CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

	September 30,			December 31,
	2021			2020
ASSETS
Current Assets:
Cash and cash equivalents	$	4,281,094		$	167,725
Trade receivables, net of allowance of $26,000 and $45,833, respectively		3,971			5,539
Inventories, net		615,674			534,431
Prepaid and other current assets		189,730			71,575
Total current assets		5,090,469			779,270

Property, Plant and Equipment:		24,148,192			24,867,176
Accumulated depreciation		(23,964,362	)		(24,848,408	)
Property, Plant and Equipment, net		183,830			18,768

Other Assets:
Operating lease right-of-use assets, net		5,150,718			5,633,663
Patents, net of accumulated amortization of $495,745 and $467,102, respectively		393,545			439,836
Other non-current assets		625,000			500,000
Total Assets	$	11,443,562		$	7,371,537
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable	$	650,720		$	736,986
Related party payables		45,000			135,834
Accrued expenses		1,031,017			1,518,212
Accrued interest		479,872			438,063
Notes payable		250,000			250,000
Current portion of operating lease liability		628,438			575,404
Promissory notes, net		-			193,200
Convertible notes, net		250,000			-
Embedded derivative liability		-			5,303,984
Total current liabilities		3,335,047			9,151,683
Long-Term Liabilities:
Non-current operating lease liabilities		4,698,431			5,179,229
Non-current secured promissory notes, net		-			5,405,637
Non-current convertible notes, net		8,006,452			7,813,048
Accrued warranty liability		21,225			14,143
Total liabilities		16,061,155			27,563,740
Stockholders’ Deficit:
Series A preferred stock, $.0001 par value; 750,000 shares authorized; 48,100 and 48,100 shares issued and outstanding, respectively ($789,241 and $752,765 Liquidation Preference, respectively)		5			5
Common stock, $0.0001 par value, 30,000,000,000 authorized; 19,678,916,809 and 18,102,583,473 shares issued and outstanding, respectively		1,967,891			1,810,258
Additional paid in capital		417,608,765			399,780,319
Accumulated deficit		(424,194,254	)		(421,782,785	)
Total stockholders’ deficit		(4,617,593	)		(20,192,203	)
Total Liabilities and Stockholders’ Deficit	$	11,443,562		$	7,371,537

~~(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

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)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenues
Products	$	11,723		$	6,293		$	557,369		$	60,445
Total Revenues		11,723			6,293			557,369			60,445
Costs and Expenses
Costs of revenue		687,885			5,528			1,184,528			101,156
Research, development and manufacturing operations		1,086,513			150,060			2,716,395			485,592
Selling, general and administrative		882,641			315,660			2,244,771			505,053
Depreciation and amortization		15,111			26,325			40,047			137,978
Total Costs and Expenses		2,672,150			497,573			6,185,741			1,229,779
Loss from Operations		(2,660,427	)		(491,280	)		(5,628,372	)		(1,169,334	)
Other Income/(Expense)
Other income/(expense), net		67,644			3,055,366			68,443			3,314,966
Interest expense		(167,983	)		(963,648	)		(899,533	)		(3,227,112	)
Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net		195,852			990,183			4,047,993			8,707,333
Total Other Income/(Expense)		95,513			3,081,901			3,216,903			8,795,187
Net Income/(Loss)	$	(2,564,914	)	$	2,590,621		$	(2,411,469	)	$	7,625,853
Net Income/(Loss) Per Share (Basic)	$	(0.00	)	$	0.00		$	(0.00	)	$	0.00
Net Income/(Loss) Per Share (Diluted)	$	(0.00	)	$	0.00		$	(0.00	)	$	0.00
Weighted Average Common Shares Outstanding (Basic)		19,074,521,203			5,230,490,450			18,531,805,287			5,053,300,857
Weighted Average Common Shares Outstanding (Diluted)		19,074,521,203			66,848,261,292			18,531,805,287			65,693,072,463

~~(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

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)

For the Three and Nine Months Ended September 30, 2021

	Series A Preferred Stock				Series 1A Preferred Stock					Common Stock				Additional Paid-In			Accumulated			Total Stockholders’ Equity
	Shares		Amount		Shares			Amount		Shares		Amount		Capital			Deficit			(Deficit)
Balance at December 31, 2020		48,100	$	5		1,300		$	-		18,102,583,473	$	1,810,258	$	399,780,319		$	(421,782,785	)	$	(20,192,203	)
Proceeds from issuance of Series 1A Preferred Stock		-		-		2,500			-		-		-		2,500,000			-			2,500,000
Proceeds from issuance of Common Stock		-		-		-			-		75,000,000		7,500		2,992,500			-			3,000,000
Conversion of Global Ichiban Note into Common Shares		-		-		-			-		168,000,000		16,800		5,783,200			-			5,800,000
Relieved on Conversion of Derivative Liability		-		-		-			-		-		-		1,686,079			-			1,686,079
Net Income		-		-		-			-		-		-		-			153,445			153,445
Balance at June 30, 2021		48,100		5		3,800			-		18,345,583,473		1,834,558		412,742,098			(421,629,340	)		(7,052,679	)
Proceeds from issuance of Common Shares		-		-		-			-		333,333,336		33,333		4,966,667			-			5,000,000
Conversion of TubeSolar Series 1A Preferred Stock into Common Shares		-		-		(100	)		-		1,000,000,000		100,000		(100,000	)
Net Loss		-		-		-			-		-		-		-			(2,564,914	)		(2,564,914	)
Balance at September 30, 2021		48,100	$	5		3,700		$	-		19,678,916,809	$	1,967,891	$	417,608,765		$	(424,194,254	)	$	(4,617,593	)

Table of Contents

ASCENT SOLAR TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(unaudited)

For the Three and Nine Months Ended September 30, 2020

~~(Unaudited)~~

	Series A Preferred Stock				Series 1A Preferred Stock				Common Stock				Additional Paid-In		Accumulated			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			(Deficit)
Balance at December 31, 2019		48,100	$	5		-	$	-		4,759,161,650	$	475,917	$	397,817,526	$	(423,400,229	)	$	(25,106,781	)
Interest and Dividend Expense paid with Common Stock		-		-		-		-		21,328,800		2,132		-		-			2,132
Proceeds from issuance of Series 1A Preferred Stock		-		-		2,000		-		-		-		2,000,000		-			2,000,000
Conversion of Bellridge Note into Common Shares		-		-		-		-		450,000,000		45,000		-		-			45,000
Net Income		-		-		-		-		-		-		-		5,035,232			5,035,232
Balance at June 30, 2020		48,100		5		2,000		-		5,230,490,450		523,049		399,817,526		(418,364,997	)		(18,024,417	)
Net Income		-		-		-		-		-		-		-		2,590,621			2,590,621
Balance at September 30, 2020		48,100	$	5		2,000	$	-		5,230,490,450	$	523,049	$	399,817,526	$	(415,774,376	)	$	(15,433,796	)

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
$ —

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

(unaudited)

	For the Nine Months Ended
	September 30,
	2021			2020
Operating Activities:
Net income/(loss)	$	(2,411,469	)	$	7,625,853
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization		40,047			137,978
Operating lease asset amortization		482,945			28,710
Realized (gain) on sale and foreclosure of assets		—			(3,314,966	)
Amortization of deferred financing costs		—			2,692
Non-cash interest expense		—			807,368
Amortization of debt discount		837,767			1,331,417
Bad debt expense		—			(141	)
Warranty reserve		7,082			(7,654	)
Change in fair value of derivatives and gain on extinguishment of liabilities, net		(4,047,993	)		(8,707,333	)
Changes in operating assets and liabilities:
Accounts receivable		1,568			(5,608	)
Inventories		(81,243	)		23,843
Prepaid expenses and other current assets		(243,155	)		(283,912	)
Accounts payable		(86,266	)		(388,113	)
Related party payable		(90,834	)		—
Operating lease liabilities		(427,764	)		(16,129	)
Accrued interest		44,461			1,008,568
Accrued expenses		(252,959	)		283,439
Net cash (used in) operating activities		(6,227,813	)		(1,473,988	)
Investing Activities:
Proceeds on sale of assets		—			254,600
Payments on purchase of assets		(176,466	)		—
Patent activity costs		17,648			(156	)
Net cash (used in) provided by investing activities		(158,818	)		254,444
Financing Activities:
Repayment of debt		—			(145,000	)
Proceeds from issuance of debt		—			443,200
Proceeds from issuance of stock		10,500,000			2,000,000
Net cash provided by financing activities		10,500,000			2,298,200
Net change in cash and cash equivalents		4,113,369			1,078,656
Cash and cash equivalents at beginning of period		167,725			—
Cash and cash equivalents at end of period	$	4,281,094		$	1,078,656
Non-Cash Transactions:
Non-cash conversions of preferred stock and convertible notes to equity	$	5,800,000		$	47,132
Non-cash forgiveness of PPP loan	$	193,200
Operating lease assets obtained in exchange for operating lease liabilities				$	(5,819,489	)
Non-cash mortgage derecognition				$	(6,443,897	)
Non-cash property foreclosure				$	6,443,897

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

Table of Contents

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~(Unaudited)~~

NOTE 1. ORGANIZATION

Ascent Solar Technologies, Inc. ~~(“Ascent”) was incorporated on October 18, 2005 from~~and its wholly owned subsidiary, Ascent Solar (Asia) Pte. Ltd. (collectively, the ~~separation of ITN Energy Systems, Inc's (“ITN”~~“Company") 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 Company~~ is focusing on integrating its PV products into high value markets such as aerospace, satellites, near earth orbiting vehicles, ~~fixed-wing~~and fixed wing unmanned aerial vehicles ~~(UAV), military, and emergency preparedness.~~(“UAV”). The value proposition of Ascent’s proprietary solar technology not only aligns with the needs of customers in these industries, but also overcomes many of the obstacles other solar technologies face in these unique markets. Ascent has the capability to design and develop finished products for end users in these areas as well as collaborate with strategic partners to design and develop custom integrated solutions for products like fixed-wing UAVs. Ascent sees significant overlap of the needs of end users across some of these industries and can achieve economies of scale in sourcing, development, and production in commercializing products for these customers.

~~Sale of EnerPlex Brand~~

~~In February 2017, Ascent announced~~

On September 15, 2021, the ~~sale of our EnerPlex brand~~Company entered into a Long-Term Supply and ~~related intellectual properties and trademarks associated~~Joint Development Agreement (“JDA”) with ~~EnerPlex to our battery product supplier, Sun Pleasure Co. Limited~~TubeSolar AG (“~~SPCL”~~TubeSolar”), ~~in an effort to better allocate its resources and to continue to focus on its core strength~~a significant existing stakeholder in the ~~high-value specialty~~ Company. Under the terms of the JDA, the Company will produce, and TubeSolar will purchase, thin-film photovoltaic (“PV”) foils (“PV ~~market. Following~~Foils”) for use in TubeSolar’s solar modules for agricultural photovoltaic (“APV”) applications that require solar foils for its production. Under the ~~transfer, Ascent~~JDA, the Company will ~~no longer produce or sell Enerplex-branded consumer products. Ascent will also supply solar PV products~~receive up (i) to ~~SPCL, supporting the continuous growth~~$4 million of ~~EnerPlex™ with Ascent’s proprietary~~non-recurring engineering (“NRE”) fees, (ii) up to $13.5 million of payments upon achievement of certain agreed production and ~~award-winning thin-film solar technologies~~cost structure milestones, and ~~products.~~

~~Ascent continues to design and manufacture its own line~~(iii) product revenues from sales of PV ~~integrated consumer electronics,~~Foils to TubeSolar. The JDA has no fixed term, and may only be terminated by either party for breach. There has been no activity under the JDA as ~~well as portable power applications for commercial, military,~~of September 30, 2021.

The Company and ~~emergency management.~~

~~Increase~~TubeSolar have also jointly established a subsidiary company in Germany, in which TubeSolar holds a minority stake of ~~Authorized Common Stock~~

~~On March 16, 2017, the Company filed a Certificate of Amendment to the Amended and Restated Certificate of Incorporation~~30% (the “JV”). The purpose of the JV is to establish and operate a PV manufacturing facility in Germany that will produce and deliver PV Foils exclusively to TubeSolar. Until the JV facility is fully operational, PV Foils will be manufactured in the Company’s existing facility in Thornton, Colorado. The parties expect to jointly develop next generation tooling for use in manufacturing PV Foils at the JV facility. The Company ~~(the “Certificate of Amendment”) with the Secretary of State~~is required to purchase 17,500 shares of the ~~State~~JV for 1 Euro per share, which has not been funded as of ~~Delaware to increase~~September 30, 2021. There has been no activity under the ~~number~~JV as 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.

September 30, 2021.

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")~~the Company as of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, and the results of operations for the three and nine months ended September 30, ~~2017~~2021 and ~~2016. Ascent Solar (Shenzhen) Co., Ltd. is wholly owned by Ascent Solar (Asia) Pte. Ltd., which is wholly owned by Ascent Solar Technologies, Inc.~~2020. 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~~2020 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~~.2020. 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~~.

2020.

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~~2021 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017~~.

2021.

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~~.2020. There have been no significant changes to our accounting policies as of September 30, ~~2017.~~

2021.

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Derivatives: The Company evaluates its financial instruments under FASB ASC 815, "Derivatives and Hedging" to determine whether the instruments contain an embedded derivative. When an embedded derivative is present, the instrument is evaluated for a fair value adjustment upon issuance and at the end of every reporting period. Any adjustments to fair value are treated as gains and losses in fair values of derivatives and are recorded in the Condensed Consolidated Statements of Operations.

Refer to Notes 8, 10 and 11 for further discussion on the embedded derivatives of each instrument.

Paycheck Protection Program Loan: The Company has elected to account for the forgivable loan received under the Paycheck Protection Program (“PPP”) provisions of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act as a debt instrument and to accrue interest on the outstanding loan balance. Additional interest at a market rate (due to the stated interest rate of the PPP loan being below market) is not imputed, as the transactions where interest rates prescribed by governmental agencies are excluded from the scope of accounting guidance on imputing interest. The proceeds from the loan will remain recorded as a liability until either (1) the loan is, in part or wholly, forgiven and the Company has been legally released or (2) the Company repays the loan to the lender.

Refer to Note 9 for further discussion.

Earnings per Share: Earnings per share (“EPS”) are the amount of earnings attributable to each share of common stock. Basic EPS has been computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Income available to common stockholders has been computed by deducting dividends accumulated for the period on cumulative preferred stock (whether or not earned) from net income. Diluted earnings per share has been computed by dividing net income adjusted on an if-converted basis for the period by the weighted average number of common shares and potentially dilutive common share outstanding (which consist of options and convertible securities using the treasury stock method or the if-converted method, as applicable, to the extent they are dilutive). Approximately 144 billion and 939 billion shares of dilutive shares were excluded from the three and nine months periods ended September 30, 2021 EPS calculation, respectively, as their impact is antidilutive. There were approximately 67 billion and 66 billion shares of dilutive shares for the three and nine months periods ended September 30, 2020, respectively.

Recently Adopted or to be Adopted Accounting Policies

In ~~May 2014,~~August 2020, the FASB issued ASU No. ~~2014-09,~~ ~~Revenue~~2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity s Own Equity. ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from ~~Contracts~~the host contract as compared with ~~Customers (Topic 606). The update~~current U.S. GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 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~~be 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 effectivepublic companies 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 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 for2023, including interim periods ~~and~~within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, ~~2017, and early application is permitted. The Company is currently evaluating~~2020, including interim periods within those fiscal years. Management has not yet evaluated the impact ~~if any,~~ that the adoption of ~~this guidance~~ASU 2020-06 will have on ~~its~~the Company’s condensed consolidated financial ~~statements.~~

~~In July 2017,~~statement presentation or disclosures.

Other new pronouncements issued but not effective as of September 30, 2021 are not expected to have a material impact on 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 itsCompany’s condensed consolidated financial statements.

The Series J Preferred Stock was reclassified from mezzanine equity in the 2016 financial information to conform to the 2017 presentation in liabilities. Such reclassifications had no effect 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.

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

AND GOING CONCERN

During the nine months ended September 30, ~~2017~~2021 and the year ended December 31, ~~2016,~~2020, the Company entered into multiple financing agreements to fund operations. Further discussion of these transactions can be found in Notes ~~8 through 20~~9, 10, 11 and 14 of the financial statements presented as of, and for, the nine months ended September 30, ~~2017,~~2021, and in Notes 8, 9, ~~through 20~~10, 11, 12, 15 and 22 of the financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

2020.

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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~~2021 the Company used ~~$10.7 million~~$6,227,813 in cash for operations. The Company's primary significant long term cash obligation consists of a note payable of $5.5 million 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 and interest, will come due in the remainder of 2017.

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,~~2021, the Company has ~~negative~~ working ~~capital.~~capital of $1,755,422. As such, cash liquidity is not sufficient for the ~~year ending December 31, 2017~~next twelve months and 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 scaled down its operations in 2019 and 2020, due to cash flow issues. During 2021, the Company secured additional financing to being ramping up operations. However, additional financing will be needed to continue this process.

Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These condensed 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~~2021 and December 31, ~~2016~~:2020:

	As of September 30,			As of December 31,
	2021			2020
Furniture, fixtures, computer hardware and computer software	$	437,532		$	489,421
Manufacturing machinery and equipment		23,607,580			-
Manufacturing machinery and equipment, in progress		103,080			24,377,755
Depreciable property, plant and equipment		24,148,192			24,867,176
Less: Accumulated depreciation and amortization		(23,964,362	)		(24,848,408	)
Net property, plant and equipment	$	183,830		$	18,768

As of September 30, As of December 31,
2017 2016
Building $ 5,828,960
$ 5,828,960
Furniture, fixtures, computer hardware and computer software 489,421
489,421
Manufacturing machinery and equipment 30,306,793
30,300,391
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
Less: Accumulated depreciation and amortization (31,873,054 ) (30,983,448 )
Net property, plant and equipment $ 4,772,808
$ 5,656,012

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

Depreciation expense for the three ~~and nine~~ months ended September 30, ~~2017~~2021 and 2020 was ~~$266,489~~$5,956 and ~~$889,605, respectively, compared to depreciation~~$15,316, respectively. Depreciation expense ~~of $384,738 and $3,106,948~~ for the ~~three and~~ nine months ended September 30, ~~2016,~~2021 and 2020 was $11,404 and $103,014, respectively. Depreciation expense is recorded under “Depreciation and amortization expense” in the unaudited Condensed Consolidated Statements of Operations.

On July 29, 2020 the Company’s owned facility at 12300 Grant Street, Thornton, CO 80241 (the “Building”) was foreclosed by the Building’s first lien holder (“Mortgage Holder”) and sold at public auction. The successful bidder for the Building was the Mortgage Holder, at the price of $7.193 million. As a result, the Company’s obligations to Mortgage Holder and all of the Company’s outstanding real property taxes on the Building were considered fully repaid.

On September 21, 2020, the Company entered into a lease agreement with 12300 Grant LLC (“Landlord”), an affiliated company of the Mortgage Holder, for approximately 100,000 rentable square feet of the Building (the “Lease”). The lease is classified as an operating lease and accounted for accordingly. The Lease term is for 88 months and commenced on September 21, 2020 at a rent of $50,000 per month including taxes, insurance and common area maintenance until December 31, 2020. Beginning January 1, 2021, the rent adjusted to $80,000 per month on a triple net basis and shall increase at an annual rate of 3% per annum until December 31, 2027.

At September 30, 2021, the Company recorded an operating lease asset and liability totaling $5,150,718 and $5,326,869, respectively. During the three and nine months ended September 30, 2021, the Company recorded operating lease costs included in Selling, general, and administrative expense on the Condensed Consolidated Statement of Operations totaling $258,392 and $775,177, respectively. During the three months ended September 30, 2020, the Company recorded operating lease costs included in Selling, general, and administrative expense on the Condensed Consolidated Statement of Operations totaling

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$28,710.

Future maturities of the operating lease liability are as follows:

Remainder of 2021	$	240,000
2022		988,800
2023		1,018,464
2024		1,049,018
2025		1,080,488
Thereafter		2,259,194
Total lease payments		6,635,964
Less amounts representing interest		(1,309,095	)
Present value of lease liability	$	5,326,869

The remaining lease term and discount rate of the operating lease is 75.5 months and 7.0%, respectively.

NOTE 6. INVENTORIES

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

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.~~

~~NOTE 7. DEBT~~

~~On February 8, 2008, the Company acquired a manufacturing and office facility in Thornton, Colorado, for approximately~~ ~~$5.5 million~~. The purchase was financed by a promissory note, deed of trust and construction loan agreement (the “Construction Loan”) with the Colorado Housing and Finance Authority (“CHFA”), which provided the Company borrowing availability of up to ~~$7.5 million~~ for the building and building improvements. In 2009, the Construction Loan was converted to a permanent loan pursuant to a Loan Modification Agreement between the Company and CHFA (the “Permanent Loan”). The Permanent Loan, collateralized by the building, has an interest rate of ~~6.6%~~ and the principal will be amortized through its term to January 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~~2021 and December 31, ~~2016, respectively.~~2020:

	As of September 30,		As of December 31,
	2021		2020
Raw materials	$	614,656	$	525,626
Work in process		992		-
Finished goods		26		8,805
Total	$	615,674	$	534,431

On November 1, 2016, the Company and the CFHA 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 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 on February 1, 2028.

~~As of~~ ~~September 30, 2017, 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 8.7. 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 mature on February 24, 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 $27,823.

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, the Company entered into an agreement with a vendor to convert 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.~~

On June 30, 2017, the Company entered into an agreement with a vendor (“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~~matured on February 28, ~~2018; all outstanding principal and accrued interest is due and payable upon maturity.~~2018. As of September 30, ~~2017,~~2021, the Company had not made any payments on ~~these notes and~~this note, the accrued interest was ~~$3,151.~~

On$53,185, and the note is due upon demand. To the best of our knowledge, Vendor has not made any attempts to recover any amount owing to them since 2019.

NOTE 8. SECURED PROMISSORY NOTES

Global Ichiban Secured Promissory Notes

Prior to 2021, the Company had issued a secured convertible promissory note to Global Ichiban Limited (“Global”) that had a remaining principal balance of $5,800,000, and 0 accrued interest, as of January 1, 2021.

The note was to mature on September 30, 2022. Principal, if not converted, was to be payable in a lump sum on September 30, 2022. The note did not bear any interest. Customary default provisions applied. The note was secured by a lien on substantially all of the Company’s assets pursuant to the Security Agreement dated November 30, 2017 (the “Security Agreement”) entered into between the Company and Global.

The conversion option associated with the note was deemed to include an embedded derivative that required bifurcation and separate accounting. Refer to Note 11. Derivative Liabilities for further details.

On March 9, 2021, the Company entered into a settlement agreement (“Settlement”) with Global. Pursuant to the Settlement, the Company issued 168,000,000 shares of Common Stock of the Company (“Settlement Shares”) to Global in exchange for the cancellation of the outstanding secured promissory note of $5,800,000 (the “Secured Note”). The Secured Note, which was originally scheduled to mature on September 30, 2022, had a ~~customer~~variable-rate conversion feature that entitled

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Global to convert into shares of Common Stock of the ~~credit balance~~Company at 80% of ~~their account into~~the 5-day average closing bid-price prior to any conversion. The Secured Note also had a ~~note payable~~lien on substantially all of the Company’s assets including intellectual properties. Following the Settlement, the lien was removed and the Company’s assets are currently unencumbered.

NOTE 9. PROMISSORY NOTES

SBA PPP

On April 17, 2020, the Company obtained a PPP Loan from Vectra Bank Colorado (“Vectra”) in the aggregate amount of $193,200, which was established under the CARES Act, as administered by the Small Business Association (“SBA”). Under the terms of the CARES Act and the PPP, all or a portion of the principal amount of the PPP Loan is subject to forgiveness so long as, over the 24-week period following the Company’s receipt of the proceeds of the PPP Loan, the Company uses those proceeds for payroll costs, rent, utility costs or the maintenance of employee and compensation levels. The PPP Loan is unsecured, guaranteed by the SBA, and has a two-year term, maturing on April 17, 2022. Interest accrues on the loan beginning with the initial disbursement; however, payments of principal and interest are deferred until Vectra’s determination of 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,~~forgiveness applied for by the Company ~~entered into a note purchase agreement with Tertius Financial Group Pte. Ltd. ("TFG”)~~is approved by the SBA. If the Company does not apply for forgiveness within 10 months after the ~~private placement of $330,000~~last day of the covered period (defined, at the Company’s ~~original issue discount notes~~election as 24 weeks), such payments will be due that month. On September 4, 2021, the Company received notification from Vectra that the SBA has forgiven the PPP loan. The Company recognized $195,852 of forgiven principal and accrued interest in Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net in the Condensed Consolidated Statement of Operations.

NOTE 10. CONVERTIBLE NOTES

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

	Principal Balance 12/31/2020		Less: Discount Balance			Net Principal Balance 12/31/2020		Principal Balance 9/30/2021		Less: Discount Balance			Net Principal Balance 9/30/2021
BD 1 Notes (related party)	$	10,500,000	$	(2,936,952	)	$	7,563,048	$	9,900,000	$	(2,351,060	)	$	7,548,940
Nanyang Notes		0		0			0		600,000		(142,488	)		457,512
Crowdex Note (related party)		250,000		0			250,000		250,000		0			250,000
	$	10,750,000	$	(2,936,952	)	$	7,813,048	$	10,750,000	$	(2,493,548	)	$	8,256,452

Penumbra/Crowdex Convertible Note

As of January 1, 2021, Crowdex Investment, LLC (“Crowdex”) held a convertible promissory note with an ~~original maturity date~~aggregate principal balance of ~~November 26, 2016.~~ $250,000.

The ~~notes bear interest of 6% per annum and~~aggregate principal ~~and interest~~amount (together with accrued interest) was scheduled to mature on ~~the notes are payable upon maturity. The notes are unsecured and not convertible into equity shares of the Company.~~

~~On December 6, 2016,~~June 9, 2021; however, the Company ~~issued a new $600,000 original issue discount note~~and Crowdex agreed to ~~TFG in exchange for (i) $200,000 of additional gross proceeds and (ii) cancellation of the existing outstanding $330,000 note.~~extend maturity by one year to June 9, 2022. The ~~new TFG~~ note bears interest at a rate of 6% per ~~annum and matures on December 31, 2017. Principal and~~annum. The interest onrate increases to 18% in the ~~new TFG~~event of default. The note is ~~payable~~convertible, 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. Unless paid in advance, the principal and interest of these promissory notes are payable upon maturity. The notes are not convertibleholder’s option, into ~~equity~~ shares of the ~~Company~~Company’s Common Stock at a conversion price equal to $0.0001 per share.

At September 30, 2021, the note had a principal balance of $250,000 and ~~are unsecured.~~

~~Between June and August, 2017, eight~~an accrued interest balance of $19,644.

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BD 1 Convertible Note

During September 2020, a number 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~~Company’s investors entered into ~~a Promissory Note Exchange Agreement. Pursuant~~assignment agreements to ~~the agreement, the Investor exchanged and canceled the eleven~~sell their existing debt to BD 1 Investment Holding, LLC (“BD 1”) resulting in BD 1 acquiring outstanding promissory notes ~~(with an aggregate~~with principal and accrued interest balances of ~~$3,504,199) for one new~~approximately $6.3 million and $1.3 million, respectively.

On December 18, 2020, the Company entered into a securities exchange agreement (“BD1 Exchange Agreement”) with BD 1. Pursuant to the terms of the BD1 Exchange Agreement, BD 1 agreed to surrender and exchange all of its outstanding promissory ~~note having a~~notes with principal and accrued interest balances of approximately $6.3 million and $1.3 million, respectively. Default penalties related to the notes of approximately $2.9 million were not designated. In exchange, the Company issued to BD 1 2 unsecured convertible notes with an aggregate principal amount of ~~$3,504,199.~~

$10,500,000 (“BD1 Exchange Notes”), and recorded an original issue discount of approximately $3.0 million, which will be recognized as interest expense, ratably, over the life of the note. The ~~new note~~BD1 Exchange Notes do not bear any interest, and will mature on December 18, 2025. BD 1 has ~~a term~~the right, at any time until the BD1 Exchange Notes are fully paid, to convert any outstanding and unpaid principal into shares of ~~36 months, bears interest~~common stock at a ~~rate~~fixed conversion price equal to $0.0001 per share. Accordingly, the Company would issue 105,000,000,000 shares of ~~12% per annum,~~common stock upon a full conversion of the BD 1 Exchange Notes. BD 1 has agreed not to effect any conversion of the Notes without the prior consent of the Company unless and ~~calls for monthly installment payments of $116,390 commencing on October 13, 2017. The~~until the Company has created additional authorized and issued common shares sufficient to convert all of the ~~option~~Notes in full.

On August 13, 2021, BD 1 assigned $600,000 of its outstanding principal balance to ~~pay monthly installment amounts in the form~~Nanyang Investment Management Pte Ltd (“Nanyang”). Subsequent to this assignment, BD 1 held notes with an aggregate principal amount of $9,900,000 convertible to 99,000,000,000 shares of common stock. ~~Payments in~~

Nanyang Convertible Note

On August 13, 2021, as discussed above, BD 1 assigned $600,000 of the ~~form~~BD 1 Exchange Notes to Nanyang. This note does not bear any interest and will mature on December 18, 2025. Nanyang has the right, at any time until the note is fully paid, to convert any outstanding and unpaid principal into share of ~~shares would be calculated using~~common stock at a ~~variable~~fixed 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) $0.004~~$0.0001 per share. ~~The~~Accordingly, the Company would issue 6,000,000,000 common shares upon full conversion of this note. Shares of common stock may not ~~make payments in the form of shares of Common Stock~~be issued pursuant to this note if, after giving effect to the conversion or issuance, ~~the holder~~Nanyang, together with its affiliates, would beneficially own in excess of ~~9.9%~~4.99% of the outstanding shares of ~~Common Stock.~~

~~As of~~the Company’s common stock.

Subsequent to September 30, ~~2017 and December 31, 2016~~2021, the ~~outstanding principal balance on~~debt with Nanyang was partially converted into common stock. Refer to the ~~promissory notes was $3,504,199 and $1,010,000, respectively.~~ Nanyang Conversion section of Note 15. Subsequent Events for further details.

NOTE 11. DERIVATIVE LIABILITIES

The ~~accrued interest outstanding on these notes was $19,585 as~~following table is a summary of the derivative liability activity for the nine months ended September 30, ~~2017.~~2021:

Derivative Liability Balance as of December 31, 2020	$	5,303,984
Liability extinguished		(5,303,984	)
Derivative Liability Balance as of September 30, 2021	$	—

~~Pursuant~~

Convertible Notes Assigned to BD 1

The convertible notes that were assigned to BD 1 in September 2020 and were partially assigned to Nanyang in August 2021, further described above in Note 10, were exchanged for new notes on December 18, 2020, as part of the Company’s recapitalization and restructuring effort which began in June 2020. Prior to the exchange, pursuant to a number of factors outlined in ASC Topic 815, Derivatives and Hedging, the conversion ~~option~~options 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.

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At December 31, 2019, the aggregate derivative liability associated with these notes was $5,706,175. This value was derived from Management’s fair value assessment using the following assumptions: annual volatility range of ~~63%~~42% to 46%, present value discount rate of 12%, and a dividend yield of 0%.

~~Offering~~

In 2020, pursuant to ASC Topic 815, Derivatives and Hedging, Management conducted quarterly fair value assessments of ~~Unsecured, Non-Convertible Notes~~

~~During October 2016,~~the embedded derivatives associated with these notes. Engaging the services of a firm specializing in these valuations, it was determined that a rational investor would not convert the notes, and would not expect to do so in the foreseeable future. The Company had reported doubt as to its ability to continue as a going concern since 2015. The Company scaled down operations and did not expect to ramp up until significant financing could be obtained and has been operating under these conditions for some time already, continuously chasing funding to continue operations. Circumstances shifted in late 2019 and early 2020, making fundraising and continuing operations more difficult, thereby reducing liquidity and attractiveness of the common stock. These new circumstances made it clear to current and prospective investors that the Company ~~received $420,000 from~~would either file bankruptcy or restructure with a ~~separate private~~strategic investor. ~~These funds, along with $250,000~~Accordingly, conversion of ~~additional funding, were rolled~~a debt instrument into ~~a promissory note, executed on January 17, 2017,~~common stock that cannot be sold in the ~~amount~~marketplace would put the holder in a far less secure position compared to holding the instrument as debt. As a result of ~~$700,000 issued~~the fair value assessments, the Company recorded an aggregate net gain of $5,706,175 for the year ended December 31, 2020, as “Change in fair value of derivatives and gain/loss on extinguishment of liabilities, net” in the Consolidated Statements of Operations to properly reflect that the value of the embedded derivative had been eliminated in 2020.

Convertible Notes held by Global Ichiban

In connection with the convertible notes held by Global, further described above in Note 8, pursuant to a number of factors outlined in ASC Topic 815, Derivatives and Hedging, the conversion options 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.

At December 31, 2019, the aggregate derivative liability associated with these notes was $2,010,975. This value was derived from Management’s fair value assessment using the following assumptions: annual volatility of 46%, present value discount rate of ~~$30,000 which~~12%, and a dividend yield of 0%.

The conversion option in the GI Exchange 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 49%, expected interest rate of 1.52%, and a dividend yield of 0%, and appropriately recorded that value as a derivative liability. At September 9, 2020, the derivative liability associated with the Global note was $447,903. The fair value of the derivative was recorded as a debt discount and will be charged to 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~~derivative liability associated with the note is ~~not convertible into equity shares~~subject to revaluation on a quarterly basis to reflect the market value change of the ~~Company~~embedded conversion option. Management assessed the fair value option of this embedded derivative, as of December 31, 2020, using the following assumptions: annual volatility of 62%, and ~~is unsecured.~~

~~On June 30, 2017,~~a dividend yield of 0%. As a result of the fair value assessments, the Company recorded an aggregate net loss of $2,845,106 for the year ended December 31, 2020, as “Change in fair value of derivatives and gain/loss on extinguishment of liabilities, net” in the Consolidated Statement of Operations to properly reflect that the value of the embedded derivative of $5,303,984 as of December 31, 2020.

On March 9, 2021, the Company entered into a settlement agreement with Global, further described above in Note 8. As a result of the settlement, the entire debt was cancelled and the ~~private investor agreed~~Company recorded an aggregate net gain of $5,303,984 for the three months ended March 31, 2021, as “Change in fair value of derivatives and gain/loss on extinguishment of liabilities, net” in the Condensed Consolidated Statement of Operations to ~~a 12 month payment plan on~~properly reflect that the ~~balance~~value 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.~~

~~As of September 30, 2017, $143,759 of principal and $43,544 of interest~~the embedded derivative 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, the Company initiated a non-convertible, unsecured promissory note with a private investor for $103,000 in exchange for proceeds of $100,000. The discount of $3,000 will be charged to interest expense ratably over the term of the note. The promissory note bears interest of 10% per annum and matures on October 6, 2017. As of September 30, 2017, the principal and accrued interest outstanding on 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.

eliminated.

NOTE ~~10.~~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~~$750,000 shares of Series A Preferred Stock at a price of $8.00 per share, resulting in gross proceeds of ~~$6,000,000.~~$6.0 million. 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.~~$1.0 million. The final closings took place in

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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.~~

$5.0 million.

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

This make-whole provision expired in June 2017.

The Series A Preferred Stock may be converted into shares of common stock at the option of the Company if the closing price of the common stock exceeds $232, as adjusted, for 20twenty 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,~~2021, 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.

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

As of September 30, ~~2017,~~2021, there were ~~60,756~~48,100 shares of Series A Preferred Stock ~~outstanding.~~

outstanding and accrued and unpaid dividends of $404,441.

NOTE ~~11.~~13. SERIES E1A PREFERRED STOCK ~~AND THE COMMITTED EQUITY LINE~~

Series E1A Preferred Stock

– Tranche 1 Closing

On ~~November 4, 2015,~~September 22, 2020, the Company entered into a securities purchase agreement (“Series 1A SPA”) 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, into common stock at a variable conversion price equal to 80% of the average of the two lowest VWAPs of the Company's common stockCrowdex, for the ~~ten consecutive trading day period prior to the conversion date. If certain defined default events occur, the conversion price would thereafter be reduced (and only reduced), to equal 70%~~private placement 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 25,160,171 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 of Series E Preferred Stock, along with all 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 E 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 $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~~$5,000,000 of the Company’s newly designated Series ~~F 7%~~1A Convertible Preferred Stock ~~(the “Series F~~(“Series 1A Preferred Stock”).

~~On January 20, 2016, the Company sold and issued 7,000 shares~~

Each share of Series F1A Preferred Stock ~~to the private investor. The aggregate purchase~~has an original issue 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.

$1,000 per share. Shares of the Series F1A 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~~$0.0001 per ~~share. If certain defined default events occur, the conversion price would thereafter be reduced (and only reduced),~~common share, subject 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~~standard ratable anti-dilution adjustments.

Outstanding 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~~1A Preferred Stock are entitled to ~~dividends in~~vote together with the ~~amount~~holders of ~~7% per annum. During~~common stock as a single class (on an as-converted to common stock basis) on any matter presented to the ~~quarter ended September 30, 2017,~~stockholders of the Company ~~did not pay~~for their action or consideration at any ~~dividends or issue any shares~~meeting of stock holders (or written consent of stockholders 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~~lieu 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 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 75%, present value discount rate of 12% and dividend yield of 0%meeting).

~~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~~1A 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 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 J Preferred Stock. As a result of the fair value assessment, the Company recorded a 489,064 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 $686,699, to properly reflect the fair value of the embedded derivative of $18,325 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 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~~

On October 14, 2016, the Company entered into a securities purchase agreement with a private investor 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 in exchange for gross proceeds of $700,000.

Shares of the Series J-1 Preferred Stock (including the amount of any accrued and unpaid dividends thereon) may be converted, at the option of the holder, into common stock at a fixed conversion price of $0.0125 per share. Holders of the Series J-1 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 Series J-1 Preferred Stock at a price per share equal to $1,000 plus any accrued but unpaid dividends thereon.

On August 10, 2017, the Company and the investor entered into a redemption agreement whereby the Company agreed to redeem $700,000 face value of Series J-1 Preferred Stock plus accrued dividends of $55,306 by issuing 500 million shares of common stock and a warrant to purchase 250 million shares of common stock.

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 of the Warrant, together with its affiliates, would beneficially own in excess of 9.99% of the outstanding shares of common stock.

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

~~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. At Closing, the Company sold and issued $330,000 principal amount of October 2016 Convertible Notes to Adar Bays in exchange for $330,000 of gross proceeds.

Unless earlier converted or prepaid, the October 2016 Convertible Notes will mature December 31, 2017 (the “Maturity Date”). The October 2016 Convertible Notes 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). Principal and accrued interest on the October 2016 Convertible Notes is payable on the Maturity Date.

All principal and accrued interest on the October 2016 Convertible Notes are convertible at any time, in whole or in part, at the option of Adar Bays, 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, 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 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; and (ii) bankruptcy or insolvency of the Company.

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

~~Pursuant to a number of factors outlined in ASC Topic 815,~~ ~~Derivatives and Hedging~~, the conversion option in the October 2016 Convertible Notes were deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At 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 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 69% present value discount rate of 12% and dividend yield of 0%.

~~Exchange of Outstanding Series A Preferred Stock for Convertible Notes~~

In 2013, the Company completed private placement to one accredited investor (the “Series A Holder”) of its Series A Convertible Preferred Stock. Prior to 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 portion of the October 2016 Convertible Notes for outstanding shares 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 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.

~~The shares of~~ If the ~~Series K Preferred Stock will be convertible at the option of the holder into common stock at~~Company pays a ~~fixed conversion price equal to $0.004. At no time may the Series K Preferred Stock be converted if the number of~~dividend or otherwise makes a distribution payable on 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~~holders of the Series K1A Preferred Stock ~~at a price per share equal~~will receive such dividend or distribution on an as-converted to ~~$1,000 plus any accrued but unpaid dividends (if any) thereon on~~common stock basis. There are no specified redemption rights for the ~~fifth anniversary of the date of the original issue of such shares.~~

Series 1A Preferred Stock. Upon ~~our~~ liquidation, dissolution or winding up, holders of Series K1A 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,~~

The Company sold 2,000 shares of Series 1A Preferred Stock to Crowdex in ~~accordance with ASC 480-10,~~exchange for $2,000,000 of gross proceeds at an initial closing under the Series K1A SPA on September 22, 2020.

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In November 2020, Crowdex converted 1,200 shares of outstanding Series 1A Preferred Stock ~~was classified as a liability on~~into 12,000,000,000 shares of common stock.

On December 31, 2020 the ~~Consolidated Balance Sheets. Pursuant to a number~~Company sold 500 shares of ~~factors outlined in ASC Topic 815, the conversion option in the~~ Series K1A Preferred Stock ~~was deemed~~ to ~~not require bifurcation or separate accounting treatment.~~

~~NOTE 19. ST. GEORGE CONVERTIBLE NOTE~~

Crowdex in exchange for the cancellation of the Crowdex Note issued on November 27, 2020. There were no additional cash proceeds from this closing.

On ~~September 8, 2017,~~January 4, 2021, the Company entered into a securities purchase agreement (“Series 1ATranche 2 SPA”) with ~~St. George Investments LLC~~TubeSolar AG, a developer of photovoltaic thin-film tubes to enable additional application opportunities in solar power generation compared to conventional solar modules (“~~Investor”~~TubeSolar”)~~, for~~. Pursuant to the ~~private placement of $1,725,000 principal amount of the Company’s Original Issue Discount Convertible Promissory Notes.~~

~~On September 11, 2017,~~Series 1A Tranche 2 SPA, the Company sold 2,500 shares of Series 1A Preferred Stock to TubeSolar and ~~issued $1,725,000 principal amount of the convertible notes to the Investor in exchange for $1,500,000~~received $2,500,000 of gross proceeds ~~and paid $20,000 in financing costs. The original issue discount~~on January 5, 2021. During the three months ended September 31, 2021, TubeSolar converted 100 shares of ~~$225,000, and the financing fee, will be charged to interest expense, ratably, over the life of the note.~~

~~Unless earlier converted or prepaid, the convertible notes will mature on March 11, 2019. The notes do not bear interest in the absence of an event of default.~~

For the first six months after the issuance of the notes, the Company will make a monthly cash repayment on the notes of approximately $96,000. Thereafter, the Investor may request that the Company make monthly partial redemptions of the note up to $150,000 per month. If the Investor 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 in no event can the amount requested by the Investor for any one month exceed $275,000.

Redemption amounts are payable by the Company in cash. Beginning ten months after the issuance of the convertible notes, cash redemption payments by the Company will be subject to a 15% redemption premium.

~~Beginning six months after the issuance of the convertible notes, the Company also has the option (subject to customary equity conditions) to pay redemption amounts in the form of~~Series 1A Preferred Stock into 1,000,000,000 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.

~~All principal and accrued interest on the Notes are convertible at any time, in whole or in part, at the option of the Investor into shares of~~

NOTE 14. STOCKHOLDERS’ EQUITY (DEFICIT)

Common Stock ~~at a fixed conversion price of $0.004 per share.~~

The Notes 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. Upon the occurrence of an event of default, the Notes will begin to bear interest at the rate of 22% per annum. In addition, upon the occurrence of an event of default, the Investor has the option to increase the outstanding balance of the Notes by 25%.

~~In connection with the closing under the Note SPA,~~

During September 2021, the Company ~~issued 37,500,000 unregistered~~increased its authorized shares from 20 billion to 30 billion of common ~~stock to the Investor as an origination fee. The closing stock price on the date of close was $0.0017 resulting in an interest expense of $63,750 being recorded as of the date of close.~~

The Notes may not be converted and shares of Common Stock may not be issued pursuant to the Notes if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 4.99% of the outstanding shares of Common Stock.

~~Pursuant to a number of factors outlined in ASC Topic 815,~~ ~~Derivatives and Hedging, the conversion option in the Convertible Promissory Notes were deemed to include an embedded derivative that required bifurcation and separate accounting.~~stock. 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 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 74% present value discount rate of 12% and dividend yield of 0%.

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

In June 2013, the Company entered into a Series A Preferred Stock Purchase Agreement. Holders of Series A Preferred Stock are entitled to cumulative dividends at a rate of 8.0% per annum, with the dividend rate being indexed to the Company's stock price and subject to adjustment. Conversion or redemption of the Series A Preferred Stock within 4 years of issuance requires the Company pay a make-whole dividend to the holders, whereby dividends for the full four year period are to be paid in cash or common stock (valued at 10% below market price).

The Company concluded the make-whole dividends should be characterized as embedded derivatives under ASC 815. The make-whole dividends were expensed at the time of issuance and recorded as "Make-whole dividend liability" in the Condensed Consolidated Balance Sheets.

The fair value of these dividend liabilities, which are indexed to the Company's common stock, must be evaluated at each period end. 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 fair value determination required forecasting stock price volatility, expected average annual return and conversion date. During the nine months ended September 30, 2017, the fair value 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.

As of March 31, 2017, a Preferred Series A holder had converted 104,785 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 dividends of $264,289, payable in cash or common shares.

~~NOTE 21. STOCKHOLDERS’ DEFICIT~~

~~Common Stock~~

~~At September 30, 2017,~~2021, the Company had ~~20,000,000,000~~30 billion shares of common stock, $0.0001 par value, authorized for issuance. Each share of common stock has the right to ~~one~~1 vote. As of September 30, ~~2017,~~2021, the Company had ~~8,717,859,917~~19,678,916,809 shares of common stock outstanding. The Company has not declared or paid any dividends related to the common stock through September 30, ~~2017.~~

2021.

On August 2, 2021, the Company entered into a common stock purchase agreement (“Common Stock SPA”) with BD 1 for the placement of 666,666,672 shares of the Company’s common stock at a fixed purchase price of $0.015 per share for an aggregate purchase price of $10,000,000. The first tranche of 333,333,336 shares for $5,000,000 closed on September 2, 2021 and the second tranche will close on or before October 31, 2021 (if the Company has authorized but unissued common stock sufficient to issue all of the second tranche shares) or within five business days after the effective date when the Company has sufficient unissued common stock.

Subsequent to September 30, 2021, the second tranche of the Common Stock SPA with BD 1 closed. Refer to the Tranche 2 Closing section of Note 15. Subsequent Events for further detail.

Preferred Stock

At September 30, ~~2017,~~2021, 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.

Table of Contents

The following table summarizes the designations, shares authorized, and shares outstanding for the Company's Preferred Stock:

Preferred Stock Series Designation	Shares Authorized		Shares Outstanding
Series A		750,000		48,100
Series 1A		5,000		3,700
Series B-1		2,000		0
Series B-2		1,000		0
Series C		1,000		0
Series D		3,000		0
Series D-1		2,500		0
Series E		2,800		0
Series F		7,000		0
Series G		2,000		0
Series H		2,500		0
Series I		1,000		0
Series J		1,350		0
Series J-1		1,000		0
Series K		20,000		0



~~Preferred Stock Series Designation~~	~~Shares Outstanding~~
~~Series A~~	~~60,756~~
~~Series F~~	~~140~~
~~Series J~~	~~1,075~~
~~Series K~~	~~2,810~~

Series A Preferred Stock

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

Stock activity.

Series F1A Preferred Stock

Refer to Note 12 ~~descriptions of~~13 for Series ~~F Preferred Stock.~~

~~Series J~~1A Preferred Stock

~~Refer to~~ ~~Note 16~~ ~~descriptions of~~ activity.

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

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

~~Refer to~~ ~~Note 18~~ ~~descriptions of Series K Preferred Stock.~~

~~Warrants~~

On July 24, 2017, 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.

~~NOTE 22. 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

~~Stock Options:~~ ~~The Company recognized share-based compensation expense for stock options of approximately $82,000 to officers, directors and employees for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2017~~ ~~related to stock option awards ultimately expected to vest. The weighted average estimated fair value of employee stock options granted for the~~ ~~nine~~ ~~months ended September 30, 2016 was~~ ~~$1.20~~ ~~per share, and there were no stock options granted during the nine months ended~~ ~~September 30, 2017. 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 stock options not yet recognized was~~ ~~$44,000~~ ~~which is expected to be recognized over a weighted average period of approximately~~ ~~1.5~~ ~~years,~~ ~~66,607~~ ~~shares were vested or expected to vest in the future at a weighted average exercise price of~~ ~~$39.61, and~~ ~~195,218~~ ~~shares remained available for future grants under the Option Plan.~~

~~Restricted Stock:~~ ~~In addition to the stock options discussed above, the Company recognized share-based compensation expense related to restricted stock grants of~~ ~~$26,000~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2017~~.

There were no ~~restricted stock grants for~~transactions involving the ~~nine months ended~~ ~~September 30, 2017, and the weighted average estimated fair value of restricted stock grants for the~~ ~~nine~~ ~~months ended September 30, 2016 was~~ ~~$2.00~~ ~~per share.~~

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

~~NOTE 23. RELATED PARTY TRANSACTIONS~~

On August 29, 2016, the Company entered into a note purchase agreement with Tertius Financial Group Pte. Ltd. ("TFG”) for the private placement of $330,000 of the Company’s original issue discount notes with an original maturity date of November 26, 2016. The notes bear interest of 6% per annum and 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, 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”).~~

~~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.~~

~~All related party transactions were approved by our independent board of directors.~~

~~NOTE 24. COMMITMENTS AND CONTINGENCIES~~

The Company is subject 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 proceedingsSeries B-1, B-2, C, D, D-1, E, F, G, H, I, J, J-1, 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~~K during the three and nine months ended September 30, ~~2017.~~

~~The Company records a liability in its financial statements for costs related to claims, including settlements~~2021 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~~2020.

NOTE 15. SUBSEQUENT EVENTS

Nanyang Conversion

On October 13, 2021, $100,000 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,~~Nanyang’s convertible notes were converted into ~~33,333,333 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 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 principal balance of $103,000 and accrued interest of $5,233 in to common shares. Per the terms of the agreement the promissory note 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~~1,000,000,000 shares of common stock. ~~The redemption amount~~

Common Stock SPA – Tranche 2 Closing

Between October 29 and November 5, 2021, the Company received aggregate payments of ~~$116,390, consisting of $81,348 principal~~$5,000,000 and ~~$35,042 interest, resulted in the issuance of 93,786,866~~issued 333,333,336 total shares of common ~~stock.~~

~~On October 31, 2017,~~stock for 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 into shares of equity. All principal and interest on the note are payable upon maturity.

~~Update on St. George Convertible Note~~

~~On October 8, 2017 and November 8, 2017, the Company issued two cash payments of $95,833 each, in accordance with the terms~~second tranche of the ~~St. George Convertible Note. Following this payment, the remaining principal balance on the note was $1,533,333.~~

Common Stock SPA.

Table of Contents

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.~~10-Q and our audited financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on May 13, 2021. 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.

You should carefully read the “Risk Factors” section of this Quarterly Report and of our Annual Report on Form 10-K for the year ended December 31, 2020 to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitles “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~~,2021, we generated ~~$242,055~~$11,723 and ~~$547,792~~$557,369 of revenue from product sales, respectively.

As of September 30, 2021, we had an accumulated deficit of $424,194,254.

In ~~2012, we transitioned~~January 2017, Ascent was awarded a contract to supply high-voltage SuperLight thin-film CIGS PV blankets. These 50W, fully laminated, flexible blankets were manufactured using a new 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 desired voltage and current required for such application.

In November 2017, Ascent introduced the next generation of our ~~business model adding a second business focused on developing PV integrated consumer electronics. In June of 2012, we launched our new line of consumer products under~~USB-based portable power systems with the ~~EnerPlex™ brand, and introduced our~~XD™ series. The first product introduced was the ~~Surfr™ battery~~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 ~~solar case~~2.0 Amp smart USB output to enable the XD-12 to charge most smartphones, tablets, and USB-enabled devices as fast as a wall outlet. The enhanced smart USB circuit works with the device to be charged so that the device can determine the maximum power it is able to receive from the XD-12 and ensures the best possible charging performance directly from the sun.

Also, in 2017, 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~~space customer, Ascent manufactured a ~~thin, life extending, battery. The charger adds minimal weight and bulk to the iPhone, yet provides supplemental charging when needed.~~

~~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,~~new micro-module, 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~~12.8mm x 50mm (0.5in x 2.0in) in size 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~~both laboratory-scale environmental testing, and ~~mountain climbing as well as daily city use. To complement~~for subsequent integration into flight experiments.

In February 2018, the ~~Kickr IV, we also released~~Company introduced the ~~Jumpr™ series~~second product in our XD series. Delivering up to 48 Watts of solar power, the durable and compact Ascent XD-48 Solar Charger is the ideal solution for charging many portable electronics and off-grid power ~~banks.~~systems. The ~~Jumpr™ series provides~~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 ~~storage solution~~through the harshest conditions.

In March 2018, Ascent successfully shipped to a European based customer for ~~those who need to take the power~~a lighter-than-air, helium-filled airship project based on our newly developed ultra-light modules with substrate material than half of the ~~sun~~thickness of our standard modules. In 2019, Ascent completed a repeat order from the same customer who had since established its airship development operation in the US. In 2020, Ascent received a third and enlarged order from the same customer and completed the order in May 2021.

On September 15, 2021, the Company entered into a Long-Term Supply and Joint Development Agreement (“JDA”) with ~~them on~~TubeSolar. Under 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~~terms of the ~~premier home shopping networks with TV programming~~JDA, the Company will produce, and TubeSolar will purchase, thin-film PV foils (“PV Foils”) for use in TubeSolar’s solar modules for agricultural photovoltaic (“APV”) applications that ~~reaches over 87 million US homes to begin selling EnerPlex products during their broadcasts. During the second quarter EnerPlex launched the Generatr S100~~require solar foils for its production. Ascent and ~~select other products exclusively with EVINE,~~TubeSolar have jointly established a subsidiary in Germany, in which Ascent holds a stake of 70% and ~~in the third quarter the Generatr 1200 launched exclusively with EVINE for~~TubeSolar holds a ~~limited period.~~

~~During the second quarter~~minority stake of ~~2015 EnerPlex launched its products into two world recognized retailers; including over 100~~30% (the “JV”). 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~~purpose of the ~~first quarter of 2015, we announced~~JV is to establish and operate a PV Foils manufacturing facility in Germany that ~~six EnerPlex products were awarded accolades as Red Dot Design Award winners, recognizing both~~will produce and deliver PV Foils exclusively to TubeSolar. Until 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 Ascent Solar won its second R&D 100 Award, the 2015 award was given for the development of the MilPak platform, a military-grade solar power generation and storage unit. The MilPak platformJV facility is ~~on of the most rugged, yet lightweight, power generation and storage solutions available, both attributes enabled by the use of Ascent’s CIGS technology.~~

In the first quarter of 2016, EnerPlex launched the new Emergency sales vertical, partnering with Emergency Preparedness eCommerce leader, Emergency Essentials. In early 2016 Ascent announced new breakthroughsfully operational, PV Foils will be manufactured in the Company’s ~~line of high-voltage solar products, designed specifically~~existing facility in Thornton, Colorado. The parties expect to jointly develop next generation tooling for ~~high-altitude and space markets, building on~~use in manufacturing PV Foils at the ~~progress previously announced in Q4, 2015. Also during~~JV facility. Under the ~~first quarter of 2016,~~JDA, the Company ~~announced the launch~~will receive (i) up to $4 million of ~~select products on the GSA Advantage website; which allows Federal employees, including members~~non-recurring engineering fees, (ii) up to $13.5 million of ~~all branches~~payments upon achievement of ~~the US Military,~~certain agreed production and cost structure milestones, and (iii) product revenues from sales of PV Foils to ~~directly purchase Ascent~~TubeSolar. The JDA has no fixed term, and ~~EnerPlex products including: the MilPak E, Commandr 20, Kickr 4 and WaveSol solar modules.~~

~~In February 2017 Ascent announced the sale~~may only be terminated by either party for breach.

Table 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 toContents

We 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 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.

extensive.

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~~back-end assembly cost 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.~~ near-term 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 ability to generate customer acceptance of and demand for our products;

•

Successful ramping up of commercial production on the equipment installed;

~~our ability to generate customer acceptance~~

•

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

•

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

•

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

•

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

•

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;

•

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

•

Our ability to maintain effective internal controls over financial reporting;

•

Our ability to achieve projected operational performance and cost metrics;

•

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

•

Availability of raw materials; and

•

COVID-19 and the uncertainty around the continued duration and effect of the worldwide pandemic.

Table of Contents

Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been derived from the accounting records of Ascent Solar Technologies, Inc. and ~~demand~~Ascent Solar (Asia) Pte. Ltd. (collectively, the “Company") as of September 30, 2021 and December 31, 2020, and the results of operations for ~~our products;~~

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

~~our products are successfully~~three and ~~timely certified for use~~nine months ended September 30, 2021 and 2020. Ascent Solar (Asia) Pte. Ltd. is wholly owned by Ascent Solar Technologies, Inc. All significant inter-company balances and transactions have been eliminated in ~~our target markets;~~

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

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

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

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;

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

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

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

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

~~availability of raw materials.~~

accompanying condensed 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.~~2020. 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.

2021.

Results of Operations

	Three Months Ended September 30,
	2021			2020			$ Change
Revenues
Product Revenue		11,723			6,293			5,430
Total Revenues		11,723			6,293			5,430

Costs and Expenses
Cost of Revenue		687,885			5,528			(682,357	)
Research, development and manufacturing operations		1,086,513			150,060			(936,453	)
SG&A		882,641			315,660			(566,981	)
Depreciation		15,111			26,325			11,214
Total Costs and Expenses		2,672,150			497,573			(2,174,577	)

Loss From Operations		(2,660,427	)		(491,280	)		(2,169,147	)

Other Income/(Expense)
Other Income/(Expense), net		67,644			3,055,366			(2,987,722	)
Interest Expense		(167,983	)		(963,648	)		795,665
Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities		195,852			990,183			(794,331	)
Total Other Income/(Expense)		95,513			3,081,901			(2,986,388	)
Net (Loss)/Income		(2,564,914	)		2,590,621			(5,155,535	)

Comparison of the Three Months Ended September 30, ~~2017~~2021 and ~~2016~~

2020

Revenues.Our ~~net~~ revenues ~~were~~ ~~$242,000~~increased by $5,430 for the three months ended September 30, ~~2017~~2021 when compared to ~~$453,000~~the same period in 2020, due primarily to increased operations in the current period. The Company was in a dormant status for the 2020 three-month period, as the focus in 2020 was to recapitalize and restructure the Company’s balance sheet.

Cost of revenues. Our Cost of revenues increased by $682,357 for the three months ended September 30, ~~2016. A decrease of $211,000. The following factors contributed~~2021 when compared to the ~~decrease~~same period in ~~revenue during~~2020. mainly due to the increase in repair and maintenance, materials, and labor costs as a result of an increase in production for the three months ended September 30, ~~2017:~~


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~~2021 compared to 2020. Cost of revenues for the three months ended September 30, 2017 was approximately $535,000 compared to $1,332,000 for the three months ended September 30, 2016, a decrease of $797,000. The decrease is primarily attributed to a decrease in materials and labor costs as a result of a decrease in production as compared to the third quarter in the prior year. Cost of revenues for the third quarter of 20172021 is comprised primarily of ~~materials~~repair and ~~freight of $75,000,~~maintenance, direct labor, ~~of $51,000,~~ and overhead costs.

Table of ~~$409,000.~~ Contents

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~~increased by $936,453 for the three months ended September 30, ~~2017~~2021 when compared to ~~$1,660,000 for~~ the ~~three months ended September 30, 2016, a decrease~~same period in 2020 is due primarily to an increased level of ~~$348,000.~~operations in the current period as compared to the Company’s dormant status in the 2020 three-month period. 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,~~

Selling,general and ~~manufacturing operations~~administrative. Selling, general and administrative expenses ~~during the three months ended September 30, 2017:~~


1.	Personnel and facility related expenses decreased approximately $363,000 as compared to the third quarter of 2016. The decrease in personnel related costs was primarily due to a reduction in headcount.


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.


3.	Materials and equipment related expenses, increased approximately $20,000 compared to the third quarter of 2016. The decrease in expense was primarily due to the reserve against WIP inventory as a result of our focus transition from the consumer electronics market to high-value PV markets.

~~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 costsincreased by $566,981 for the three months ended September 30, ~~2017.~~

~~Selling,general and administrative.~~ ~~Selling, general and administrative expenses were $1,342,000~~2021 when compared to the same period in 2020. The increase in costs is due primarily to an increased level of operations in the current period as compared to the Company’s dormant status in the 2020 three-month period.

Other Income/Expense. Other income decreased $2,986,388 for the three months ended September 30, ~~2017~~2021 when compared to ~~$2,576,000~~the same period in 2020. The decrease is due primarily to a gain from the change in fair value of derivative liabilities recognized in the prior period and a gain on disposal of the Building. In the current period, the Company’s gain from the extinguishment of the PPP loan was partially offset by interest expense.

Net (Loss)/Income. Our Net Loss increased by $5,155,535 for the three months ended September 30, ~~2016, a decrease of $1,234,000. The following factors contributed~~2021 compared to the ~~decrease~~same period in ~~selling, general, and administrative expenses during the three months ended September 30, 2017:~~


1.	Personnel and facility related costs decreased approximately $436,000 during the three months ended September 30, 2017 as compared to the three months ended September 30, 2016. The overall decrease in personnel related costs was2020 primarily due ~~a lower headcount for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016.~~

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


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


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


5.	Bad debt and settlement expenses decreased approximately $75,000 during the three months ended September 30, 2017 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.


6.	Public company expenses decreased approximately $26,000 during the three months ended September 30, 2017 as compared to the three months ended September 30, 2016. 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 of non-cash interest expense amortization of debt discounts related to convertible debt, promissory notes, and Preferred Stock.


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, net improved to a $2,151,000 gain during the third quarter of 2017 as compared to a $4,500,000 loss the third quarter of 2016. The improvement of $6,652,000 in this non-cash item is attributable to a gain of $2,593,000 on the change in fair value of our embedded derivative instruments during the three months ended September 30, 2017 and a decrease in the loss from extinguishment of liabilities of $4,059,000, related to conversions and redemptions of certain convertible notes and preferred stock, for the three months ended September 30, 2017 as compared to the the three months ended September 30, 2016

~~Net Loss.~~ ~~Our Net Loss was $2,356,000 for the three months ended September 30, 2017 compared to a Net Loss of $11,786,000 for the three months ended September 30, 2016, an improvement of $9,430,000.~~

~~The decrease in Net Loss for the three months ended September 30, 2017 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

items mentioned above.

Comparison of the Nine Months Ended September 30, ~~2017~~2021 and ~~2016~~2020

	Nine Months Ended September 30,
	2021			2020			$ Change
Revenues
Product Revenue		557,369			60,445			496,924
Total Revenues		557,369			60,445			496,924

Costs and Expenses
Cost of Revenue		1,184,528			101,156			(1,083,372	)
Research, development and manufacturing operations		2,716,395			485,592			(2,230,803	)
SG&A		2,244,771			505,053			(1,739,718	)
Depreciation		40,047			137,978			97,931
Total Costs and Expenses		6,185,741			1,229,779			(4,955,962	)

Loss From Operations		(5,628,372	)		(1,169,334	)		(4,459,038	)

Other Income/(Expense)		-			-			-
Other Income/(Expense), net		68,443			3,314,966			(3,246,523	)
Interest Expense		(899,533	)		(3,227,112	)		2,327,579
Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities		4,047,993			8,707,333			(4,659,340	)
Total Other Income/(Expense)		3,216,903			8,795,187			(5,578,284	)
Net (Loss)/Income		(2,411,469	)		7,625,853			(10,037,322	)

Revenues.Our ~~net~~ revenues ~~were $548,000~~increased by $496,924 for the nine months ended September 30, ~~2016~~2021 when compared to ~~$1,418,000~~the same period in 2020, due primarily to increased operations in the current period. The Company was in a dormant status for the 2020 nine-month period, as the focus in 2020 was to recapitalize and restructure the Company’s balance sheet.

Table of Contents

Cost of revenues. Our Cost of revenues increased by $1,083,372 for the nine months ended September 30, ~~2016. A decrease of $870,000. The following factors contributed~~2021 when compared to the ~~decrease~~same period in ~~revenue during~~2020. The increase in cost of revenues is mainly due to the ~~three~~increase in repair and maintenance, materials, and labor costs as a result of an increase in production for the nine months ended September 30, ~~2017:~~


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~~2021 compared to 2020. Cost of revenues for the nine months ended September 30, 2017 was $2,323,000 compared to $4,769,000 for the nine months ended September 30, 2016, a decrease of $2,446,000. The decrease is primarily attributed to a decrease in materials and labor costs as a result of a decrease in production as compared to the nine months ended September 30, 2016. Cost of revenues for the nine months ended September 30, 20172021 is comprised primarily of ~~materials~~repair and ~~freight of $789,000,~~maintenance, direct labor ~~of $53,000,~~ and overhead ~~of $1,481,000.~~costs. 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~~increased by $2,230,803 for the nine months ended September 30, ~~2017~~2021 when compared to ~~$5,132,000 for~~ the ~~nine months ended September 30, 2016, a decrease of $1,302,000.~~same period in 2020. The increase in costs is due primarily to increased operations in the current period as compared to the Company’s dormant status in the 2020 nine-month period. 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~~

Selling,general and administrative. Selling, general and administrative expenses increased by $1,739,718 for the nine months ended September 30, 2021 when compared to the same period in 2020. The increase in costs is due primarily to an increased level of operations in the current period as compared to the Company’s dormant status in the 2020 nine-month period.

Other Income/Expense. Other income decreased by $5,578,284 for the nine months ended September 30, 2021 when compared to the same period in 2020. The decrease is due primarily to smaller gains from the change in ~~research, development, and manufacturing operations expenses~~derivative liabilities during the nine months ended September 30, ~~2017:~~


1.	~~Personnel and facility related expenses decreased approximately $1,219,000 as~~2021 when compared ~~to the nine months ended September 30, 2016. The decrease in personnel related costs was primarily due to a reduction in headcount.~~


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.


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

~~Inventory impairment costs.~~ ~~Due~~ to the ~~sale~~same period in 2020 and a gain from disposal 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~~Building recognized during 2020 that was not repeated in ~~a lower-cost-to-market analysis and reserve for impairment. An expense of approximately $364,000 was recorded to inventory impairment costs~~2021.

Net (Loss)/Income. Our Net Income decreased by $10,037,322 for the nine months ended September 30, ~~2017.~~

~~Selling,general and administrative.~~ ~~Selling, general and administrative expenses were $4,512,000 for the nine months ended September 30, 2017~~2021 when compared to ~~$8,520,000 for~~ the ~~nine months ended September 30, 2016, a~~same period in 2020. The decrease ~~of $4,008,000. The following factors contributed~~is due primarily to the ~~decrease~~change in ~~selling, general, and administrative expenses during~~fair value of the ~~nine months ended September 30, 2017:~~


1.	Personnel and facility related costs decreased approximately $1,742,000 during the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. 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.

Marketing and related expenses decreased approximately $1,685,000 during the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. 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 which is the direct result of changing our main focus from the consumer electronics market to higher-value PV markets.


3.	Consulting and contract services increased approximately $55,000 during the nine months ended September 30, 2017 as compared to 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.


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


5.	Bad debt expense decreased approximately $246,000 during the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. During the nine months ended September 30, 2017, we recorded payments and settlements against existing reserves which were offset by additional reserves for customers whose accounts were greater than 120 days overdue.


6.	Public company expenses decreased approximately $122,000 during the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. 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 is primarily due to an decrease of non-cash interest expense and amortization of debt discounts related to convertible and promissory notes and Preferred Stock.


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 gain of $3,753,000 for the nine months ended September 30, 2017 an increase of $11,682,000 compared to the net loss of $7,929,000 for the nine months ended September 30, 2016. The change in this non-cash item is the result of an increase of $7,816,000 in the gain on change in the fair value of our embedded derivative instruments during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, and an decrease of $3,866,000 on loss on extinguishment of liabilities related to conversions of certain convertible notes and preferred stock in the same comparative periods.

~~Net Loss.~~ ~~Our Net Loss was $12,649,000 for the nine months ended September 30, 2017 compared to a Net Loss of $33,479,000 for the nine months ended September 30, 2016, an improvement of $20,830,000.~~

~~The decrease in Net Loss for the nine months ended September 30, 2017 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
Revenues (870,000 )
Cost of Revenue 2,446,000
Research, development and manufacturing operations
Materials and Equipment Related Expenses 62,000
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 )
Selling, general and administrative expenses
Personnel, Administrative, and Facility Related Expenses 1,742,000
Marketing Related Expenses 1,685,000
Legal Expenses 432,000
Public Company Costs 122,000
Bad Debt Expense 246,000
Consulting and Contract Services (55,000 )
Settlement Expenses (164,000 )
Depreciation and Amortization Expense 2,168,000
Other Income / (Expense)
Interest Expense 305,000
Other Income/Expense 489,000
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

derivative liabilities.

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~~2021 the Company used ~~$10.7 million~~$6,227,813 in cash for operations. Our primary significant long term cash obligation consists of a note payable of $5.5 million 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 and interest, will come due in the remainder of 2017.

Additional projected product revenues are not anticipated to result in a positive cash flow position for the year ~~2017~~ overall and, as of September 30, ~~2017, we have negative~~2021, the Company has working ~~capital.~~capital of $1,755,422. As such, cash liquidity would not be sufficient for the ~~year ending December 31, 2017~~next twelve months and will require additional financing.

~~We continue~~

The Company continues to accelerate sales and marketing efforts related to its ~~certain consumer products,~~ 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.

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Statements of Cash Flows Comparison of the Nine Months Ended September 30, ~~2017~~ 2021and ~~2016~~

2020

For the nine months ended September 30, ~~2017,~~2021, our cash used in operations was ~~$10.7 million~~$6,227,813 compared to ~~$13.6 million~~$1,473,988 for the nine months ended September 30, ~~2016, a decrease~~2020, an increase of ~~$2.8 million.~~$4,753,825. The ~~decrease~~increase is primarily ~~due to~~ the ~~reduction~~result of ~~headcount and production, coupled with~~scaling up operations during the ~~transition out of certain consumer electronics markets~~current period and the ~~sale of~~Company’s dormant status in the ~~EnerPlex brand.~~2020 nine months period. For the nine months ended September 30, ~~2017, our~~2021, cash used in investing activities was $158,818 compared to cash provided by investing activities of $254,444 for the nine months ended September 30, 2020. This change was ~~$92.7 thousand as compared to our cash used in operations of $192.3 thousand, an increase of $285.0 thousand. This increase is~~primarily the result of ~~investing~~a decrease in ~~intellectual property ("IP") during~~proceeds from the ~~first quarter~~sale of ~~2016 and the sales of the EnerPlex brand IP during the first quarter of 2017.~~assets. During the nine months ended September 30, ~~2017, negative operating~~2021, net cash ~~flows~~used in operations of ~~$10.7 million~~$6,227,813 were funded through ~~$11.6 million~~$10,500,000 in proceeds from issuances of ~~funding received from promissory notes,~~preferred and ~~the use 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

common stock.

Off Balance Sheet Transactions

As of September 30, ~~2017 and December 31, 2016,~~2021, we did not have any ~~off balance~~off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of ~~SEC~~ Regulation S-K.

Smaller Reporting Company Status

We are a “smaller reporting company” meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. As a smaller reporting company, we may rely on exemptions from certain disclosure requirement that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and smaller reporting companies have reduced disclosure obligations regarding executive compensation.

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 significant 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, 2021.

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,~~2021, our cash equivalents consisted only of ~~federally insured~~ operating ~~and savings~~ accounts held with financial institutions. From time to time, we may hold restricted funds, money market funds, investments in U.S. government securities and ~~high quality~~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 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 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

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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.~~2021. 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.~~

~~Description~~effective as of ~~Material Weakness identified~~September 30, 2021.

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 ~~2016~~Rules 13a-15(f) and ~~2017~~

~~Based on our assessment~~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 ~~criteria used,~~preparation of financial statements for external purposes in accordance with generally accepted accounting principles ("U.S. 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 U.S. GAAP, 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, ~~concluded that~~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 effective as of ~~December 31, 2016 and~~ September 30, ~~2017, was~~2021. Our management reviewed the results of its assessment with the Audit Committee.

Because of its inherent limitations, internal control over financial reporting may not ~~effective due~~prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the ~~material weaknesses described as follows:~~

~~The Company was understaffed and did not have sufficiently trained resources~~risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the ~~technical expertise to research and account for the Company's complex capitalization and multiple complex capital raising and equity transactions. This~~policies or procedures may deteriorate.

A material weakness is a deficiency, ~~arose primarily from staff turnover including the Company’s failure to more quickly replace its Director~~or combination of ~~Financial Planning and Reporting, who left the Company for a new position~~deficiencies, in ~~November, 2016.~~

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

~~Accounting for the Company's convertible debt and preferred stock transactions was lacking for the preparation of the December 31, 2016~~ financial ~~statements. Many of the special accounting issues specific to debt and equity financing have become increasingly complex and time-consuming, and require extensive expertise to ensure~~reporting such 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, or cash flows. The control deficiencies described above created~~is a reasonable possibility that a material misstatement toof the ~~consolidated~~Company’s annual or interim financial statements ~~would~~will not be prevented or detected on a timely basis.

~~The control deficiencies described above resulted~~

Material Weakness

As disclosed in ~~material misstatements in the preliminary consolidated financial statements that were corrected prior to the issuance~~Item 9A, “Controls and Procedures,” of the ~~consolidated financial statements as of and~~Company’s Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016~~2020, management concluded that a material weakness existed in its internal control over financial reporting as it related to the lack of accounting resourcing with technical expertise to ensure that all Company transactions were accounted for in accordance with U.S. GAAP. Specifically, the Company’s controls to ensure that appropriate accounting for the Company’s inventory and ~~management does~~cost of revenue and the Company’s accounting for complex debt and equity securities transactions were not ~~believe enough time has passed~~designed at a sufficient level of precision to ~~determine~~mitigate the ~~effectiveness~~risk of ~~our remediation plan.~~

material misstatement.

Remediation Plan for Material Weaknesses in Internal Control over Financial Reporting

The Company’s financial challenges faced in 2020 subsided as cash flow improved during the nine months ended September 30, 2021, and the Company received funding during the second half of 2020 and during the nine months ended September 30, 2021 and began to bring the Company back into operating status. The Company ~~has~~ executed the following steps ~~in 2017~~ to remediate the aforementioned material weaknesses in its internal control over financial reporting:

•

The Company hired a new Chief Financial Officer during the fourth quarter of 2020 and a new Controller with a strong financial statement audit and technical accounting background during the second quarter of 2021. The Company’s Controller, acting in coordination with the Company’s CFO, were both highly involved in implementing and monitoring internal controls over the Company’s quarterly financial reporting including the oversight of controls

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specifically related to the Company’s inventory activities, cost of revenue allocations, and accounting for the Company’s debt and equity securities, supervising the accounting staff involved in the Company’s quarterly financial reporting, and identifying, monitoring, and resolving accounting issues as raised throughout the Company’s ongoing activities.

•

The Company significantly reduced the complexity of the debt structure through consolidation and simplifying of terms thereby lowering the associated administration and cost burden.

~~In March 2017,~~

•

The Company engaged an external resource with the technical expertise to assist in documenting and testing internal controls under Section 302 and 404 of the Sarbanes Oxley Act of 2002.

The substantial elimination of the ~~Company hired a Director of Financial Planning~~complexities in the Company’s debt and ~~Reporting~~securities accounting along with the ~~technical expertise to research~~above changes in internal controls over financial reporting during the three and account for the Company's complex capital raising 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.

~~The Company will design and implement additional procedures in order to assure that the Director, Financial Planning and Reporting and other audit/accounting personnel are more involved with~~nine months ended September 30, 2021, have materially improved the Company’s ~~financing activities to monitor~~internal control over financial reporting, and ~~earlier identify accounting issues that may be raised by~~have effectively remediated the Company’s ~~ongoing financing activities.~~

prior material weaknesses as previously disclosed above.

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 ended September 30, ~~2017~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

~~On October 21, 2011,~~

From time to time, we ~~were notified that a complaint (the “Lawsuit”) was filed by Jefferies & Company, Inc. ("Jefferies") against us~~may become involved in ~~state court located~~legal proceedings arising in the ~~County and State~~ordinary course of ~~New York.~~

~~In December 2010,~~our business. We are not currently aware of any such proceedings or claims that we and Jefferies entered into an engagement agreement (the “Fee Agreement”) pursuant to which Jefferies was hired to act as our 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 interestbelieve will have, individually or in the ~~approximate amount~~aggregate, a material adverse effect on our business, financial condition or results 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.

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.

operations.

Item 1A. Risk Factors

The COVID-19 pandemic in the United States and world-wide has caused business disruption which may negatively impact the Company’s operations and results. While the disruption is currently expected to be temporary, there is considerable uncertainty around the duration. It is therefore likely there will be an impact on the Company’s operating activities and results. However, the related financial impact and duration cannot be reasonably estimated at this time.

In addition to the ~~other~~ information set forth in this ~~report,~~Form 10-Q, you should carefully consider the ~~factors discussed in the updated~~ risk factors disclosed under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020. There have been no material changes to our risk factors from those included in our Annual Report on Form 10-K ~~filed on April 17, 2017, 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 are not~~for 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.

year ended December 31, 2020.

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

Not required.

Use of Proceeds

Not required.

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities during the nine months ended September 30, 2021.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~Not applicable.~~

None.

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Item 6. Exhibits

The exhibits listed on the accompanying Index to Exhibits on this Form 10-Q are filed or incorporated into this Form 10-Q by reference.

EXHIBIT INDEX


Exhibit No.		Description

3.1		Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to our Registration Statement on Form SB-2 filed on January 23, 2006 (Reg. No. 333-131216))

3.2		Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2011)

3.3		Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed February 11, 2014)

3.4		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated August 26, 2014. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed September 2, 2014)

3.5		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated October 27, 2014 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K dated October 28, 2014)

3.6		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated December 22, 2014. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K dated December 23, 2014)

3.7		Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed on February 17, 2009)

3.8		First Amendment to Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2009)

3.9		Second Amendment to Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed January 25, 2013)

3.10		Third Amendment to Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed December 18, 2015)

3.11		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated May 26, 2016 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed June 2, 2016)

3.12		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated September 15, 2016 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed September 16, 2016)

3.13		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated March 16, 2017 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed March 17, 2017)

3.14		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated July 19, 2018 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed July 23, 2018)

3.15		Certificate of Designations of Preferences, Rights, and Limitations of Series 1A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed September 30, 2020)

3.16		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated September 23, 2021 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed September 24, 2021)

~~A list~~

Table of ~~exhibits is found on page 47~~Contents


4.1		Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form SB-2/A filed on June 6, 2006 (Reg. No. 333-131216))

4.2		Certificate of Designations of Series A Preferred Stock (filed as Exhibit 4.2 to our Registration Statement on Form S-3 filed July 1, 2013 (Reg. No. 333-189739))

4.3		Description of Securities (incorporated by reference to Exhibit 4.3 to our Annual Report on Form 10-K filed May 13, 2021)

10.1		Common Stock Securities Purchase Agreement dated August 2, 2021 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed August 5, 2021)

10.2+		Long-Term Supply and Joint Development Agreement dated September 15, 2021

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		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*		Filed herewith

+		Certain portions of the exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed.

Table of ~~this report.~~

Contents

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~~10th day of November, ~~2017~~.

2021.



	ASCENT SOLAR TECHNOLOGIES, INC.

November 10, 2021	By:	/S/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~~

Officer)

~~10.1~~ November 10, 2021	By:	~~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)~~ /s/ MICHAEL J. GILBRETH
~~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*		Michael J. Gilbreth 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~~ (Principal 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~~and Accounting Officer)



*	~~Filed herewith.~~



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)

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common	ASTI	OTC



Large accelerated filer	o ☐	Accelerated filer	o ☐

Non-accelerated filer	o ~~(Do not check if a smaller reporting company)~~ ☒	Smaller reporting company	x ☒

		Emerging growth company	o ☐



x
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o ☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




PART I. FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Consolidated Financial Statements ~~(unaudited)~~	4 1
	Unaudited Condensed Consolidated Balance Sheets - ~~For the Nine Months Ended~~as of September 30, ~~2017~~2021 and ~~the Year Ended~~ December 31, ~~2016~~2020	4 1
	Unaudited Condensed ~~and~~ Consolidated Statements of Operations - For the Three and Nine Months Ended September 30, ~~2017~~2021 and September 30, ~~2016~~2020	5 2
	Unaudited Condensed Consolidated Statements of Changes in Stockholder's Deficit - for the Three and Nine Months Ended September 30, 2021 and September 30, 2020	3
	Unaudited Condensed Consolidated Statements of Cash Flow - For the Nine Months Ended September 30, ~~2017~~2021 and September 30, ~~2016~~2020	6 5
	Notes to the Unaudited Condensed Consolidated Financial Statements	7 6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31 16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41 21
Item 4.	Controls and Procedures	42 21
PART II. OTHER INFORMATION		24
Item 1.	Legal Proceedings	44 24
Item 1A.	Risk Factors	44 24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44 24
Item 3.	Defaults Upon Senior Securities	44 24
Item 4.	Mine Safety Disclosures	44 24
Item 5.	Other Information	44 24
Item 6.	Exhibits	44 25
SIGNATURES		45 27



	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		$	—



	As of September 30,			As of December 31,
	2017			2016
Building	$	5,828,960		$	5,828,960
Furniture, fixtures, computer hardware and computer software	489,421			489,421
Manufacturing machinery and equipment	30,306,793			30,300,391
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
Less: Accumulated depreciation and amortization	(31,873,054		)	(30,983,448		)
Net property, plant and equipment	$	4,772,808		$	5,656,012




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



	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



	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) to Net Loss For the Nine Months Ended September 30, 2017 Compared to the Nine Months Ended September 30, 2016
Revenues	(870,000		)
Cost of Revenue	2,446,000
Research, development and manufacturing operations
Materials and Equipment Related Expenses	62,000
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		)
Selling, general and administrative expenses
Personnel, Administrative, and Facility Related Expenses	1,742,000
Marketing Related Expenses	1,685,000
Legal Expenses	432,000
Public Company Costs	122,000
Bad Debt Expense	246,000
Consulting and Contract Services	(55,000		)
Settlement Expenses	(164,000		)
Depreciation and Amortization Expense	2,168,000
Other Income / (Expense)
Interest Expense	305,000
Other Income/Expense	489,000
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



			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