carried in all of Fry’s 34 stores across 9 states. In 2014 EnerPlex products launched in multiple online and brick-and-mortar partners; including BestBuy.com, 300 premium Verizon Wireless stores via partner The Cellular Connection (TCC) and 25 Micro Center stores across 16 states. In the third quarter of 2015, EnerPlex expanded its presence to 456 total TCC Verizon Wireless Premium retailers, adding 156 stores.

At Outdoor Retailer 2014, EnerPlex debuted the Generatr Series, the Generatr 1200 and Generatr 100 are lithium-ion based large format batteries; lighter and smaller than competitors, the Generatr Series is targeted for consumers who require high-capacity, high-output batteries which remain ultra-portable when compared to the competition. Also debuted at Outdoor Retailer was the Commandr 20, a high output solar charger designed specifically to integrate with and charge the Generatr series, allowing consumers to stay out longer without needing to charge their Generatr batteries from a traditional power source. In August 2014, the Kickr II+ and IV+ were also announced, these products represent another evolution in EnerPlex’s line of solar products; integrated with a 500mAh battery the Kickr II+ and IV+ are able to provide a constant flow of power even when there are intermittent disruptions in sunlight.

During the first quarter of 2015 we reached an agreement with EVINE Live, one of the premier home shopping networks with TV programming that reaches over 87 million US homes to begin selling EnerPlex products during their broadcasts. During the second quarter EnerPlex launched the Generatr S100 and select other products exclusively with EVINE, and in the third quarter the Generatr 1200 launched exclusively with EVINE for a limited period.

During the second quarter of 2015 EnerPlex launched its products into two world recognized retailers; including over 100 The Sports Authority stores nationwide, in addition to launching in select Cabela’s, “The World’s Foremost Outfitter”, stores and via Cabela’s online catalog. Internationally, EnerPlex products became available in the United Kingdom via the brand’s launch with 172 Maplin’s stores throughout the country. During the forth quarter of 2015, EnerPlex launched with GovX, the premier online shopping destination for Military, Law Enforcement and Government agencies.

At the end of the first quarter of 2015, we announced that six EnerPlex products were awarded accolades as Red Dot Design Award winners, recognizing both the aesthetic as well as functional design of the Jumpr Quad, Jumpr Stack 3/6/9, the Generatr 100 and the Generatr 1200. During the third quarter of ~~2015 the Generatr 100 won a Best of Show Award at the CTIA Super Mobility show in Las Vegas. In 2015~~2017, Ascent Solar ~~won its second R&D 100 Award,~~was selected by Energizer to develop and supply solar panels for their PowerKeep line of solar products, and in November 2017, Ascent introduced the ~~2015 award~~next generation of our USB-based portable power systems with the XD™ series. The first product introduced was ~~given for~~ the ~~development~~XD-12 which, like previous products, is a folding, lightweight, easily stowable, PV system with USB power regulation. Unique to this generation of PV portable power is more PV power (12 Watts) and a 2.0 Amp smart USB output to enable the ~~MilPak platform,~~XD-12 to charge most smartphones, tablets, and USB-enabled devices as fast as a ~~military-grade solar~~wall outlet. The enhanced smart USB circuit works with the device to be charged so that the device can determine the maximum power ~~generation~~it is able to receive from the XD-12, and ~~storage unit. The MilPak platform is on of~~ensures the ~~most rugged, yet lightweight, power generation and storage solutions available, both attributes enabled by~~best possible charging performance directly from the ~~use of Ascent’s CIGS technology.~~sun.

~~In the first quarter of 2016, EnerPlex launched the~~Also in 2017, for a space customer, Ascent manufactured a new ~~Emergency sales vertical, partnering with Emergency Preparedness eCommerce leader, Emergency Essentials. In early 2016 Ascent announced new breakthroughs~~micro-module, approximately 12.8mm x 50mm (0.5in x 2.0in) in ~~the Company’s line of high-voltage solar products, designed specifically~~size that is ideal for ~~high-altitude~~both laboratory-scale environmental testing, and space markets, building on the progress previously announced in Q4, 2015. Also during the first quarter of 2016, the Company announced the launch of select products on the GSA Advantage website; which allows Federal employees, including members of all branches of the US Military, to directly purchase Ascent and EnerPlex products including: the MilPak E, Commandr 20, Kickr 4 and WaveSol solar modules.for subsequent integration into flight experiments.

In February ~~2017~~2018, the Company introduced the second product in our XD series. Delivering up to 48 Watts of solar power, the durable and compact Ascent ~~announced~~XD-48 Solar Charger is the ~~sale~~ideal solution for charging many portable electronics and off-grid power systems. The XD-48’s versatility allows it to charge both military and consumer electronics directly from the sun wherever needed. Like the XD-12, the XD-48 has a compact and portable design, and its rugged, weather-resistant construction withstands shocks, drops, damage and even minor punctures to power through the harshest conditions.

In March 2018, Ascent successfully shipped to a European based customer for a lighter-than-air, helium-filled airship project based on our newly developed ultra-light modules with substrate material than half of the thickness of our EnerPlex brand and related intellectual properties and trademarks associated with EnerPlex to our battery product supplier, Sun Pleasure Co. Limited (“SPCL”) in an effort to better allocate its resources and to continue to focus on its core strength in the high-value specialty PV market. Following the transfer, Ascent will no longer produce or sell Enerplex-branded consumer products. Ascent will also supply solar PV products to SPCL, supporting the continuous growth of EnerPlex™ with Ascent’s proprietary and award-winning thin-film solar technologies and products.standard modules.

~~Ascent continues~~We continue to design and manufacture ~~its own line of~~ PV integrated consumer electronics as well as portable power applications for commercial and military users. Due to the high durability enabled by the monolithic integration employed inby our technology, the capability to customize modules into different form factors and the industry leading light weight and flexibility provided by our modules, we believe that the potential applications for our products are numerous. We also remain focused on specialty solar applications which can fully leverage the unique properties of our award winning CIGS technology. These include aerospace, defense, emergency management and consumer/OEM applications.

Commercialization and Manufacturing Strategy

~~Our proprietary manufacturing process deposits multiple layers of materials, including~~

We manufacture our products by affixing a thin ~~film of highly efficient Copper-Indium-Gallium-diSelenide (“CIGS”) semiconductor material, on~~CIGS layer to a flexible, ~~lightweight~~ plastic substrate using a large format, roll-to-roll ~~manufacturing~~ process ~~and then laser patterns the layers~~that permits us to ~~create interconnected PV cells, or~~fabricate our flexible PV modules in ~~a process known as monolithic integration. Our~~an integrated sequential operation. We use proprietary monolithic integration techniques which enable us to form complete PV modules with ~~less or~~little to no costly back end assembly of ~~intercell~~inter cell connections. Traditional PV manufacturers assemble PV modules by bonding or soldering discrete PV cells together. This manufacturing step typically increases manufacturing costs and at times proves detrimental to the overall yield and reliability of the finished product. By reducing or eliminating this added step using our proprietary monolithic integration techniques, we believe we can achieve cost savings in, and increase the reliability of, our PV modules. ~~We believe our technology and manufacturing process, which results in a lighter, flexible module package, provides~~All tooling necessary for us with unique market opportunities relative to both the crystalline silicon (“c-Si”) based PV manufacturers that currently lead the PV market, as well as other thin-film PV manufacturers that use substrate materials such as glass, stainless steel or other metals that can be heavier and more rigid than plastics.

Currently, we are producing consumer and military oriented products focusing on charging devices powered by or enhanced by our solar modules. Products in these markets are priced based on the overall value proposition rather than a commodity-style price per watt basis. We continue to develop new consumer products and we have adjusted the utilization of our equipment to meet our near term ~~forecast sales.~~ production requirements is installed in our Thornton, Colorado plant. In 2012, we further revised our strategy to focus on applications for emerging and high-value specialty PV markets, including off grid, aerospace, military and defense and consumer oriented products.

We plan to continue the development of our current PV technology to increase module efficiency, improve our manufacturing tooling and process capabilities and reduce manufacturing costs. We also plan to continue to take advantage of research and development contracts to fund a portion of this development.

We plan to continue the development of our PV technology in order to increase module efficiency, improve our manufacturing tooling and process capabilities and reduce manufacturing costs. We also plan to continue to take advantage of research and development contracts to fund a portion of this development.

~~Related Party Activity~~

On February 2, 2012, we announced the appointment of Victor Lee as President and Chief Executive Officer. Mr. Lee had served on our Board of Directors since November 2011 and is currently the managing director of Tertius Financial Group Pte Ltd, the joint venture partner with Radiant Group, in TFG Radiant. In April 2012, we appointed the Chairman of TFG Radiant, Mr. Winston Xu (aka Xu Biao), as a member of our Board of Directors. TFG Radiant owned less than 1% of our outstanding common stock as of September 30, 2017.

On August 29, 2016, the Company entered into a note purchase agreement with Tertius Financial Group Pte. Ltd. (“Tertius”), for the private placement of $330,000 of the Company’s original issue discount notes (“Discount Notes”). On August 29, 2016, the Company sold and issued $330,000 principal amount of Discount Notes to Tertius in exchange for $300,000 of gross proceeds. Tertius is an investment firm located in Singapore. Victor Lee, the Company’s president and CEO, is a managing director and 50% owner of Tertius.

On December 6, 2016, the Company issued a new $600,000 original issue discount note to Tertius in exchange for (i) $200,000 of gross proceeds and (ii) cancellation of the existing outstanding $330,000 note. The outstanding balance of the note is $602,000 (including accrued and unpaid interest) with a discount of $60,000 as of December 31, 2016.

On January 19, 2017, the Company issued 333,333,333 shares of unregistered common stock in a private placement to Tertius Financial Group ("TFG") pursuant to a Securities Purchase Agreement (the “SPA”).

~~The new ownership by TFG represents less than 4% of the outstanding shares of common stock of the Company as of September 30, 2017. There are no registered rights.~~

~~Tertius is an investment firm located in Singapore. Victor Lee, the Company’s President and CEO, is a managing director and 50% owner of Tertius.~~

Significant Trends, Uncertainties and Challenges

We believe the significant trends, uncertainties and challenges that directly or indirectly affect our financial performance and results of operations include:

~~our~~Our ability to generate customer acceptance of and demand for our products;

~~successful~~Successful ramping up of commercial production on the equipment installed;

~~our~~Our products are successfully and timely certified for use in our target markets;

~~successful~~Successful operating of production tools to achieve the efficiencies, throughput and yield necessary to reach our cost targets;

~~the~~The products we design are saleable at a price sufficient to generate profits;

~~our~~Our ability to raise sufficient capital to enable us to reach a level of sales sufficient to achieve profitability on terms favorable to us;

~~effective~~Effective management of the planned ramp up of our domestic and international operations;

~~our~~

~~our~~Our ability to maintain the listing of our common stock on the OTCBB Market;

~~our~~Our ability to implement remediation measures to address material weaknesses in internal control;

~~our~~Our ability to achieve projected operational performance and cost metrics;

~~our~~Our ability to enter into commercially viable licensing, joint venture, or other commercial arrangements; and

~~availability~~Availability of raw materials.

Basis of Presentation: The accompanying condensed consolidated financial statements (unaudited) 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 September 30, 2019 and September 30, 2018, and the results of operations for the three and nine months ended September 30, 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.

Critical Accounting Policies and Estimates

Critical accounting policies used in reporting our financial results are reviewed by management on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Processes used to develop these estimates are evaluated on an ongoing basis. Estimates are based on historical experience and various other assumptions that are believed to be reasonable for making judgments about the carrying value of assets and liabilities. Actual results may differ as outcomes from assumptions may change.

~~Our significant accounting policies were described in Note 3 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016.~~

~~Recent Accounting Pronouncements~~

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, ~~2016.~~2018. There have been no significant changes to our accounting policies as of September 30, ~~2017.~~

~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~. The update will establish a comprehensive revenue recognition standard for virtually all industries in GAAP. ASU 2014-09 will change the amount and timing of revenue and cost recognition, implementation, disclosures and documentation. In August 2015, the FASB issued ASU No. 2015-14, ~~Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date.~~ The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all entities by one year. ASU 2014-09 is now effective for the Company in fiscal year 2018. The Company continues to evaluate ASU 2014-09, but does not believe it will have a material effect on the Company’s consolidated financial statements.

~~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 is currently evaluating the impact, if any, that the adoption of this guidance will have on its consolidated financial statements.

~~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 Company is currently evaluating the impact, if any, that the adoption of this guidance will have on its consolidated financial statements.2019.

Results of Operations

Comparison of the Three Months Ended September 30, ~~2017~~2019 and ~~2016~~2018

Revenues. Our ~~net~~ revenues were ~~$242,000~~$338,373 for the three months ended September 30, ~~2017~~2019 compared to ~~$453,000~~$32,001 for the three months ended September 30, ~~2016. A decrease~~2018, an increase of ~~$211,000. The following factors contributed~~$306,372, due to ~~the decrease in revenue~~a larger product order during the ~~three months ended September 30, 2017:~~third quarter of 2019.


1.	Net product revenues were approximately $242,000 for the three months ended September 30, 2017 compared to $437,000 for the three months ended September 30, 2016, a decrease of $195,000. The decrease in product sales is largely the result of our sale of the EnerPlex brand of products.


2.	The Company did not have any revenues attributable to government research and development contracts during the three months ended September 30, 2017, compared to $16,000 during the three months ended September 30, 2016.

Cost of revenues. Our Cost of revenues for the three months ended September 30, ~~2017~~2019 was ~~approximately $535,000~~$74,271 compared to ~~$1,332,000~~zero for the three months ended September 30, ~~2016, a decrease~~2018, an increase of ~~$797,000.~~$74,271. The ~~decrease~~increase in cost of revenues is ~~primarily attributed~~mainly due to ~~a decrease in materials and labor costs as a result of a decrease in~~not having any production asfor the three months ended September 30, 2018 compared to ~~the third quarter in the prior year.~~2019. Cost of revenues for the ~~third quarter of 2017~~three months ended September 30, 2019 is comprised of materials and freight of ~~$75,000,~~$1,899, direct labor of ~~$51,000,~~$927, and overhead of ~~$409,000.~~$114,002, offset by inventory reserves of $42,557. Management believes our factory is currently significantly under-utilized, and a substantial increase in revenue would result in marginal increases to ~~overhead.~~Direct Labor and Overhead included in the Cost of revenues. As such management’s focus going forward is to improve gross margin through increased sales and improved utilization of our factory. We are currently pursuing high-value PV markets.

Research, development and manufacturing operations. Research, development and manufacturing operations costs were ~~approximately $1,312,000~~$460,775 for the three months ended September 30, ~~2017~~2019, compared to ~~$1,660,000~~$516,782 for the three months ended September 30, ~~2016,~~2018, a decrease of ~~$348,000.~~$56,007. Research, development and manufacturing operations costs include costs incurred for product development, pre-production and production activities in our manufacturing facility. Research, development and manufacturing operations costs also include costs related to technology development and governmental contracts. The following factors contributed to the decrease in research, development, and manufacturing operations expenses during the three months ended September 30, ~~2017:~~2019:


1.	Personnel and facility related expenses decreased ~~approximately $363,000~~$39,246, as compared to the ~~third quarter~~same time period of ~~2016.~~2018. The decrease in personnel and facility related costs was primarily due to a reduction in ~~headcount.~~headcount and the use of contractors.


2.	Consulting and contract services decreased approximately $5,000 compared to the third quarter of 2016. The decrease in expense as compared to the third quarter of 2016 was primarily attributed to the reduced number of contractors during the quarter ended September 30, 2017.

Materials and equipment related expenses, ~~increased approximately $20,000~~decreased $16,761, as compared to the ~~third quarter~~same time period of ~~2016.~~2018. The decrease ~~in expense~~ was ~~primarily~~ due to ~~the reserve against WIP inventory as~~ a ~~result~~decrease in production of ~~our focus transition from the consumer electronics market to high-value PV markets.~~research and development products.

~~Inventory impairment costs.~~ Due to the sale of the EnerPlex brand and the re-purposing of our work-in-process inventory, we are unable to estimate the recoverability of all of our work-in process inventory values, resulting in a lower-cost-to-market analysis and reserve for impairment. No adjustment was recorded to inventory impairment costs for the three months ended September 30, 2017.

Selling, general and administrative. Selling, general and administrative expenses were ~~$1,342,000~~$633,566 for the three months ended September 30, ~~2017~~2019, compared to ~~$2,576,000~~$607,784 for the three months ended September 30, ~~2016,~~2018, a decrease of ~~$1,234,000.~~$25,782. The following factors contributed to the decrease in selling, general, and administrative expenses during the three months ended September 30, ~~2017:~~2019:

Personnel and facility related costs ~~decreased approximately $436,000~~increased $38,270 during the three months ended September 30, ~~2017~~2019, as compared to the the three months ended September 30, ~~2016.~~2018. The overall ~~decrease~~increase in personnel related costs was primarily due ~~a lower headcount~~to the increased use of consultants and contractors for the the three months ended September 30, ~~2017~~2019, as compared to the the three months ended September 30, ~~2016.~~2018, offset by a reduction in headcount during the same period.

Marketing and related expenses decreased ~~approximately $529,000~~$1,768 during the three months ended September 30, ~~2017~~2019, as compared to the three months ended September 30, ~~2016.~~2018. The decrease in Marketing and related expenses is due to reduced marketing, advertising, and promotional activities during the ~~third quarter of 2016 as~~the three months ended September 30, 2019, compared to the ~~first quarter~~same time period of ~~2016~~2018, which is the direct result of ~~changing~~reducing our ~~main~~marketing budget to focus ~~from~~more on the ~~consumer electronics market to higher-value PV markets.~~development of our PV.


3.	~~Consulting and contract services~~Legal expenses decreased ~~approximately $52,000~~$8,797 during the three months ended September 30, ~~2017~~2019, as compared to the three months ended September 30, ~~2016. The decrease was a result of decreased consulting expenses related to our financing efforts.~~

~~Legal expenses decreased approximately $116,000 during the three months ended September 30, 2017 as compared to the three months ended September 30, 2016.~~2018. The primary reasons for the decrease is due to ~~reductions in both legal expenses related to our patents and~~decreased general legal expenses related to financing efforts as compared to the ~~quarter~~three months ended September 30, ~~2016.~~2018 and decreases in legal expenses related to our patent activity as compared to the same period of 2018.


4.	Public company expenses increased $4,878 during the three months ended September 30, 2019, as compared to the the three months ended September 30, 2018. This increase is primarily due to accrued fees for the Company's board of directors, offset by the costs related to the reverse split which occurred during the three months ended September 30, 2018.


5.	Bad debt ~~and settlement~~ expenses decreased approximately ~~$75,000~~$6,801 during the three months ended September 30, ~~2017~~2019, as compared to the three months ended September 30, ~~2016. During the quarter we recorded payments and settlements against existing reserves which were offset by additional reserves for customers whose accounts were greater than 120 days overdue.~~2018.

Other Income/Expense, net. Other net expense was $391,012 for the three months ended September 30, 2019, compared to other net income of $1,567,163 for the the three months ended September 30, 2018, a decrease of approximately $1,958,175. The following factors contributed to the increase in other expense, net, during the three months ended September 30, 2019:


6.1.	~~Public company expenses decreased approximately $26,000 during~~During the three months ended September 30, ~~2017~~2019, the Company disposed of certain manufacturing assets and recognized a gain of $6,000 in Other income compared to a gain of $13,144 for the three months ended September 30, 2018, a reduction of $7,144.


2.	Interest expense increased approximately $177,178, as compared to the three months ended September 30, ~~2016.~~2018. The ~~decrease is mostly due to a decrease in public relations expense.~~

~~Other income / expense, net.~~ Other income / expense was a $902,000 net income for the three months ended September 30, 2017 compared to a $6,247,000 net expense for the three months ended September 30, 2016, an improvement of $7,149,000. The following factors contributed to the increase ~~in other income/(expense) during the three months ended September 30, 2017:~~


1.	~~Interest expense decreased approximately $891,000 as compared the third quarter of 2016. The decrease~~ is primarily due to ~~an decrease~~a increase of non-cash interest expense ~~amortization of debt discounts~~ related to convertible debt and promissory ~~notes, and Preferred Stock.~~notes.


2.	Other expense, net increased approximately $58,000. This increase primarily results from a $15,000 loss on sale of assets in the three months ended September 30, 2016, compared to a $42,000 gain on sale of assets for the three months ended September 30, 2016.


3.	Warrant expense increased by approximately $336,000 as compared to the third quarter of 2016. This increase is due to the issuance of warrants during the three months ended September 30, 2017, related to redemption and settlement agreements.

Gains and losses on change in fair value of derivatives and on extinguishment of liabilities, was a net ~~improved to a $2,151,000~~ gain ~~during~~of $1,510,883 for the ~~third quarter of 2017~~three months ended September 30, 2019, as compared to a ~~$4,500,000 loss~~net gain of $3,284,736 for the ~~third quarter~~three months ended September 30, 2018. The change of ~~2016. The improvement of $6,652,000~~$1,773,853 in this non-cash item is attributable to a net gain of ~~$2,593,000~~$1,518,008 on the change in fair value of our embedded derivative instruments during the three months ended September 30, ~~2017 and~~2019, compared to $3,858,483 in 2018, offset by a ~~decrease in the~~net loss from extinguishment of liabilities of ~~$4,059,000,~~$7,125, related to conversions and redemptions of certain convertible notes and preferred stock, for the three months ended September 30, ~~2017~~2019, as compared to ~~the the~~a net loss of $573,747 for three months ended September 30, ~~2016~~2018.

Net Loss. Our Net Loss was ~~$2,356,000~~$1,279,405 for the three months ended September 30, ~~2017~~2019, compared to a Net ~~Loss~~Income of ~~$11,786,000~~$383,494 for the three months ended September 30, ~~2016, an improvement of $9,430,000.~~2018.

The ~~decrease~~increase in Net Loss of $1,662,899 for the three months ended September 30, ~~2017~~2019 can be summarized in variances in significant account activity as follows:

Decrease (Increase)
to Net Loss
For the Three
Months Ended
September 30, 2017 Compared to the Three Months Ended
September 30, 2016
Revenues (211,000 )
Cost of Revenue 797,000
Research, development and manufacturing operations
Materials and Equipment Related Expenses (19,000 )
Personnel Related Expenses 354,000
Consulting and Contract Services 5,000
Facility Related Expenses 9,000
Other Miscellaneous Costs (1,000 )
Selling, general and administrative expenses
Personnel, administrative, and facility Related Expenses 436,000
Marketing Related Expenses 529,000
Legal Expenses 116,000
Public Company Costs 26,000
Consulting and Contract Services 52,000
Bad debt expense 73,000
Settlement expense 2,000
Depreciation and Amortization Expense 113,000
Other Income / (Expense)
Interest Expense 891,000
Other Income/Expense (58,000 )
Warrant Expense (336,000 )
Non-Cash Change in Fair Value of Derivatives and Gain/Loss on Extinguishment of Liabilities, net 6,652,000
Decrease (Increase) to Net Loss $ 9,430,000



	Decrease (Increase) in Net Loss For the Three Months Ended September 30, 2019 Compared to the Three Months Ended September 30, 2018
Revenues	$	306,372
Cost of Revenue	(74,271		)
Research, development and manufacturing operations
Materials and Equipment Related Expenses	16,761
Personnel and Facility Related Expenses	39,246
Selling, general and administrative expenses
Personnel, Administrative, and Facility Related Expenses	(38,270		)
Marketing Related Expenses	1,768
Legal Expenses	8,797
Public Company Costs	(4,878		)
Bad Debt Expense	6,801
Depreciation and Amortization Expense	32,950
Other Income/Expense
Interest Expense	(7,144		)
Other Income/Expense	(177,178		)
Non-Cash Change in Fair Value of Derivative Liabilities and Gain/Loss on Extinguishment of Liabilities, net	(1,773,853		)
Increase to Net Loss	$	(1,662,899	)

Comparison of the Nine Months Ended September 30, ~~2017~~2019 and ~~2016~~2018

Revenues. Our ~~net~~ revenues were ~~$548,000~~$628,124 for the nine months ended September 30, ~~2016~~2019 compared to ~~$1,418,000~~$512,473 for the nine months ended September 30, ~~2016. A decrease~~2018, an increase of ~~$870,000. The following factors contributed~~$115,651, due to ~~the decrease in revenue~~a larger product order during the ~~three months ended September 30, 2017:~~third quarter of 2019.


1.	Net product revenues were approximately $548,000 for the nine months ended September 30, 2017 compared to $1,370,000 for the nine months ended September 30, 2016, a decrease of $822,000. The decrease in product sales is largely the result of our sale of the Enerplex brand of products.


2.	The Company did not have any revenues attributable to government research and development contracts during the nine months ended September 30, 2017, compared to $48,000 during the nine months ended September 30, 2016.

Cost of revenues. Our Cost of revenues for the nine months ended September 30, ~~2017~~2019 was ~~$2,323,000~~$282,825 compared to ~~$4,769,000~~$503,609 for the nine months ended September 30, ~~2016,~~2018, a decrease of ~~$2,446,000.~~$220,784. The decrease in cost of revenues is ~~primarily attributed~~mainly due to athe decrease in materials and labor costs as a result of a decrease in production ~~as compared to~~for the nine months ended September 30, ~~2016.~~2019 compared to 2018. Cost of revenues for the nine months ended September 30, ~~2017~~2019 is comprised of materials and freight of ~~$789,000,~~$41,715, direct labor of ~~$53,000,~~$1,929, and overhead of ~~$1,481,000.~~$301,617, offset by inventory reserves of $62,436. Management believes our factory is currently significantly under-utilized, and a substantial increase in revenue would result in marginal increases to ~~overhead.~~Direct Labor and Overhead included in the Cost of revenues. As such management’s focus going forward is to improve gross margin through increased sales and improved utilization of our factory. We are currently pursuing high-value PV markets.

Research, development and manufacturing operations. Research, development and manufacturing operations costs were ~~$3,830,000~~$1,078,842 for the nine months ended September 30, ~~2017~~2019, compared to ~~$5,132,000~~$2,389,863 for the nine months ended September 30, ~~2016,~~2018, a decrease of ~~$1,302,000.~~$1,311,021. Research, development and manufacturing operations costs include costs incurred for product development, pre-production and production activities in our manufacturing facility. Research, development and manufacturing operations costs also include costs related to technology development and governmental contracts. The following factors contributed to the decrease in research, development, and manufacturing operations expenses during the nine months ended September 30, ~~2017:~~2019:


1.	Personnel and facility related expenses decreased ~~approximately $1,219,000~~$1,237,527, as compared to the ~~nine months ended September 30, 2016.~~same time period of 2018. The decrease in personnel and facility related costs was primarily due to a reduction in ~~headcount.~~headcount and the use of contractors.


2.	Consulting and contract services decreased approximately $20,000 compared to the nine months ended September 30, 2016. The decrease in expense as compared to the nine months ended was primarily attributed to the reduced number of contractors during the nine months ended September 30, 2017.

Materials and equipment related expenses, decreased ~~approximately $63,000~~$73,494, as compared to the ~~nine months ended September 30, 2016.~~same time period of 2018. The decrease ~~in expense~~ was ~~primarily~~ due to ~~the reserve against WIP inventory as~~ a ~~result~~decrease in production of ~~our focus transition from the consumer electronics market to high-value PV markets.~~research and development products.

~~Inventory impairment costs.~~ Due to the sale of the EnerPlex brand and the re-purposing of our work-in-process inventory, we are unable to estimate the recoverability of all of our work-in process inventory values, resulting in a lower-cost-to-market analysis and reserve for impairment. An expense of approximately $364,000 was recorded to inventory impairment costs for the nine months ended September 30, 2017.

Selling, general and administrative. Selling, general and administrative expenses were ~~$4,512,000~~$1,545,852 for the nine months ended September 30, ~~2017~~2019, compared to ~~$8,520,000~~$2,243,925 for the nine months ended September 30, ~~2016,~~2018, a decrease of ~~$4,008,000.~~$698,073. The following factors contributed to the decrease in selling, general, and administrative expenses during the nine months ended September 30, ~~2017:~~2019:

Personnel and facility related costs decreased ~~approximately $1,742,000~~$604,397 during the nine months ended September 30, ~~2017~~2019, as compared to the the nine months ended September 30, ~~2016.~~2018. The overall decrease in personnel related costs was primarily due a lower headcount for the ~~nine months ended September 30, 2017 as compared to~~ the nine months ended September 30, ~~2016.~~2019, as compared to the the nine months ended September 30, 2018 as well as the decreased use of consultants and contractors during the same period.

Marketing and related expenses decreased ~~approximately $1,685,000~~$22,145 during the nine months ended September 30, ~~2017~~2019, as compared to the nine months ended September 30, ~~2016.~~2018. The decrease in Marketing and related expenses is due to reduced marketing, advertising, and promotional activities during the ~~nine months ended as compared to~~ the nine months ended September 30, ~~2016~~2019, compared to the same time period of 2018, which is the direct result of ~~changing~~reducing our ~~main~~marketing budget to focus ~~from~~more on the ~~consumer electronics market to higher-value PV markets.~~development of our PV.


3.	~~Consulting and contract services increased approximately $55,000~~Legal expenses decreased $165,483 during the nine months ended September 30, ~~2017~~2019, as compared to the the nine months ended September 30, ~~2016. The increase was the result of a marketing campaign that began during the nine months ended September 30, 2017.~~

~~Legal expenses decreased approximately $432,000 during the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016.~~2018. The primary reasons for the decrease is due to ~~reductions in both legal expenses related to our patents and~~decreased general legal expenses related to financing efforts as compared to the the nine months ended September 30, ~~2016.~~2018 and decreases in legal expenses related to our patent activity as compared to the same period of 2018.


4.	Public company expenses increased $63,832 during the nine months ended September 30, 2019, as compared to the the nine months ended September 30, 2018. This increase is primarily due to accrued fees for the Company's board of directors, offset by the timing of the annual meeting in 2019, and the costs of the reverse stock split in 2018.


5.	Bad debt ~~expense decreased approximately $246,000~~and settlement expenses increased $30,120 during the nine months ended September 30, ~~2017~~2019, as compared to the nine months ended September 30, ~~2016.~~ 2018. During 2018 we recorded payments and settlements against existing reserves. We did not have settlement expenses during 2019.

Other Income/Expense, net. Other net income was $532,208 for the nine months ended September 30, 2019, compared to a other net expense of $2,666,245 for the the nine months ended September 30, 2018, an improvement of $3,198,453. The following factors contributed to the increase in other income, net during the nine months ended September 30, 2019:


1.	During the nine months ended September 30, ~~2017, we recorded payments~~2019, the Company disposed of certain manufacturing assets and ~~settlements against existing reserves which were offset by additional reserves for customers whose accounts were greater than 120 days overdue.~~recognized a gain of $842,500 in Other income, compared to a gain of $13,144 in 2018, an increase of $829,356.


6.2.	~~Public company expenses decreased approximately $122,000 during the nine months ended September 30, 2017~~Interest expense increased $1,461,081, as compared to the nine months ended September 30, ~~2016.~~2018. The ~~decrease is mostly due to a decrease in public relations expense.~~


7.	Settlement expenses for the nine months ended September 30, 2017 were approximately $164,000. These expenses consisted of a settlement of $23,000 related to an alleged Proposition 65 violation and a settlement of $141,000 with a former EnerPlex customer regarding a return of product.

~~Other income / expense, net.~~ Other income / expense was a $1,156,000 net expense for the nine months ended September 30, 2017 compared to a $13,296,000 net expense for the nine months ended September 30, 2016, an improvement of $12,140,000. The following factors contributed to the decrease in other income/expense during the nine months ended September 30, 2017:


1.	~~Interest expense decreased $305,000 as compared the nine months ended September 30, 2016 . The decrease~~increase is primarily due to an ~~decrease~~increase of non-cash interest expense ~~and amortization of debt discounts~~ related to convertible debt and promissory ~~notes and Preferred Stock.~~notes.


2.	Other income, net increased $489,000. This increase is comprised of an increase in gain on sale of assets of $1,125,000, primarily related to the transfer of the EnerPlex IP, offset by induced conversion costs of $636,000 on several of the financial instruments.


3.	Warrant expense increased by approximately $336,000 as compared to the nine months ended September 30, 2016. This increase is due to the issuance of warrants during the nine months ended September 30, 2017, related to redemption and settlement agreements.

Gains and losses on change in fair value of derivatives and on extinguishment of liabilities, ~~net~~ was a net gain of ~~$3,753,000~~$6,430,048 for the nine months ended September 30, ~~2017 an increase of $11,682,000~~2019, as compared to ~~the~~a net ~~loss~~gain of ~~$7,929,000~~$2,599,870 for the nine months ended September 30, ~~2016.~~2018. The change of $3,830,178 in this non-cash item is ~~the result~~attributable to a net gain of ~~an increase of $7,816,000 in~~$6,124,139 on the ~~gain on~~ change in ~~the~~ fair value of our embedded derivative instruments during the nine months ended September 30, ~~2017~~2019, compared to a net gain $4,532,147 in 2018, and by an increase in the ~~nine months ended September 30, 2016, and an decrease of $3,866,000 on loss on~~gain from extinguishment of liabilities of $2,238,186, related to conversions and redemptions of certain convertible notes and preferred stock, infor the ~~same comparative periods.~~nine months ended September 30, 2019, as compared to the the nine months ended September 30, 2018.

Net Loss. Our Net Loss was ~~$12,649,000~~$1,932,350 for the nine months ended September 30, ~~2017~~2019, compared to a Net Loss of ~~$33,479,000~~$7,580,493 for the nine months ended September 30, ~~2016, an improvement of $20,830,000.~~2018.

The decrease of $5,648,143 in Net Loss for the nine months ended September 30, ~~2017~~2019 can be summarized in variances in significant account activity as follows:


	Decrease (Increase) to Net Loss For the Nine Months Ended September 30, 2017 Compared to the Nine Months Ended September 30, 2016			Decrease (Increase) in Net Loss For the Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018
Revenues	(870,000		)	$	115,651
Cost of Revenue	2,446,000			220,784
Research, development and manufacturing operations
Materials and Equipment Related Expenses	62,000			73,494
Personnel Related Expenses	1,164,000
Consulting and Contract Services	20,000
Facility Related Expenses	55,000
Other Miscellaneous Costs	1,000
Inventory impairment costs	(364,000		)
Personnel and Facility Related Expenses				1,237,527
Selling, general and administrative expenses
Personnel, Administrative, and Facility Related Expenses	1,742,000			604,397
Marketing Related Expenses	1,685,000			22,145
Legal Expenses	432,000			165,483
Public Company Costs	122,000			(63,832		)
Bad Debt Expense	246,000			(30,120		)
Consulting and Contract Services	(55,000		)
Settlement Expenses	(164,000		)
Depreciation and Amortization Expense	2,168,000			104,161
Other Income / (Expense)
Other Income/Expense
Interest Expense	305,000			(1,461,081		)
Other Income/Expense	489,000			829,356
Warrant Expense	(336,000		)
Non-Cash Change in Fair Value of Derivatives and Gain/Loss on Extinguishment of Liabilities, net	11,682,000
Decrease (Increase) to Net Loss	$	20,830,000
Non-Cash Change in Fair Value of Derivative Liabilities and (Gain)/Loss on Extinguishment of Liabilities, net				3,830,178
Decrease in Net Loss				$	5,648,143

Liquidity and Capital Resources

~~As of September 30, 2017, we had approximately $1,083 thousand in cash and cash equivalents.~~

During the nine months ended September 30, 2017 and the year ended December 31, 2016, we entered into multiple financing agreements to fund operations. Further discussion of these transactions can be found in Notes 8 through 19 of the financial statements presented as of, and for the nine months ended, September 30, 2017, and in notes 9 through 20 of the financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.

~~We have~~The Company has continued limited PV production at ~~our~~its manufacturing facility. ~~We do~~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 ~~new specialty PV~~product strategy. During the nine months ended September 30, ~~2017, we~~2019 the Company used ~~$10.7 million~~$2,565,168 in cash for operations. ~~Our~~

The Company's primary significant long term cash obligation consists of a note payable of ~~$5.5 million~~$5,917,315 to a financial institution secured by a mortgage on its headquarters and manufacturing building in Thornton, Colorado. ~~Total payments of $0.2 million, including principal~~The note is currently in default and ~~interest, will come due in~~ the ~~remainder of 2017.~~entire outstanding balance is classified as a current liability.

The Company is currently marketing it's Thornton, Colorado property to prospective buyers.

Additional projected product revenues are not anticipated to result in a positive cash flow position for the year ~~2017~~2019 overall and, as of September 30, ~~2017, we have~~2019, the Company has negative working capital. As such, cash liquidity sufficient for the ~~year ending December 31, 2017~~next twelve months will require additional financing.

~~We continue~~The Company continues to accelerate sales and marketing efforts related to its ~~certain~~ consumer ~~products,~~and military solar products and specialty PV application strategies through expansion of ~~our~~its sales and distribution channels. ~~We have~~The Company has begun activities related to securing additional financing through strategic or financial investors, but there is no assurance wethe Company will be able to raise additional capital on acceptable terms or at all. If ~~our~~the Company's revenues do not increase rapidly, and/or additional financing is not obtained, wethe Company will be required to significantly curtail operations to reduce costs and/or sell assets. Such actions would likely have an adverse impact on ~~our~~the Company's future operations.

As a result of ~~our~~the Company’s recurring losses from operations, and the need for additional financing to fund ~~our~~its operating and capital requirements, there is uncertainty regarding ~~our~~the Company’s ability to maintain liquidity sufficient to operate ~~our~~its business effectively, which raises substantial doubt as to ~~our~~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.

Statements of Cash Flows Comparison of the Nine Months Ended September 30, ~~2017~~2019 and ~~2016~~2018

For the nine months ended September 30, ~~2017,~~2019, our cash used in operations was ~~$10.7 million~~$2,565,168 compared to ~~$13.6 million~~$3,043,397 for the nine months ended September 30, ~~2016,~~2018, a decrease of ~~$2.8 million.~~$478,229. The decrease is primarily ~~due to~~ the ~~reduction~~result of ~~headcount and production, coupled with~~reduced operations during the ~~transition out of certain consumer electronics markets and the sale of the EnerPlex brand.~~current year. For the nine months ended September 30, ~~2017, our~~2019, cash ~~provided by~~used in investing activities was ~~$92.7 thousand as~~$826,746 compared to ~~our cash used in operations of $192.3 thousand, an increase of $285.0 thousand.~~$4,295 for the nine months ended September 30, 2018. This ~~increase is~~decrease was the result of ~~investing in intellectual property ("IP") during the first quarter of 2016 and the sales of the EnerPlex brand IP during the first quarter of 2017.~~reduced spending on patents. During the nine months ended September 30, ~~2017,~~2019, negative operating cash flows of ~~$10.7~~$2,565,168 million were funded through ~~$11.6~~$1,762,268 million in new debt issuances, offset by payment of ~~funding received from promissory notes, and the use~~financing costs of ~~cash customer receivables.~~

~~Contractual Obligations~~

The following table presents our contractual obligations as of September 30, 2017. Our long-term debt obligation is related to our building loan reflecting both principal and interest. Our purchase obligations include orders for equipment, inventory and operating expenses.

Payments by Year
Contractual Obligation
Total
Less than 1 year 1-3 Years 3-5 Years More than 5 Years
Long Term Debt
$ 7,874,857

$ 693,611
$ 2,080,832
$ 2,080,832
$ 3,019,582
Purchase Obligations
$ 368,697

368,697

$ 8,243,554

$ 1,062,308
$ 2,080,832
$ 2,080,832
$ 3,019,582
$7,500.

Off Balance Sheet Transactions

As of September 30, ~~2017 and December 31, 2016,~~2019, we did not have any off balance sheet arrangements as defined in Item 303(a)(4)(ii) of ~~SEC~~ Regulation S-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Risk

~~Historically, we~~We hold no significant funds and have ~~purchased manufacturing equipment internationally, which exposes us to~~no future obligations denominated in foreign ~~currency risk.~~

From time to time we enter into foreign currency fair value hedges utilizing forward contracts designed to match scheduled contractual payments to equipment suppliers. Our objective is to fix the dollar amount of our foreign currency denominated manufacturing equipment purchases at the time of order. Although our hedging activity is designed to fix the dollar amount to be expended, the asset purchased is recorded at the spot foreign currency rate in effectcurrencies as of the date of the payment to the supplier. The difference between the spot rate and the forward rate has been reported as gain or loss on forward contract. We cannot accurately predict future exchange rates or the overall impact of future exchange rate fluctuations on our business, results of operations and financial condition. All forward contracts entered into by us have been settled on the contract settlement dates, the last of which was settled in December 2009.September 30, 2019.

Although our reporting currency is the U.S. Dollar, we may conduct business and incur costs in the local currencies of other countries in which we may operate, make sales and buy materials. As a result, we are subject to currency translation risk. Further, changes in exchange rates between foreign currencies and the U.S. Dollar could affect our future net sales and cost of sales and could result in exchange losses.

Interest Rate Risk

Our exposure to market risks for changes in interest rates relates primarily to our cash ~~equivalents.~~equivalents and investment portfolio. As of September 30, ~~2017,~~2019, our cash equivalents consisted only of ~~federally insured~~ operating ~~and savings~~ accounts held with financial institutions. From time to time, we hold restricted funds, money market funds, investments in U.S. government securities and high quality corporate securities. The primary objective of our investment activities is to preserve principal and provide liquidity on demand, while at the same time maximizing the income we receive from our investments without significantly increasing risk. The direct risk to us associated with fluctuating interest rates is limited to our investment portfolio, and we do not believe ~~that~~ a change in interest rates will have a significant impact on our financial position, results of operations, or cash flows.

Credit Risk

From time to time, we hold certain financial and derivative instruments that potentially subject us to credit risk. These consist primarily of cash, cash equivalents, restricted cash, investments, and forward foreign currency option contracts. We are exposed to credit losses in the event of nonperformance by the counter parties to our financial and derivative instruments. We place cash, cash equivalents, investments and forward foreign currency option contracts with various ~~high-quality~~high quality financial institutions, and exposure is limited at any one institution. We continuously evaluate the credit standing of our counter party financial institutions.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures ~~that are~~ designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission ~~(SEC)~~ rules and forms. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management ~~including our Chief Executive Officer and interim Principal Financial Officer,~~as appropriate to allow timely decisions regarding required disclosures. Our management conducted an evaluation required by Rules 13a-15 and 15d-15 under the Exchange Act of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 and 15d-15 under the

Exchange Act as of September 30, ~~2017.~~2019. Based on this evaluation, our ~~Chief Executive Officer~~management concluded the design and ~~interim Principal Financial Officer concluded that as~~operation of ~~September 30, 2017,~~ our disclosure controls and procedures were not ~~effective.~~effective as of September 30, 2019.

~~Description~~Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles ("GAAP") in the United States of America and includes those policies and procedures that:

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

provide reasonable assurance transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Under the supervision of the Audit Committee of the Board of Directors and with the participation of our management, including our Chief Executive Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, our management concluded our internal controls over financial reporting were not effective as of September 30, 2019. Our management reviewed the results of its assessment with the Audit Committee.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Material Weakness ~~identified in 2016 and 2017~~

Based on our assessment and the criteria used, management concluded that our internal control over financial reporting as of ~~December 31, 2016 and~~ September 30, ~~2017,~~2019 was not effective due to the material weaknesses described as follows:

The Company was understaffed and did not have sufficiently trained resources with the technical expertise to ~~research and account~~ensure that all company transactions were accounted for ~~the Company's complex capitalization and multiple complex capital raising and equity transactions.~~in accordance with GAAP. This deficiency arose primarily from staff turnover ~~including~~and the ~~Company’s failure to more quickly replace its Director~~inability of ~~Financial Planning and Reporting, who left~~ the Company ~~for~~to devote sufficient replacement resources in a ~~new position in November, 2016.~~timely manner, as a result of the Company's financial situation

As a consequence, the Company did not have effective process level control activities over the following:

Accounting for the Company's ~~convertible debt~~inventory and ~~preferred stock transactions~~cost of revenue was lacking for the preparation of the ~~December 31, 2016~~September 30, 2019 financial statements. ~~Many of~~Miscalculations in these areas could impact the special accounting issues specific to debt and equity financing have become increasingly complex and time-consuming, and require extensive expertise to ensure that the accounting and reporting are accurate and in accordance with applicable standards. Given the numerous complex convertible equity financing transactions engaged in by the Company during 2016, the relevant accounting standards require the calculation, monitoring, recalculation and “marking to market” of a wide variety of derivative securities instruments that are deemed to arise from such financing transactions. These complex derivatives calculations are used in order to calculate the intrinsic value of the financial instruments and affect the short term embedded derivative liabilities line item on the Company’s balance sheet and in the change in fair value of derivatives and gain/loss on extinguishment of liabilities line item on the Company’s consolidated statement of operations. As the calculations in question relate to non-cash transactions, there was no impact on the Company's ~~cash,~~ current assets, revenues, operating results, orand cash flows.

The control deficiencies described above created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis.

The control deficiencies described above resulted in material misstatements in the preliminary consolidated financial statements that were corrected prior to the issuance of the consolidated financial statements as of and for the fiscal year ended December 31, 2016 and management does not believe enough time has passed to determine the effectiveness of our remediation plan.

Remediation Plan for Material Weaknesses in Internal Control over Financial Reporting

The Company ~~has~~plans to executed the following steps in ~~2017~~2019 to remediate the aforementioned material weaknesses in its internal control over financial reporting:

~~In March 2017, the~~

The Company ~~hired~~plans to engage a ~~Director of Financial Planning and Reporting~~resource, either as internal staff or an external contractor, with the technical expertise to ~~research~~track and ~~account for the Company's complex capital raising~~report on inventory transactions and financial transactions. In addition, the Company will be evaluating its personnel needs and other resources to ensure appropriate staffing and enhance its research and technical accounting knowledge base.cost of revenue calculations.

The Company will design and implement additional procedures in order to assure that the ~~Director, Financial Planning and Reporting~~resource mentioned above and other audit/accounting personnel are more involved with the Company’s ~~financing~~inventory activities and cost of revenue allocations to monitor and earlier identify accounting issues that may be raised by the Company’s ongoing ~~financing~~ activities.

Changes in Internal Control Over Financial Reporting

Except for the identification and mitigation of the material weaknesses noted above, there were no other changes in internal control over financial reporting during the ~~nine months~~year ended September 30, ~~2017~~2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

~~On October 21, 2011, we were notified that~~In May 2019, a ~~complaint (the “Lawsuit”) was~~vendor filed ~~by Jefferies &~~suit against the Company ~~Inc. ("Jefferies") against us~~ in ~~state court located~~District Court in Adams County Colorado in an effort to collect approximately $1.2 million of unpaid fees (and related interest charges). The matter is currently pending. The unpaid amounts are reflected in the ~~County and State of New York.~~

~~In December 2010, we and Jefferies entered into an engagement agreement (the “Fee Agreement”) pursuant to which Jefferies was hired to act as our~~Company's financial advisor in relation to certain potential transactions. In the Lawsuit, Jefferies claims it is entitled to receive an investment banking fee of $3.0 million (plus expense reimbursement of approximately $49,000) under the Fee Agreement in connection with the August 2011 investment and strategic alliance transaction (the “Financing”) between us and TFG Radiant. In addition, should it prevail at trial, Jefferies would be able to claim an award for attorney's fees and prejudgment interest in the approximate amount of $1.2 million.

On April 16, 2014, the parties settled the lawsuit where the Company agreed to pay Jefferies a total of $2.0 million in equal installments over 40 months. The Company has paid $339,000 during the nine months ended September 30, 2017.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in the updated risk factors in our Annual Report on Form 10-K filed on April ~~17, 2017,~~19, 2019, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K filed on April ~~17, 2017~~19, 2019 are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not required.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~Not applicable.~~

None.

Item 6. Exhibits

~~A list of~~

The exhibits ~~is found~~listed on ~~page 47 of~~the accompanying Index to Exhibits on this ~~report.~~Form 10-Q are filed or incorporated into this Form 10-Q by reference.

EXHIBIT INDEX



Exhibit No.		Description
10.1		Non-Convertible Promissory Note Dated July 8, 2019 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed July 12, 2019)
10.2		Exchange Agreement Dated August 22, 2019 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed August 28, 2019)
10.3		Convertible Exchange Promissory Note Dated August 22, 2019 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed August 28, 2019)
10.4		Non-Convertible Promissory Note Dated August 22, 2019 (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed August 28, 2019)
10.5		Securities Purchase Agreement Dated August 26, 2019 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed August 30, 2019)
10.6		Convertible Promissory Note Dated August 26, 2019 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed August 30, 2019)
10.7		Non-Convertible Promissory Note Dated September 9, 2019 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed September 13, 2019)
10.8		Exchange Agreement Dated October 22, 2019 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed November 12, 2019)
10.9		Convertible Exchange Promissory Note Note Dated October 22, 2019 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed November 12, 2019)
31.1*		Chief Executive Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Chief Financial Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Chief Executive Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Chief Financial Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

*		Filed herewith

ASCENT SOLAR TECHNOLOGIES, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the ~~13th~~9th day of ~~November, 2017~~.December, 2019.



	ASCENT SOLAR TECHNOLOGIES, INC.

	By:	/S/ VICTOR LEE
		Lee Kong Hian (aka Victor Lee) President and Chief Executive Officer (Principal Executive Officer, Principal Financial Officer, Chief Accounting Officer, and Authorized Signatory)

~~ASCENT SOLAR TECHNOLOGIES, INC.~~

~~EXHIBIT INDEX~~



~~10.1~~		~~Form of Warrant dated July 24, 2017 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed July 28, 2017)~~
~~10.2~~		~~Form of Warrant dated August 10, 2017 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed August 11, 2017)~~
~~10.3~~		~~Securities Purchase Agreement dated September 8, 2017 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed September 14, 2017)~~
~~10.4~~		~~Note dated September 11, 2017 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed September 14, 2017)~~
~~10.5~~		~~Promissory Note Exchange Agreement dated September 13, 2017 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed September 20, 2017)~~
~~10.6~~		~~Note dated September 13, 2017 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed September 20, 2017)~~
~~10.7~~		~~Note dated October 31, 2017 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed November 8, 2017)~~
31.1*		~~Chief Executive Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002~~
31.2*		~~Chief Financial Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002~~
32.1*		~~Chief Executive Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002~~
32.2*		~~Chief Financial Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002~~
~~101.INS~~		~~XBRL Instance Document~~
~~101.SCH~~		~~XBRL Taxonomy Extension Schema Document~~
~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase Document~~
~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document~~
~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase Document~~
~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase Document~~



*	~~Filed herewith.~~

4641



	September 30, 2017			December 31, 2016
ASSETS
Current Assets:
Cash and cash equivalents	$	1,083,029		$	130,946
Trade receivables, net of allowance for doubtful accounts of $48,201 and $60,347, respectively	24,809			549,204
Inventories, net	1,067,056			2,569,816
Prepaid expenses and other current assets	394,511			983,796
Total current assets	2,569,405			4,233,762
Property, Plant and Equipment	36,645,862			36,639,460
Less accumulated depreciation and amortization	(31,873,054		)	(30,983,448		)
	4,772,808			5,656,012
Other Assets:
Patents, net of accumulated amortization of $386,538 and $169,626, respectively	1,502,576			1,647,505
Other non-current assets	56,750			77,562
	1,559,326			1,725,067
Total Assets	$	8,901,539		$	11,614,841
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable	$	631,263		$	4,902,471
Related party payables	201,616			214,903
Accrued expenses	1,480,733			1,469,684
Current portion of long-term debt	337,791			243,113
Notes Payable	1,587,760			—
Promissory Notes, net of discount of $2,627,529 and zero, respectively	1,535,912			1,430,000
Current portion of litigation settlement	—			339,481
Series E preferred stock, net of discount of $63,640	—			56,360
Series F preferred stock	140,001			160,001
Series G preferred stock, net of discount of $699,674	—			408,326
July 2016 convertible notes, net of discount of $1,634,357	—			1,159,610
Series I exchange notes, net of discount of $199,474	—			26,597
Series J preferred stock	1,075,000			1,350,000
October 2016 convertible notes, net of discount of $66,000 and $264,000 respectively	264,000			66,000
St. George convertible note, net of discount and cash payment premium of $817,506 and zero, respectively	1,079,994
Tertius Financial Group promissory notes, net of discount of $59,658	—			542,808
Short term embedded derivative liabilities	2,412,212			6,578,154
Make-whole dividend liability	264,289			500,176
Total current liabilities	11,010,571			19,447,684
Long-Term Debt	5,206,403			5,281,776
Series K preferred stock	2,810,000			—
Accrued Warranty Liability	105,102			176,457
Commitments and Contingencies (Notes 4 & 23)
Mezzanine Equity:
Series J-1 preferred stock: 700 shares authorized; zero and 700 and issued and outstanding as of September 30, 2017 and December 31, 2016, respectively	—			700,000
Stockholders’ Deficit:
Series A preferred stock, $.0001 par value; 750,000 shares authorized and issued; 60,756 shares and 125,044 shares outstanding as of September 30, 2017 and December 31, 2016, respectively ($746,550 and $1,500,528 Liquidation Preference)	6			13
Common stock, $0.0001 par value, 20,000,000,000 shares authorized; 8,717,859,917 and 554,223,320 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively	871,786			55,422
Additional paid in capital	385,479,540			369,886,065
Accumulated deficit	(396,581,869		)	(383,932,576		)
Total stockholders’ deficit	(10,230,537		)	(13,991,076		)
Total Liabilities, Mezzanine Equity and Stockholders’ Deficit	$	8,901,539		$	11,614,841



	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016

Products, net	$	242,055		$	436,708		$	547,792		$	1,369,823
Government contracts	—			15,966			—			48,396
Revenues	$	242,055		$	452,674		$	547,792		$	1,418,219
Costs and Expenses:
Cost of revenues (exclusive of depreciation shown below)	535,258			1,332,153			2,323,125			4,769,059
Research, development and manufacturing operations (exclusive of depreciation shown below)	1,311,944			1,660,203			3,829,918			5,131,969
Inventory impairment costs	—			—			363,758			—
Selling, general and administrative (exclusive of depreciation shown below)	1,341,850			2,576,297			4,511,944			8,519,993
Depreciation and amortization	310,207			422,971			1,012,183			3,180,529
Total Costs and Expenses	3,499,259			5,991,624			12,040,928			21,601,550
Loss from Operations	(3,257,204		)	(5,538,950		)	(11,493,136		)	(20,183,331		)
Other Income/(Expense)
Other Income/(Expense), net	(15,053		)	42,789			564,093			75,122
Interest expense	(898,916		)	(1,789,599		)	(5,137,975		)	(5,442,591		)
Warrant Expense	(335,739		)	—			(335,739		)	—
Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net	2,151,478			(4,500,151		)	3,753,465			(7,928,578		)
Total Other Income/(Expense)	901,770			(6,246,961		)	(1,156,156		)	(13,296,047		)
Net Loss	$	(2,355,434	)	$	(11,785,911	)	$	(12,649,292	)	$	(33,479,378	)

Net Loss Per Share (Basic and diluted)	$	(0.0003	)	$	(0.1457	)	$	(0.0026	)	$	(0.9350	)
Weighted Average Common Shares Outstanding (Basic and diluted)	8,062,351,305			80,896,300			4,806,752,298			35,806,147



	Nine Months Ended
	September 30,
	2017			2016
Operating Activities:
Net loss	$	(12,649,292	)	$	(33,479,378	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,012,183			3,180,529
Share based compensation	108,717			708,776
Warrant expense	335,739			—
Realized gain on sale of assets	(1,199,606		)	—
Amortization of financing costs to interest expense	73,018			125,902
Write down of previously capitalized inventory	363,758			—
Non-cash interest expense	1,273,087			298,149
Amortization of debt discount	3,656,430			4,437,611
Change in fair value of derivatives and (gain)/loss on extinguishment of liabilities, net	(3,753,465		)	7,928,578
Inducement conversion costs	635,514			—
Bad debt expense	514			246,116
Changes in operating assets and liabilities:
Accounts receivable	545,481			1,506,462
Inventories	1,139,001			813,735
Prepaid expenses and other current assets	493,008			497,325
Accounts payable	(1,469,670		)	382,738
Related party payable	(13,287		)	—
Accrued expenses	(850,314		)	238,768
Accrued litigation settlement	(339,481		)	(401,268		)
Warranty reserve	(71,355		)	(34,834		)
Net cash used in operating activities	(10,710,020		)	(13,550,791		)
Investing Activities:
Purchase of property, plant and equipment	(6,402		)	(40,262		)
Proceeds from the sale of assets	150,000			—
Patent activity costs	(50,898		)	(152,076		)
Net cash provided by/(used in) investing activities	92,700			(192,338		)
Financing Activities:
Payment of debt financing costs	(20,000		)	(40,000		)
Repayment of debt	(1,785,597		)	(211,648		)
Proceeds from the issuance of promissory notes	2,865,000			300,000
Proceeds from convertible notes	1,500,000			2,000,000
Proceeds from Committed Equity Line	—			1,056,147
Proceeds from issuance of stock and warrants	9,010,000			10,405,000
Net cash provided by financing activities	11,569,403			13,509,499
Net change in cash and cash equivalents	952,083			(233,630		)
Cash and cash equivalents at beginning of period	130,946			326,217
Cash and cash equivalents at end of period	$	1,083,029		$	92,587
Supplemental Cash Flow Information:
Cash paid for interest	$	1,120,350		$	267,666
Non-Cash Transactions:
Non-cash conversions of preferred stock and convertible notes to equity	$	10,914,988		$	9,236,810
Make-whole provision on convertible preferred stock	$	257,152		$	—
Non-cash financing costs	$	2,500		$	—
Accounts payable converted to notes payable	$	1,637,260		$	—
Accounts payable forgiven related to sale of EnerPlex	$	1,031,726		$	—
Interest converted to principal	$	104,199		$	—
Common shares issued for commitment fee	$	63,750		$	—




2017	$	82,375
2018	343,395
2019	366,757
2020	391,709
2021	418,358
Thereafter	3,941,599
	$	5,544,193



Conversion Period	Preferred Series E Shares Converted	Value of Series E Preferred Shares (inclusive of accrued dividends)		Common Shares Issued
Q4 2015	478	$	481,500	250,000
Q1 2016	1,220	1,239,436		1,132,000
Q2 2016	365	381,414		7,979,568
Q3 2016	523	548,896		21,973,747
Q4 2016	94	101,018		13,089,675
Q1 2017	15	16,248		8,289,962
Q2 2017	35	38,886		134,927,207
Q3 2017	70	76,814		129,314,677
	2,800	$	2,884,212	316,956,836



Conversion Period	Preferred Series F Shares Converted	Value of Series F Preferred Shares (inclusive of accrued dividends)		Common Shares Issued
Q1 2016	2,168	$	2,188,298	2,183,992
Q2 2016	3,234	3,300,931		6,649,741
Q3 2016	1,262	1,315,743		81,917,364
Q4 2016	176	185,118		27,276,005
Q3 2017	20	20,000		18,181,818
	6,860	$	7,010,090	136,208,920



Conversion Period	Preferred Series G Shares Converted	Value of Series G Preferred Shares (inclusive of accrued dividends)		Common Shares Issued
Q4 2016	892	929,895		245,726,283
Q1 2017	372	397,970		327,718,386
Q2 2017	526	575,096		1,337,776,821
	1,790	$	1,902,961	1,911,221,490



Conversion Period	July 2016 Convertible Notes Converted (exclusive of interest)		Common Shares Issued
Q4 2016	$	152,460	64,000,000
Q1 2017	1,017,732		959,704,543
Q2 2017	682,235		1,865,043,998
	$	1,852,427	2,888,748,541



Conversion Period	Exchange Convertible Notes Converted		Common Shares Issued
Q3 2016	$	15,000	1,470,588
Q4 2016	91,563		13,346,274
Q1 2017	70,000		50,503,662
Q2 2017	37,535		86,987,428
Q3 2017	118,536		282,228,524
	$	332,634	434,536,476



Closing Period	Preferred Series K Shares Purchased	Closing Amount
Q1 2017	150	$	150,000
Q2 2017	4,100	4,100,000
Q3 2017	4,760	$	4,760,000
	9,010	$	9,010,000



Conversion Period	Preferred Series K Shares Converted	Value of Series K Preferred Shares		Common Shares Issued
Q2 2017	3,200	$	3,200,000	800,000,000
Q3 2017	3,000	$	3,000,000	750,000,000
	6,200	$	6,200,000	1,550,000,000



	Decrease (Increase) to Net Loss For the Three Months Ended September 30, 2017 Compared to the Three Months Ended September 30, 2016
Revenues	(211,000		)
Cost of Revenue	797,000
Research, development and manufacturing operations
Materials and Equipment Related Expenses	(19,000		)
Personnel Related Expenses	354,000
Consulting and Contract Services	5,000
Facility Related Expenses	9,000
Other Miscellaneous Costs	(1,000		)
Selling, general and administrative expenses
Personnel, administrative, and facility Related Expenses	436,000
Marketing Related Expenses	529,000
Legal Expenses	116,000
Public Company Costs	26,000
Consulting and Contract Services	52,000
Bad debt expense	73,000
Settlement expense	2,000
Depreciation and Amortization Expense	113,000
Other Income / (Expense)
Interest Expense	891,000
Other Income/Expense	(58,000		)
Warrant Expense	(336,000		)
Non-Cash Change in Fair Value of Derivatives and Gain/Loss on Extinguishment of Liabilities, net	6,652,000
Decrease (Increase) to Net Loss	$	9,430,000



			Payments by Year
Contractual Obligation	Total		Less than 1 year		1-3 Years		3-5 Years		More than 5 Years
Long Term Debt	$	7,874,857	$	693,611	$	2,080,832	$	2,080,832	$	3,019,582
Purchase Obligations	$	368,697	368,697
	$	8,243,554	$	1,062,308	$	2,080,832	$	2,080,832	$	3,019,582

Large accelerated filer

Accelerated filer

Non-accelerated filer

o ~~(Do not check if a smaller reporting company)~~
x

Smaller reporting company

Emerging growth company