UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): September 28, 2015 (September 28, 2015)
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ASCENT SOLAR TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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Delaware | | 001-32919 | | 20-3672603 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
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12300 Grant Street Thornton, Colorado | | 80241 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (720) 872-5000
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry Into a Material Definitive Agreement.
Closing of Additional $500,000 Convertible Note Financing.
As previously disclosed on September 4, 2015, the Company entered into a Note Purchase Agreement (the “New Loan Agreement”), between the Company and two accredited investors (the “Lenders”). Pursuant to the New Loan Agreement, on September 4, 2015 the Company issued to the Lenders $1.5 million original principal amount of secured subordinated convertible notes (the “New Notes”).
The New Loan Agreement provided the Company an option to issue up to an additional $500,000 of New Notes within the next 30 days. On September 28, 2015, the Company issued to one of the Lenders an additional New Note with an original principal amount of $500,000.
The Company will use the $500,000 of gross proceeds from this transaction for working capital and general corporate purposes.
Terms.
The terms of the $500,000 New Note are identical to the terms of the $1.5 million New Notes previously issued on September 4, 2015.
Unless earlier converted or redeemed, the New Notes will mature on September 4, 2016 (the “Maturity Date”).
The New Notes bear interest at a rate of 8% per annum. Principal and interest on the New Notes is payable on the Maturity Date.
All amounts due under the New Notes are convertible at any time, in whole or in part, at the option of the Lenders into shares of Common Stock at a fixed conversion price, which is subject to adjustment for stock splits, stock dividends, combinations or similar events, of $0.12 per share (the “Conversion Price”).
The Company, however, is prohibited from issuing shares of Common Stock pursuant to the New Notes unless stockholder approval of such issuance of securities is obtained as required by applicable NASDAQ listing rules. The Company intends to seek stockholder approval of such share issuances at a special stockholders meeting to be held in November or December 2015.
The New Notes will be secured by a security interest in substantially all of the Company’s assets (other than the Company’s Thornton, Colorado real estate assets which currently secure other outstanding indebtedness). The security interest for the New Notes will be subordinated to the security interest securing the Company’s outstanding senior secured notes issued in November 2014 unless and until such outstanding notes are completely retired.
The foregoing description is a summary and is qualified in its entirety by reference to the documents attached hereto as Exhibits 10.1 and 10.2, which documents are incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. The New Note described in this Current Report on Form 8-K was offered and sold to one accredited investor in reliance upon exemptions from the registration requirements under Section 4(a)(2) under the Securities Act of 1933, as amended (“Securities Act”), and Rule 506 of Regulation D promulgated thereunder.
Item 9.01 Financial Statements and Exhibits.
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(d) | Exhibits | | |
| Exhibit Number | | Description |
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| 10.1 | | Joinder to Note Purchase Agreement dated September 28, 2015 |
| 10.2 | | Secured Convertible Promissory Note for $500,000 dated September 28, 2015 |
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This Current Report on Form 8-K contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon the Company’s current expectations, speak only as of the date hereof and are subject to change. All statements, other than statements of historical fact included in this Current Report on Form 8-K, are forward-looking statements. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “goal,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions, and variations or negatives of these words. Such forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate, and involve factors that may cause actual results to differ materially and adversely from those projected or suggested. Readers are cautioned not to place undue reliance on these forward-looking statements and are advised to consider the factors listed above together with the additional factors under the heading “Forward-Looking Statements” and “Risk Factors” in the Company’s Annual Report on Form 10-K, Quarterly Reports of Form 10-Q, and in other filings with the Securities and Exchange Commission. The Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason, except as required by law.
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 hereunto duly authorized.
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| | | | ASCENT SOLAR TECHNOLOGIES, INC. |
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September 28, 2015 | | | | By: | | /s/ Victor Lee |
| | | | | | | | Name: Victor Lee |
| | | | | | | | Title: Chief Executive Officer |
EXHIBIT INDEX
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Exhibit | | Description |
10.1 | | Joinder to Note Purchase Agreement dated September 28, 2015 |
10.2 | | Secured Convertible Promissory Note for $500,000 dated September 28, 2015 |
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ASCENT SOLAR TECHNOLOGIES, INC.
JOINDER TO NOTE PURCHASE AGREEMENT
September 28, 2015
Reference is hereby made to that certain Note Purchase Agreement dated as of September 4, 2015 (the “Purchase Agreement”) by and among ASCENT SOLAR TECHNOLOGIES, INC., a Delaware corporation (the “Company”), and the persons and entities named on the Schedule of Purchasers attached hereto as Exhibit A (individually a “Purchaser,” and collectively, the “Purchasers”). Capitalized terms used herein but not otherwise defined have the meanings assigned to them in the Purchase Agreement.
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1. | The undersigned hereby acknowledges receipt of a copy of the Purchase Agreement. |
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2. | The undersigned agrees to be bound by the provisions of the Purchase Agreement as a “Purchaser” thereunder as of the date hereof. |
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3. | Exhibit A to the Purchase Agreement is hereby deleted and replaced in its entirety by the revised Exhibit A attached to this Joinder to Purchase Agreement. |
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4. | Conversion Limitation – Stockholder Approval. The undersigned and the Company agree that at no time may any Notes issued under the Purchase Agreement be converted into shares of the Company’s Common Stock if the number of conversion shares to be received, when aggregated with all other shares of Common Stock that may be issued upon conversion of all of the Notes issued under the Purchase Agreement (and also including any other shares that may be issued in any other transactions which may be aggregated under applicable Nasdaq listing rules), would result in the issuance of more than 19.999% of the amount of Common Stock of the Company outstanding as of July 22, 2015 (as determined in accordance with applicable Nasdaq listing rules), unless (i) the Company’s stockholders shall have approved the issuance of shares of Common Stock in excess of 20% of the amount of Common Stock of the Company issued and outstanding as of July 22, 2015 in accordance with applicable Nasdaq listing rules, or (ii) Nasdaq has provided a waiver of any applicable Nasdaq listing rules requiring stockholder approval. |
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5. | Conversion Limitation – 10% Ownership. The undersigned and the Company agree that, notwithstanding any other provision in this Agreement or the Notes, at no time may (x) the undersigned’s Notes be converted or (y) any other shares of Common Stock be issued to the undersigned if the number of shares of Common Stock to be received by the undersigned pursuant to such conversion or other issuance, when aggregated with all other shares of Common Stock then beneficially (or deemed beneficially) owned by the undersigned, would result in the Purchaser beneficially owning more than 9.9% of all Common Stock outstanding as determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. |
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IN WITNESS WHEREOF, the parties have executed this JOINDER TO NOTE PURCHASE AGREEMENT as of the date first written above.
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COMPANY:
ASCENT SOLAR TECHNOLOGIES, INC.
By: /s/ Victor Lee Name: Victor Lee Title: Chief Executive Officer
| PURCHASER:
SENG WEI SEOW
By: /s/ Seng Wei Seow Name: Seng Wei Seow
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SIGNATURE PAGE TO JOINDER TO NOTE PURCHASE AGREEMENT
Exhibit A
Schedule of Purchasers
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NAME AND ADDRESS OF PURCHASER: | NOTE AMOUNT: | Closing Date: |
Global Ichiban Limited | $1,000,000 | September 4, 2015 |
Seng Wei Seow | $500,000 | September 4, 2015 |
Seng Wei Seow | $500,000 | September 28, 2015 |
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THIS SECURED CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER SATISFACTORY TO THE PAYOR THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
SECURED CONVERTIBLE PROMISSORY NOTE
$500,000.00
September 28, 2015
Thornton, Colorado
For value received, Ascent Solar Technologies, Inc., a Delaware corporation (“Payor”), promises to pay to Seng Wei Seow or its assigns (“Holder”) the principal sum of Five Hundred Thousand Dollars ($500,000.00) with interest on the outstanding principal amount at the rate of eight percent (8%) per annum. Interest shall commence with the date hereof, shall accrue and compound quarterly and shall continue to accrue on the outstanding principal until paid in full or converted. Interest shall be computed on the basis of a year of 365 days for the actual number of days elapsed. The principal and accrued interest on this note (the “Note”) shall be due and payable on September 4, 2016 (the “Maturity Date”), unless converted in accordance with the terms of Section 4 below provided that the Maturity Date of all Notes (as defined below) may be extended with the written consent of Holders of at least a majority in interest of the outstanding principal amount of all Notes, provided further that the Payor shall provide written notice of any such extension to all Holders (as defined below).
1.This Note is issued as part of a series of substantially similar notes (collectively, the “Notes”) to be issued pursuant to the terms of that certain Note Purchase Agreement dated as of the date hereof (the “Agreement”) to the persons listed on the Schedule of Purchasers thereof (collectively, the “Holders”). Terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.
2. THE OBLIGATIONS DUE UNDER THIS NOTE ARE SECURED BY THE SECURITY AGREEMENT, DATED AS OF SEPTEMBER 4, 2015 AND EXECUTED BY THE PAYOR IN FAVOR OF HOLDERS (SUCH AGREEMENT, AS AMENDED, MODIFIED OR SUPPLEMENTED, THE “SECURITY AGREEMENT”). ADDITIONAL RIGHTS OF HOLDER ARE SET FORTH IN THE SECURITY AGREEMENT.
3. All payments of interest and principal shall be in lawful money of the United States of America and shall be made pro rata among all Holders. All payments shall be applied first to accrued expenses due under this Note, next to interest and thereafter to principal.
4. The Holder shall have the option, but not the obligation, to convert the outstanding principal and accrued unpaid interest of this Note into shares of the Payor’s Common Stock at a purchase price per share equal to $0.12 per share (the “Conversion Price”). The Conversion Price shall be ratably adjusted in the event of any stock split, reverse stock split, stock dividend or similar subdivision or combination affecting the Payor’s Common Stock. Any such adjustment shall become effective at the close of business on the date the subdivision or combination becomes effective.
5. Upon any conversion pursuant to Section 4 above, the Holder shall deliver the Note to Payor, and Payor shall deliver to the Holder a certificate representing that number of shares into which the Holder has converted the principal and interest at such rate. The principal so converted shall be deemed fully paid, and interest shall not thereafter accrue on such amounts. No fractional shares will be issued in connection with such conversion. In lieu of fractional shares which would otherwise be issuable, Payor shall pay cash equal to the product of such fraction multiplied by the per share price used in the conversion the Note.
6. Unless this Note has been converted in accordance with the terms of Sections 4 and 5 above, the entire outstanding principal balance and all unpaid accrued interest shall become fully due and payable on the Maturity Date. On the Maturity Date, Payor shall pay the Holder the outstanding principal balance, plus an amount equal to all accrued interest.
7. Promptly upon the occurrence thereof, Payor shall furnish to Holder written notice of the occurrence of any Event of Default (as defined below) hereunder.
8. If action is instituted to collect this Note, the Payor promises to pay all costs and expenses, including, without limitation, reasonable attorneys’ fees and costs, incurred in connection with such action.
9. Payor may prepay this Note prior to the Maturity Date.
10. If there shall be any Event of Default hereunder, with the consent of a Majority of Secured Parties (as such term is defined in the Security Agreement), at the option of, and upon the declaration of the Holder of this Note and upon written notice to the Payor (which election and notice shall not be required in the case of an Event of Default under Section 10(e) or 10(f)), this Note shall accelerate and all principal and unpaid accrued interest shall become due and payable. The occurrence of any one or more of the following shall constitute an “Event of Default”:
(a) Payor fails to pay timely any of the principal amount due under any of the Notes on the date the same becomes due and payable or any accrued interest or other amounts due under any of the Notes on the date the same becomes due and payable;
(b) Payor shall default in its performance of any agreement, term, covenant or condition under any Transaction Agreement (as such term is defined in the Security Agreement);
(c) Any representation, warranty, or other statement made or furnished by or on behalf of the Payor to Holder in writing in connection with this Note or any of the other Transaction
Agreements, shall be false, incorrect, incomplete or misleading in any material respect when made or furnished;
(d) The Payor shall (i) fail to make any payment when due under the terms of any bond, debenture, note or other evidence of indebtedness for money borrowed to be paid by Payor and such failure shall continue beyond any period of grace provided with respect thereto, or (ii) default in the observance or performance of any other agreement, term or condition contained in any bond, debenture, note or other evidence of indebtedness for borrowed money, and the effect of such failure or default is to cause, or permit the holder or holders thereof to cause, indebtedness in an aggregate amount of $1,000,000 or more to become due prior to its stated date of maturity;
(e) Payor (i) files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect; (ii) makes any assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing; (iii) applies for or consents to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property; (iv) is unable, or admits in writing its inability, to pay its debts generally as they mature, (v) is dissolved or liquidated; (vi) becomes insolvent (as such term may be defined or interpreted under any applicable statute); or (vii) takes any action for the purpose of effecting any of the foregoing;
(f) An involuntary petition is filed against Payor (unless such petition is dismissed or discharged within thirty (30) days under any bankruptcy statute now or hereafter in effect) or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of Payor;
(g) A final judgment or order for the payment of money in excess of $1,000,000 shall be rendered against the Payor and the same shall remain undischarged for a period of 10 days during which execution shall not be effectively stayed, or any judgment, writ, assessment, warrant of attachment, or execution or similar process shall be issued or levied against the Collateral (as such term is defined in the Security Agreement) and such judgment, writ, or similar process shall not be released, stayed, vacated or otherwise dismissed within ten (10) days after issue or levy;
(h) An uninsured loss, theft, substantial damage, destruction, sale (other than a sale of inventory in the ordinary course of business) or encumbrance (other than Permitted Liens (as such term is defined in the Security Agreement)) to all or substantial part of the Collateral; or
(i) The deterioration, depreciation or destruction of the Collateral, or any part thereof, which causes the Collateral to become unsatisfactory to the Secured Parties (as determined by the Majority of Secured Parties) as to character or value.
11. Upon the occurrence or existence of any Event of Default (other than an Event of Default described in Section 11(e) or 11(f)) and at any time thereafter during the continuance of such Event of Default, Holder may, by written notice to the Payor, declare all outstanding Obligations (as defined below) payable by the Payor hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the other Transaction Agreements to the contrary notwithstanding. Upon the occurrence or existence of any Event of Default described in Section 11(e) or 11(f), immediately and without notice, all outstanding Obligations payable by the Payor hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the other Transaction Agreements to the contrary notwithstanding. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, Holder may exercise any other right, power or remedy granted to it by the Transaction Agreements or otherwise permitted to it by law, either by suit in equity or by action at law, or both. The term “Obligations” shall have the meaning ascribed to such term in the Security Agreement.
12. Security Interest.
(a) The security interest granted to the Holder pursuant to the Security Agreement shall be pari passu with the security interests granted to each other holder of the Notes.
(b) Payor agrees that the indebtedness evidenced by this Note is secured by a pledge of certain of the Payor’s assets, as set forth in the Security Agreement. Payor agrees to take such actions and execute such documents as the Holders reasonably request to perfect their security interest in such assets of Payor.
13. All notices required or permitted hereunder shall be given in accordance with the notice provisions contained in the Agreement.
14. The Payor hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this Note.
15. This Note shall be governed by and construed under the laws of the State of Colorado, as applied to agreements among Colorado residents, made and to be performed entirely within the State of Colorado, without giving effect to conflicts of laws principles.
16. Any term of this Note (excluding the principal amount of the Note, the interest rate of the Note or Sections 4, 6, and 9) may be amended or waived with the written consent of Payor and Holders of at least two-thirds (2/3) in interest of the outstanding principal amount of all Notes, as provided in the Agreement. Upon the effectuation of such waiver or amendment in conformance with this Section 16, the Payor shall promptly give written notice thereof to the record holders of the Notes who have not previously consented thereto in writing.
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IN WITNESS WHEREOF, Payor and Holder have caused this Note to be executed as of the date first written above.
PAYOR:
ASCENT SOLAR TECHNOLOGIES, INC.
By: /s/ Victor Lee
Name: Victor Lee
Title: Chief Executive Officer
HOLDER:
SENG WEI SEOW
By: /s/ Seng Wei Seow
Name: Seng Wei Seow
SIGNATURE PAGE TO SECURED CONVERTIBLE PROMISSORY NOTE
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