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ASTI > SEC Filings for ASTI > Form 8-K on 21-Jul-2014All Recent SEC Filings




Entry into a Material Definitive Agreement, Creation of a Direct

Item 1.01 Entry into a Material Definitive Agreement.

On July 18, 2014, Ascent Solar Technologies, Inc., a Delaware corporation (the "Company"), entered into a securities purchase agreement (the "Purchase Agreement") with a group of institutional and accredited investors (the "Investors"). Pursuant to the terms of the Purchase Agreement, the Company will sell to the Investors an aggregate of $32,000,000 original principal amount of senior secured convertible notes (the "Notes") and warrants (the "Warrants") to purchase up to 26,685,729 shares of the Company's common stock, par value $0.0001 per share (the "Common Stock"). At the closing of the sale of the Notes and the Warrants (the "Financing"), the Company will enter into (i) a registration rights agreement (the "Registration Rights Agreement") with the Investors, (ii) a security and pledge agreement (the "Security and Pledge Agreement") in favor of the collateral agent for the Investors, and
(iii) certain account control agreements with several banks with respect to restricted control accounts described in the Notes and Purchase Agreement. The Financing is expected to close on or before July 25, 2014 (the "Closing Date"), subject to the satisfaction of certain customary closing conditions.

The Company expects to receive gross proceeds of approximately $7 million on the Closing Date. The remaining $25 million of gross proceeds from the Financing will be deposited on the Closing Date by the Investors into restricted control accounts. These restricted proceeds will be released to the Company in increments in accordance with the terms of the Notes, as described further below.

In connection with the Financing, the Company will pay WestPark Capital, Inc., the placement agent (the "Placement Agent"), an aggregate cash fee equal to $1.35 million, paid ratably over time as the gross proceeds of the Financing become unrestricted and available to the Company, as well as reimbursement of certain expenses. The Company will also issue shares of Common Stock (the "Placement Agent Shares") in an amount equal to $600,000 divided by the closing bid price of a share of Common Stock on July 21, 2014.

The Purchase Agreement provides that, subject to certain exceptions, the Company will not issue any securities from the Closing Date until the date immediately following the 90th trading day of the earlier of (A) the date that a resale registration statement for the resale of a portion of the Common Stock underlying the Notes and Warrants becomes effective or (B) the date that the Common Stock underlying the Notes and Warrants are eligible for resale under Rule 144. Under the Purchase Agreement, the Company will not enter into any new variable rate securities transactions so long as any Notes remain outstanding. For so long as any Notes remain outstanding, the Investors have the right to participate in the purchase of their respective pro rata portion of 50% of the securities offered by the Company in any future financing transactions.

In connection with the Purchase Agreement, TFG Radiant Investment Group Ltd. ("TFG Radiant"), the Company's largest stockholder, entered into a Voting Agreement with the Company. Pursuant to the Voting Agreement, TFG Radiant has agreed to vote all of the shares of Common Stock that it owns in favor of the stock issuances related to the Notes and Warrants and certain other stockholder proposals. The Company intends to seek stockholder approval for these matters at a special stockholders meeting to be held in August or September 2014.

Description of the Notes


The Notes will rank senior to the Company's outstanding and future indebtedness, except for certain existing permitted indebtedness of the Company. The Notes are secured by a first priority perfected security interest in all of the Company's and its subsidiaries' current and future assets (including a pledge of the stock of the Company's subsidiaries), other than those assets which already secure the Company's existing permitted indebtedness. So long as any Notes remain outstanding, the Company and its subsidiaries will not incur any new indebtedness, except for permitted indebtedness under the Notes, or create any new encumbrances on the Company's or its subsidiaries' assets, except for permitted liens under the Notes. Under certain circumstances, subsidiaries of the Company will be required to guarantee the Company's obligations under the Notes.

Maturity Date

Unless earlier converted or redeemed, the Notes will mature on the fifth anniversary of the Closing Date ("Maturity Date"), subject to the right of the Investors to extend the date under certain circumstances.


The Notes bear interest at a rate of 8% per annum, subject to increase to 15% per annum upon the occurrence and continuance of an event of default (as described below). Interest on the Notes is payable monthly in shares of Common Stock or cash, at the Company's option. Interest on the Notes is computed on the basis of a 360-day year and twelve 30-day months and is payable in arrears monthly and is compounded monthly.


All amounts due under the Notes are convertible at any time, in whole or in part, at the option of the holders into shares of Common Stock at a fixed conversion price, which is subject to adjustment for stock splits, stock . . .

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. All of the securities described in this Current Report on Form 8-K were offered and sold to accredited investors in reliance upon exemptions from the registration requirements under
Section 4(a)(2) under the Securities Act of 1933, as amended ("Securities Act"), and Rule 506 of Regulation D promulgated thereunder.

Item 7.01 Regulation FD Disclosure.

On July 21, 2014, the Company issued a press release announcing the Financing. A copy of the press release is furnished as Exhibit 99.1 of this report.

The information under Item 7.01 and in Exhibit 99.1 of this Current Report on Form 8-K is being furnished and shall not be deemed "filed" for the purpose of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section. The information under Item 7.01 and in Exhibit 99.1 of this Current Report on Form 8-K shall not be incorporated by reference into any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) The following exhibits are filed with this report:

Number                                    Description

10.1         Securities Purchase Agreement, dated July 18, 2014, among the Company
             and the Investors named therein.

10.2         Form of Senior Secured Convertible Note

10.3         Form of Warrant

10.4         Form of Registration Rights Agreement among the Company and the
             Investors named therein.

10.5         Form of Security and Pledge Agreement by the Company in favor of the
             collateral agent named therein

10.6         Form of Guaranty Agreement for certain future subsidiaries of the

10.7         Form of Voting Agreement between the Company and TFG Radiant
             Investment Group Ltd.

99.1         Press Release, dated July 21, 2014

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This Current Report on Form 8-K contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon the Company's current expectations, speak only as of the date hereof and are subject to change. All statements, other than statements of historical fact included in this Current Report on Form 8-K, are forward-looking statements. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "goal," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words and include, but are not limited to, the amount and use of proceeds the Company expects to receive from the Financing, the closing of the Financing and

the conversion of the Notes and the exercise of the Warrants. Such forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate, and involve factors that may cause actual results to differ materially and adversely from those projected or suggested. Readers are cautioned not to place undue reliance on these forward-looking statements and are advised to consider the factors listed above together with the additional factors under the heading "Forward-Looking Statements" and "Risk Factors" in the Company's Annual Report on Form 10-K, Quarterly Reports of Form 10-Q, and in other filings with the Securities and Exchange Commission. The Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason, except as required by law.

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