(unaudited)


	June 30,			December 31,
	2023			2022
ASSETS
Current Assets:
Cash and cash equivalents	$	905,621		$	11,483,018
Trade receivables, net of allowance of $0 and $26,000, respectively		14,916			1,769
Inventories, net		678,288			615,283
Prepaid and other current assets		302,044			344,110
Total current assets		1,900,869			12,444,180

Property, Plant and Equipment:		26,431,542			22,590,169
Accumulated depreciation		(22,079,147	)		(22,038,508	)
Property, Plant and Equipment, net		4,352,395			551,661

Other Assets:
Operating lease right-of-use assets, net		3,929,876			4,324,514
Patents, net of accumulated amortization of $163,803 and $154,218 respectively		78,567			79,983
Equity method investment		67,685			61,379
Other non-current assets		1,332,471			1,214,985
		5,408,599			5,680,861
Total Assets	$	11,661,863		$	18,676,702
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	1,152,303		$	595,157
Related party payables		15,193			67,164
Accrued expenses		783,276			888,869
Accrued payroll		491,895			927,264
Accrued professional services fees		784,551			952,573
Accrued interest		672,969			559,060
Current portion of operating lease liability		765,378			733,572
Conversions payable (Note 11)		500,370			-
Current portion of convertible notes, net		5,606,467			-
Other payable		250,000			250,000
Total current liabilities		11,022,402			4,973,659
Long-Term Liabilities:
Non-current operating lease liabilities		3,411,364			3,827,878
Non-current convertible notes, net		-			5,268,399
Accrued warranty liability		21,225			21,225
Total liabilities		14,454,991			14,091,161
Commitments and contingencies (Note 16)
Stockholders’ Equity (Deficit):
Series A preferred stock, $.0001 par value; 750,000 shares authorized; 48,100 and 48,100 shares issued and outstanding, respectively ($874,485 and $850,301 Liquidation Preference, respectively)		5			5
Common stock, $0.0001 par value, 500,000,000 authorized; 55,937,658 and 34,000,812 shares issued and outstanding, respectively		5,566			3,400
Additional paid in capital		466,294,127			452,135,653
Accumulated deficit		(469,078,672	)		(447,537,493	)
Accumulated other comprehensive loss		(14,154	)		(16,024	)
Total stockholders’ equity (deficit)		(2,793,128	)		4,585,541
Total Liabilities and Stockholders’ Equity (Deficit)	$	11,661,863		$	18,676,702

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

CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(unaudited)

For the Three and Six Months Ended June 30, 2023


	Series A Preferred Stock				Series 1B Preferred Stock				Common Stock				Additional Paid-In			Accumulated			Other Accumulated Comprehensive			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Loss			(Deficit)
Balance at January 1, 2023		48,100	$	5		-	$	-		34,000,812	$	3,400	$	452,135,653		$	(447,537,493	)	$	(16,024	)	$	4,585,541
Impact of adopting ASU 2020-06		-		-		-		-		-		-		(3,795,874	)		109,631			-			(3,686,243	)
Balance at January 1, 2023, as adjusted		48,100	$	5		-	$	-		34,000,812	$	3,400	$	448,339,779		$	(447,427,862	)	$	(16,024	)	$	899,298
Conversion of L1 Note into Common Stock		-		-		-		-		1,440,090		144		508,596			-			-			508,740
Conversion of Sabby Note into Common Stock		-		-		-		-		2,051,052		205		1,083,513			-			-			1,083,718
Share-based compensation		-		-		-		-		-		-		1,404,450			-			-			1,404,450
Net Loss		-		-		-		-		-		-		-			(6,083,352	)		-			(6,083,352	)
Foreign Currency Translation Loss		-		-		-		-		-		-		-			-			6,706			6,706
Balance at March 31, 2023		48,100	$	5		-	$	-		37,491,954	$	3,749	$	451,336,338		$	(453,511,214	)	$	(9,318	)	$	(2,180,440	)
Conversion of L1 Note into Common Stock		-		-		-		-		7,585,704		759		731,319			-			-			732,078
Conversion of Sabby Note into Common Stock		-		-		-		-		10,575,000		1,058		1,038,873			-			-			1,039,931
Share-based compensation		-		-		-		-		-		-		560,861			-			-			560,861
Proceeds from issurance of Series 1B Preferred Stock		-		-		900		-		-		-		900,000			-			-			900,000
Preferred Stock issuance cost														(20,000	)								(20,000	)
Common stock issued for services		-		-		-		-		285,000		-		92,750			-			-			92,750
Down round deemed dividend		-		-		-		-		-		-		11,653,986			(11,653,986	)		-			-
Net Loss		-		-		-		-		-		-		-			(3,913,472	)		-			(3,913,472	)
Foreign Currency Translation Loss		-		-		-		-		-		-		-			-			(4,836	)		(4,836	)
Balance at June 30, 2023		48,100	$	5		900	$	-		55,937,658	$	5,566	$	466,294,127		$	(469,078,672	)	$	(14,154	)	$	(2,793,128	)

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

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(unaudited)

For the Three and Six Months Ended June 30, 2022


	Series A Preferred Stock				Series 1A Preferred Stock					Common Stock				Additional Paid-In			Accumulated			Other Accumulated Comprehensive			Total Stockholders’ Equity
	Shares		Amount		Shares			Amount		Shares		Amount		Capital			Deficit			Loss			(Deficit)
Balance at January 1, 2022		48,100	$	5		3,700		$	-		4,786,804	$	479	$	424,948,698		$	(427,782,788	)				$	(2,833,606	)
Conversion of TubeSolar Series 1A Preferred Stock into Common Stock		-		-		(2,400	)		-		4,800,000		480		(480	)		-			-			-
Conversion of Crowdex Series 1A Preferred Stock into Common Stock		-		-		(1,300	)		-		2,600,000		260		(260	)		-			-			-
Conversion of BD1 Note into Common Stock		-		-		-			-		15,800,000		1,580		7,898,420			-			-			7,900,000
Conversion of Nanyang Note into Common Stock		-		-		-			-		1,200,000		120		599,880			-			-			600,000
Conversion of Fleur Note into Common Stock		-		-		-			-		1,400,000		140		699,860			-			-			700,000
Net Loss		-		-		-			-		-		-		-			(4,297,249	)		-			(4,297,249	)
Foreign Currency Translation Loss		-		-		-			-		-		-		-			-			(7,097	)		(7,097	)
Balance at March 31, 2022		48,100	$	5		-		$	-		30,586,804	$	3,059	$	434,146,118		$	(432,080,037	)	$	(7,097	)	$	2,062,048
Net Loss		-		-		-			-		-		-		-			(2,312,785	)		-			(2,312,785	)
Foreign Currency Translation Loss		-		-		-			-		-		-		-			-			(6,256	)		(6,256	)
Balance at June 30, 2022		48,100	$	5		-		$	-		30,586,804	$	3,059	$	434,146,118		$	(434,392,822	)	$	(13,353	)	$	(256,993	)

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

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ASCENT SOLAR TECHNOLOGIES, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)


	For the Six Months Ended
	June 30,
	2023			2022
Operating Activities:
Net income/(loss)	$	(9,996,824	)	$	(6,610,034	)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization		50,224			34,503
Share-based compensation		1,965,311			—
Operating lease asset amortization		394,638			340,114
Amortization of debt discount		1,542,085			2,086,301
Loss on equity method investment		170			2
Inventory reserve expense		83,357			—
Changes in operating assets and liabilities:
Accounts receivable		(13,147	)		(786,824	)
Inventories		(146,362	)		(85,934	)
Prepaid expenses and other current assets		17,330			(559,774	)
Accounts payable		557,146			185,596
Related party payable		(51,971	)		7,127
Operating lease liabilities		(384,708	)		(322,729	)
Accrued interest		113,909			30,383
Accrued expenses		(708,984	)		305,585
Net cash used in operating activities		(6,577,826	)		(5,375,684	)
Investing Activities:
Contributions to equity method investment		—			(83,559	)
Payments on purchase of assets		(3,841,373	)		(66,053	)
Patent activity costs		(8,169	)		(7,192	)
Net cash used in investing activities		(3,849,542	)		(156,804	)
Financing Activities:
Proceeds from issuance of Series 1B Preferred Stock		880,000			—
Payment of convertible notes		(1,025,423	)		—
Net cash used in financing activities		(145,423	)		—
Effect of foreign exchange rate on cash		(4,606	)
Net change in cash and cash equivalents		(10,577,397	)		(5,532,488	)
Cash and cash equivalents at beginning of period		11,483,018			5,961,760
Cash and cash equivalents at end of period	$	905,621		$	429,272
Non-Cash Transactions:
Right-of-use assets acquired through operating lease liabilities	$	—		$	21,045
Purchase of equipment not yet paid at end of period	$	—		$	213,922
Non-cash conversions of convertible notes to equity	$	3,364,467		$	9,200,000
Series 1A preferred stock conversion	$	—		$	740
Down round deemed dividend	$	11,653,986		$	—
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest	$	173,600		$	—

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

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NOTES TO UNAUDITED CONDENSED ~~CONSOLIDATED~~ FINANCIAL STATEMENTS

NOTE 11. CONVERTIBLE NOTES

The note bears interest of 5% per annum and matures on February 28, 2018; all outstanding principal and accrued interest is due and payable upon maturity. As of September 30, 2017, the Company had not made any payments on these notes and the accrued interest was $3,151.

~~On September 30, 2017, the Company entered into~~following table provides a settlement agreement with a customer to convert the credit balance of their account into a note payable in the amount of $215,234. The note bears interest of 5% per annum and matures on September 30, 2018. Monthly payments of $18,426 commence on October 30, 2017.

~~NOTE 9. PROMISSORY NOTES~~

~~Tertius Financial Group Notes and Exchange~~

~~On August 29, 2016, the Company entered into a note purchase agreement with Tertius Financial Group Pte. Ltd. ("TFG”) for the private placement of $330,000~~summary 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”).~~

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%~~activity of the Company's ~~outstanding shares at September 30, 2017.~~secured, convertible, promissory notes:


	Principal Balance 12/31/2022		Notes converted			Principal Balance 6/30/2023		Less: Discount Balance			Net Principal Balance 6/30/2023
Sabby Volatility Warrant Master Fund, LTD	$	7,392,899	$	(4,431,207	)	$	2,961,692	$	(782,138	)	$	2,179,554
L1 Capital Global Opportunities Master Fund, Ltd		7,500,000		(2,843,333	)		4,656,667		(1,229,754	)		3,426,913
	$	14,892,899	$	(7,274,540	)	$	7,618,359	$	(2,011,892	)	$	5,606,467

~~Offering of Unsecured Promissory~~

Sabby / L1 Convertible Notes

~~Between~~

On 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 convertible into equity shares of the Company and are unsecured.

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

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

The new note has a term of 36 months, bears interest at a rate of 12% per annum, and calls for monthly installment payments of $116,390 commencing on October 13, 2017. The Company has the option to pay monthly installment amounts in the form of shares of common stock. Payments in the form of shares would be calculated using a variable conversion price equal to the lowest of (i) 85% of the average VWAP for the shares over the prior five trading days, (ii) the closing bid price for the shares on the prior trading day, or (iii) $0.004 per share. The Company may not make payments in the form of shares of Common Stock if, after giving effect to the issuance, the holder together with its affiliates would beneficially own in excess of 9.9% of the outstanding shares of Common Stock.

As of September 30, 2017 and December 31, 2016 the outstanding principal balance on the promissory notes was $3,504,199 and $1,010,000, respectively. The accrued interest outstanding on these notes was $19,585 as of September 30, 2017.

~~Pursuant to a number of factors outlined in ASC Topic 815,~~ ~~Derivatives and Hedging~~, the conversion option in the new promissory note was 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 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 63%, present value discount rate of 12% and dividend yield of 0%.

~~Offering of Unsecured, Non-Convertible Notes~~

During October 2016, the Company received $420,000 from a separate private investor. These funds, along with $250,000 of additional funding, were rolled into a promissory note, executed on January 17, 2017, in the amount of $700,000 issued with a discount of $30,000 which will be charged to interest expense ratably over the term of the note. The note bears interest at 12% per annum and matures on July 17, 2017. Principal and interest on this note are payable at maturity. This note is not convertible into equity shares of the Company and is unsecured.

On June 30, 2017, the Company and the private investor agreed to a 12 month payment plan on the balance of this promissory note. Interest will continue to accrue on this note at 12% per annum and payments of approximately $62,000 will be made monthly beginning in July 2017.

As of September 30, 2017, $143,759 of principal and $43,544 of interest had been paid on this note. The outstanding principal and accrued interest balances on the note as of September 30, 2017 were $556,241 and $13,695, respectively.

During April 2017, 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.

~~NOTE 10. SERIES A PREFERRED STOCK~~

~~In June 2013,~~19, 2022, the Company entered into a Securities Purchase Contract (the “Securities Purchase Contract”) with two institutional investors (each, an “Investor” and collectively, the “Investors”) for the issuance to the Investors of $12,500,000 in aggregate principal amount of Senior Secured Original Issue 10% Discount Convertible Advance Notes pursuant to a direct registered offering (the “Registered Advance Notes”) and $2,500,000 in aggregate principal amount of Senior Secured Original Issue 10% Discount Convertible Advance Notes in a concurrent private placement (the “Private Placement Advance Notes” and, together with the Registered Advance Notes, the “Advance Notes”).

On March 29, 2023, the Company and each of the Investors entered into a Waiver and Amendment Agreement (the “Amendment”) relating to the Securities Purchase Contract and the Advance Notes to waive any event of default arising under Section 2.1 of the Advance Notes relating to the Company’s receipt of notice from the Listing Qualifications Department of Nasdaq indicating that the Company is not in compliance with the $1.00 Minimum Bid Price Requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market (the “Specified Default”).

Pursuant to the Amendment, the Company and each of the Investors agreed to waive the Specified Default and further agreed to the amend the Advance Notes to provide that (i) the new “Floor Price” for all purposes of the Advance Notes is $0.20 per share of the Company’s common stock, (ii) until the Company regains compliance with the $1.00 Minimum Bid Price Requirement, “Conversion Price” under the Advance Notes will mean the “Alternative Conversion Price” (as defined in the Advance Notes) and (iii) the Company will make certain prepayments of the Advance Notes held by the Investors on the following dates and in the following aggregate cash amounts, at a price equal to 100% of the principal amount of the Advance

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Notes to be repaid plus accrued and unpaid interest thereon (if any). The Company's failure to comply with the terms of the Amendment would constitute an Event of Default under the Advance Notes.

On April 12, 2023, the Company and each of the Investors entered in a further amendment to the Amendment (the “Revised Amendment”), to provide for a consistent prepayment schedule for the Advance Notes held by each of the Investors. After giving effect to the Revised Amendment, the Advance Notes will be prepaid by the Company in cash on the following dates and in the following aggregate amounts, at a price equal to 100% of the principal amount of the Advance Notes to be prepaid plus accrued and unpaid interest thereon (if any). The Company’s failure to comply with the terms of the Revised Amendment would constitute an “Event of Default” under the Advance Notes.


Prepayment Date	Aggregate
April 3, 2023	$	333,333
April 13, 2023		333,333
May 18, 2023		666,667
June 19, 2023		666,667
	$	2,000,000

On May 22, 2023, the Investors and the Company agreed to defer for 90 days each of the two prepayments of $666,667 that were scheduled for May 18, 2023 and June 19, 2023. Accordingly, (i) the May 18, 2023 payment is deferred until August 16, 2023, and (ii) the June 19, 2023 payment is delayed until September 17, 2023.

On May 25, 2023, the Company and each of the Investors entered into a Waiver and Amendment Agreement (the “Second Amendment”) relating to the Securities Purchase Contract and the Advance Notes. Pursuant to the Second Amendment, the Company and each of the Investors agreed to amend the Advance Notes to provide that if the Company receives a Notice of Conversion at a time that the Conversion Price (or, as applicable, the Alternative Conversion Price) then in effect Price, without regard to the Floor Price (the “Applicable Conversion Price”), is less than the Floor Price then in effect, the Company shall issue a number of shares equal to the Conversion Amount divided by such Floor Price and, at its election (x) pay the economic difference between the Applicable Conversion Price and such Floor Price (the “Outstanding Conversion Amount”) in cash at such time or (y) pay the Outstanding Conversion Amount following the consummation of a reverse stock split by the Company (1) in cash or (2) by issuing to the Holder a number of shares of Common Stock with an ~~investor~~aggregate value equal to ~~sell~~the Outstanding Conversion Amount, with the value per share of Common Stock for purposes of such calculation equal to (i) if such shares are issued on or prior to August 23, 2023, the daily VWAP of the Common Stock on the Trading Day following the date of the consummation of such reverse stock split or (ii) if such shares are issued after August 23, 2023, 90% of the daily VWAP of the Common Stock on the Trading Day following the date of the consummation of such reverse stock split. As of June 30, 2023, the Company had $500,370 in Outstanding Conversion Amounts recorded as Conversions Payable on the Condensed Balance Sheets.

The Securities Purchase Contract also included certain warrants to purchase up to 2,513,406 shares of common stock (the "Warrants"). The Warrants were issued with an exercise price equal to $3.93 per share, subject to certain adjustments in certain events, including the future issuance by the Company of securities with a purchase or conversion, exercise or exchange price that is less than the exercise price of the Warrants then in effect at any time.

On April 14, 2023 the Company entered a securities purchase agreement (“SPA”) with Lucro Investments VCC-ESG Opportunities Fund (“Lucro”) for an approximate $9 million private placement (the “Private Placement”) of an aggregate of ~~750,000~~7,499,997 shares of the Company’s Common Stock. The per share purchase price for the Shares is $1.20 per share. The terms of the SPA with Lucro triggered certain adjustments to the Advance Notes and the Warrants in accordance with the existing terms of the outstanding Advance Notes and the outstanding Warrants. Following these adjustments:

The fixed conversion price of the remaining principal outstanding on the Advance Notes was lowered to $0.3661 per share of Common Stock;

The exercise price of the outstanding Warrants was lowered to $0.3661 per share of Common Stock; and

The number of shares that the Warrants are exercisable for increased from 2,513,406 to 26,980,840 shares of Common Stock.

On June 29, 2023 the Company entered a securities purchase agreement (“Series 1B SPA”) with accredited investors (the "Accredited Investors") for the private placement of $900,000 for 900 shares of the Company’s newly designated Series 1B

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Convertible Preferred Stock (“Series 1B Preferred Stock”) (Note 13). Shares of the Series 1B Preferred Stock are convertible at the option of the holder into common stock at an initial conversion price of equal to $0.14 per share.

The terms of the Series 1B SPA triggered certain further adjustments to the Advance Notes and the Warrants in accordance with the existing terms of the outstanding Advance Notes and the outstanding Warrants. Following these further adjustments in June 2023:

The fixed conversion price of the remaining principal outstanding on the Advance Notes was lowered to $0.1268 per share of Common Stock;

The exercise price of the outstanding Warrants was lowered to $0.1268 per share of Common Stock; and

The number of shares that the Warrants are exercisable for increased from 26,980,840 to 77,899,728 shares of Common Stock.

Pursuant to ASC 260, Earnings per Share, the Company recorded a deemed dividend for the down round adjustments of $11,653,986 which reduced income available to common shareholders in the Company's earnings per share calculations.

During the six months ended June 30, 2023, the Company settled $7.3 million of principal as follows:


	Debt Settlement
Equity issued for convertible debt	$	3,364,467
Conversions payable		500,370
Cash repayments		1,025,423
Accelerated discount recognized in APIC		2,384,280
Principal settled during the six months ended June 30, 2023	$	7,274,540

During the three and six months ended June 30, 2023, the Company had interest expense of $746,578 and $1,799,506, respectively, of which, $640,438 and $1,542,097 for the three and six months ended June 30, 2023, respectively, was due to accretion of discount on the Advanced Notes. Interest payable was $105,647 as of June 30, 2023.

NOTE 12. SERIES A PREFERRED STOCK

As of January 1, 2023, there were 48,100 shares of Series A Preferred Stock at a price of $8.00 per share, resulting in gross proceeds of $6,000,000. This purchase agreement included warrants to purchase up to 13,125 shares of common stock of the Company. The transfer of cash and securities took place incrementally, the first closing occurring on June 17, 2013 with the transfer of 125,000 shares of Series A Preferred Stock and a warrant to purchase 2,187 shares of common stock for $1,000,000. The final closings took place in August 2013, with the transfer of 625,000 shares of Series A Preferred Stock and a warrant to purchase 10,938 shares of common stock for $5,000,000.

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

The Series A Preferred Stock may be converted into shares of common stock at the option of the Company if the closing price of the common stock exceeds ~~$232, as~~$1,160,000, adjusted for 20reverse stock splits, for twenty consecutive trading days, or by the holder at any time. The Company has the right to redeem the Series A Preferred Stock at a price of ~~$8.00~~$8.00 per share, plus any accrued and unpaid dividends, plus the make-whole amount (if applicable). At ~~September~~June 30, ~~2017,~~2023, 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~~time. After making adjustment for the Company’s prior reverse stock splits, all 48,100 outstanding Series A preferred ~~share~~shares are convertible into 1less than one common ~~share (subject to standard ratable anti-dilution adjustments).~~share. 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~~June 30, ~~2017,~~2023, there were ~~60,756~~48,100 shares of Series A Preferred Stock ~~outstanding.~~outstanding and accrued and unpaid dividends of $489,685.

Table of Contents

NOTE ~~11.~~13. SERIES E1B PREFERRED STOCK ~~AND THE COMMITTED EQUITY LINE~~

~~Series E Preferred Stock~~

On ~~November 4, 2015,~~June 29, 2023, the Company entered into ~~a securities purchase agreement with a private investor to issue 2,800 shares of Series E Preferred Stock in exchange for $2,800,000.~~

~~Shares of~~ the Series E Preferred Stock (including the amount of any accrued and unpaid dividends thereon) are convertible, at the option of the holder, into common stock at a variable conversion price equal to 80% of the average of the two lowest VWAPs of the Company's common stock 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% 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~~1B SPA 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 of the Company’s newly designated Series F 7% Convertible Preferred Stock (the “Series F Preferred Stock”).

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

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

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

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

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

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

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

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

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

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

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

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

~~Pursuant to a number of factors outlined in ASC Topic 815,~~ ~~Derivatives and Hedging~~, the conversion option in the Series F Preferred Stock was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At closing, a derivative liability and a corresponding debt discount in the amount of $1,666,000 were recorded. The debt discount will be charged to interest expense ratably over the life of the Series F Preferred Stock.

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

The fair value measurements rely primarily on Company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the Series F Preferred Stock 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%.

~~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~~Accredited Investors 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~~900 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~~1B Preferred Stock for convertible notes (“Exchange Convertible Notes”) and as of December 31, 2016 the Series I Purchaser had exchanged all 326 shares of Series I Preferred Stock and no shares were outstanding. Refer to the section below for details of the exchange.

~~Series I Exchange Convertible Notes~~

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

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

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

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

$ 332,634
434,536,476

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

~~Pursuant to a number of factors outlined in ASC Topic 815,~~ ~~Derivatives and Hedging~~, the conversion option in the Exchange Convertible Notes was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At December 31, 2016 the fair value of the derivative liability was $196,617.

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

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

~~Series J Preferred Stock~~

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

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

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

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

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

~~Conversion Inducement Offers~~

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

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

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

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

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

~~Pursuant to a number of factors outlined in ASC Topic 815,~~ ~~Derivatives and Hedging~~, the conversion option in the Series J Preferred Stock, post inducement offers, was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At March 24, 2017, the fair value of the derivative liability was $705,024 .

The derivative liability associated with the Series J Preferred Stock 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$900,000 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 K1B Preferred Stock ranks senior to the ~~Company’s~~ common stock inwith respect to dividends and rights upon liquidation. ~~The~~Holders of the Series K1B Preferred Stock ~~will~~do not have voting rights and ~~the holders of the Series K Preferred Stock will~~are not be entitled to any fixed rate of ~~dividends.~~

~~The~~dividends; however, if the Company pays a dividend or otherwise makes a distribution or distributions payable on shares of common stock, then the Company will make a dividend or distribution to the holders of the Series K1B Preferred Stock ~~will be convertible~~in such amounts as each share of Series 1B Preferred Stock would have been entitled to receive if such share of Series 1B Preferred Stock was converted into shares of common stock at the time of payment of the stock dividend or distribution.

There is no scheduled or mandatory redemption for the Series 1B Preferred Stock and there is no redemption for the Series 1B Preferred Stock exercisable (i) at the option of the ~~holder into common stock~~Investor, or (ii) at ~~a fixed conversion price equal to $0.004. At no time may~~ the Series K Preferred Stock be converted if the number of shares of common stock to be received by Investor pursuant to such conversion, when aggregated with all other shares of common stock then beneficially (or deemed beneficially) owned by Investor, would result in Investor beneficially owning more than 19.99% of all common stock then outstanding. The following table summarizes the conversion activity of Series K Preferred Stock:

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

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

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

Company.

Upon our liquidation, dissolution or winding up, holders of Series K1B 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~~$1,000 per share plus any accrued but unpaid dividends (if any) thereon.

~~Upon issuance, in accordance with ASC 480-10,~~

Shares of the Series K1B Preferred Stock ~~was classified as a liability~~are convertible at the option of the holder into common stock at an initial conversion price of equal to $0.14 per share. The conversion price for the Series 1B Preferred Stock is subject to adjustment on the Consolidated Balance Sheets. Pursuant to a number of factors outlined in ASC Topic 815, the conversion option in the Series K Preferred Stock was deemed to not require bifurcation or separate accounting treatment.

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

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

~~On September 11, 2017, the Company sold and issued $1,725,000 principal amount of the convertible notes~~date that (a) a resale registration statement relating to the Investor in exchange for $1,500,000 of gross proceeds, and paid $20,000 in financing costs. The original issue discount of $225,000, and the financing fee, 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~~ shares of common ~~stock. Payments in~~stock underlying the ~~form~~Series 1B Preferred Stock has been declared effective by the SEC, (b) all of such underlying shares ~~would~~of common stock have been sold pursuant to SEC Rule 144 or may be ~~calculated using~~sold pursuant to SEC Rule 144 without volume or manner-of-sale restrictions, (c) the one year anniversary of the closing provided that a ~~variable~~holder of such underlying shares is not an affiliate of the Company or (d) all of such underlying shares may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions (such earliest date, the “Reset Date”).

On the Reset Date, the conversion price shall be equal to the lower of (i) ~~85%~~$0.14 and (ii) 90% of the ~~average~~lowest VWAP for the ~~shares over~~Company’s common stock out of the ~~prior five~~10 trading days ~~or (ii)~~commencing 5 trading days immediately prior to the ~~closing bid~~Reset Date, provided that the conversion 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~~may not be adjusted to less than $0.05 per share.

Holders of the ~~Investor into~~Series 1B Preferred Stock (together with its affiliates) may not convert any portion of such Investor’s Series 1B Preferred Stock to the extent that the holder would beneficially own more than 4.99% of the Company’s outstanding shares of common stock after conversion, except that upon at least 61 days’ prior notice from the holders to the Company, the holder may increase the maximum amount of its beneficial ownership of outstanding shares of the Company’s Common Stock after converting the holder’s Series 1B Preferred Stock up to 9.99% of the number of shares of 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, the Company issued 37,500,000 unregistered shares 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,~~immediately after giving effect to the conversion, ~~or issuance, the holder together with its affiliates would beneficially own~~as such percentage ownership is determined 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. 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~~accordance 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 redemptionterms of the Series A1B Preferred Stock.

NOTE 14. STOCKHOLDERS’ EQUITY (DEFICIT)

Common 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

At June 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,~~2023, the Company had ~~20,000,000,000~~500 million shares of common stock, ~~$0.0001~~$0.0001 par value, authorized for issuance. Each share of common stock has the right to one vote. As of ~~September~~June 30, ~~2017,~~2023, the Company had ~~8,717,859,917~~55,937,658 shares of common stock outstanding. The Company has not declared or paid any dividends related to the common stock ~~through September~~during the three or six months ended June 30, ~~2017.~~

2023 and 2022.

Table of Contents

During the six months ended June 30, 2023, $7.3 million of convertible debt principal was converted into 21,651,846 shares of common stock and 285,000 shares of common stock was issued for vendor services.

Preferred Stock

At ~~September~~June 30, ~~2017,~~2023, the Company had ~~25,000,000~~25 million shares of preferred stock, ~~$0.0001~~$0.0001 par value, authorized for issuance. Preferred stock may be issued in classes or series. Designations, powers, preferences, rights, qualifications, limitations and restrictions are determined by the Company’s Board of Directors.

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


Preferred Stock Series Designation	Shares Authorized		Shares Outstanding
Series A		750,000		48,100
Series 1A		5,000		—
Series B-1		2,000		—
Series B-2		1,000		—
Series 1B		900		900
Series C		1,000		—
Series D		3,000		—
Series D-1		2,500		—
Series E		2,800		—
Series F		7,000		—
Series G		2,000		—
Series H		2,500		—
Series I		1,000		—
Series J		1,350		—
Series J-1		1,000		—
Series K		20,000		—



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

Warrants

As of June 30, 2023, there are 79,314,823 outstanding warrants with exercise prices between $0.1268 and $5.30 per share.

Series A Preferred Stock

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

Series F1B Preferred Stock

Refer to Note 12 ~~descriptions of~~13 for information on Series F1B Preferred Stock.

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

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

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

There were no transactions involving the Series 1A, B-1, B-2, C, D, D-1, E, F, G, H, I, J, J-1, or K during the three and six months ended June 30, 2023.

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

~~Warrants~~

~~On July 24, 2017,~~

NOTE 15. SHARE-BASED COMPENSATION

In 2022, the Company ~~issued a warrant for 250 million~~granted restricted stock units to its Chief Executive Officer and Chief Financial Officer. On April 26, 2023, the Company terminated its employment contract with the Company's then Chief Executive Officer resulting in the forfeiture of 2,277,848 restricted stock units. The remaining non-vested shares of ~~common stock,~~466,666 units as of June 30, 2023 are expected to vest 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~~future. Total unrecognized share-based compensation expense ~~recognized in~~from the ~~Condensed Consolidated Statements~~remaining unvested restricted stock as of ~~Operations~~June 30, 2023 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~~$1,390,667 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~~30 months. The Company recognized share-based compensation expense related to restricted stock grants of $~~26,000~~560,861 and $1,965,311 for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017. There were no~~2023. The following table summarizes non-vested restricted stock ~~grants for the nine months ended~~ ~~September 30, 2017~~, and the ~~weighted average estimated fair value~~related activity as of June 30, 2023:

Table of Contents


	Shares		Weighted Average Grant Date Fair Value
Non-vested at January 1, 2023		3,152,033		4.95
Vested		407,519		4.82
Forfeited		2,277,848		5.37
Non-vested at June 30, 2023		466,666		2.98

NOTE 16. COMMITMENTS AND CONTINGENCIES

On April 26, 2023, the board of directors of the Company terminated Jeffrey Max as the Company’s President and Chief Executive Officer. Mr. Max claims that his termination was not for cause as defined in his employment agreement which could enable him to certain benefits, including severance and vesting of restricted stock ~~grants~~units. Management believes Mr. Max was terminated for cause and any such claims, if asserted, would be without substantial merit. Although the ~~nine~~ ~~months ended September 30, 2016 was~~ ~~$2.00~~ ~~per share.~~

Asoutcome 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,~~any legal proceedings is uncertain, 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 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~~will vigorously defend any future claims made 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.~~

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

~~NOTE 24. COMMITMENTS AND CONTINGENCIES~~

Mr. Max.

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 proceedings or in certain instances provide reasonable ranges of potential losses. However, as of the date of this report, the Company believes that none of these claims will have a material adverse effect on its ~~consolidated~~ financial position or results of operations. In the event of unexpected subsequent developments and given the inherent unpredictability of these legal proceedings, there can be no assurance that the Company’s assessment of any claim will reflect the ultimate outcome, and an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s ~~consolidated~~ financial position or results of operations in particular quarterly or annual periods.

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

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

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

NOTE ~~25.~~17. SUBSEQUENT EVENTS

~~Update on Series F Preferred Stock~~

~~As of November 10, 2017, an additional~~

Subsequent to June 30, 2023, Sabby and L1 converted approximately $2.6 million principal for 12.6 million shares of ~~Series F Preferred Stock, with a value~~Common Stock.

Table of ~~$30,000, 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~~Contents. 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 shares of common stock. The redemption amount of $116,390, consisting of $81,348 principal and $35,042 interest, resulted in the issuance of 93,786,866 shares of common stock.

On October 31, 2017, 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 of the St. George Convertible Note. Following this payment, the remaining principal balance on the note was $1,533,333.

Item 2. ~~Management's~~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, 2022 which was filed with the SEC on March 10, 2023. 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, 2022 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 entitled “Forward-Looking Statements.”

Overview

We target high-volume production and high-value specialty solar markets. These include agrivoltaics, space, aerospace and high-value niche manufacturing/construction sectors. This strategy enables us to fully leverage what we believe are ~~a company formed~~the unique advantages of our technology, including flexibility, durability and attractive power to ~~commercialize flexible photovoltaic modules using~~weight and power to area performance. It further enables us to offer unique, differentiated solutions in large markets with less competition, and more attractive pricing.

Specifically, we focus on commercializing our proprietary ~~technology. For~~solar technology in two high-value PV verticals:

I. Aerospace: Space, Near-space and Fixed Wing UAV

II. Agrivoltaics

We believe the ~~three~~value proposition of Ascent’s proprietary solar technology not only aligns with the needs of customers in these verticals, but also overcomes many of the obstacles other solar technologies face in these unique markets. Ascent has the capability to design and ~~nine~~ ~~months ended~~ ~~September 30, 2017, we generated $242,055 and $547,792 of revenue from product sales, respectively.~~

~~In 2012, we transitioned 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~~develop finished products ~~under the EnerPlex™ brand, and introduced our first product, the Surfr™ battery and a solar case~~ for the Apple® iPhone® 4/4S smart phone featuring our ultra-light CIGS thin film technology integrated directly into the case. The case incorporates our ultra-light and thin PV module into a sleek, protective iPhone 4/4S case, along with a thin, life extending, battery. The charger adds minimal weight and bulk to the iPhone, yet provides supplemental charging when needed.

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

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

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

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

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

At the end of the first quarter of 2015, we announced that six EnerPlex products were awarded accolades as Red Dot Design Award winners, recognizing both the aesthetic as well as functional design of the Jumpr Quad, Jumpr Stack 3/6/9, the Generatr 100 and the Generatr 1200. During the third quarter of 2015 the Generatr 100 won a Best of Show Award at the CTIA Super Mobility show in Las Vegas. In 2015 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 platform 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 breakthroughs in the Company’s line of high-voltage solar products, designed specifically for high-altitude and space markets, building on the progress previously announced in Q4, 2015. Also during the first quarter of 2016, the Company announced the launch of select products on the GSA Advantage website; which allows Federal employees, including members of all branches of the US Military, to directly purchase Ascent and EnerPlex products including: the MilPak E, Commandr 20, Kickr 4 and WaveSol solar modules.

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

~~Ascent continues~~strategic partners to design and ~~manufacture its own line~~develop custom integrated solutions for products like airships and fixed-wing UAVs. Ascent sees significant overlap in the needs of ~~PV integrated consumer electronics, as~~end users across some of these verticals and believes it can achieve economies of scale in sourcing, development, and production in commercializing products for these customers.

The integration of Ascent's solar modules into space, near space, and aeronautic vehicles with ultra-lightweight and flexible solar modules is an important market opportunity for the Company. Customers in this market have historically required a high level of durability, high voltage and conversion efficiency from solar module suppliers, and we believe our products are well ~~as portable power applications for commercial and military users.~~ suited to compete in this premium market.

For the six months ended June 30, 2023, we generated$225,526 of total revenue. As of June 30, 2023, we had an accumulated deficit of $469,078,672.

Due to the high durability enabled by the monolithic integration employed inby our technology, the capability to customize modules into different form factors and what we believe is 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~~extensive, including integrated solutions anywhere that may need power generation such as vehicles in space or in flight, or dual-use installations on ~~specialty solar applications which can fully leverage the unique properties~~agricultural land.

Table of ~~our award winning CIGS technology. These include aerospace, defense, emergency management and consumer/OEM applications.~~

Contents

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 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.

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,~~March, 2023, the Company ~~entered into a note purchase agreement with Tertius Financial Group Pte. Ltd. (“Tertius”), for the private placement of $330,000~~redeployed its Thornton manufacturing facility to focus on industrial commercialization of the ~~Company’s original issue discount notes (“Discount Notes”). On August 29, 2016,~~Company's patent-pending Perovskite solar technologies. Additionally, while the Company ~~sold and issued $330,000 principal amount of Discount Notes~~purchased manufacturing assets in Zurich, Switzerland in April 2023 with plans 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~~commence manufacturing using this equipment, Management continues 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”).

~~Pursuant to the SPA, the Company issued the 333,333,333 shares to TFG in exchange for cancellation of~~evaluate 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.

~~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.~~

manufacturing options.

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 operating history and lack of profitability;

•

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

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

~~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~~Our ability to ~~raise sufficient capital~~attract and retain qualified personnel to ~~enable us~~implement our business plan and corporate growth strategies;

•

Our ability to ~~reach a level of~~develop sales, ~~sufficient to achieve profitability on terms favorable to us;~~marketing and distribution capabilities;

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

•

~~our~~Our ability to successfully develop and maintain strategic relationships with key ~~partners, including OEMs, system integrators, distributors, retailers~~partners;



~~Delaware~~		~~20-3672603~~

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	Nasdaq Capital Markets



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 ☐




PART I. FINANCIAL INFORMATION
Item 1.	Unaudited Condensed ~~Consolidated~~ Financial Statements ~~(unaudited)~~	4 1
	Unaudited Condensed ~~Consolidated~~ Balance Sheets - ~~For the Nine Months Ended September~~as of June 30, ~~2017~~2023 and ~~the Year Ended~~ December 31, ~~2016~~2022	4 1
	Unaudited Condensed ~~and Consolidated~~ Statements of Operations and Comprehensive Income - For the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2023 and ~~September 30, 2016~~2022	5 2
	Unaudited Condensed Statements of Changes in Stockholders’ Equity (Deficit) - For the Three and ~~Consolidated~~Six Months Ended June 30, 2023 and 2022	3
	Unaudited Condensed Statements of Cash Flow - For the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2023 and ~~September 30, 2016~~2022	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 18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41 23
Item 4.	Controls and Procedures	42 23
PART II. OTHER INFORMATION		25
Item 1.	Legal Proceedings	44 25
Item 1A.	Risk Factors	44 25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44 26
Item 3.	Defaults Upon Senior Securities	44 26
Item 4.	Mine Safety Disclosures	44 26
Item 5.	Other Information	44 26
Item 6.	Exhibits	44 27
SIGNATURES		45
~~EXHIBIT INDEX~~		46 31



	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



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



	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


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues
Products	$	86,385		$	627,571		$	185,610		$	681,781
Milestone and engineering		14,916			10,000			39,916			522,000
Total Revenues		101,301			637,571			225,526			1,203,781
Costs and Expenses
Costs of revenue		666,269			576,994			1,128,064			1,109,885
Research, development and manufacturing operations		822,321			1,453,273			2,488,016			2,859,595
Selling, general and administrative		1,178,832			871,881			2,770,652			1,693,145
Share-based compensation		560,861			-			1,965,311			-
Depreciation and amortization		24,443			17,838			50,224			34,503
Total Costs and Expenses		3,252,726			2,919,986			8,402,267			5,697,128
Loss from Operations		(3,151,425	)		(2,282,415	)		(8,176,741	)		(4,493,347	)
Other Income/(Expense)
Other income/(expense), net		-			2,000			10,000			2,000
Interest expense		(761,877	)		(32,370	)		(1,829,913	)		(2,118,685	)
Total Other Income/(Expense)		(761,877	)		(30,370	)		(1,819,913	)		(2,116,685	)
Income/(Loss) on Equity Method Investments		(170	)		-			(170	)		(2	)
Net Income/(Loss)	$	(3,913,472	)	$	(2,312,785	)	$	(9,996,824	)	$	(6,610,034	)
Net Income/(Loss) Per Share (Basic and Diluted)	$	(0.33	)	$	(0.08	)	$	(0.53	)	$	(0.25	)
Weighted Average Common Shares Outstanding (Basic)		46,887,774			30,587,415			41,208,236			26,154,266
Weighted Average Common Shares Outstanding (Diluted)		46,887,774			30,587,415			41,208,236			26,154,266
Other Comprehensive Income/(Loss)
Foreign currency translation gain/(loss)		(4,836	)		(6,256	)		1,870			(13,353	)
Net Comprehensive Income/(Loss)	$	(3,918,308	)	$	(2,319,041	)	$	(9,994,954	)	$	(6,623,387	)



	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		$	—


Balance as of January 1, 2023	$	13,000
Additions		29,350
Recognized as revenue		(29,350	)
Balance as of June 30, 2023	$	13,000


	Three months ended			Six months ended
	June 30, 2023			June 30, 2023
Net Loss	$	(3,913,472	)	$	(9,996,824	)
Down round deemed dividend		(11,653,986	)		(11,653,986	)
Net Loss attributable to common shareholders		(15,567,458	)		(21,650,810	)
Earnings Per Share (Basic and Diluted)		(0.33	)		(0.53	)


	Balance at December 31, 2022			Adjustments Due to Adoption			Balance at January 1, 2023
Liabilities
Non-current convertible notes, net	$	5,268,399		$	3,686,243		$	8,954,642
Shareholders' equity
Additional paid in capital		452,135,653			(3,795,874	)		448,339,779
Accumulated deficit		(447,537,493	)		109,631			(447,427,862	)


	Post ASU 2020-06			Pre ASU 2020-06			Difference
Three months ended June 30, 2023
Net Loss	$	(3,913,472	)	$	(6,687,795	)	$	2,774,323
Net Loss attributable to common shareholders		(15,567,458	)		(18,341,781	)		2,774,323
Earnings Per Share (Basic and Diluted)		(0.33	)		(0.39	)		(0.06	)

Six months ended June 30, 2023
Net Loss	$	(9,996,824	)	$	(14,971,111	)	$	4,974,287
Net Loss attributable to common shareholders		(21,650,810	)		(26,625,097	)		4,974,287
Earnings Per Share (Basic and Diluted)		(0.53	)		(0.65	)		(0.12	)


	Asset Price Allocation
Inventory
Raw Material	$	130,030
Finished Goods		62,427
Other Assets		98,746
Fixed Assets
Manufacturing machinery and equipment		3,682,621
Furniture, fixtures, computer hardware and computer software		110,102


Remainder of 2023	$	509,232
2024		1,049,018
2025		1,080,488
2026		1,112,903
2027		1,146,290
Total lease payments		4,897,931
Less amounts representing interest		(721,189	)
Present value of lease liability	$	4,176,742




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


	As of June 30,			As of December 31,
	2023			2022
Furniture, fixtures, computer hardware and computer software	$	592,336		$	482,235
Manufacturing machinery and equipment		25,492,755			21,739,504
Leasehold improvements		103,951			87,957
Manufacturing machinery and equipment, in progress		242,500			280,473
Depreciable property, plant and equipment		26,431,542			22,590,169
Less: Accumulated depreciation and amortization		(22,079,147	)		(22,038,508	)
Net property, plant and equipment	$	4,352,395		$	551,661



	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



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


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.


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.


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 was primarily due a lower headcount for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016.


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.


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.