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Item 1.01
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Entry into a Material Definitive Agreement.
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Offering of Series H Convertible Preferred Stock
On June 9, 2016, Ascent Solar Technologies, Inc., a Delaware corporation (the “Company”), entered into a securities purchase agreement
(“Series H SPA”) with a private investor (“Investor”), for the private placement of up to $2,500,000 of the Company’s newly designated Series H 7% Convertible Preferred Stock (“Series H Preferred Stock”).
On June 9, 2016, the Company sold and issued 250 shares of Series H Preferred Stock to Investor in exchange for $250,000. The Company will sell and issue
an additional 250 shares of Series H Preferred Stock to Investor in exchange for $250,000 on June 23, 2016.
The Company will sell and issue an
additional 2,000 shares of Series H Preferred Stock to Investor in exchange for $2,000,000 within three business days after the effectiveness of the Company’s registration statement filed with the Securities and Exchange Commission covering the
re-sale of the common stock underlying the Series H Preferred Stock.
Terms of the Series H Preferred Stock
The Company has filed a Certificate of Designations of Preferences, Rights and Limitations of Series H Preferred Stock (“Certificate of Designation”)
with the Secretary of State of the State of Delaware.
Rank
The Certificate of Designation provides that the Series H Preferred Stock ranks senior to the common stock with respect to dividends and rights upon
liquidation.
Voting Rights
Except as otherwise
required by law (or with respect to approval of certain actions), the Series H Preferred Stock will not have voting rights.
Dividends
Holders of the Series H Preferred Stock will be entitled to dividends in the amount of 7.00% per annum, payable when, as and if declared by the Board of
Directors in its discretion.
Conversion Rights
Shares of the Series H Preferred Stock (including the amount of any accrued and unpaid dividends thereon) will be convertible at the option of the holder into
common stock at a variable conversion price equal to 70% of (i) the lowest volume weighted average price (“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. If certain “Triggering Events” occur, then the conversion price would thereafter be reduced (and only reduced), to equal 60% of
the average of the two lowest VWAPs of our common stock for the twenty consecutive trading day period prior to the conversion date. In no event, however, shall the conversion price be less than $0.005 per share.
Redemption
At any time after the occurrence of certain
defined “Triggering Events”, the holder will have the option to redeem for cash all or any portion of the outstanding shares of the Series H Preferred Stock at a price per share equal to $1,250 plus any accrued but unpaid dividends
thereon.
At any time after the third anniversary of the date of the initial issuance of Series H Preferred Stock, the
Company will have the option to redeem for cash all outstanding shares of the Series H Preferred Stock at a price per share equal to $1,250 plus any accrued but unpaid dividends thereon.
Liquidation Value
Upon our liquidation, dissolution or
winding up, holders of Series H 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 thereon.
Series H Registration Rights Agreement
In connection
with the Series H SPA, the Company entered into a related registration rights agreement (“Series H RRA”) agreeing to register the shares of common stock which may be issued upon conversion of the Series H Preferred Stock. The Series H RRA
requires the Company to file a resale registration statement with the Securities and Exchange Commission (the “SEC”) by June 24, 2016, and to have such registration statement declared effective within 45 days after such filing.
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The foregoing is only a brief description
of the material terms of the Series H SPA, the Certificate of Designation, and the Series H RRA, each of which is filed as an exhibit to this Current Report on Form 8-K and incorporated herein by reference. The foregoing does not purport to be a
complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to such exhibits.