NanoFlex Power Corp (Form: S-1, Received: 11/30/2016 16:11:50)

As filed with the Securities and Exchange Commission on November 30, 2016

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form S-1

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

NANOFLEX POWER CORPORATION

(Exact name of registrant as specified in its charter)

Florida		4955		46-1904002
(State or other jurisdiction of Incorporation or organization)		(Primary Standard Industrial Classification Code number)		(I.R.S. Employer Identification No.)

17207 N. Perimeter Dr., Suite 210

Scottsdale, AZ 85255

(480) 585-4200

(Address and telephone number of principal executive offices)

Dean L. Ledger

Chief Executive Officer

17207 N. Perimeter Dr., Suite 210

Scottsdale, AZ 85255

(480) 585-4200

(Name, address and telephone number of agent for service)

Copies to:

M. Ali Panjwani, Esq.	Mitchell S. Nussbaum, Esq.
Pryor Cashman LLP	Loeb & Loeb LLP
7 Times Square	345 Park Avenue
New York, NY 10036	New York, NY 10154
Tel: (212) 326-0820	Tel: (212) 407-4159
Fax: (212) 798-6319	Fax: (212) 504-3013

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price (1)		Amount of Registration Fee
Shares of common stock, par value $0.0001 per share (2)(3)	$	17,250,000.00	$	1,999.28
Warrants to purchase shares of common stock (4)		—		—
Shares of common stock issuable upon exercise of the warrants (2)(3)(5)	$	21,562,500.00	$	2,499.09
Representative’s Warrants to purchase common stock (4)		—		—
Shares of common stock issuable upon exercise of the Representative’s Warrants (2)(6)(7)	$	660,000.00	$	76.49
Total	$	39,472,500.00	$	4,574.86	(8)

(1)	Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) of the Securities Act. Includes shares that the underwriters have the option to purchase from the registrant to cover over-allotments, if any.
(2)	Pursuant to Rule 416 under the Securities Act, this registration statement also covers such indeterminate number of additional shares of common stock as may be issuable with respect to the shares being registered hereunder as a result of stock splits, stock dividends, recapitalizations or similar transactions.
(3)	Includes shares of common stock which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.
(4)	No registration fee required pursuant to Rule 457(g) of the Securities Act
(5)	We have calculated the proposed maximum aggregate offering price of the shares of common stock underlying the warrants by assuming that such warrants are exercisable to purchase common stock at a price per share equal to 125% of the expected offering price of our common stock.
(6)	We have agreed to issue warrants exercisable within five years after the effective date of this registration statement representing 4% of the securities issued in the offering, excluding any over-allotment securities (the “Representative’s Warrants”) to Aegis Capital Corp. The Representative’s Warrants are exercisable at a per share price equal to 110% of the common stock public offering price. Resales of the Representative’s Warrants on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, are registered hereby. Resales of shares issuable upon exercise of the Representative’s Warrants are also being similarly registered on a delayed or continuous basis hereby. See “Underwriting.”
(7)	Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(g) of the Securities Act. We have calculated the proposed maximum aggregate offering price of the shares of common stock underlying the Representative’s Warrants by assuming that such warrants are exercisable to purchase shares of common stock at a per share price of 110% of the expected offering price of our common stock, excluding any over-allotment securities.
(8)	Paid herewith.

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION

DATED NOVEMBER 30, 2016

Common Stock and Warrants

This is a firm commitment public offering of shares of common stock and warrants of NanoFlex Power Corporation consisting of one share of common stock and one warrant to purchase one share of common stock at an exercise price of 125% of the public offering price of a share of common stock in this offering. The common stock and warrants are immediately separable and will be issued separately. The warrants are exercisable immediately and will expire five years from the date of issuance.

Our common stock is currently traded on the OTCQB Marketplace operated by the OTC Markets Group, Inc., or OTCQB, under the symbol “OPVS.” Prior to the effectiveness of the registration statement of which this prospectus is a part, we will effect a reverse stock split in a range of between one-for- and one-for- , such exact amount to be determined by the Company’s Board of Directors. On November 25, 2016, the last reported sale price for our common stock was $0.75 per share.

We intend to apply to list our common stock and warrants on the NYSE MKT under the symbols “NFP” and “NFPW”, respectively. No assurance can be given that our application will be approved.

We are an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements. An investment in our securities may be considered speculative and involves a high degree of risk, including the risk of a substantial loss of your investment. See “Risk Factors” beginning on page 5 to read about the risks you should consider before buying our securities. An investment in our securities is not suitable for all investors. We intend to continue to issue common stock after this offering and, as a result, your ownership in us is subject to dilution. See “Risk Factors—Risks Related to Ownership of Our Common Stock.”

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Per Share

Per Warrant

Total

Public offering price

Underwriting discounts and commissions (1)

Proceeds, before expenses, to us

(1)	The underwriters will receive compensation in addition to the underwriting discount. See “Underwriting” beginning on page 59 of this prospectus for a description of compensation payable to the underwriters.

We have granted a 45-day option to the representative of the underwriters to purchase up to additional shares of common stock and/or additional warrants to purchase up to shares of common stock solely to cover over-allotments, if any.

The underwriters expect to deliver our shares to purchasers in the offering on or about , 2017.

Aegis Capital Corp

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NANOFLEX POWER CORPORATION

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS	ii

THE OFFERING	4

RISK FACTORS	5

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	17

USE OF PROCEEDS	18

DIVIDEND POLICY	19

DETERMINATION OF OFFERING PRICE	20

MARKET PRICE OF OUR COMMON STOCK AND RELATED MATTERS	21

CAPITALIZATION	22

DILUTION	23

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24

BUSINESS	32

MANAGEMENT	45

EXECUTIVE COMPENSATION	48

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	53

PRINCIPAL STOCKHOLDERS	55

DESCRIPTION OF CAPITAL STOCK	56

DESCRIPTION OF SECURITIES WE ARE OFFERING	58

UNDERWRITING	59

LEGAL MATTERS	66

EXPERTS	66

WHERE YOU CAN FIND MORE INFORMATION	66

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE	66

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	F-1

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ABOUT THIS PROSPECTUS

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The information contained in this prospectus is accurate only as of the date of this prospectus. Our business, financial condition, results of operations and prospects may have changed since such date. Other than as required under the federal securities laws, we undertake no obligation to publicly update or revise such information, whether as a result of new information, future events or any other reason.

The distribution of this prospectus and the offering of our securities in certain jurisdictions may be restricted by law. This prospectus does not constitute, and may not be used in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so to any person to whom it is unlawful to make such offer or solicitation. See the “Underwriting” section of this prospectus. In this prospectus, unless specifically set forth to the contrary, the terms “Company,” “we,” “us,” or “our,” are references to the combined business of (i) NanoFlex Power Corporation, a Florida corporation, and (ii) Global Photonic Energy Corporation, a Pennsylvania corporation (“GPEC”).

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PROSPECTUS SUMMARY

This summary provides an overview of selected information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing in our securities. You should carefully read this prospectus and the registration statement of which this prospectus is a part in their entirety before investing in our securities, including the information discussed under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Description of Business,” and our financial statements and notes thereto that appear elsewhere in this prospectus, before making an investment decision.

Overview

NanoFlex Power Corporation, formerly known as Universal Technology Systems, Corp., was incorporated in the State of Florida on January 28, 2013. On September 24, 2013, the Company completed the acquisition of Global Photonic Energy Corporation, a Pennsylvania corporation (“GPEC”) pursuant to a Share Exchange Agreement (the “Share Exchange Transaction”). GPEC was founded and incorporated on February 7, 1994 and is engaged in the research, development, and commercialization of advanced configuration solar technologies. Immediately following the closing of the Share Exchange Transaction and as a result, the Company owned 100% of the equity interests of GPEC and GPEC became a wholly-owned subsidiary of the Company. On November 25, 2013, the Company changed its name from “Universal Technology Systems, Corp.” to “NanoFlex Power Corporation” and its trading symbol was changed to “OPVS” on December 26, 2013.

Our Business

The Company is engaged in the research, development, and commercialization of advanced configuration solar technologies which enable unique thin-film solar cell implementations with what we believe will be industry-leading efficiencies, light weight, flexibility, and low total system cost. Our sponsored research programs at the University of Southern California, the University of Michigan, and Princeton University have resulted in an extensive portfolio of issued and pending patents worldwide covering flexible, thin-film photovoltaic technologies. Pursuant to our license agreement with our university research partners, we have obtained the exclusive worldwide license and right to sublicense any and all intellectual property resulting from our sponsored research programs. While each patent is issued in the name of the respective university that developed the subject technology, the Company has exclusive commercial license rights to all of the patents and their attendant technologies and the patents are referred to herein as being the Company’s patents.

As of November 29, 2016, there were 81 issued patents, 54 pending non-provisional applications and 3 pending provisional applications in the U.S. and 7 pending Patent Cooperation Treaty applications. In addition, in countries and regions outside the U.S., including, but not limited to, China, European Patent Convention, India, Japan, Korea and Taiwan, there were a total of 74 issued patents and 153 pending patent applications. The patent numbers presented exclude issued and pending patents that the Company has identified for abandonment in order to optimize its patent portfolio and reduce unnecessary or redundant costs while still protecting critical technologies. The duration of the issued U.S. and foreign patents is typically 20 years from their respective first effective filing dates.

These patented and patent-pending technologies fall into two general categories – (1) cost reducing and performance-enhancing fabrication processes and device architectures for ultra-high efficiency Gallium Arsenide solar thin films and (2) organic photovoltaic (“OPV”) materials, architectures, and fabrication processes for low cost, ultra-thin solar films offering high quality aesthetics, such as semi-transparency and tinting, and highly flexible form factors. The technologies are targeted at certain broad applications that require high power conversion efficiency, flexibility, and light weight. These applications include: (a) mobile and off-grid solar power generation, (b) building applied photovoltaics (“BAPV”), (c) building integrated photovoltaics (“BIPV”), (d) space vehicles and unmanned aerial vehicles (“UAVs”), (e) semi-transparent solar power generating glazing or windows, and (f) ultra-thin solar films for automobiles or other consumer applications. The Company believes these technologies have been demonstrated in a laboratory environment with our research partners. The Company is currently engaged in product development and commercialization on some of these technologies in collaboration with industry partners and potential customers.

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Our Growth Strategy

The Company’s business model is oriented around licensing and sublicensing processes and technologies to large, well-positioned commercial partners who can provide manufacturing and marketing capabilities to enable rapid commercial growth. The Company plans to license or sublicense its intellectual property to industry partners and customers, rather than being a direct manufacturer of its technologies. These manufacturing partners can supply customers directly, from which the Company expects to receive license royalties. Additionally, these manufacturing partners can also serve as a source of solar cell supply for the Company to provide products to customers on its own through a “fab-less” manufacturing model, particularly in the early stages of market development.

We have made contact with major solar cell and electronics manufacturers world-wide and are finding commercial interest in both our high efficiency and OPV technologies. We are seeking to work closely with those companies interested in our technology solutions to develop proof-of-concept prototypes and processes to mitigate commercialization risks and gain early market entry and acceptance.

The Company has identified its high efficiency solar technologies as its nearest term market opportunity. A key to reducing the risk to market entry of the Company’s high efficiency technologies by our partners is for us to demonstrate our technologies on their product designs and fabrication processes. To support this joint development, the Company has established its own engineering team and plans to expand this team contingent on its ability to secure sponsored development funding and/or raise the necessary capital. This team is to be tasked with serving several key functions, including working closely with the Company’s sponsored research organizations and its industry partners to integrate and customize our proprietary processes and technologies into the partner’s existing product designs and fabrication processes. In conjunction with facilitating technology transfer, our engineering team will also work closely with downstream partners and customers such as military users for mobile field applications, system integrators, installers, and architects for BAPV and BIPV applications, and engineering, procurement, and construction (“EPC”) companies and project developers for solar farm applications. This customer interaction allows the Company to better understand application specific requirements and incorporate these requirements into its product development cycle.

To support this work, the Company’s engineering team leverages the facilities and equipment at the University of Michigan on a recharge basis, which we believe is a cost effective approach to move the technologies toward commercialization. We believe that this allows our engineering team to work directly with industry partners to acquire early licenses to use our intellectual property without the need for large-scale capital investment in clean room facilities and solar cell fabrication equipment.

The Company is pursuing sponsored development funding to generate revenue in the near-term. Having an established technical team enables us to more effectively pursue and execute sponsored research projects from the Department of Defense (“DoD”), the Department of Energy (“DOE”), and the National Aeronautics and Space Administration (“NASA”), each of which has interests in businesses that can deliver ultra-lightweight, high-efficiency solar technologies for demanding applications.

Another potential revenue source is from joint development agreements (“JDAs”) with existing solar cell manufacturers. Once we are able to initially demonstrate the efficacy of our processes and technologies on partner’s products and fabrication processes, we expect to be in a position where we can sign licenses covering further joint development, IP licensing, solar cell supply, and joint marketing, as applicable. We anticipate that partnerships with one or more of the existing high efficiency solar cell manufacturers can be supported by the Company’s engineering team, and result in near-term revenue opportunities, as we have demonstrated with our current joint development partner.

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Market Opportunity

There are several key trends that we believe are reshaping the future of the global energy mix, including continued rapid growth in the use of solar technologies, a retreat from nuclear power in some countries, and the emergence of unconventional natural gas production. These trends are driving a pronounced shift away from oil, coal, and nuclear towards renewables and natural gas. Expectations are building for a concerted global effort to tackle climate change, according to the International Energy Agency’s World Energy Outlook 2016.

Expansion of solar generation worldwide is a necessary component of any serious strategy to mitigate climate change, according to the Massachusetts Institute of Technology Energy Initiative. In recent years, solar costs have fallen substantially and installed capacity has grown very rapidly. Nonetheless, solar energy currently accounts for only about 1% of global electricity generation.

Solar photovoltaics (“PV”) installations have experienced rapid growth over the past several years. According to IHS Technology, global solar installations reached 59 GW in 2015, a 35% increase over 2014, while growth in 2016 is expected to increase a further 17% to 69 GW.

The dominant PV technology, used in approximately 90% of installations, is wafer-based crystalline silicon (“c-Si”), with thin-film technologies, such as cadmium telluride (“CdTe”), copper indium gallium selenide (“CIGS”), and amorphous silicon (“a-Si”), accounting for approximately 10% of the PV market, according to the MIT Energy Initiative. However, current c-Si technologies have inherent technical limitations, including high processing complexity and low intrinsic light absorption, which requires a thick silicon wafer, resulting in rigidity and heavy weight, according to the MIT Energy Initiative. We believe these form factor constraints largely limit the addressable market for crystalline silicon-based solar to rooftop and utility-scale installations, which dominate the current solar power installed base. We plan to initially focus our high efficiency technologies and products on applications that are not well-served by crystalline silicon-based solar panels and rather demand solar solutions with some combination of high power, light weight, and flexibility.

Corporate Information

Our corporate headquarters are located at 17207 N. Perimeter Dr., Suite 210, Scottsdale, AZ 85255 and our telephone number is (480) 585-4200. We maintain our web site at www.nanoflexpower.com. The information on our website or that can be accessed through our website is not a part of, or incorporated in, this prospectus.

Recent Developments

Between November 18, 2016 and November 28, 2016, the Company entered into amendments with certain holders of the Company’s issued and outstanding warrants and convertible promissory notes, pursuant to which such holders have agreed to remove price-based anti-dilution provisions contained in the original securities effective immediately following the execution of the underwriting agreement relating to this offering (the “Anti-Dilution Amendments”). The amendments have resulted in the reduction of the Company’s warrant derivative liabilities and conversion option derivative liabilities from $12,581,604 as of September 30, 2016 to $5,648,773 as of November 28, 2016. The Company expects to further reduce its warrant derivative liabilities and conversion option derivative liabilities by entering into similar amendments with holders of the Company’s issued and outstanding warrants and convertible promissory notes.

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THE OFFERING

Securities offered	Up to shares of common stock and warrants to purchase up to shares of common stock. The warrants are issued separately from the shares of common stock.

Offering price	$ per share of common stock and warrant.

Common stock outstanding before the offering	59,265,087 shares

Common stock to be outstanding after the offering	shares ( shares if the warrants are exercised in full) ⁽¹⁾

Description of the warrants	The warrants will have a per share exercise price equal to 125% of the closing bid price of our common stock on the date of this prospectus. The warrants are exercisable immediately and expire five years from the date of issuance. The exercise price and the number of shares of common stock purchasable upon the exercise of the warrants are subject to adjustment upon the occurrence of specific events, including stock dividends, stock splits, combinations and reclassifications of our common stock.

Common stock issuable upon exercise of warrants outstanding before the offering	58,957,805 shares

Common stock issuable upon exercise of warrants to be outstanding after the offering	shares

Underwriter’s option to purchase additional shares of common stock and/or warrants in this offer	We have granted the underwriters a 45-day option to purchase, on the same terms and conditions set forth above, up to additional shares of common stock and/or additional warrants to purchase up to shares of common stock.

Use of proceeds	We estimate that the net proceeds from this offering will be approximately $ (approximately $ if the underwriters exercise their option to purchase additional shares of common stock and warrants in full) based upon an assumed offering price of $ per share, after deducting the underwriting discounts and commissions. We intend to use the net proceeds from this offering to fund development and commercialization of the Company’s high efficiency thin film solar technology; to fund OPV research and development to support future joint development; to maintain and enhance the Company’s IP portfolio; to pay the Company’s accounts payable and accrued liabilities; and for working capital and general corporate purposes. See “Use of Proceeds.”

Market symbol and listing	Our common stock is listed on the OTCQB Marketplace operated by the OTC Markets Group, Inc. under the symbol “OPVS.” We intend to apply to list our common stock and warrants on the NYSE MKT under the symbols “NFP” and “NFPW”, respectively.

Risk Factors	Investing in our securities involves substantial risks. You should carefully review “Risk Factors” and the other information in this prospectus for a discussion of the factors you should consider before you decide to invest in shares of our securities.

⁽¹⁾	The number of shares of common stock outstanding is based on 59,265,087 shares outstanding as of November 29, 2016 and excludes, as of that date:

	●	shares of common stock issuable upon exercise of warrants to be issued to investors in this offering at an exercise price of $ per share;
	●	13,000 shares of common stock issuable upon exercise of outstanding stock options, with a weighted average exercise price of $0.54 per share;
	●	58,957,805 shares of common stock issuable upon exercise of warrants outstanding prior to this offering, with a weighted average exercise price of $0.71 per share;
	●	11,823,589 shares of common stock reserved for future issuance under our 2013 stock option plan;
	●	shares of common stock issuable upon the exercise of the underwriters’ over-allotment option to purchase additional shares of common stock and shares of common stock issuable upon the exercise of additional warrants that are issuable upon the exercise of the underwriters’ over-allotment option to purchase additional warrants; and
	●	shares of common stock issuable upon exercise of the warrant to be issued to Aegis Capital Corp. (representing 4% of the shares of common stock and warrants sold by us in this offering).

Unless otherwise specifically stated, information throughout this prospectus does not assume the exercise of outstanding options or warrants to purchase shares of common stock.

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RISK FACTORS

You should carefully consider the risks described below as well as other information provided to you in this document, including information in the section of this document entitled “Cautionary Note Regarding Forward-Looking Statements”. If any of the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected, the value of our common stock could decline, and you may lose all or part of your investment.

Risks Relating to Our Business

There is doubt about our ability to continue as a going concern, which may hinder our ability to obtain financing and force us to cease operations.

The Company has only generated limited revenues to date. In their audit reports for the fiscal years 2015 and 2014, our independent registered public accounting firm expressed substantial doubt about our ability to continue as a going concern. The Company had current liabilities of $25,506,910 and current assets of $116,467 as of December 31, 2015. As of September 30, 2016, the Company had a working capital deficit of $18,983,497 and an accumulated deficit of $207,732,287. We generated revenues of $115,400 for the nine months ended September 30, 2016, and we lack sufficient capital to fund ongoing operations, including our research and development activities and for maintenance of our patent portfolio. The Company has funded its initial operations primarily by way of sale of equity securities, convertible note financing, short term financing from private parties, and advances from related parties. We anticipate that we will continue to experience net operating losses as we seek to commercialize our technologies and that the continuation of our business and our ability to service existing liabilities will continue to be dependent primarily on raising capital.

Our net operating losses require that we finance our operations from outside sources through funding from the sale of our securities. If we are unable to obtain such additional capital, we will not be able to sustain our operations and would be required to cease our operations. Investors should consider this when determining if an investment in our company is suitable.

Even if we do raise sufficient capital and generate sufficient revenues to support our operating expenses, there can be no assurance that the revenue will be sufficient to enable us to develop our business to a level where it will generate sufficient profits and cash flows from operations, or provide a return on investment. In addition, if we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could be significantly diluted, the newly-issued securities may have rights, preferences or privileges senior to those of existing stockholders and the trading price of our common stock could be adversely affected. Further, if we obtain additional debt financing, a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, and the terms of the debt securities issued could impose significant restrictions on our operations. If we are unable to continue as a going concern, our shareholders may lose their entire investment.

We are presently solely dependent on raising capital to maintain the Company, our patent portfolio, research and development activities and efforts to commercialize our technologies .

We are currently in the development stage and have not yet commercialized any of our technologies nor have we licensed any of our technologies or sold any products, and have only generated limited revenues and are solely dependent on raising capital to fund our operations. We currently need to raise capital in order to maintain the Company’s operations, our patent portfolio, research and development activities and efforts to commercialize our technologies, as well as to pay our approximately $4.4 million in outstanding accounts payable and accrued liabilities as of September 30, 2016, excluding derivative liabilities.

There can be no assurance that we will be able to raise the capital that we need or that if we can, that it will be available on terms that are acceptable to the Company and its shareholders or which would not substantially dilute existing shareholders’ interests. If we fail to raise sufficient capital, we will be unable to maintain the Company, or our patents or commercialize our technologies which may result in a total loss of shareholders’ investments.

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We will need additional capital to fund our growth and we may not be able to obtain sufficient capital on reasonable terms and may be forced to limit the scope of our operations.

If adequate additional financing is not available to us, or if available, it is not available on reasonable terms, we may not be able to fund our future operations and we would have to modify our business plans accordingly. There is no assurance that additional financing will be available to us.

If we cannot obtain additional funding, we may be required to: (i) limit internal growth (ii) limit the recruitment and retention of additional key personnel, and (iii) limited acquisitions of businesses and technology. Such limitations could materially adversely affect our business and our ability to compete.

Even if we do find a source of additional capital, we may not be able to negotiate terms and conditions for receiving the additional capital that are acceptable to us. Any future capital investments could dilute or otherwise materially and adversely affect the holdings or rights of our existing shareholders. In addition, new equity or convertible debt securities issued by us to obtain financing could have rights, preferences and privileges senior to our common stock. We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us.

The Company has incurred, and expects to continue to incur, significant losses as we seek to commercialize our technologies.

The Company’s operating subsidiary was incorporated under the laws of the Commonwealth of Pennsylvania in February 1994. We have been a development-stage company since that time, and have only generated limited revenues to date. Since the Company’s incorporation we have incurred significant losses. We expect that our expenditures will increase to the extent we seek to continue to develop strategic partnerships to commercialize our products. We expect these losses to continue until such time, if ever, as we are able to generate sufficient revenues from the commercial exploitation of our high efficiency and organic photovoltaics (“OPV”) technologies to support our operations. Our high efficiency and OPV technologies may never be incorporated in any commercial applications. We have encountered and will continue to encounter risks and difficulties frequently experienced by early, commercial-stage companies in rapidly evolving industries. If we do not address these risks successfully, our business will suffer. The Company may never be profitable. We may be unable to satisfy our obligations solely from cash generated from operations. If, for any reason, we are unable to make required payments under our obligations, one or more of our creditors may take action to collect their debts. If we continue to incur substantial losses and are unable to secure additional financing, we could be forced to discontinue or further curtail our business operations; sell assets at unfavorable prices; refinance existing debt obligations on terms unfavorable to us; or merge, consolidate or combine with a company with greater financial resources in a transaction that may be unfavorable to us.

Our inability to achieve and sustain profitability could cause us to go out of business and for our shareholders to lose their entire investment.

We are a development-stage company, and have only generated limited revenues to date. We cannot provide any assurance that any of our business strategies will be successful or that future growth in revenues or profitability will ever be achieved or, if they are achieved, that they can be consistently sustained or increased on a quarterly or annual basis. If we are unable to grow our business sufficiently to achieve and maintain positive net cash flow, the Company may not be able to sustain operations and our investors’ entire investment may be lost.

Our substantial indebtedness could adversely affect our business, financial condition and results of operations and our ability to meet our payment obligations.

As of September 30, 2016, we had total indebtedness of approximately $1.7 million. Our substantial indebtedness could have important consequences to our stockholders. For example, it could require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, research and development efforts and other general corporate purposes; increase our vulnerability to and limit our flexibility in planning for, or reacting to, changes in our business; place us at a competitive disadvantage compared to our competitors that have less debt; limit our ability to borrow additional funds, dispose of assets, and make certain investments; and make us more vulnerable to a general economic downturn than a company that is less leveraged.

A high level of indebtedness increases the risk that we may default on our debt obligations. Our ability to meet our debt obligations and to reduce our level of indebtedness will depend on our future performance. General economic conditions and financial, business and other factors affect our operations and our future performance. Many of these factors are beyond our control. We may not be able to generate sufficient cash flows to pay the interest on our debt and future working capital, borrowings or equity financing may not be available to pay or refinance such debt. Factors that will affect our ability to raise cash through an offering of our capital stock or a refinancing of our debt include financial market conditions, the value of our assets and our performance at the time we need capital.

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Our business could be adversely affected by general economic conditions which may negatively affect our ability to be profitable.

Our business could be adversely affected in a number of ways by general economic conditions, including higher interest rates, consumer credit conditions, unemployment and other economic factors. Changes in interest rates may increase our costs of capital and negatively affect our ability to secure financing on favorable terms. During economic downturns, we may have greater difficulty in gaining new customers for our products and services. Our strategies to acquire new customers may not be successful, which, in turn, could have a material adverse effect on our business, financial condition and results of operations.

The Company’s access to research facilities, engineers, resources, and equipment depends upon the continued effectiveness of the Company’s sponsored research partnerships, the termination of which could materially impair the Company’s ability to continue its business.

The Company conducts research and development pursuant to sponsored research agreements with the University of Southern California (“USC”) and the University of Michigan (“Michigan”).

The Company’s sponsored research agreement with USC covers basic research related to high efficiency thin film solar technologies and OPV technologies. Michigan is a subcontractor to USC on this research agreement. The agreement extends until January 31, 2021, but is terminable upon 60 days’ prior written notice in the event that, for reasons outside of the terminating party’s control, it becomes infeasible to continue the partnership. Pursuant to this agreement, all intellectual property made jointly by USC, Michigan and Company personnel, or solely by the Company’s personnel using USC or Michigan facilities, resources, equipment, or funds, will be jointly owned by USC, Michigan and the Company.

On August 8, 2016, the Company amended this research agreement with USC, suspending the agreement effective as of August 15, 2016. The amendment was requested by the Company for the purpose of temporarily suspending our OPV-related sponsored research activities to reduce near-term expenditures while it seeks a development partner for OPV commercialization and allow the Company to bring its account with USC current through a payment plan. The suspension is to continue until the date that is 30 days after expenses incurred by USC have been reimbursed by the Company, which expenses will be repaid by the Company to USC in quarterly installments through February 2018, unless earlier repaid by the Company at its option. The amended agreement provides USC with the option to terminate the agreement upon any late installment payments.

The Company’s failure to timely pay any of its installments to USC may result in the termination of its sponsored research agreement with USC. If the agreement is terminated, the Company will no longer have use of USC’s facilities, equipment and resources to research and develop its OPV technologies and our ability to generate revenues could be substantially impaired and our business and financial condition could be materially and adversely impacted.

The Company established direct agreements with Michigan on June 16, 2016, which were amended on July 21, 2016, to provide engineering support and facility access associated with technology transfer and commercialization of its high efficiency thin film solar technologies. The Company’s failure to timely pay any of its installments to Michigan may result in the termination of its sponsored research agreement with Michigan. If the agreement is terminated, the Company will no longer have use of Michigan’s facilities, equipment and resources to research and develop its high efficiency technologies and our ability to generate revenues could be substantially impaired and our business and financial condition could be materially and adversely impacted.

The Company’s patents depend upon the continued effectiveness of the Company’s license agreement, the termination of which could materially impair the Company’s ability to continue its business.

Pursuant to that certain License Agreement, as amended, with USC, Michigan and Princeton University, we have obtained the exclusive worldwide license and right to sublicense any and all intellectual property resulting from our sponsored research programs. If the License Agreement expires or is terminated for any reason, including by the Company’s default or breach thereof, our ability to generate revenues could be substantially impaired and our business and financial condition could be materially and adversely impacted.

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The Company is in arrears on payments to certain critical vendors and may not have sufficient capital to pay such vendors in the future which could negatively impact the Company’s business.

The Company is currently in arrears with regard to payments to certain of its vendors and may not have sufficient capital to pay such vendors in the short term or long term future. If the Company continues to fall behind on these payments and if the Company is unable to ultimately pay its vendors, the vendors may stop providing critical services to the Company. Additionally, if the Company’s vendors remain unpaid they may seek to recover payments owed to them by bringing legal claims for such payments against the Company. The Company may not be able to successfully defend these claims which may lead to the Company being ordered to pay such amounts by a court of lawful jurisdiction which could have a negative effect on the Company’s business operations.

T he success of the Company is dependent in part on market acceptance of thin-film solar technology.

The success of the Company’s business is dependent in part on market acceptance of thin-film solar technology. Thin-film technology has a limited operating history making it difficult to predict a level at which the technology is competitive with other energy sources without government subsidies. If thin-film technology performs below expectations or if it does not achieve cost competitiveness with conventional or other solar or non-solar renewable energy sources without government subsidies, it could result in the failure of the technology to be widely adopted in the market. This could significantly affect demand for thin-film solar technologies and negatively impact our business.

The Company may never develop or license a product that uses its high efficiency or OPV technologies.

We have devoted substantially all of our financial resources and efforts to developing our OPV technologies and identifying potential users of our technologies. Development and commercialization of the photovoltaic (“PV”) technologies is a highly speculative undertaking and involves a substantial degree of uncertainty. Neither the Company nor anyone else has developed any product that uses our OPV technologies, nor has the Company licensed its high efficiency or OPV technologies to anyone else who has developed such a product. The Company may never develop a commercially viable use for those technologies, may never achieve commercially viable performance for our OPV technologies and may never license our high efficiency or OPV technologies to anyone. Even if the Company or a licensee of the Company does develop a commercially viable product or use, the product may never become profitable, either because it is not developed quickly enough, it is not developed to meet industry standards, or because no market for the product is identified, or otherwise.

Our business is based on new and unproven technologies, and if our high efficiency or OPV technologies fail to achieve the performance and cost metrics that we anticipate, then we may be unable to develop demand for our products and generate sufficient revenue to support our operations.

Our high efficiency and OPV technologies are new and unproven at commercial scale production, and such technologies may never gain market acceptance, if they do not compare favorably against competing products on the basis of cost, quality, efficiency and performance. Our business plan and strategies assume that we will be able to achieve certain milestones and metrics in terms of throughput, uniformity of cell efficiencies, yield, cost and other production parameters. We cannot assure you that our technologies will prove to be commercially viable in accordance with our plan and strategies. Further, we or our strategic partners and licensees may experience operational problems with such technology after its commercial introduction that could delay or defeat the ability of such technology to generate revenue or operating profits. If we are unable to achieve our targets on time and within our planned budget, then we may not be able to develop adequate demand for our high efficiency and OPV technologies, and our business, results of operations and financial condition could be materially and adversely affected.

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We may not reach profitability if our high efficiency and OPV technologies are not suitable for widespread adoption or sufficient demand for our technologies does not develop or develops slower than we anticipate.

The extent to which solar PV products based on our technologies will be widely adopted is uncertain. If our high efficiency and OPV technologies prove unsuitable for widespread adoption or demand for our high efficiency and OPV technologies fails to develop sufficiently, we may be unable to grow our business or generate sufficient revenue from operations to reach profitability or maintain our business. In addition, demand for solar modules in our targeted markets may not develop or may develop to a lesser extent than we anticipate. Many factors may affect the viability of widespread adoption of solar PV technology and demand for our high efficiency and OPV products, including the following:

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performance and reliability of solar modules and thin film technology compared with conventional and other non-solar renewable energy sources and products;

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cost-effectiveness of solar modules compared with conventional and other non-solar renewable energy sources and products;

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availability of government subsidies and incentives to support the development of the solar PV industry;

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success of other renewable energy generation technologies, such as hydroelectric, wind, geothermal, solar thermal, concentrated PV and biomass;

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fluctuations in economic and market conditions that affect the viability of conventional and non-solar renewable energy sources, such as increases or decreases in the price of oil and other fossil fuels;

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deregulation of the electric power industry and the broader energy industry.

If we do not reach profitability because our PV technology is not suitable for widespread adoption or due to insufficient demand for solar PV modules, our financial condition and business could be materially and adversely affected.

The Company’s intellectual property rights with regard to its high efficiency and OPV technologies may be challenged.

Pursuant to the license agreement, the Company has obtained exclusive rights to an extensive portfolio of issued and pending U.S. patents, plus their foreign counterparts relating to advanced thin-film PV technologies. The Company may obtain rights to additional patents and patent applications under its Sponsored Research Agreements. However, additional patent applications may never be filed and the Company may never obtain any rights to such applications. Any patent applications now pending or filed in the future may not result in patents being issued. Any patents now licensed to the Company, or licensed to us in the future, may not provide the Company with any competitive advantages or prove enforceable. The Company’s rights to these patents may be challenged by third parties. The cost of litigation to uphold the validity, or to prevent infringement of patents and to enforce licensing rights can be substantial and beyond the Company’s financial means. Furthermore, others may independently develop similar technologies or duplicate our high efficiency and OPV technologies licensed to the Company or design around the patented aspects of such technology. In addition, there can be no assurance that the products and technologies the Company will seek to commercialize will not infringe patents or other rights owned by others, or that licenses for other’s technology will be available.

Our success is dependent on key personnel of the company, whom we may not be able to retain or hire.

Our business relies heavily on the efforts and talents of our researchers and our management. The development and application of our technologies originated and will greatly depend on the research by Dr. Mark E. Thompson and Dr. Stephen R. Forrest. None of our researchers or executives is currently insured for the benefit of the Company by key man life insurance. The loss of the services of any of these persons could result in material adverse effect to the development and commercialization of our technologies. Competition for experienced researchers and management personnel in the PV sector is intense, the pool of qualified candidates is very limited, and we may not be able to attract qualified candidates or retain the services of those already engaged, which could significantly negatively impact our business.

We may be unable to protect our intellectual property rights or keep up with that of our competitors .

We regard our intellectual property rights as highly valuable to our business strategy, and intend to rely on the maximum protection provided by law to protect our rights. We have entered into and continue to use confidentiality agreements with our employees and contractors and, to the extent practicable, nondisclosure agreements with our suppliers and strategic partners in order to limit access to and disclosure of our information. We cannot be sure that these contractual arrangements or the other steps taken by us to protect our intellectual property will prove sufficient to prevent misappropriation of our technology or deter independent third-party development of similar technologies. Our failure to protect our intellectual property rights could put us at a competitive disadvantage in the future. Any such failure could have a materially adverse effect on our future business, results of operations and financial condition. We intend to defend vigorously our intellectual property against any known infringement, but such actions could involve significant legal fees, and we have no guarantee that such actions will be resolved in our favor. We also cannot be sure that any steps taken by us will be adequate to prevent misappropriation or infringement of our intellectual property.

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We also intend to sell and/or license our products and technology in countries worldwide, including some with limited ability to protect intellectual property of products and services sold in those countries by foreign firms. We cannot be sure that the steps taken by us will be adequate to prevent misappropriation or infringement of our intellectual property in these countries.

We may not have sufficient funds and may need additional capital to protect and maintain our intellectual property rights.

The Company’s sponsored research has resulted in an extensive portfolio of issued and pending U.S. patents, plus their foreign counterparts, which are in the names of our sponsored research partners, USC, Michigan, and Princeton. The Company has the exclusive commercial rights to these intellectual property rights and the obligation to maintain, defend and fund the defense of these patents. The Company has only generated limited revenues from its operating business and it expects to have limited cash flow in the near future. In the event of filing infringement lawsuits or defending any infringement suits that are filed against the Company, relevant expenses and fees will increase substantially and could harm our profitability. We may need to raise additional funds to protect and maintain our intellectual property rights.

If we are unable to successfully maintain or license existing patents, our ability to generate revenues could be substantially impaired.

Our business model is to license or sublicense our proprietary high efficiency and OPV technologies to industry partners and customers, and the Company is currently entitled to the exclusive right to sub-license an extensive portfolio of issued and pending U.S. patents, plus their foreign counterparts. Our ability to be successful in the future therefore will depend on our continued efforts and success in licensing existing patents, including maintaining and prosecuting our patents properly. If we are unable to successfully maintain and license our existing patents, our ability to generate revenues could be substantially impaired and our business and financial condition could be materially and adversely impacted.

Our insurance coverage may be inadequate to cover all significant risk exposures.

We will be exposed to liabilities that are unique to the products we provide. While we intend to maintain insurance for certain risks, the amount of our insurance coverage may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs resulting from risks and uncertainties of our business. It is also not possible to obtain insurance to protect against all operational risks and liabilities. The failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition, results of operations and prospects.

If we fail to establish and maintain an effective system of internal control, we may not be able to report our financial results accurately or to prevent fraud. Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our common stock.

Effective internal control is necessary for us to provide reliable financial reports and prevent fraud. The Company currently does not have an audit committee. As a result, our small size and any current internal control deficiencies may adversely affect our financial condition, results of operation and access to capital. We have not performed an in-depth analysis to determine if historical un-discovered failures of internal controls exist, and may in the future discover areas of our internal control that need improvement. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed.

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Risks Relating to Our Industry

Our industry has historically been cyclical and experienced periodic downturns.

Our future success partly depends on continued demand for solar PV systems in the solar energy markets, including in the United States and internationally. The solar equipment industry has historically been cyclical and has experienced periodic downturns which may affect the demand for our solar technologies. The solar industry has undergone challenging business conditions, including downward pricing pressure for PV modules, mainly as a result of overproduction, and reductions in applicable governmental subsidies, contributing to demand decreases. There is no assurance that the solar industry will not suffer significant downturns in the future, which may adversely affect demand for our solar technologies and our operations.

Existing regulations and policies and changes to these regulations and policies may present technical, regulatory and economic barriers to the purchase and use of solar PV products, which may significantly reduce demand for our technologies.

The market for electricity generation products is heavily influenced by foreign, federal, state and local government regulations and policies concerning the electric utility industry, utility rates, and internal policies of electric utilities. These regulations and policies often relate to electricity pricing and technical interconnection of customer-owned electricity generation. In the United States and in a number of other countries, these regulations and policies have been, and continue to be, continuously modified. The market for electric generation equipment is also influenced by trade and local content laws, regulations and policies. These regulations and policies could deter end-user purchases of PV products and investment in the research and development of PV technology. For example, without a mandated regulatory exception for PV systems, utility customers are often charged interconnection or standby fees for putting distributed power generation on the electric utility grid. If these interconnection standby fees were applicable to PV systems, it is likely that they would increase the cost to our end-users of using PV systems which could make them less desirable, thereby harming our business, prospects, results of operations and financial condition. In addition, electricity generated by PV systems mostly competes with expensive peak hour electricity, rather than the less expensive average price of electricity. Modifications to the peak hour pricing policies of utilities, such as to a flat rate for all times of the day, would require PV systems to achieve lower prices in order to compete with the price of electricity from other sources.

The Company has not yet introduced commercial products and, as such, has not commenced any governmental approval process. The applicability and extent of government approval requirements will depend on the particular end-market. Successful introduction of our products into certain markets may require significant government testing and evaluation prior to high volume procurement. We anticipate that the installation of products based on our high efficiency and OPV technologies will be subject to oversight and regulation in accordance with national and local ordinances relating to building codes, safety, environmental protection, utility interconnection and metering and related matters. It is difficult to track the requirements of individual states and design equipment to comply with the varying standards. In addition, the U.S., European Union and Chinese governments, among others, have imposed tariffs or are in the process of evaluating the imposition of tariffs on solar panels, solar cells, polysilicon, and potentially other components. These tariffs may increase the price of our solar products, which could harm our results of operations and financial condition. Any new government regulations or utility policies pertaining to our solar modules may result in significant additional expenses to us, our resellers and their customers and, as a result, could cause a significant reduction in demand for our solar modules.

The solar energy industry depends, in part, on continued support in the form of rebates, tax credits and other incentives from federal, state and local governments. An elimination or reduction of these rebates, tax credits and other incentives could negatively impact the Company’s ability to successfully introduce products and secure capital.

Federal, state and local governments currently provide tax credits, rebates, and other incentives to owners, users, and manufacturers of solar energy. Any elimination or reduction of such incentives would increase the cost of solar energy, which would negatively impact the Company’s ability to introduce products and secure necessary capital. The federal government currently provides a 30% federal tax credit (the “ITC”) for solar systems installed on residential and commercial properties under Sections 25(d) and 48(a) of the Internal Revenue Code, respectively. In December 2015, legislation was signed into law extending the 30% ITC for both residential and commercial projects through the end of 2019; after which the ITC drops to 26% in 2020 and 22% in 2021 before dropping permanently to 10% for commercial projects and 0% for residential projects. Unless modified by a further change in law, the reduction of the ITC may negatively impact the demand for our solar products and our ability to obtain financing support.

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Environmental obligations and liabilities could have a substantial negative impact on our business and financial condition.

The solar energy industry is subject to heavy laws, rules and regulations, some of which pertain to environmental concerns. The solar energy industry can involve the use handling, generation, processing, storage, transportation, and disposal of hazardous materials which are subject to extensive environmental laws and regulations at the national, state, local, and international levels. These environmental laws and regulations include those governing the discharge of pollutants into the air and water, the use, management, and disposal of hazardous materials and wastes, the cleanup of contaminated sites, and occupational health and safety. As the Company proceeds to seek to develop and commercialize its solar technologies, we and our potential license partners will have to comply with applicable environmental requirements, future developments such as more aggressive enforcement policies, the implementation of new, more stringent laws and regulations, or the discovery of presently unknown environmental conditions may require expenditures that could have a material adverse effect on our business, results of operations, and financial condition.

Competition is intense in the energy industry.

The global energy industry is presently dominated by hydrocarbon, hydroelectric and nuclear-based technologies, and therefore our solar energy-based technologies will primarily compete against the providers of these established energy sources. However, we also compete directly against large multinational corporations (including global energy suppliers and generators) and numerous small entities worldwide that are pursuing the development and commercialization of renewable and non-renewable technologies that might have performance and/or price characteristics similar or even superior to our high efficiency and OPV technologies. Most of our current competitors are significantly larger and have substantially greater market presence as well as greater financial, technical, operational, marketing and other resources and experience than we do. We also expect that new competitors are likely to join existing competitors in this industry.

The Company’s attempt to develop commercially viable technologies based on Company-funded research will also encounter competition from other academic institutions and/or governmental laboratories, which are conducting or funding research in alternative technologies similar to our high efficiency and OPV technologies. These academic institutions and/or governmental laboratories likely will have financial resources substantially greater than the resources available to the Company. Given the foregoing competitive environment, the Company cannot determine at this time whether it will be successful in its development and commercialization efforts or whether such efforts, even if successful, will be commercially viable and profitable.

There is competition between manufacturers of crystalline silicon solar modules, as well as thin-film solar modules and solar thermal and concentrated PV systems. If global supply exceeds global demand, it could lead to a reduction in the demand and price for PV modules, which could adversely affect our business.

The solar energy and renewable energy industries are highly competitive and continually evolving as participants strive to distinguish themselves within their markets and compete with the larger electric power industry. Within the global PV industry, there is competition from crystalline silicon solar module manufacturers, other thin-film solar module manufacturers and companies developing solar thermal and concentrated PV technologies. Existing or future solar manufacturers might be acquired by larger companies with significant capital resources, thereby intensifying competition. This intensified competition can lead to a large amount of supply which can exceed the demand. Even if demand for solar modules continues to grow, the rapid manufacturing capacity expansion undertaken by many solar module manufacturers, particularly manufacturers of crystalline silicon solar modules, has created and may continue to cause periods of structural imbalance during which supply exceeds demand. We anticipate that competitors will continue to develop competing solar PV technologies and will attempt to commercialize these technologies. If these competing technologies present a compelling value proposition or are available to market sooner than our technologies, then our market opportunity could diminish.

Our business and financial results may be harmed as a result of increases in materials and component costs.

The cost of raw materials and key components associated with our technologies could increase in the future due to a variety of factors, including trade barriers, export regulations, regulatory or contractual limitations, industry market requirements and changes in technology and industry standards. If we are unable to adjust our cost structure in the future to deal with potential increases in costs, we may not be able to achieve profitability, which could have a material adverse effect on our business and prospects.

Developments in alternative technologies or improvements in distributed solar energy generation may have a material adverse effect on our business.

Significant developments in alternative technologies, such as advances in other forms of distributed solar PV power generation, storage solutions such as batteries, the widespread use or adoption of fuel cells for residential or commercial properties or improvements in other forms of centralized power production may have a material adverse effect on our business and prospects. Any failure by us to adopt new or enhanced technologies or processes, or to react to changes in existing technologies, could result in product obsolescence, the loss of competitiveness of our products and lack of revenues.

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A drop in the retail price of conventional energy or non-solar alternative energy sources may negatively impact our profitability.

We believe that an end customer’s decision to purchase or install solar energy is primarily driven by the cost and return on investment resulting from solar energy. Fluctuations in economic and market conditions that affect the prices of conventional and non-solar alternative energy sources, such as decreases in the prices of oil, natural gas, and other fossil fuels, could cause the demand for solar power systems to decline, which would have a negative impact on our business.

Risks Relating to Our Securities

An investment in the Company’s common stock is extremely speculative and there can be no assurance of any return on any such investment.

An investment in the Company’s common stock is extremely speculative and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment.

The market price of our common stock is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market and other factors, many of which we have little or no control over. In addition, broad market fluctuations, as well as general economic, business and political conditions, may adversely affect the market for our common stock, regardless of our actual or projected performance.

Our shares are subject to the Securities and Exchange Commission’s “penny stock” rules that limit trading activity in the market, which may make it more difficult for our shareholders to sell their common stock.

Penny stocks generally are equity securities with a price of less than $5.00. Since our common stock is trading at less than $5.00 per share, we are subject to the penny stock rules adopted by the Securities and Exchange Commission that require broker-dealers to deliver extensive disclosure to its customers prior to executing trades in penny stocks not otherwise exempt from the rules. The broker-dealer must also provide its customers with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held by the customer. Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or accredited investor must make a special suitability determination regarding the purchaser and must receive the purchaser’s written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth in excess of $1,000,000, or annual income exceeding $200,000 individually, or $300,000 together with his or her spouse, is considered an accredited investor. The additional burdens from the penny stock requirements may deter broker-dealers from effecting transactions in our securities, which could limit the liquidity and market price of our securities. These disclosure requirements may cause a reduction in the trading activity of our common stock, which likely would make it difficult for our stockholders to resell their securities.

We will continue to incur significant costs to ensure compliance with United States corporate governance and accounting requirements.

We will continue to incur significant costs associated with our public company reporting requirements, costs associated with applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. We expect all of these applicable rules and regulations will result in significant legal and financial compliance costs and to make some activities more time consuming and costly. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

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In order to raise sufficient funds to expand our operations, we may have to issue additional securities at prices which may result in substantial dilution to our shareholders.

If we raise additional funds through the sale of equity or convertible debt, our current stockholders’ percentage ownership will be reduced. In addition, these transactions may dilute the value of our securities outstanding. We may have to issue securities that may have rights, preferences and privileges senior to our common stock. We cannot provide assurance that we will be able to raise additional funds on terms acceptable to us, if at all. If future financing is not available or is not available on acceptable terms, we may not be able to fund our future needs, which would have a material adverse effect on our business plans, prospects, results of operations and financial condition.

Our shareholders’ percentage of ownership may become diluted upon conversion of our convertible promissory notes, upon the exercise of currently outstanding warrants, or upon the issuance of new shares of stock or other securities, including issuances to consultants as compensation.

As of November 29, 2016, there are outstanding warrants to purchase 58,957,805 shares of our common stock. Furthermore, as of November 29, 2016, outstanding warrants to purchase a total of 16,539,500 shares of our common stock have anti-dilution provisions and the exercise price of such warrants will be automatically reduced to a lower price if the Company issues securities in a subsequent offering at a price which is less than each such warrant’s then-effective exercise price. Of the Company’s warrants with anti-dilution provisions, outstanding warrants to purchase 7,489,500 shares of our common stock, as of November 29, 2016, also provide that the number of shares of common stock that can be issued under such warrants will be adjusted in the event of a subsequent lower price issuance such that the aggregate exercise price of such warrants remain the same.

In addition, as of November 29, 2016, the Company has outstanding options to purchase 13,000 shares of our common stock, with a weighted average exercise price of $0.54 per share, and convertible notes outstanding in the aggregate amount of $1,830,000, with a conversion price of $0.50 per share.

We may enter into additional agreements with independent contractors, consultants, and other unaffiliated third parties for services and compensation under such agreements may be payable in equity. The conversion of outstanding debt, the exercise of outstanding warrants, and the issuance of new securities could result in significant dilution to existing stockholders. Additionally, securities issued in connection with future financing activities or any potential acquisitions could have preferences and rights senior to the rights of common stock.

We are not likely to pay cash dividends in the foreseeable future.

We currently intend to retain any future earnings for use in the operation and expansion of our business. Accordingly, we do not expect to pay any cash dividends in the foreseeable future, but will review this policy as circumstances dictate.

An active trading market for our common stock or warrants may not develop and the market price for our common stock or warrants may decline below the offering price of our common stock or warrants in this offering.

Our common stock is quoted on the OTCQB Marketplace (“OTCQB”), under the symbol “OPVS”. The OTCQB is an electronic quotation system that displays real-time quotes, last-sale prices, and volume information for many over the counter securities that are not listed on a national securities exchange. Trading volume for our common stock has been limited and OTCQB quotations for our common stock price may not represent the true market value of our common stock. In addition, there is no established trading market for the warrants being offered in this offering. We intend to apply to list our common stock and warrants on the NYSE MKT under the symbols “NFP” and “NFPW”, respectively. The historical trading prices of our common stock on the OTCQB may not be indicative of the price levels at which our common stock will trade following this offering or upon listing of our common stock and warrants on the NYSE MKT, and we cannot predict the extent to which the consummation of this offering, the commencement of the trading of our common stock and warrants on the NYSE MKT or investor interest in us generally will lead to the development of an active public trading market for our common stock and our warrants or how liquid that public market may become. The offering price for our common stock and warrants in this offering will be determined by negotiation between the representative of the underwriters and us based upon several factors, and may not be indicative of prices that will prevail in the open market after this offering. Consequently, you may be unable to sell your shares of our common stock or warrants at prices equal to or greater than the prices you paid for them, if at all.

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For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

In April 2012, the President signed into law the Jumpstart Our Business Startups Act (the “JOBS Act”). The JOBS Act contains provisions that, among other things, relax certain reporting requirements for “emerging growth companies,” including certain requirements relating to accounting standards and compensation disclosure. We are classified as an emerging growth company. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things, (1) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes Oxley Act of 2002, (2) comply with any new requirements adopted by the Public Company Accounting Oversight Board (the “PCAOB”), requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (3) comply with any new audit rules adopted by the PCAOB after April 5, 2012 unless the Securities and Exchange Commission determines otherwise, (4) provide certain disclosure regarding executive compensation required of larger public companies or (5) hold shareholder advisory votes on executive compensation.

Further, our independent registered public accounting firm is not yet required to formally attest to the effectiveness of our internal controls over financial reporting, and will not be required to do so for as long as we are an “emerging growth company” pursuant to the provisions of the JOBS Act.

Under the JOBS Act we have elected to use an extended period for complying with new or revised accounting standards.

We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1), which allows us to delay adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

If equity research analysts do not publish research or reports about our business, or if they issue unfavorable commentary or downgrade our common stock, the market price of our common stock and warrants will likely decline.

The trading market for our common stock and warrants will rely in part on the research and reports that equity research analysts, over whom we have no control, publish about us and our business. We may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our company, the market price for our common stock and warrants could decline. In the event we obtain securities or industry analyst coverage, the market price of our common stock and warrants could decline if one or more equity analysts downgrade our common stock or if those analysts issue unfavorable commentary, even if it is inaccurate, or cease publishing reports about us or our business.

Risks Relating to this Offering

We may require additional financing after completion of this offering.

At September 30, 2016, we had an accumulated deficit since inception of $207,732,287 and had a negative working capital of $18,983,497. As of September 30, 2016, we had remaining cash of approximately $41,725. Even if this offering is fully subscribed, we may need additional debt or equity financing in the future to execute our business plan and to continue as a going concern. Accordingly, market conditions may limit our ability to raise capital on favorable terms, or at all, and the terms of any public or private offerings of securities likely would dilute existing shareholders.

There are no guarantees that we would be able to obtain additional debt or equity financing that would be needed after completion of this financing on commercially reasonable terms or at all, and we may continue to evaluate a full range of potential strategic alternatives. Additional equity funding could dilute existing shareholders. If we fail to obtain sufficient financing when needed, we may be unable to execute our growth strategy, which would have a material adverse effect on our operations and financial condition. This could cause us to be unable to take advantage of future opportunities or respond to competitive pressures. This may also force us to delay, reduce or eliminate some or all of our research and development programs or force us to reduce operations.

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If we successfully complete a reverse stock split, the liquidity of our common stock and market capitalization could be adversely affected.

The Board of Directors intends to effect a reverse stock split in order to increase the stock price to a level that will enable it to apply for listing on the NYSE MKT. A reverse stock split may be viewed negatively by the market and could lead to a decrease in our overall market capitalization. If the per share market price does not increase proportionately as a result of the reverse stock split, then the value of our company as measured by our market capitalization could be reduced significantly. If we successfully complete a reverse stock split, it would significantly reduce the number of shares of our common stock that are outstanding, and the liquidity of our common stock could be adversely affected and you may find it more difficult to purchase or sell shares of our common stock.

There is no guarantee that our shares of common stock or warrants will be listed on the NYSE MKT.

In connection with the filing of the registration statement of which this prospectus forms a part, we intend to apply for listing of our common stock and warrants on the NYSE MKT. After the consummation of this offering, we believe that we will satisfy the listing requirements and expect that our common stock and warrants will be listed on the NYSE MKT. Such listing, however, is not guaranteed. If such listing is approved, there can be no assurance any broker will be interested in trading our stock. Therefore, it may be difficult to sell your shares of common stock if you desire or need to sell them. Our lead underwriter, Aegis Capital Corp., is not obligated to make a market in our securities, and even if they make a market, they can discontinue market making at any time without notice. Neither we nor the underwriters can provide any assurance that an active and liquid trading market in our securities will develop or, if developed, that such market will continue.

If our common stock and warrants are approved for listing on the NYSE MKT, there is no guarantee that we will be able to maintain such listing for any period of time by perpetually satisfying NYSE MKT’s continued listing requirements.

Due to the speculative nature of warrants, there is no guarantee that it will ever be profitable for holders of the warrants to exercise the warrants.

The warrants being offered do not confer any rights of common stock ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of common stock at a fixed price for a limited period of time. Specifically, commencing on the date of issuance, holders of the warrants may exercise their right to acquire the common stock and pay an exercise price of per share equal to 125% of the common stock public offering price, prior to five years from the date of issuance, after which date any unexercised warrants will expire and have no further value. Moreover, following this offering, the market value of the warrants is uncertain and there can be no assurance that the market value of the warrants will equal or exceed their public offering price. There can be no assurance that the market price of the common stock will ever equal or exceed the exercise price of the warrants, and, consequently, whether it will ever be profitable for holders of the warrants to exercise the warrants.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:

	●	The availability and adequacy of our capital to meet our requirements including, but not limited to, maintaining our patent portfolio and continuing research and development and commercialization activities;
	●	Changes or developments in laws, regulations or taxes in our industry;
	●	Competitors developing better or more commercially acceptable or marketable technologies; and
	●	Other risks identified under “Risk Factors” beginning on page 5 of this prospectus and in our other filings with the Securities and Exchange Commission.

This prospectus should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward looking statements included in this prospectus are made as of the date of this prospectus and should be evaluated with consideration of any changes occurring after the date of this prospectus. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

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USE OF PROCEEDS

We estimate that the net proceeds to us from the sale of shares of common stock and warrants to purchase shares of common stock we are offering will be approximately $ , based upon an assumed public offering price of $ per share of common stock and warrant to purchase one share of common stock, after deducting underwriting discounts and commissions and estimated offering expenses that we must pay.

The shares of common stock and warrants offered hereby are being sold by us primarily to enable us to meet the initial requirements for the listing of our common stock and warrants on the NYSE MKT.

The Company intends to use the net proceeds from this offering: to fund development and commercialization of the Company’s high efficiency thin film solar technology; to fund OPV research and development to support future joint development; to maintain and enhance the Company’s IP portfolio; to pay the Company’s accounts payable and accrued liabilities; and for working capital and general corporate purposes.

Until we use the net proceeds of this offering, we intend to invest the funds in short-term, interest-bearing investments, which may include interest-bearing bank accounts, money market funds, certificates of deposit and U.S. government securities.

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DIVIDEND POLICY

Any future determination as to the declaration and payment of dividends on shares of our common stock will be made at the discretion of our Board of Directors out of funds legally available for such purpose. We are not under any contractual obligations or restrictions to declare or pay dividends on our shares of common stock. In addition, we currently have no plans to pay such dividends. Our Board of Directors currently intends to retain all earnings for use in the business for the foreseeable future.

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DETERMINATION OF OFFERING PRICE

The public offering prices of the shares of common stock and warrants offered by this prospectus have been determined by negotiation between us and the underwriters. Among the factors considered in determining the public offering prices of the shares and warrants were:

●

The price and trading history of our common stock on the OTCQB Marketplace;

●

Our history and our prospects;

●

The industry in which we operate;

●

The status and development prospects of our business;

●

The previous experience of our executive officers; and

●

The general condition of the securities markets at the time of this offering.

The offering prices stated on the cover page of this prospectus should not be considered as indication of the actual value of the shares or warrants. Those prices are subject to change as a result of the market conditions and other factors, and we cannot assure you that the shares or warrants can be resold at or above their public offering prices.

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MARKET PRICE OF OUR COMMON STOCK AND RELATED MATTERS

Market Information

Our common stock commenced trading on the OTCQB Marketplace (the “OTCQB”) operated by OTC Market Group, Inc. on July 14, 2015 under the symbol “OPVS”. Trading in stocks quoted on the OTCQB is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to do with a company’s operations.

OTCQB securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead OTCQB securities transactions are conducted through a telephone and computer network connecting dealers in stock.

The following table sets forth, for the fiscal quarters indicated, the high and low sales prices of our common stock as reported by the OTCQB:

QUARTER ENDED	HIGH		LOW
December 31, 2016 (through November 25, 2016)	$	1.19	$	0.75
September 30, 2016	$	2.10	$	0.54
June 30, 2016	$	1.00	$	0.60
March 31, 2016	$	1.60	$	0.80

December 31, 2015	$	3.00	$	0.78
September 30, 2015	$	10.00	$	1.35
June 30, 2015	$	-	$	-
March 31, 2015	$	-	$	-

On November 25, 2016, our common stock closed at $0.75.

Holders of Common Stock

We have 756 record holders of our common stock, par value $.0001, issued and outstanding as of November 29, 2016.

Securities Authorized for Issuance under Equity Compensation Plans

On September 24, 2013, the directors of the Company unanimously approved the 2013 Equity Incentive Plan (the “Plan”) under which the Company has reserved a number of shares of its common stock equal to 10% of the Company’s fully diluted common stock for awards under the Plan of any stock option, stock appreciation right, restricted stock, performance share, or other stock-based award or performance-based cash awards under the Plan.

The following table provides information as of November 29, 2016 with respect to the shares of our common stock that may be issued under our existing equity compensation plans.

		Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)				Weighted- average exercise price of outstanding options, warrants and rights (b)				Number of securities remaining available for future issuance under equity compensation plan (excluding securities reflected in column (a)) (c)
Equity compensation plan approved by the directors – 2013 Equity Incentive Plan			13,000			$	0.54				11,823,589

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CAPITALIZATION

The following table sets forth our cash and cash equivalents, derivative liabilities and capitalization as of September 30, 2016, on:

	●	an actual basis; and
	●	a pro forma basis to reflect the Anti-Dilution Amendments; and
	●	a pro forma, as adjusted basis, to give further effect to the sale of shares of common stock and warrants in this offering at an assumed initial public offering price of $ per share of common stock and $ per warrant, after deducting estimated underwriting discounts and commissions and estimated offering expenses.

The pro forma information below is illustrative only and our capitalization following the completion of this offering will be adjusted based on the actual public offering price and other terms of this offering determined at pricing. You should read this table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Description of Capital Stock” and our condensed combined financial statements and related notes included elsewhere in this prospectus.

	September 30, 2016
	Actual			Pro Forma ⁽¹⁾			Pro Forma, As Adjusted
Cash and cash equivalents and short-term investments	$	41,725		$	41,725
Warrant derivative liability	$	(8,990,943	)		-
Conversion option derivative liability	$	(3,590,660	)		-
Stockholders’ equity:
Common Stock, 500,000,000 authorized, $0.0001 par value, 59,196,687 issued and outstanding, actual; issued and outstanding, pro forma	$	5,919		$	5,919
Additional paid-in capital	$	188,751,460		$	201,333,063
Total debt	$	2,089,144		$	2,089,144
Accumulated deficit	$	(207,732,287	)	$	(207,732,287	)
Total stockholders’ equity	$	(18,974,908	)	$	(6,393,305	)
Total capitalization	$	(16,885,764	)	$	(4,304,161	)

(1)	Reflects the re-classification of the warrant derivative and conversion option derivative liabilities as components of additional paid-in capital in the Company’s balance sheet as a result of the Anti-Dilution Amendments.

The number of shares of common stock outstanding set forth in the table above excludes:

●

shares of common stock issuable upon exercise of warrants to be issued to investors in this offering at an exercise price of $ per share;

●

10,000 shares of common stock issuable upon exercise of outstanding stock options, with a weighted average exercise price of $0.50 per share;

●

57,220,405 shares of common stock issuable upon exercise of warrants outstanding prior to this offering, with a weighted average exercise price of $0.83 per share;

●

11,632,709 shares of common stock reserved for future issuance under our 2013 stock option plan;

●

shares of common stock issuable upon exercise of the underwriters’ over-allotment option to purchase additional shares of common stock and shares of common stock issuable upon the exercise of additional warrants that are issuable upon exercise of the underwriters’ over-allotment option to purchase additional warrants; and

●

shares of common stock issuable upon exercise of the warrant to be issued to Aegis Capital Corp. (representing 4% of the shares of common stock and warrants sold by us in this offering).

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DILUTION

Dilution represents the difference between the public offering price per share of our common stock and the net tangible book value per share of our common stock immediately after completion of this offering. Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets.

Our net tangible book value as of September 30, 2016 was approximately $(18,974,908), or $(0.32) per share of common stock. If you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the difference between the public offering price per share and our as adjusted net tangible book value per share after this offering. We calculate net tangible book value per share by dividing our net tangible book value, which is total tangible assets less total liabilities, by the number of outstanding shares of our common stock as of September 30, 2016. The pro forma net tangible book value per share represents our total tangible assets less total liabilities, divided by the number of outstanding shares of our common stock on such date, in each case after giving effect to the Anti-Dilution Amendments, as if they had occurred on September 30, 2016.

Upon completion of this offering at an assumed public offering price of $ per share and $ per warrant, our pro forma as adjusted net tangible book value at September 30, 2016 would have been approximately $ , or approximately $ per share of our common stock. Accordingly, the as adjusted net tangible book value of our common stock held by our existing stockholders would have been increased by $ per share without any additional investment on their part. The purchasers of our common stock in this offering will incur immediate dilution (a reduction in the net tangible book value per share from the assumed offering price of $ per share) of $ per share.

The following table illustrates this dilution on a per share basis:

Assumed public offering price per share				$
Net tangible book value per share as of September 30, 2016	$	(0.32	)
Pro forma net tangible book value per share at September 30, 2016 after giving effect to the Anti-Dilution Amendments	$
Increase in net tangible book value per share attributable to this offering	$
As adjusted net tangible book value per share as of September 30, 2016, after this offering				$
Dilution in net tangible book value per share to investors in this offering				$

If the representative of the underwriters exercises its option to purchase additional shares of common stock and warrants in full, the increase in net tangible book value per share attributable to new investors will increase to $ and our pro forma adjusted net tangible book value will increase to $ per share, representing an increase in our adjusted net tangible book value of $ per share to existing holders, and there will be an immediate dilution of $ per share to new investors.

Each $1.00 increase in the assumed public offering price of $ per share would increase our as adjusted net tangible book value per share after this offering by $ , and the dilution to new investors by $ per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses that we must pay.

Each $1.00 decrease in the assumed public offering price of $ per share would decrease our as adjusted net tangible book value per share after this offering by $ , and the dilution to new investors by $ per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses that we must pay.

The discussion and the table above are based on 59,196,687 shares outstanding as of September 30, 2016 and excludes, as of that date:

●

shares of common stock issuable upon exercise of warrants to be issued to investors in this offering at an exercise price of $ per share;

●

10,000 shares of common stock issuable upon exercise of outstanding stock options, with a weighted average exercise price of $0.50 per share;

●

57,220,405 shares of common stock issuable upon exercise of warrants outstanding prior to this offering, with a weighted average exercise price of $0.83 per share;

●

11,632,709 shares of common stock reserved for future issuance under our 2013 stock option plan;

●

shares of common stock issuable upon the exercise of the underwriters’ over-allotment option to purchase additional shares of common stock and shares of common stock issuable upon the exercise of additional warrants that are issuable upon the exercise of the underwriters’ over-allotment option to purchase additional warrants; and

●

shares of common stock issuable upon exercise of the warrant to be issued to Aegis Capital Corp. (representing 4% of the shares of common stock and warrants sold by us in this offering) .

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

This discussion and analysis contains forward-looking statements relating to future events, our future financial performance and financial condition. Such statements are only predictions and the actual events or results may differ materially from the results discussed in or implied by the forward-looking statements. The historical results set forth in this discussion and analysis are not necessarily indicative of trends with respect to any actual or projected future financial performance. This discussion and analysis should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this prospectus.

Overview

NanoFlex Power Corporation is engaged in the development, commercialization, and licensing of advanced configuration solar technologies which we believe enable unique thin-film solar cell implementations with industry-leading efficiencies, light weight, flexibility, and low total system cost. The Company has the exclusive worldwide license to the intellectual property resulting from the Company's sponsored research programs, which have resulted in an extensive portfolio of issued and pending U.S. patents, plus foreign counterparts. The patents are referred to herein as being the Company’s patents or as the Company’s “IP.” Building upon the sponsored research, the Company plans to work with industry partners and customers to commercialize its technologies to target key applications where it believes products incorporating its technologies present compelling competitive advantages.

The Company’s research programs have yielded two distinct thin film solar technology platforms – (1) cost reducing and performance-enhancing fabrication processes and device architectures for ultra-high efficiency Gallium Arsenide solar thin films and (2) organic photovoltaic (“OPV”) materials, architectures, and fabrication processes for low cost, ultra-thin solar films offering high quality aesthetics, such as semi-transparency and tinting, and highly flexible form factors. The technologies are targeted at certain broad applications that require high power conversion efficiency, flexibility, and light weight. These applications include: (a) mobile and off-grid solar power generation, (b) building applied photovoltaics (“BAPV”), (c) building integrated photovoltaics (“BIPV”), (d) space vehicles and unmanned aerial vehicles (“UAVs”), (e) semi-transparent solar power generating glazing or windows, and (f) ultra-thin solar films for automobiles or other consumer applications. The Company believes these technologies have been demonstrated in a laboratory environment with our research partners. The Company is currently engaged in product development and commercialization on some of these technologies in collaboration with industry partners and potential customers.

The Company currently holds exclusive rights to an extensive portfolio of issued and pending U.S. patents, plus foreign counterparts, which cover architecture, processes and materials for high efficiency thin film solar technologies and flexible, thin-film OPVs. In addition, the Company has an extensive collection of patents in process. Some of our technology holdings include foundational concepts in the following areas:

	●	Ultra-low cost, ultra-high efficiency, flexible thin film III-V cells
	●	Accelerated and recyclable liftoff process
	●	Cold-weld bonding of high efficiency solar cells to plastic substrates and metal foils
	●	Micro-inverters monolithically integrated into III-V solar cells
	●	Low cost, thermo-formed plastic mini-compound parabolic concentrator arrays
	●	Protective and sacrificial layering of III-V solar cell growth
	●	Integrated low-cost solar tracking with Kirigami structures
	●	Scalable growth technologies
	●	Tandem organic solar cell
	●	Fullerene acceptors
	●	Blocking layers
	●	New materials for visible and infrared sensitivity
	●	Inverted solar cells
	●	Materials for enhanced light collection via multi-exciton generation
	●	Mixed layer and nanocrystalline cells
	●	Solar films, coatings, or paints
	●	Semi-transparent cells

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Plan of Operation and Liquidity and Capital Resources

Overall Operating Plan

The Company has identified its high efficiency thin film solar technologies as its nearest term market opportunity. A key to reducing the risk to market entry of the Company’s high efficiency technologies by our partners is for us to demonstrate our technologies on their product designs and fabrication processes. To support this joint development, the Company has established its own engineering team and plans to expand this team contingent on its ability to secure sponsored development funding and/or raise the necessary capital. This team is to be tasked with serving several key functions, including working closely with the Company’s sponsored research organizations and its industry partners to integrate and customize our proprietary processes and technologies into the partner’s existing product designs and fabrication processes. In conjunction with facilitating technology transfer, our engineering team will also work closely with downstream partners and customers such as military users for mobile field applications, system integrators, installers, and architects for BAPV and BIPV applications, and engineering, procurement, and construction (“EPC”) companies and project developers for solar farm applications. This customer interaction allows the Company to better understand application specific requirements and incorporate these requirements into its product development cycle.

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Near Term Operating Plan

Our near-term focus is on advancing our product development efforts while containing costs. The Company requires approximately $6 million to $8 million to continue its operations over the next twelve months to support its development and commercialization activities, fund patent application and prosecution, service outstanding liabilities, and support its corporate functions. Our operating plan over the next twelve months is comprised of the following:

Cost cutting and containment to reduce our cash operating expenses;

Prioritizing and optimizing our existing IP portfolio to align it with the commercialization strategy and reduce costs;

Focusing research and development investments on near-term commercialization opportunities;

	4.	Collaborating with strategic partners to accelerate joint development and licensing of our technologies;

	5.	Selectively pursuing government-sponsored projects to fund product development and commercialization; and

Raising adequate capital (approximately $6 million to $8 million) to support our activities for at least 12 months.

We believe that we have made progress with each of the components of this operating plan and have aligned our operations and cost structure with expediting the development and commercialization of our high efficiency solar technologies. We have taken steps to reduce patent expenses, particularly related to optimizing our OPV patent portfolio. We have realigned our research and development operations with several strategic actions, including hiring Company engineers to focus on high efficiency product development and technology transfer from the University of Michigan to a commercial environment with our industry partner, establishing a new sponsored research agreement with the University of Michigan focused on research and development of high efficiency technology in support of our commercialization efforts, and temporarily suspending our OPV-related sponsored research activities to reduce near-term expenditures while we seek a development partner for OPV commercialization. We remain focused on increasing our revenue through JDAs with industry partners and through government-sponsored research projects and we believe that we are making positive progress with these efforts.

There can be no assurance that our near term operating plan will be successful or that we will be able to fulfill it as it is largely dependent on raising capital and there can be no assurance that capital can be raised nor that we will be awarded the government contracts that we are currently pursuing.

In the event that we raise less than the required amount of capital, our focus is planned to be on prioritizing our commercialization effort to capture near-term revenue opportunities and limiting spending on general and administrative expenses and patent costs.

Basis of Presentation

During the three months ended June 30, 2016, the Company identified errors in its financial statements for the third and fourth quarters of the fiscal year ended December 31, 2015, and first quarter of the fiscal year ended March 31, 2016, as included in the Company’s 10-Q for the periods ended September 30, 2015 and March 31, 2016, and its 2015 annual report on Form 10-K, related to the accounting for conversion option derivative liabilities. Specifically, the Company accounted for all of its convertible debt instruments assuming that each contained an embedded conversion feature that met the criteria for bifurcation when, in fact, several of the outstanding notes contained embedded conversion features that did not require bifurcation. The Company has made adjustments in each period related to this.

The Company determined that the correction of the cumulative amounts of the errors would be material to its consolidated financial statements for the three and six months ended June 30, 2016. Therefore, the Company revised its previously-issued financial statements as of December 31, 2015 and for the third and fourth quarters of fiscal 2015 and first quarter of fiscal 2016. The balance sheet as of December 31, 2015 and the statement of operations for the three and nine months ended September 30, 2015 included in this prospectus are revised as described below for those adjustments.

For additional information and a detailed discussion of the adjustments, see Note 1, “Background, Basis of Presentation, and Going Concern – Basis of Presentation – Revision of Previously-Issued Financial Statements” to the Notes to our unaudited Condensed Consolidated Financial Statements included in this prospectus.

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Results of Operations

For the three and nine months ended September 30, 2016 compared to the three and nine months ended September 30, 2015

Revenue

Revenue was $85,000 and $115,400 for the three and nine months ended September 20, 2016, respectively. This relates to revenue earned for engineering services provided under our JDA. There was no revenue for the three and nine months ended September 30, 2015.

Cost of Services

Cost of services was $97,829 and $331,710 for the three and nine months ended September 30, 2016. This increase was due to expenses incurred as part of our engineering services provided under our JDA. There was no cost of services for the three and nine months ended September 30, 2015.

Research and Development Expenses

Research and development expenses were $299,500 for the three months ended September 30, 2016, an 8% decrease from $327,253 for the three months ended September 30, 2015. The decrease is attributable to decreased amounts of expense related to the Company’s research agreement with USC. Research and development expenses were $1,475,847 for the nine months ended September 30, 2016, a 78% increase from $828,002 for the nine months ended September 30, 2015. The increase is attributable to non-cash expenses of $1,277,701 associated with warrants issued to consultants and executives during the nine months ended September 30, 2016. There were no non-cash expenses during the nine months ended September 30, 2015. These increases were partially offset by lower expense associated with the Company’s sponsored research activity.

Patent Application and Prosecution Fees

Patent application and prosecution fees consist of expenses associated with prosecuting and maintaining the patents resulting from the research program sponsored by NanoFlex and were $649,378 for the three months ended September 30, 2016, a 102% increase from $321,643 for the three months ended September 30, 2015. Patent application and prosecution fees were $1,187,145 for the nine months ended September 30, 2016, a 20% decrease from $1,490,657 for the nine months ended September 30, 2015. These fluctuations are attributable to the timing and volume of the submittal and prosecution of patent applications.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $772,508 for the three months ended September 30, 2016, a 40% decrease from $1,281,736 for the three months ended September 30, 2015. The decrease is primarily due to decreased non-cash expenses associated with warrants issued to executives, which equaled $265,787 for the three months ended September 30, 2016, compared to $817,049 for the three months ended September 30, 2015. Selling, general and administrative expenses were $2,122,330 for the nine months ended September 30, 2016, a 19% decrease from $2,629,669 for the nine months ended September 30, 2015. The decrease is primarily due to a reduction in salaries and professional fees partially offset by an increase in non-cash expenses of $98,440 associated with warrants issued to executives.

Other Expense

Other expense for the three months ended September 30, 2016 was $4,034,438 as compared to $9,724,978 for the three months ended September 30, 2015. Other income (expense) for the nine months ended September 30, 2016 was $1,226,177 as compared to $12,853,899 for the nine months ended September 30, 2015. These changes are primarily due to the gain (loss) on change in fair value of derivative liabilities, the timing of entering into interest bearing debt agreements and the timing of the conversion of existing debt and extinguishment of old debt.

Net Loss

Net loss for the three months ended September 30, 2016 was $5,768,653, as compared to $11,655,610 for the three months ended September 30, 2015. The net loss for the nine months ended September 30, 2016 was $6,227,809, as compared to $17,802,227 for the nine months ended September 30, 2015. These changes are impacted by non-cash income and expenses, including the gain (loss) on change in fair value of the derivative liability offset by an increase in interest expense, changes in research and development, patent application and prosecution fees, and selling, and general and administrative expenses, each of which is described above.

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For the year ended December 31, 2015 compared to the year ended December 31, 2014

Revenue

Revenue was $119,998 for the year ended December 31, 2015. This relates to engineering services provided under our JDA. There was no revenue for the year ended December 31, 2014.

We do not believe that inflation or changing prices have had a material effect on our business, financial condition, or results of operations.

Cost of Services

Cost of services was $114,947 for the year ended December 31, 2015. This increase was due to expenses incurred as part of our services provided under our JDA. There was no cost of services for the year ended December 31, 2014.

Research and Development Expenses

Research and development expenses were $2,325,539 for the year ended December 31, 2015, a 98% increase from $1,174,473 for the year ended December 31, 2014. The increase is attributable to non-cash expenses of $1,334,017 associated with warrants issued to a consultant during the year. This was partially offset by lower expense associated with our sponsored research activity.

Patent Application and Prosecution Fees

Patent application and prosecution fees consist of the fees due for prosecuting and maintaining the patents resulted from the research program sponsored by the Company and were $1,724,988 for the year ended December 31, 2015, a 28% decrease from $2,394,118 for the year ended December 31, 2014. The year-over-year decrease is attributable to reduced submittal and processing of patent applications resulting from efforts to optimize the patent portfolio to align it with the Company’s development and commercialization strategy.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $7,018,803 for the year ended December 31, 2015, a 203% increase from $2,314,315 for the year ended December 31, 2014. The increase is primarily attributable to non-cash expenses of $4,747,101 associated with warrants issued to employees during the year, partially offset by a reduction in base salaries that was negotiated with the Company’s employees in an effort to conserve capital resources.

Interest Expense

Interest expense for the year ended December 31, 2015 was $1,909,022 as compared to $80,522 for year ended December 31, 2014 due to new a large amount of interest-bearing debt agreements entered into during 2015, the conversion of existing debt and the extinguishment of old debt.

Net Loss

The net loss for the year ended December 31, 2015 was $23,316,519, a 294% increase from $5,924,931 for the year ended December 31, 2014. The change in net loss is impacted by non-cash expenses, including the loss on change in fair value of the derivative liability and an increase in interest expense offset by changes in research and development, patent application and prosecution fees, and selling, general and administrative expenses, each of which is described above.

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Liquidity and Capital Resources

Sources of Liquidity

As of September 30, 2016, the Company had cash and cash equivalents of $41,725 and a working capital deficit of $18,893,497, as compared to cash and cash equivalents of $6,255 and a working capital deficit of $25,404,178 as of December 31, 2015. The increase in cash is due to the increase in related party advances compared to December 31, 2015. The decrease in working capital is attributable to the gain on change in fair value of derivative liabilities.

The Company needs to raise additional capital and is in the process of raising additional funds in order to continue to finance our research and development, service existing liabilities and commercialize photonic energy conversion technologies utilizing organic semiconductor-based solar cells. The Company needs to raise approximately $6 million to $8 million in additional capital in order to continue our operations as described above and support our corporate functions. We anticipate that the additional funding can result from private sales of our equity securities. However, there can be no assurance that the additional funds will be available to us when needed, or if available, on terms that will be acceptable to us or our shareholders. If it is unable to raise sufficient funds the Company may have to cease its operations.

Cash Flows – Operating Activities

Net cash used in operating activities increased by $1,002,518 to $3,599,240 for the nine months ended September 30, 2016, compared to $2,596,722 for the nine months ended September 30, 2015. The increase in cash used in operating activities was attributable primarily to decreased net loss partially offset by a net gain on change in fair value of derivative liabilities and debt extinguishment and an increase in working capital.

Net cash used in operating activities increased by $52,874 to $3,501,546 for the year ended December 31, 2015, compared to $3,448,672 for the year ended December 31, 2014. The cash used in operating activities was attributable primarily to increased net loss partially offset by loss on change in fair value of derivative liabilities and warrants issued for services.

Cash Flows – Investing Activities

There were no investing activities during the nine months ended September 30, 2016 and 2015.

Net cash used in investing activities was $5,842 and $10,064 during the years ended December 31, 2015, and 2014, respectively. These amounts represent purchases of property and equipment.

Cash Flows – Financing Activities

Net cash provided by financing activities was $3,634,710 and $2,749,568 during the nine months ended September 30, 2016 and 2015, respectively. For the nine months ended September 30, 2016, net cash included proceeds for sale of common shares and warrants of $663,922, proceeds from the exercise of warrants of $6,288, borrowings from short-term debt of $300,000, borrowings on related party debt of $1,375,000, borrowings on convertible debt of $1,199,500, advances received from related party of $510,000, partially offset by advances repaid to related party of $270,000 and payments on related party debt of $150,000. For the nine months ended September 30, 2015 this includes proceeds from sale of common shares and warrants of $86,000, proceeds from exercise of warrants of $914,218, borrowings from short –term debt of $50,000, borrowings on related party debt of $300,000, borrowings on convertible debt of $1,657,500, advances received from related party of $193,350, offset by advances repaid to related party of $451,500.

Net cash provided by financing activities was $3,513,475 and $3,261,900 during the years ended December 31, 2015 and 2014, respectively. For the year ended December 31, 2015, net cash included proceeds from the exercise of warrants of $914,220, borrowings on debt of $2,781,405, advances received from related party of $212,350, proceeds from the sale of common shares and warrants of $136,000, partially offset by advances repaid to related party of $530,500. For the year ended December 31, 2014, this includes proceeds from sale of common shares and warrants of $1,883,750, borrowings on debt of $950,000, advances received from related party of $721,150, partially offset by advances repaid to related party of $293,000.

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Going Concern

The Company has generated limited revenues to date. As of December 31, 2015, the Company had cash and cash equivalents of $6,255 and a working capital deficit of $25,404,178, as compared to cash and cash equivalents of $168 and a working capital deficit of $6,058,021 as of December 31, 2014. The increase in cash was due to the increase in short term debt compared to December 31, 2014. The decrease in working capital is attributable to the loss on change in fair value of derivative liabilities. The Company had a working capital deficit of $18,983,497 and an accumulated deficit of $207,732,287 as of September 30, 2016. The ability of the Company to continue as a going concern is dependent on raising capital to fund ongoing operations and carry out its business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect our reported assets and liabilities, expenses, and other financial information. Actual results may differ significantly from our estimates under other assumptions and conditions. We believe that our accounting policies related to stock-based compensation, research and development, impairment of long-lived assets, development stage and property plant and equipment as described below, are our “critical accounting policies” as contemplated by the Securities and Exchange Commission.

Basis of Accounting

The Company’s policy is to maintain its books and prepare its combined financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

Use of Estimates

The preparation of combined financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue from its services when it is probable that the economic benefits associated with the transactions will flow to the Company and the amount of revenue can be measured reliably. This is normally demonstrated when: (i) persuasive evidence of an arrangement exists; (ii) the fee is fixed or determinable; (iii) performance of service has been delivered; and (iv) collection is reasonably assured. Revenue from our JDAs are recognized as services are provided and are limited to the total dollar amount specified in the agreement. R&D engineering services, through JDAs are a core component of the Company’s operations and business model, since they are a necessary prerequisite to obtaining intellectual property licensing agreements with customers. As such, R&D engineering services are expected to be a sustained revenue stream for the Company as it works with additional customers and the services constitute a portion of the Company’s ongoing central operations.

Stock-Based Compensation

We account for stock based compensation in accordance with FASB ASC 718 which requires companies to measure the cost of employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period. We account for non-employee share-based awards in accordance with FASB ASC 505-50.

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Research and Development

Research and development costs are expensed in the period they are incurred in accordance with ASC 730, Research and Development, unless they meet specific criteria related to technical, market and financial feasibility, as determined by management, including but not limited to the establishment of a clearly defined future market for the product, and the availability of adequate resources to complete the project. If all criteria are met, the costs are deferred and amortized over the expected useful life, or written off if a product is abandoned.

Impairment of Long-Lived Assets

The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical-cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Fair value is estimated based upon either discounted cash flow analysis or estimated salvage value.

Property and Equipment

Property and equipment are stated at cost. Depreciation of property and equipment is provided using the straight-line method for financial reporting purposes at rates based on the estimated useful lives of the assets. Estimated useful lives range from three to eight years.

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BUSINESS

Introduction

NanoFlex Power Corporation, formerly known as Universal Technology Systems, Corp., was incorporated in the State of Florida on January 28, 2013. On September 24, 2013, the Company completed the acquisition of Global Photonic Energy Corporation, a Pennsylvania corporation (“GPEC”) pursuant to a Share Exchange Agreement (the “Share Exchange Transaction”). Immediately following the closing of the Share Exchange Transaction and as a result, the Company owned 100% of the equity interests of GPEC and GPEC became a wholly-owned subsidiary of the Company. On November 25, 2013, the Company changed its name from “Universal Technology Systems, Corp.” to “NanoFlex Power Corporation” and its trading symbol was changed to “OPVS” on December 26, 2013.

GPEC was incorporated in Pennsylvania on February 7, 1994. The Company is organized to fund, develop, commercialize and license advanced configuration solar technologies which enable unique thin-film solar cell implementations with industry-leading efficiencies, light weight, flexibility, and low total system cost.

These technologies are targeted at certain broad applications, including: (a) mobile and off-grid solar power generation, (b) building applied photovoltaics (“BAPV”), (c) building integrated photovoltaics (“BIPV”), (d) space vehicles and unmanned aerial vehicles (“UAVs”), (e) semi-transparent solar power generating glazing or windows, and (f) ultra-thin solar films for automobiles or other consumer applications.

We believe these technologies have been demonstrated in a laboratory environment with our research partners. The Company is currently engaged in product development and commercialization on some of these technologies in collaboration with industry partners and potential customers.

Our Business

The Company is engaged in the research, development, and commercialization of advanced configuration solar technologies which enable unique thin-film solar cell implementations with what we believe will be industry-leading efficiencies, light weight, flexibility, and low total system cost. Our sponsored research programs at the University of Southern California (“USC”), the University of Michigan (“Michigan”), and Princeton University (“Princeton”) have resulted in an extensive portfolio of issued and pending patents worldwide covering flexible, thin-film photovoltaic technologies. Pursuant to our license agreement with our university research partners, we have obtained the exclusive worldwide license and right to sublicense any and all intellectual property resulting from our sponsored research programs. While each patent is issued in the name of the respective university that developed the subject technology, the Company has exclusive commercial license rights to all of the patents and their attendant technologies and the patents are referred to herein as being the Company’s patents.

These patented and patent-pending technologies fall into two general categories – (1) cost reducing and performance-enhancing fabrication processes and device architectures for ultra-high efficiency Gallium Arsenide solar thin films and (2) organic photovoltaic (“OPV”) materials, architectures, and fabrication processes for low cost, ultra-thin solar films offering high quality aesthetics, such as semi-transparency and tinting, and highly flexible form factors. The technologies are targeted at certain broad applications that require high power conversion efficiency, flexibility, and light weight. These applications include: (a) mobile and off-grid solar power generation, (b) BAPV, (c) BIPV, (d) space vehicles and UAVs, (e) semi-transparent solar power generating glazing or windows, and (f) ultra-thin solar films for automobiles or other consumer applications. The Company believes these technologies have been demonstrated in a laboratory environment with our research partners.

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The Company is working with industry partners to commercialize its technologies for key applications where it believes they present compelling competitive advantages. For example, the Company has begun staffing our engineering team to support the transfer of technologies from university laboratories to implementation in industry partners’ commercial product designs and fabrication processes. To this end, on August 26, 2015, the Company signed a Joint Development Agreement with SolAero Technologies Corp. (“SolAero”). The Company’s Joint Development Agreement with SolAero provides for the joint development of high efficiency solar cells utilizing our proprietary manufacturing processes in conjunction with SolAero’s advanced high efficiency solar cell technologies.

The Company’s business model is oriented around licensing and sublicensing processes and technologies to large, well-positioned commercial partners who can provide manufacturing and marketing capabilities to enable rapid commercial growth. Further, the Company plans to license or sublicense its intellectual property to industry partners and customers, rather than being a direct manufacturer of its technologies. These manufacturing partners can supply customers directly, from which the Company expects to receive license royalties. Additionally, these manufacturing partners can also serve as a source of solar cell supply for the Company to provide products to customers on its own through a “fab-less” manufacturing model, particularly in the early stages of market development.

The Company has identified high efficiency solar technologies as its nearest term market opportunity. We are executing a plan to commercialize the patented GaAs-based processes and technologies on an accelerated program. We have begun staffing our engineering team to support the transfer of technologies from university laboratories to implementation in industry partners’ commercial products through joint development agreements (“JDAs”). Upon successful completion of joint development, our intention is to enter into licensing and supply agreements with industry partners. We are also in discussions with system integrators, installers, and architects to assist with requirements, definition and technology development for several targeted applications. Additionally, we are working with our university researchers as well as industry partners to submit proposals for government programs to advance our technology development for both high efficiency and OPV technologies.

The Company is currently in the development stage and has not sold any products nor licensed any of its technologies. The Company’s auditors’ opinion states that there is substantial doubt about the Company’s ability to continue as a going concern.

Sponsored Research and License Agreements

Research and development of the Company’s high efficiency solar thin films and OPV technologies are conducted in collaboration with University partners through sponsored research agreements.

The Company established direct research and development agreements with Michigan on June 16, 2016, which were amended on July 21, 2016, to provide engineering support and facility access associated with technology transfer and commercialization of its high efficiency thin film solar technologies.

A separate Research Agreement, dated December 20, 2013, among the Company and USC (the “2013 Research Agreement”), governs research conducted by USC and Michigan on high efficiency thin film and OPV technologies. Michigan is a subcontractor to USC on this research agreement. Under the 2013 Research Agreement, the Company made a deposit of $550,000 (the “Deposit”) in early 2014. This Deposit was used by USC to pay for research costs and expenses as it incurred them, including payments to Michigan, during any billing quarter. When the Company pays the related quarterly billing, the funds go to replenish the Deposit back to the full amount of $550,000, which is to continue until the end of the 2013 Research Agreement. The 2013 Research Agreement expires on January 31, 2021.

On August 8, 2016, the Company amended the 2013 Research Agreement with USC, suspending the agreement effective as of August 15, 2016. The Company requested this amendment to temporarily suspend its OPV-related sponsored research activities to reduce near-term expenditures while it seeks a development partner for OPV commercialization and to allow the Company to bring its account with USC current through a payment plan. The suspension is to continue until the date that is 30 days after expenses incurred by USC have been reimbursed by the Company. Under this amendment, the Company will repay expenses to USC in quarterly installments through February 2018, unless earlier repaid at the Company’s option. The amended agreement provides USC with the option to terminate the agreement upon any late installment payments.

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Under the Company’s currently effective License Agreement, as amended on August 22, 2016, among the Company and USC, Michigan, and Princeton (the “Fourth Amendment to License Agreement”), wherein the Company has obtained the exclusive worldwide license and right to sublicense any and all intellectual property resulting from the Company’s sponsored research agreements, we have agreed to pay for all reasonable and necessary out of pocket expenses incurred in the preparation, filing, maintenance, renewal and continuation of patent applications designated by the Company. In addition, the Company is required to pay to USC 3% of net sales of licensed products or licensed processes used, leased or sold by the Company, 3% of revenues received by the Company from the sublicensing of patent rights and 23% of revenues (net of costs and expenses, including legal fees) received by the Company from final judgments in infringement actions respecting the patent rights licensed under the agreement. A previous amendment to the License Agreement (the Third Amendment to License Agreement dated December 20, 2013) amended the minimum royalty section to eliminate the accrual of any such royalties until 2014. Furthermore, the amounts of the non-refundable minimum royalties, which would be applicable starting in 2014, were adjusted to be lower than the amounts in the previous License Agreement. The Fourth Amendment to the License Agreement sets out a payment schedule for the minimum royalties due in 2014 and 2015 to be paid in 2016 and 2017.

There is currently no ongoing research activity at Princeton related to the Company, although the Company maintains licensing rights to technology previously developed there.

During the years ended December 31, 2015 and 2014, we incurred research and development costs pertaining to our sponsored research efforts and our establishment of our internal engineering team of $2,325,539 and $1,174,473, respectively.

Founding Researchers

Dr. Stephen R. Forrest (University of Michigan)

Professor Stephen R. Forrest has been working with the Company since 1998 under the Company’s Sponsored Research Program with Princeton, USC, and Michigan. Professor Forrest is one of the Company’s Founding Research Scientists; his focus is on organic and GaAs photovoltaics. In 2006, he rejoined Michigan as Vice President for Research, and as the William Gould Dow Collegiate Professor in Electrical Engineering, Materials Science and Engineering, and Physics. A Fellow of the APS, IEEE and OSA and a member of the National Academy of Engineering, he received the IEEE/LEOS Distinguished Lecturer Award in 1996-97, and in 1998 he was co-recipient of the IPO National Distinguished Inventor Award as well as the Thomas Alva Edison Award for innovations in organic LEDs. In 1999, Professor Forrest received the MRS Medal for work on organic thin films. In 2001, he was awarded the IEEE/LEOS William Streifer Scientific Achievement Award for advances made on photodetectors for optical communications systems. In 2006 he received the Jan Rajchman Prize from the Society for Information Display for invention of phosphorescent OLEDs, and is the recipient of the 2007 IEEE Daniel Nobel Award for innovations in OLEDs. Professor Forrest has been honored by Princeton establishing the Stephen R. Forrest Faculty Chair in Electrical Engineering in 2012. Professor Forrest has authored 525 papers in refereed journals, and has 247 patents. He is co-founder or founding participant in several companies and is on the Board of Directors of Applied Materials and PD-LD, Inc. He has also served from 2009-2012 as Chairman of the Board of Ann Arbor SPARK, the regional economic development organization, and serves on the Board of Governors of the Technion – Israel Institute of Technology, as well as the Vanderbilt University School of Engineering Board of Visitors. From 1979 to 1985, Professor Forrest worked at Bell Labs investigating photodetectors for optical communications. In 1992, Professor Forrest became the James S. McDonnell Distinguished University Professor of Electrical Engineering at Princeton. He served as director of the National Center for Integrated Photonic Technology, and as Director of Princeton’s Center for Photonics and Optoelectronic Materials. From 1997-2001, he served as the Chair of the Princeton’s Electrical Engineering Department. He was appointed the CSM Visiting Professor of Electrical Engineering at the National University of Singapore from 2004-2009. In 2011, Professor Forrest was named number 13 of the top 100 most influential material scientists in the world by Thomson-Reuters, based largely on his work with organic electronics. Professor Forrest is a graduate of Michigan (MSc Physics, 1974 and PhD Physics, 1979) and the University of California at Berkeley (B.A. Physics, 1972).

Dr. Mark E. Thompson (University of Southern California)

Professor Mark E. Thompson has been working with the Company since 1994 under the Company’s Sponsored Research Program with Princeton, USC and Michigan. Professor Thompson is one of the Company’s Founding Research Scientists and is a professor of Chemistry at USC. Professor Thompson, in conjunction with Professor Stephen R. Forrest, was instrumental in the discovery of phosphorescent materials central to the highly efficient OLED technology marketed by Universal Display Corporation. In 2013, Professor Thompson was named a Fellow of the American Association for the Advancement of Science. In 2012, Professor Thompson received the prestigious Alexander von Humboldt Research Award. In 2011, Professor Thompson was named number 12 of the top 100 most influential chemists in the world by Thomson-Reuters, based largely on his work with organic electronics. In 2007, Professor Thompson was awarded USC’s Associate’s Award for Excellence in Research (given to one faculty member per year). In 2006, he was awarded the MRS Medal by the Materials Research Society, and in the same year, Professors Forrest and Thompson were the co-recipients of the Jan Rajchman Prize from the Society for Information Display. Both the MRS medal and the Rajchman Prize were based on the invention of phosphorescent OLEDs. In 1998, Professor Thompson was co-recipient of The Intellectual Property Owners Association National Distinguished Inventor Award as well as the Thomas Alva Edison Award for innovations in organic LEDs. Professor Thompson joined USC in 1995, and from 2005 through 2008, he served as the Department of Chemistry Chairman at USC. From 1987 to 1995, Professor Thompson worked at Princeton. From 1985 to 1987, Professor Thompson worked at Oxford University and was an S.E.R.C. Research Fellow. From 1983 to 1985, Professor Thompson worked at E.I. duPont de Nemours & Company as a Visiting Scientist. Professor Thompson has authored over 200 papers in refereed journals, and has 75 patents. Professor Thompson is a graduate of the California Institute of Technology (Ph.D. Inorganic Chemistry, 1985) and the University of California Berkley (B.S. Chemistry with honors, 1980).

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Philosophy and Approach

The Company is focusing on two parallel technology development efforts: (a) its architectures, manufacturing processes, and technologies aim to provide GaAs solar cell manufacturers with the capability of producing ultra-high efficiency GaAs solar cells in thin-film form factors at a substantially reduced cost that is competitive with existing thin-film solar technologies. We believe this has the potential to open new market segments such as portable field generation, mobile power, BAPV, BIPV and aerospace which are not well-served by crystalline silicon solar technologies; and (b) its portfolio of OPV thin film solar technologies aim to provide highly flexible solar energy solutions for new applications such as BIPV (semi-transparent solar films for glass) and ultra-thin films for coatings on automobiles and other applications that demand design flexibility and light weight. Additionally, we believe OPV technologies have the potential to achieve a very low cost structure relative to other solar technologies due to minimal material usage and compatibility with roll-to-roll processing.

The Company is not, and does not plan to be, a direct manufacturer of its technologies. Rather, it plans to license or sublicense its intellectual property to industry partners and customers. These manufacturing partners can supply customers directly, but also serve as a source of solar cell supply for the Company to provide products to customers on its own, particularly in the early stages of market development. This business model is oriented around licensing and sublicensing processes and technologies to large, well-positioned commercial partners who can provide manufacturing and marketing capabilities to enable rapid commercial growth. This model is also intended to quickly establish the Company as an important player in the solar industry with rapid, high-margin revenue growth. Potential partners for our high efficiency technologies include current manufacturers of GaAs solar technology, who recognize the potential for our technology to dramatically reduce production costs, improve their margins, and open new market opportunities. Potential partners for our OPV technologies include manufacturers of electronics, including organic electronics, existing developers of OPV solar technologies, producers of advanced materials and films, manufacturers of building materials, and glass manufacturers.

In addition, the Company believes that there are several avenues for early revenue generation that become possible with the establishment of its developmental engineering team. First among these avenues is government funding. The Department of Energy (“DOE”), Department of Defense (“DoD”), and National Aeronautics and Space Administration (“NASA”) all have interests in technologies that can deliver lightweight, high-efficiency solar power that contribute toward ubiquitous solar.

The Company also anticipates that advancements achieved by its engineering team can attract other industry partners to acquire early licenses to use its intellectual property. Finally, new licenses and agreements can be made possible by ongoing technology development, especially that related to perfecting and broadening of the Company’s intellectual property in ultra-thin-film semi-transparent organic solar cells.

High Efficiency Thin Film Solar Technologies

The Company’s first technology platform is focused on improving the manufacturing process and device architecture of solar cells based on III-V compound semiconductors, including GaAs, and is currently advancing toward commercialization. GaAs is a key component of many ultra-high performance electronic technologies used in cellular telephones and military applications. While the very highest single-junction and multi-junction solar cell efficiencies (approximately 29% and 44%, respectively, according to the National Renewable Energy Laboratory (“NREL”)) are based on GaAs, they are prohibitively expensive for mass markets and hence are only considered for specialty applications where performance and weight requirements outweigh cost considerations, such as space-borne applications. Broader market acceptance of ultra-high efficiency III-V-based solar technologies requires substantial cost reductions.

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The Company’s patented technology has the potential to enable these cost reductions in two ways: (a) reducing the cost of the solar cell by re-using expensive GaAs source material and (b) using mini-concentrators to decrease the size of the active solar cell used within a solar module. Furthermore, the Company’s technology combines the high power conversion efficiency of III-V solar cells with an extremely light weight and flexible form factor that meets requirements for applications that are not well-served by crystalline silicon technologies, due to heavy weight and rigidity, or by other thin films due to low power conversion efficiency.

The primary cost in fabricating GaAs-based solar cells is the very high cost of the GaAs substrates on which the thin active region (called the epitaxial layers) is grown. These substrates, or “parent wafers,” constitute the largest portion of the total cost of a GaAs-based solar cell. During the fabrication process that is currently in use in industry, these expensive parent wafers are destroyed when the solar cell layer is removed, yielding only a single solar thin film for each parent wafer. Existing GaAs solar cell fabricators continue to seek methods to prevent damage to the parent wafer to enable multiple re-growths thereby fabricating multiple solar thin films from a single wafer. The Company, through its researchers, has developed an architecture and process enabling the active solar cell layer (approximately 1/1,000 ^th of the thickness of a human hair) to be removed from the parent wafer on which it is grown in a non-destructive manner without degradation in surface area, thereby allowing for the re-use of the wafer multiple times. Furthermore, lab tests also reflect no degradation in solar cell performance from each growth and removal cycle.

We believe this process, called non-destructive epitaxial lift-off (“ND-ELO”), revolutionizes the cost structure of GaAs solar cell technology, allocating the high cost of the parent wafer to multiple solar thin films, substantially reducing the total cost per watt for each GaAs solar cell. Further, as part of the ND-ELO process, the ultra-thin semiconductor is bonded to a flexible and thin secondary substrate such as plastic or metal foil using our adhesive-free, lightweight, ultra-strong and flexible process called cold-weld bonding. The cold-weld bonding process enables highly flexible and lightweight thin film GaAs solar cells.

A second aspect of the Company’s high efficiency thin film solar technology centers on minimizing the required size of the GaAs solar cell through the use of mini-concentrators, thereby further reducing cost. In this design, narrow strips of high efficiency thin-film cells are placed at the trough of low-profile plastic parabolic concentrators. The concentrators harvest solar energy using a wide acceptance angle and focus it into the small solar cell. This enables solar energy harvesting throughout the day and the integrated device is able to capture approximately the equivalent energy production density (measured in kW-hrs/m2) as a full-sized solar cell at a substantially reduced cost.

With the combination of GaAs’s high conversion efficiencies and the cost reductions associated with implementing our proprietary ND-ELO processes and mini-concentration technologies, we believe the costs of ultra-high efficiency GaAs-based solar cells can approach cost-per-Watt metrics associated with competing solar technologies, particularly thin films, such as CIGS, while providing substantial performance advantages associated with power per surface area and power per weight.

Organic Photovoltaic Technologies

The Company’s second technology platform is based on flexible, thin-film OPV technologies that have been researched and developed over the last two decades by our sponsored research partners. Relative to other solar technologies, we believe OPV present compelling advantages relating to form factor flexibility and aesthetics and has the potential to realize extremely low production costs.

Because the organic films are lightweight and extremely thin (in this case the entire structure is approximately 1/10,000 ^th of the thickness of a human hair), they can be made semitransparent and adjusted to any desirable color. As a result, we believe there are significant opportunities to achieve heretofore unrealizable applications such as window glazing and ultra-thin films or coatings to be incorporated into non-conformal surfaces.

OPV technologies have potential to achieve a very low cost structure, derived from low materials cost and highly efficient roll-to-roll processing. The ultra-thin layer of OPV requires small quantities of materials. Furthermore, layers of OPV material can be deposited directly onto plastic or metal foils and therefore is no need for energy-intensive fabrication processes required by other solar technologies, such as silicon. Rather, there is the opportunity to “print” organic solar cells onto continuous rolls of plastic in an ultra-high-speed and low energy intensity manufacturing process. We believe the potential for printed electronics - making solar films roll-to-roll rather than by batch processing - makes OPV a potentially revolutionary step in the widespread acceptance and deployment of solar energy.

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The Company’s approach has been to advance all dimensions of OPV technology, including the invention and development of new materials, new high efficiency device architectures, and ultra-high-speed, low-energy-intensity production processes such as organic vapor phase deposition developed in the Company’s researcher’s laboratories, and solar cell modulization.

Our sponsored research efforts aim to advance the practical viability of OPV by demonstrating reliable, large area and high-efficiency organic multi-junction cells based on small molecule materials systems. The Company’s development targets aim to achieve greater than 15% power conversion efficiencies on organic solar cells with operational lifetimes of 20 years on barrier-coated plastic or metal foil substrates, and to demonstrate roll-to-roll “printing” of solar cells on plastic or metal foil substrates.

OPV’s form factor flexibility offers the potential for solutions in various tints and transparencies, offering unique solutions well-suited for BIPV applications, including facades, curtain walls, skylights, and windows. Our discussions with architects emphasize a need for BIPV solutions offering design flexibility and high quality aesthetics. Furthermore, OPV also offers the potential for very low costs due to its low material usage and suitability for roll-to-roll processing.

Intellectual Property

As a result of its sponsored research programs, the Company currently holds the exclusive commercialization rights to more than 350 issued patents and pending patent applications worldwide which cover architecture, processes and materials for high efficiency and OPV technologies. As of November 29, 2016, U.S. issuances and applications were as follows: 81 issued patents, 54 pending non-provisional applications, 3 pending provisional applications, and 7 Patent Cooperation Treaty (“PCT”) applications. For regions outside of the U.S.: 74 issued patents, and 153 pending patent applications. The patent numbers presented exclude issued and pending patents that the Company has identified for abandonment in order to optimize its patent portfolio and reduce unnecessary or redundant costs while still protecting critical technologies. While each patent is issued in the name of the respective university that developed the subject technology, the Company has exclusive commercial license rights to all of the patents and their attendant technologies and the patents are referred to herein as being the Company’s patents.

The patent applications being filed as a result of the Company’s sponsored research programs are part of a dynamic, comprehensive development strategy to protect the Company’s commercialization rights. Following this developmental strategy, current work builds off of earlier work, with new discoveries continually developed and protected. Additionally, as we progress with product development and commercialization, we also have focused on optimizing the patent portfolio, reducing unnecessary or redundant costs while still protecting critical technologies.

Patent lifetimes typically run twenty years from a patent application’s effective filing date, not from when the patent was granted. Processing time from application filing to the grant of the patent may take 3-5 years, and sometimes longer.

The Company’s three U.S. patents related to its high efficiency thin film solar technologies, U.S. Patent Nos. 8,378,385, 8,927,319 and 9,118,026, will expire on September 9, 2030, October 23, 2030 and September 14, 2031, respectively. In addition to these three issued patents, the Company is pursuing additional protection for its high efficiency thin film portfolio in 8 pending U.S. patent applications, 7 pending PCT applications, which will be filed in the U.S. before their respective due dates, and 5 U.S. provisional applications, for which non-provisional patent applications will be filed before their respective due dates. If U.S. patents are successfully issued with respect to these pending applications, the Company expects that the earliest expiration date for the patents will be no earlier than June 2032.

In addition to the Company’s issued patents set forth above, the Company has numerous patent applications in process. Some of the Company’s technology holdings include foundational concepts in the following areas.

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High Efficiency Thin Film Solar Technologies:

	●	Accelerated and recyclable liftoff process. Our research partners have invented and patented manufacturing processes and materials that allow current manufacturers of high efficiency solar cells to reduce their existing fabrication costs, because the process preserves the integrity of the parent substrate which can be re-used without chemo-mechanical polishing.
	●	Cold-weld bonding of inorganic solar cells to plastic substrates and metal foils. This cold-weld bonding process enables the direct bonding of active solar material to a thin plastic or metal substrate without using adhesive. This creates thin-film cells that are lighter weight and highly flexible.
	●	Low cost thermos-formed plastic mini-compound parabolic concentrator arrays. This allows a fraction of the GaAs solar cell material while collecting an equivalent amount of energy over the course of a sun arc.
	●	Integrated tracking technology. Lattice-like solar cells, with a design inspired by Kirigami, that can stretch like an accordion, allowing them to tilt along the sun’s trajectory and capture up to an estimated 36% more energy than flat cells.
	●	Micro-inverters monolithically integrated into high efficiency solar cells during production. Integrating micro-inverters into the solar cell has the potential to greatly reduce the total cost of a photovoltaic system.

Organic Photovoltaics:

	●	Multi-junction organic solar cell. Individual conventional solar cells have limited spectral coverage, voltage output, and tradeoff between absorption length and charge collection length. By stacking multiple solar cells with complementary absorption profiles, voltages of the cells can be added (at a constant current). This can make a more efficient cell. The researchers at Michigan have achieved 12.6% power conversion efficiency in the lab.
	●	Fullerene acceptors. Fullerenes include molecules such as C ₆₀ , C ₇₀ , C ₈₄ and derivatives that are designed to dissolve in solvents and are the most prevalent acceptor in organic photovoltaics. Fullerenes offer better efficiency than any other acceptor molecule implemented to date.
	●	Blocking layers. In most solar cell designs, excitons must be blocked and reflected away from the metallic (or transparent) contact so that they can be dissociated at the donor-acceptor junction. Additionally, it is desired that these layers block the wrong carrier from contacting the electrode.
	●	New materials for visible and infrared sensitivity. Current OPV materials absorb light in the visible and deep red part of the solar spectrum, but do not collect light in the near infrared (“NIR”). Extending efficient light collection into the NIR has the potential to increase photocurrent generation by 40%, markedly improving OPV performance.
	●	Scalable growth technologies. A number of growth technologies have been developed for organic materials. These include vacuum thermal evaporation and organic vapor phase deposition for materials that can be sublimed or evaporated directly and gravure or ink-jet printing of dissolved materials. All of these processes are compatible with rigid planar substrates, but more importantly can also be applied to flexible plastic or metal foil substrates, for roll-to-roll fabrication of OPVs.
	●	Inverted solar cells. One of the most air sensitive parts of the OPV is the region between the anode and electron acceptor. This region is degraded by oxygen and water in the dark and even more so under illumination. This interfacial region in a “conventional” OPV is exposed to the atmosphere directly, requiring that the OPV be kept in a hermetic package. If the OPV is prepared as an inverted cell, the air sensitive anode/organic interfacial region is placed below the donor, buffer layer and cathode. Thus, the device itself provides a level of “packaging,” markedly slowing environmental degradation of the device, minimizing packaging requirements for long term deployment in the field.
	●	Materials for enhanced light collection via multi-exciton generation. An approach for improving the power conversion efficiency by collecting the high energy part of the spectrum, i.e. UV-to-green, and double the energy collected from this part of the solar spectrum using singlet fission (“SF”). SF materials absorb high energy light and generate two excitons for every photon absorbed, thus doubling the light collection efficiency. The SF approach has the potential to give a single solar cell efficiency well over the theoretical Shockley-Queisser limit, without increasing the cost to produce the cell.
	●	Mixed layer and nanocrystalline cells. In planar ( e.g. , bilayer) cells, the thickness of a layer is limited by the distance an exciton is expected to travel before it recombines. If the layer is too thick, photons absorbed may never result in collected charge. If the layers are too thin, there is insufficient material available for absorption of the light. By mixing the donor and acceptor throughout a thicker layer, an additional donor-acceptor interface is created throughout the layer, improving photocurrent generation capability. Nanocrystalline cells have a higher degree of phase separation between the donor and acceptor with nanocrystalline domains, with high purity and domain sizes in the nanometer scale.
	●	Solar films and coatings. OPV technology enables materials to be deposited onto virtually any smooth substrate (can be curved or non-planar). The idea is to create solar coatings or films that can be applied quickly and easily to any surface, including, for example, mobile communications devices, electric cars, roofing materials, building siding and glass.
	●	Transparent/semi-transparent cells. In certain applications it may be desirable to have a partially transparent solar cell. These applications include tinted windows. Instead of just absorbing or reflecting the light, the light would be absorbed and converted into energy. The unique nature of organics allows the Company to tune the wavelengths absorbed to those that it does not want transmitted or that are not useful for vision, such as in the infrared region of the spectrum.

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Development Goals

If necessary capital is available to it, of which there can be no assurance, the Company plans to accelerate the commercialization of its high efficiency technology as set forth below. Our research and development efforts are projected to consist of a continuation of work by our university researchers along with collaborative research and development with industry partners, including existing III-V solar cell manufacturers. We have begun staffing our engineering team to support the transfer of technologies from university laboratories to implementation in industry partners’ commercial product designs and fabrication processes. To this end, on August 26, 2015, the Company signed a Joint Development Agreement with SolAero. The Company’s Joint Development Agreement with SolAero provides for the joint development of high efficiency solar cells utilizing our proprietary manufacturing processes in conjunction with SolAero’s advanced high efficiency solar cell technologies.

To support this joint development, the Company has established its own engineering team and plans to expand this team contingent on its ability to secure government research projects or raise the necessary capital. This team is to be tasked with serving several key functions, including working closely with the Company’s sponsored research organizations and its industry partners to integrate and customize our proprietary processes and technologies into the partner’s existing product designs and fabrication processes. Our engineering team would also work closely with downstream partners and customers such as military users for mobile field applications, and system integrators, installers, and architects for BAPV and BIPV applications, and EPC companies and project developers for solar farm applications. This customer interaction allows the Company to better understand application specific requirements and incorporate these requirements into our product development cycle. Our primary technical objective for GaAs is to demonstrate the efficacy of our technologies. We plan to demonstrate ND-ELO technology on GaAs wafers of increasing diameter and on GaAs solar cells of increasing complexity. The Company plans to integrate mini-concentrators within the ND-ELO and cold-weld-bonded cells to effect further cost reductions. The Company plans to produce prototypes for demonstrations, test, and evaluation.

With respect to its OPV technology, the Company plans to continue its sponsored research activities at the universities, when its account is made current and funding is available. We also plan to work with system integrators, installers, and architects to assist with requirements definition and technology development for targeted applications. Additionally, we are working with our university researchers as well as industry partners to submit proposals for government programs to advance our technology development.

The Company plans to achieve greater than 15% power conversion efficiencies on organic solar cells with operational lifetimes of 20 years on barrier-coated plastic or metal foil substrates, and to demonstrate roll-to-roll “printing” of solar cells on plastic or metal foil substrates.

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Overall Operating Plan

The Company’s business model is oriented around licensing and sublicensing processes and technologies to large, well-positioned commercial partners who can provide manufacturing and marketing capabilities to enable rapid commercial growth. The Company plans to license or sublicense its intellectual property to industry partners and customers, rather than being a direct manufacturer of its technologies. These manufacturing partners can supply customers directly, but also serve as a source of solar cell supply for the Company to provide products to customers on its own through a “fab-less” manufacturing model, particularly in the early stages of market development.

The Company has identified its high efficiency solar technologies as its nearest term market opportunity. A key to reducing the risk to market entry of the Company’s high efficiency technologies by our partners is for us to demonstrate our technologies on their product designs and fabrication processes. To support this joint development, the Company has established its own engineering team and plans to expand this team contingent on its ability to secure sponsored development funding and/or raise the necessary capital. This team is to be tasked with serving several key functions, including working closely with the Company’s sponsored research organizations and its industry partners to integrate and customize our proprietary processes and technologies into the partner’s existing product designs and fabrication processes. In conjunction with facilitating technology transfer, our engineering team will also work closely with downstream partners and customers such as military users for mobile field applications and system integrators, installers, and architects for BAPV and BIPV applications, and engineering, procurement, and construction (“EPC”) companies and project developers for solar farm applications. This customer interaction allows the Company to better understand application specific requirements and incorporate these requirements into our product development cycle.

The Company is pursuing sponsored development funding to generate revenue in the near-term. Having an established technical team enables us to more effectively pursue and execute sponsored research projects from the DoD, DOE, and NASA, each of which has interests in businesses that can deliver ultra-lightweight, high-efficiency solar technologies for demanding applications.

Another potential revenue source is from JDAs with existing solar cell manufacturers. Once we are able to initially demonstrate the efficacy of our processes and technologies on partner’s products and fabrication processes, we expect to be in a position where we can sign licenses covering further joint development, IP licensing, solar cell supply and joint marketing, as applicable. We anticipate that partnerships with one or more of the existing high efficiency solar cell manufacturers can be supported by the Company’s engineering team, and result in near-term revenue opportunities, as we have demonstrated with our current joint development partner.

Near Term Operating Plan

	1.	Cost cutting and containment to reduce our cash operating expenses;

	2.	Prioritizing and optimizing our existing IP portfolio to align it with the commercialization strategy and reduce costs;

	3.	Focusing research and development investments on near-term commercialization opportunities;

	4.	Collaborating with strategic partners to accelerate joint development and licensing of our technologies;

	5.	Selectively pursuing government-sponsored projects to fund product development and commercialization; and

	6.	Raising adequate capital (approximately $6 million to $8 million) to support our activities for at least 12 months.

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We believe that we have made progress with each of the components of this operating plan and have aligned our operations and cost structure with expediting the development and commercialization of our high efficiency solar technologies. We have taken steps to reduce patent expenses, particularly related to optimizing our OPV patent portfolio. We have realigned our research and development operations with several strategic actions, including hiring Company engineers to focus on high efficiency product development and technology transfer from Michigan to a commercial environment with our industry partner, establishing a new sponsored research agreement with Michigan focused on research and development of high efficiency technology in support of our commercialization efforts, and temporarily suspending our OPV-related sponsored research activities to reduce near-term expenditures while we seek a development partner for OPV commercialization. We remain focused on increasing our revenue through joint development agreements with industry partners and through government-sponsored research projects and we believe that we are making positive progress with these efforts.

Market Opportunity

Expansion of solar generation worldwide is a necessary component of any serious strategy to mitigate climate change, according to the Massachusetts Institute of Technology (“MIT”) Energy Initiative. In recent years, solar costs have fallen substantially and installed capacity has grown very rapidly. Nonetheless, solar energy currently accounts for only about 1% of global electricity generation.

Solar PV installations have experienced rapid growth over the past several years. According to IHS Technology, global solar installations reached 59 GW in 2015, a 35% increase over 2014, while growth in 2016 is expected to increase a further 17% to 69 GW.

The dominant solar photovoltaics (“PV”) technology, used in approximately 90% of installations, is wafer-based crystalline silicon (“c-Si”), with thin-film technologies, such as cadmium telluride (“CdTe”), copper indium gallium selenide (“CIGS”), and amorphous silicon (“a-Si”), accounting for approximately 10% of the PV market, according to the MIT Energy Initiative. However, current c-Si technologies have inherent technical limitations, including high processing complexity and low intrinsic light absorption, which requires a thick silicon wafer, resulting in rigidity and heavy weight, according to the MIT Energy Initiative. We believe these form factor constraints largely limit the addressable market for crystalline silicon-based solar to rooftop and utility-scale installations, which dominate the current solar power installed base.

The Company plans to initially focus its high efficiency technologies and products on applications that are not well-served by c-Si-based solar panels and rather demand solar solutions with some combination of high power, light weight, and flexibility. These markets include aerospace (space vehicles and UAVs), mobile and field generation, and BIPV and BAPV, where high efficiency GaAs thin films can be applied to multi-story rooftops as well as building facades. Likewise, the Company will focus its OPV technologies on BIPV solutions where its highly flexible form factor and semi-transparency add value, such as glazing applications, including skylights, curtain walls, facades, and windows.

Global BIPV installations were 1.6 GW in 2014 and are projected to increase to 2.6 GW in 2019, according to BCC Research. We expect adoption of BIPV solutions will be driven in part by Net Zero Energy Building (“NZEB”) regulations, which require buildings to produce as much energy as it uses over the course of a year. NZEB goals are achieved through a combination of energy efficiency measures and onsite renewable energy generation. The California Public Utilities Commission (“CPUC”) has set several NZEB goals, including targeting all new residential construction and all new commercial construction within the State to be net zero energy by 2020 and 2030, respectively, and 50% of existing buildings will be required to retrofit to meet NZEB goals by 2030.

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Competition

The Company is focused on developing commercializing and licensing advanced solar technologies that will enable entry of solar PV into new applications and also eventually compete with established solar technologies in traditional solar markets. As a technology licensor, we believe our competitive exposure is somewhat insulated from industry dynamics, because we aim to partner with key industry participants and license our technology. Additionally, our licensing business model does not require us to directly establish high-volume manufacturing, which is a key competitive factor for product-based companies.

The solar PV sector is highly competitive, characterized by intense price competition among commercialized technologies and aggressive investment in emerging technologies as companies attempt to compete within the solar markets as well as within the overall electric power industry. The current solar market is dominated by c-Si technology, with some penetration by CdTe and CIGS thin film technologies, according to SolarBuzz. C-Si solar cells are produced at massive scale and have established a low-cost position within the rooftop and utility-scale PV markets. Advanced solar technology development efforts encompass various multiple technology platforms at various stages of development.

We believe our technologies will compete with established technologies as well as advanced technologies under development by other organizations primarily on a basis of cost and performance, which is typically measured as cost per watt, largely a function of production costs and power conversion efficiency. Within emerging applications, we anticipate our technologies will compete primarily with advanced technologies on a basis of cost and performance, and also functionality and aesthetics as we attempt to open new markets to solar power. Additionally, we believe that we will compete with other research and development organizations for funding from government agencies, laboratories, research institutions, and universities. Some of our existing or future competitors may be part of larger corporations that have greater financial resources than we do and, as a result, may be better positioned to adapt to changes in the industry or the economy as a whole.

High efficiency III-V solar technologies have been limited to specialty, niche applications due to their high costs; although numerous research efforts are focused on reducing manufacturing costs. Within the high efficiency solar sector, there are a small number of manufacturers, including Spectrolab, a subsidiary of The Boeing Company; SolAero, Azur Space (Germany); MicroLink Devices; Sharp Corporation (Japan); Alta Devices, a subsidiary of China’s Hanergy Thin Film; Spectrolab, SolAero, and Azur Space produce commercial GaAs solar cells for highly specialized applications such as military and space-borne systems, which are inelastic to the high prices associated with the technology. Some of these companies are attempting to reduce manufacturing costs to enable entry of GaAs-based solar technologies into commercial terrestrial markets. We believe the Company’s patented GaAs ND-ELO and mini-concentration technologies present the opportunity to significantly reduce the cost for high efficiency solutions and believe that we could potentially license our technology to these companies.

OPV technologies remain in the development stage, with numerous activities ongoing among government laboratories, universities, and private enterprises. Currently, we are not aware of any commercialized OPV technologies, but we believe there are a limited number of developers planning introduction within the next several years.

Ongoing research and development on OPV materials and devices are currently being performed by Heliatek (Dresden, Germany); Mitsubishi Chemical Holdings Corporation; LG Chemical; BELECTRIC OPV (Kolitzheim, Germany); Solvay (Brussels, Belgium; acquired Plextronics); Polyera (Skokie, Illinois); and Solarmer Energy (El Monte, California); among others. Research institutions may also become our competitors, such as University of California, Los Angeles, University of California, Berkley, Fraunhofer-Institut fur Solare Energiesysteme (ISE), Empa, a Swiss federal laboratory for materials science and technology. We believe the Company’s exclusive intellectual property rights surrounding technologies for small molecule OPVs present a formidable obstacle for those wishing to compete with us and present opportunities for potential partnerships.

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Regulation

The Company has not yet introduced commercial products and, as such, has not commenced any governmental approval process. The Company anticipates that the applicability and extent of government approval requirements will depend on the particular end-market. Successful introduction of our products into certain markets may require significant government testing and evaluation prior to high volume procurement. We anticipate that the installation of products based on our high efficiency and OPV technologies will be subject to oversight and regulation in accordance with national and local ordinances relating to building codes, safety, environmental protection, utility interconnection and metering and related matters.

Governments implement various policies to facilitate the adoption of solar power, including customer-focused financial incentives such as capital cost rebates, performance-based incentives, feed-in tariffs, tax credits, and net metering. Capital cost rebates provide funds to customers based on the cost and size of a customer’s solar power system. Performance-based incentives provide funding to a customer based on the energy produced by their solar power system. Feed-in tariffs pay customers for solar power system generation based on energy produced, at a rate generally guaranteed for a period of time. Tax credits reduce a customer’s taxes at the time the taxes are due. Net metering allows customers to deliver to the electric grid any excess electricity produced by their on-site solar power systems, and to be credited for that excess electricity at or near the full retail price of electricity.

In addition to the mechanisms described above, new market development mechanisms to encourage the use of renewable energy sources continue to emerge. For example, many states in the United States have adopted renewable portfolio standards which mandate that a certain portion of electricity delivered to customers come from eligible renewable energy resources. In certain developing countries, governments are establishing initiatives to expand access to electricity, including initiatives to support off-grid rural electrification using solar power.

Employees

Currently, the Company employees consist of five full-time personnel – our Chief Executive Officer; Executive Vice President and Chief Financial Officer; two engineers; and an office manager. The Company’s Chief Technology Officer provides support on a consulting basis. Depending on the availability of capital, the Company plans to expand its engineering team, hiring process and product engineers to facilitate technology transfer and commercialization. The Company’s engineering team is augmented by numerous post-doctoral fellows and PhD candidates that are employed in our sponsored university research programs at USC and Michigan.

Properties

The Company’s executive offices are currently located at 17207 N. Perimeter Dr., Suite 210, Scottsdale, AZ 85255 and it started leasing its offices from DTR10, LLC on November 15, 2013. The office space is approximately 3,077 square feet. Its monthly rental is $7,518, and subject to 3% annual increases.

Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

On March 18, 2015, the Company received correspondence from the counsel of Mr. John Kuhns, the Company’s former Co-CEO and Executive Chairman alleging that Mr. Kuhns has “Good Reason” to terminate his Employment Agreement, as amended and dated as of October 1, 2013 (the “Employment Agreement”), for an alleged failure to pay his salary in full. On March 30, 2015, Mr. Kuhns advised that if the alleged breaches of the Employment Agreement were not cured there was a possibility that he would pursue litigation.

As of March 30, 2015, shareholders holding approximately 67.26% of the total shares of common stock of the Company that are entitled to vote on all Company matters approved by written consent the removal of John D. Kuhns from his position as a member of the Company’s Board of Directors. Mr. Kuhns’ removal was for “Cause” as defined under his Employment Agreement. The removal arose as a result of his documented conduct and statements, which breached his fiduciary duties to the Company in order to advance personal monetary and other interests, and thereby threatened serious financial injury to the Company, its shareholders and its debtholders. On March 31, 2015, the Board of Directors terminated the Employment Agreement with Mr. Kuhns for Cause and removed him from his positions as Co-CEO, and from all other officer positions he held with the Company and its subsidiaries and affiliates, and all director positions with the Company’s subsidiaries and affiliates.

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On April 24, 2015, the Company received a letter from Mr. Kuhns’ counsel (the “Response Letter”) stating that Mr. Kuhns disagreed with statements in the Initial Filing regarding the circumstances of his removal as a director and officer.

The Response Letter was accompanied by a copy of a complaint (the “Complaint”) filed by John D. Kuhns (the “Plaintiff”) in the United States District Court Southern District of New York against the Company, Mr. Dean L. Ledger, our current CEO and member of our Board of Directors, Mr. Robert J. Fasnacht, our former Executive Vice President and former member of our Board of Directors, and Mr. Ronald B. Foster, a shareholder of the Company (each, a “Defendant,” collectively, the “Defendants”). The Complaint alleges, among other things, that the Plaintiff was terminated by the Company in violation of Section 922 of the Dodd-Frank Act, that the Company wrongfully terminated the Employment Agreement, that the Defendants made false statements to shareholders regarding the Plaintiff, that the Defendants (other than the Company) tortiously interfered with the Plaintiff’s Employment Agreement, and that Mr. Ledger and Mr. Fasnacht breached their fiduciary duties to the Company and its shareholders.

The Plaintiff seeks monetary damages, including (i) two (2) times of the alleged owed compensation to him, together with interest as well as litigation costs, expert witness fees and reasonable attorneys’ fees; (ii) damages for the alleged breach of the Employment Agreement by the Company, estimated to be at least $2 million, plus interest and attorney’s fees; (iii) an unspecified amount for his alleged libel claim; and (iv) damages for the alleged tortious interference with contract, including punitive damages of at least $2 million. The Plaintiff is also seeking a declaratory judgment, claiming that he was not terminated as a director and should continue to hold a seat on the Company’s Board of Directors.

On September 3, 2015 the Company filed a Motion to Dismiss portions of the Complaint in the United States District Court Southern District of New York. The United States District Court Southern District of New York heard oral argument on the Motion to Dismiss on June 23, 2016, and at the conclusion took the Motion to Dismiss under advisement. The Court ruled on August 24, 2016, regarding the Motion to Dismiss, and granted the motion in part and denied the motion in part.

The Court granted a dismissal of all claims against Mr. Foster and dismissal of the Plaintiff’s declaratory judgment claim. All other claims by the Plaintiff continue to be outstanding. The Company filed an answer to the Complaint on September 14, 2016, and the Plaintiff responded to the Company’s counter claims contained in the Company’s answer on November 7, 2016.

Other than the foregoing, there have been no developments in the case since Plaintiff’s response. The Company believes that the Plaintiff’s allegations and claims are without any merit and plans to continue to vigorously defend against the claims.

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MANAGEMENT

The following table sets forth the name and position of each of our current executive officers and directors. All directors hold office until the next annual meeting of stockholders or until their respective successors are elected, except in the case of death, resignation or removal.

Name	Age	Position
Dean L. Ledger	68	Chief Executive Officer and Director
Mark R. Tobin	42	Executive Vice President and Chief Financial Officer
J. Norman Allen	65	Chief Technology Officer

There are no arrangements between our directors and any other person pursuant to which our directors were nominated or elected for their positions. There are no family relationships between any of our directors or executive officers.

Dean L. Ledger , age 68, has served as a Director and senior executive of GPEC since its inception and was instrumental in its founding. Mr. Ledger is GPEC’s Chief Executive Officer, and was elected as the Chief Executive Officer of the Company on September 24, 2013. On February 6, 2015, Mr. Ledger replaced Ms. Amy B. Kornafel as our Chief Financial Officer and remained as our Chief Executive Officer. Mr. Ledger has significant experience in capital formation and business building as he played instrumental roles in both Universal Display Corporation and InterDigital Corporation from their inception. From 1994 to 2012, Mr. Ledger served as Executive Vice President-Corporate Development of Universal Display Corporation. From July 1994 to January 2001, Mr. Ledger served as a member of the Board of Directors of Universal Display Corporation. From December 2001 to July 2003, Mr. Ledger served as a member of the Board of Directors of North American Technologies, Inc. From May 1991 until October 1992, Mr. Ledger was a consultant to the IntelCom Group. Mr. Ledger served as a consultant to InterDigital Communications Corporation from October 1989 to April 1991. Prior to October 1989, Mr. Ledger spent 12 years as a financial consultant with E.F. Hutton, Shearson Lehman Brothers and Paine Webber. He is a graduate of Colorado College (B.A., Business Administration, 1972). The Board concluded that Mr. Ledger should serve as a Director of the Company based on his extensive experience and knowledge of the history of our Company and of all of its related technologies. Furthermore, he has a proven track record in leveraging information technology to capture new commercial opportunities and to increase operational efficiencies in various industries.

Mark R. Tobin , age 42, has served as the Company’s Chief Financial Officer and Director of Business Development since June 2015. Additionally, he was named Executive Vice President in October 2016. He also is a managing partner at Capital Gate Research (formerly known as Tobin Tao & Company, Inc.), a capital markets consulting firm. Additionally, Mr. Tobin serves as a Director and Audit Committee Chairman for Cellceutix Corporation, a publicly-listed clinical stage biopharmaceutical company. From 2013 to 2016, Mr. Tobin served as a Managing Director at Digital Offering, a merchant bank. From 2005 to 2013, Mr. Tobin served as Director of Research and as a Senior Research Analyst at Roth Capital Partners, where he oversaw equity research on hundreds of small-cap public companies across a variety of sectors during his tenure. He helped establish Roth’s Energy, Industrials, and Cleantech practice and has published research as a lead analyst on numerous small-cap companies within the sector. From 2002 to 2005, Mr. Tobin was a Program Manager and Senior Systems Engineer at Science Applications International Corporation, a Fortune 500 scientific, engineering, and technology applications company. Mr. Tobin began his career as an officer in the United States Air Force, overseeing advanced technology development programs and representing the U.S. as a NATO delegate. Mr. Tobin graduated with honors from the U.S. Air Force Academy with a Bachelor’s of Science in Management in 1996 and received an MBA from the University of Pittsburgh in 1997.

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J. Norman Allen , age 65, has served as the Company’s Chief Technology Officer since June 2015. He is also currently an Operating Partner of Potomac Energy Fund where he advises investors on screening startup investment opportunities and start-up companies on how to bring new energy generating and energy storage products to market. From 2007 to 2010, Mr. Allen was the Founder and Chief Executive Officer of Solidia Technologies. Mr. Allen co-founded Solidia with Dr. Richard Riman of Rutgers University. Solidia was funded by Kleiner Perkins Caufield & Byers and is developing revolutionary ceramics materials that can replace concrete and other ceramics while consuming carbon dioxide as a feedstock. From 2006 to 2007, Mr. Allen was the President of Power Strategies, LLC where he consulted for Kleiner Perkins Caufield & Byers on alternative energy investments with a specific focus on advanced batteries, fuel cells, solar cells and supercapacitors. From 2003 to 2006, Mr. Allen was the founder and Chief Operating Officer of UltraCell Inc. There, Mr. Allen created the business plan, invested, and completed Series A and B financing rounds for the reformed methanol micro fuel cell company. From 1998 to 2000, Mr. Allen was the Founder, President, and Chief Operating Officer of PowerSmart Inc., where Mr. Allen led the effort to acquire Duracell Inc.’s smart battery technology and developed industry leading integrated circuits for smart batteries and patented sensors for large battery arrays. From 1995 to 1997, Mr. Allen was the President of the New Products and Technology Division of Duracell Inc. Mr. Allen was on Duracell Inc.’s Operating Committee and headed up all research and development, Rechargeable and Global OEM Sales. There, Mr. Allen oversaw 400 people as well as $108,000,000 in sales, and additionally oversaw the research center and two manufacturing plants. From 1984 to 1995, Mr. Allen was the Vice President of New Products and Technology at Duracell Inc., where he had responsibility for sales and marketing to all original equipment manufacturers in the U.S. and Japan inclusive of all battery and flashlight product lines. From 1977 to 1984, Mr. Allen worked in the GM Activair Division of Gould Inc., and from 1972 to 1975, Mr. Allen was a Product Design Engineer in the Product Development Group at Ford Motor Co. Mr. Allen received his BSE in Science Engineering from the University of Michigan in 1972 and an MBA in Finance and Marketing, with Distinction Beta Gamma Sigma Honorary from the University of Michigan in 1976.

Board of Directors Qualifications

The Company uses a variety of criteria to evaluate the qualifications and skills necessary for each member of the Board of Directors. In addition to the individual attributes of our current director described herein, we believe that our directors should have the highest professional and personal ethics and values, consistent with our longstanding values and standards. They should have broad experience at the policy-making level in business, commitment to enhancing stockholder value and have sufficient time to carry out their duties and to provide insight and practical wisdom based on their past experience.

Board of Directors Committees

In connection with this offering, our Board of Directors will establish an Audit Committee, a Compensation Committee and a Nomination and Governance Committee.

Audit Committee

The functions of the Audit Committee are to (i) review the qualifications of the independent auditors, our annual and interim financial statements, the independent auditor’s report, significant reporting or operating issues and corporate policies and procedures as they relate to accounting and financial controls; and (ii) to consider and review other matters relating to our financial and accounting affairs. The Company’s Board will formally establish an Audit Committee and will adopt an Audit Committee charter. The Audit Committee’s charter will be available on the Company’s website at www.nanoflexpower.com under the tab “Corporate Governance” which is found under the heading “About Us.” Information on the website does not constitute a part of this prospectus.

The Company’s Audit Committee will consist of (i) one director who qualifies as an “audit committee financial expert” as defined in Item 401(h) of Regulation S-K of the Securities and Exchange Commission (the “SEC”) rules and is “independent” within the meaning of Section 803A of the NYSE MKT Company Guide and the related rules of the SEC, and (ii) one director who meets NASDAQ’s financial literacy and financial sophistication requirements and is “independent” within the meaning of Section 803A of the NYSE MKT Company Guide and the related rules of the SEC.

Compensation Committee

The purpose of the Compensation Committee is to (i) discharge the Board’s responsibilities relating to compensation of the Company’s directors and executive officers, (ii) produce an annual report on executive compensation for inclusion in the Company’s Proxy Statement, as necessary, and (iii) oversee and advise the Board on the adoption of policies that govern the Company’s compensation programs including stock incentive and benefit plans. The Company’s Board will formally establish a Compensation Committee and will adopt a Compensation Committee charter. The Compensation Committee’s charter will be available on the Company’s website at www.nanoflexpower.com under the tab “Corporate Governance” which is found under the heading “About Us.” Information on the website does not constitute a part of this prospectus.

Each member of the Compensation Committee will be independent under applicable independence requirements. Each member of the Compensation Committee will be a “non-employee director” under Section 16 of the Exchange Act and an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended.

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Nomination and Governance Committee

The function of the Nomination and Governance Committee is to (i) make recommendations to the Board regarding the size of the Board, (ii) make recommendations to the Board regarding criteria for the selection of director nominees, (iii) identify and recommend to the Board for selection as director nominees individuals qualified to become members of the Board, (iv) recommend committee assignments to the Board, (v) recommend to the Board corporate governance principles and practices appropriate to the Company, and (vi) lead the Board in an annual review of its performance. The Company’s Board will formally establish a Nomination and Governance Committee and will adopt a Nomination and Governance Committee charter. The Nomination and Governance Committee’s charter will be available on the Company’s website at www.nanoflexpower.com under the tab “Corporate Governance” which is found under the heading “About Us.” Information on the website does not constitute a part of this prospectus.

Director Independence

The Company is quoted on the OTCQB, which does not require director independence requirements. However, for purposes of determining director independence, we have applied the definitions set forth in Section 803A of the NYSE MKT Company Guide, which states, generally, that a director is not considered to be independent if he or she is, or at any time during the past three years was an employee of the Company; or if he or she (or his or her family member) accepted compensation from the Company in excess of $120,000 during any twelve month period within the three years preceding the determination of independence. We intend to maintain at least two independent directors on the Board. All directors will hold office until their successors have been elected. Officers are appointed and serve at the discretion of our Board of Directors. There are no family relationships among any of our directors or executive officers.

Board of Directors Leadership Structure and Role in Risk Oversight

Our Board of Directors recognizes that the leadership structure and combination or separation of the President and Chairman roles is driven by the needs of the Company at any point in time. Currently, Mr. Dean L. Ledger serves as the Chief Executive Officer and the sole Director of the Board of Directors of the Company, and Mr. Mark R. Tobin serves as the Executive Vice President and Chief Financial Officer of the Company. We have no policy requiring the combination or separation of leadership roles and our governing documents do not mandate a particular structure. This has allowed, and will continue to allow, our Board of Directors the flexibility to establish the most appropriate structure for our Company at any given time.

Code of Ethics

On January 28, 2013, we adopted a Code of Ethics and Business Conduct which is applicable to our employees and which also includes a Code of Ethics for our Chief Executive Officer and our Chief Financial Officer and persons performing similar functions. A copy of our Code of Business Conduct and Ethics has been filed with the Securities and Exchange Commission as an exhibit to the Company’s Registration Statement on Form S-1, filed March 15, 2013. A code of ethics is a written standard designed to deter wrongdoing and to promote:

	●	honest and ethical conduct;
	●	full, fair, accurate, timely and understandable disclosure in regulatory filings and public statements;
	●	compliance with applicable laws, rules and regulations;
	●	the prompt reporting violation of the code; and
	●	accountability for adherence to the code.

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EXECUTIVE COMPENSATION

Compensation of Executive Officers

The following table sets forth information concerning compensation earned for services rendered to the Company during each of the last two years by our named executive officers who were serving as executive officers at the end of 2015 and 2014. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any.

Name and Position(s)	Year		Salary ($)		Stock Awards ($)		All other Compensation ($)		Total Compensation ($)

Dean L. Ledger (1) Co-Chief Executive Officer,		2015	$	210,000	$	2,790,017	$	-	$	3,000,017
Chief Financial Officer, and Director		2014	$	300,000	$	-	$	-	$	300,000

John D. Kuhns (2) Co-Chief Executive Officer,		2015	$	60,000	$	-	$	-	$	60,000
Executive Chairman and Director		2014	$	240,000	$	-	$	-	$	240,000

Robert J. Fasnacht (3)		2015	$	190,000	$	465,184	$	-	$	655,184
Executive Vice President and Director		2014	$	240,000	$	-	$	-	$	240,000

Mark R. Tobin (4)		2015	$	63,333	$	1,141,900	$	84,873	$	1,290,106
Chief Financial Officer and Director of Business Development		2014	$	-	$	-	$	80,300	$	80,300

Joey Stone (5)		2015	$	100,000	$	-	$	-	$	100,000
Senior Vice President of Corporate Development		2014	$	180,000	$	-	$	-	$	180,000

Amy B. Kornafel (6)		2015	$	-	$	-	$	-	$	-
Former Chief Financial Officer and Secretary		2014	$	156,000	$	-	$	-	$	156,000

J. Norman Allen (7)		2015	$	-	$	1,334,017	$	148,698	$	1,482,715
Chief Technology Officer		2014	$	-	$	-	$	18,983	$	18,983

(1)

Mr. Dean L. Ledger was appointed as our Director and Chief Executive Officer on September 24, 2013. On February 6, 2015, Mr. Ledger was appointed as our Chief Financial Officer. Mark R. Tobin replaced him as Chief Financial Officer on June 1, 2015. In October 2014, the Company and Mr. Ledger agreed to limit Mr. Ledger’s annual salary to $300,000 for the year of 2014. At year-end 2014, Mr. Ledger received $166,667 of his annual salary and deferred the balance of $133,333 until the Board of Directors determines when the Company has sufficient funds to pay such deferred compensation. On February 5, 2015, Mr. Ledger agreed to defer a portion of his annual salary in excess of $210,000 until such time as the Board of Directors of the Company determined that the Company had sufficient funds to pay such deferred compensation. On May 8, 2015, Mr. Ledger executed an amendment to his employment agreement in which he agreed to permanently reduce his salary to $210,000 which reduction was effective retroactively to January 1, 2015. Further, on November 5, 2015, the Company agreed to issue warrants to Mr. Ledger to purchase 3,000,000 shares of the Company’s common stock in exchange for Mr. Ledger previously agreeing to forego a portion of his salary.

(2)

Mr. John D. Kuhns served as our Executive Chairman between September 24, 2013 and March 30, 2015 and as our co-Chief Executive Officer between February 6, 2015 and March 31, 2015. In October 2014, the Company and Mr. Kuhns agreed to limit Mr. Kuhns’ annual salary to $240,000 for the year of 2014. At year-end 2014, Mr. Kuhns received $133,333 of his annual salary and deferred the balance of $106,667 until such time as the Board of Directors of the Company determined that the Company had sufficient funds to pay such deferred compensation.

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(3)	Mr. Robert J. Fasnacht was appointed as our Director, President and Chief Operating Officer on September 24, 2013. On February 6, 2015, Mr. Fasnacht’s position was changed to our Executive Vice President. In October 2014, the Company and Mr. Fasnacht agreed to limit Mr. Fasnacht’s annual salary to $240,000 for the year of 2014. At year-end 2014 Mr. Fasnacht received $150,000 of his annual salary and deferred the balance of $90,000 until the Board of Directors determines when the Company has sufficient funds to pay such deferred compensation. On February 5, 2015, Mr. Fasnacht agreed to defer a portion of his annual salary in excess of $190,000 until such time as the Board of Directors of the Company determined that the Company had sufficient funds to pay such deferred compensation. On May 8, 2015, Mr. Fasnacht executed an amendment to his employment agreement in which he agreed to permanently reduce his salary to $190,000 which reduction was effective retroactively to January 1, 2015. Further, on November 9, 2015, the Company agreed to issue warrants to Mr. Fasnacht to purchase 500,000 shares of the Company’s Common Stock in exchange for Mr. Fasnacht previously agreeing to forego a portion of his salary.
(4)	In June 2015, Mr. Mark R. Tobin was appointed as our Chief Financial Officer. Prior to June 2015, Mr. Tobin provided consulting services to the Company.
(5)	Mr. Joey Stone was appointed as our Senior Vice President of Corporate Development on September 24, 2013. Mr. Joey Stone resigned on October 31, 2015.
(6)	Ms. Amy B. Kornafel was formerly our Chief Financial Officer and Secretary from September 24, 2013 through December 31, 2014.
(7)	Mr. J. Norman Allen was appointed as our Chief Technology Officer on June 19, 2015. Prior to June 2015, Mr. Allen provided consulting services to the Company.

Employment Agreements

Employment Agreements with Current Executives

On September 24, 2013, the Company and Dean L. Ledger entered into an Employment Agreement, as amended and restated on October 1, 2013, pursuant to which commencing October 1, 2013 Mr. Ledger is being employed as Chief Executive Officer of the Company for a term of five years. The initial five year term of employment automatically shall be extended for additional one-year periods unless within 60 days prior to the end of the term a party gives written notice to the other of its decision not to renew the term. Under the agreement, Mr. Ledger is entitled to compensation consisting of $400,000 per year for base salary (plus annual cost of living increases of 3% per year), an annual bonus at the discretion of the Board of the Directors and other benefits such as family health and dental insurance coverage and eligibility to participate in profit-sharing, 401K, stock option, bonus and performance award plans that are generally made available to executive officers of the Company. In October 2014, the Company and Mr. Ledger agreed to limit Mr. Ledger’s annual salary to $300,000 for the year of 2014. At year-end 2014, Mr. Ledger received $166,667 of his annual salary and deferred the balance of $133,333 until such time as the Board of Directors of the Company determined that the Company had sufficient funds to pay such deferred compensation. On February 5, 2015, Mr. Ledger agreed to defer a portion of his annual salary in excess of $210,000 until such time as the Board of Directors of the Company determined that the Company had sufficient funds to pay such deferred compensation. On May 8, 2015, Mr. Ledger executed an amendment to his employment agreement in which he agreed to permanently reduce his salary to $210,000 which reduction was effective retroactively to January 1, 2015. Further, on November 5, 2015, the Company agreed to issue warrants to Mr. Ledger to purchase 3,000,000 shares of the Company’s common stock in exchange for Mr. Ledger previously agreeing to forego a portion of his salary. On October 21, 2016, Mr. Ledger executed a second amendment to his employment agreement pursuant to which a clause was added thereto stating that if the Company raises not less than $6,000,000 in funds from sales of its securities subsequent to the amendment, then Mr. Ledger’s base salary would increase from $210,000 to $240,000, and Mr. Ledger’s severance upon the termination of Mr. Ledger in connection with a change of control transaction was reduced to six (6) months.

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On June 19, 2015, the Company appointed Mark Tobin as Chief Financial Officer as part of a consulting agreement. On September 1, 2015, the Company and Mark Tobin entered into an Employment Agreement, pursuant to which commencing September 1, 2015, Mr. Tobin is being employed as Chief Financial Officer of the Company for a term of four years. The Company shall have the option to renew the agreement on the anniversary of the effective date or terminate this agreement and the executive’s employment by giving the executive 90 days’ written notice. Under the agreement, Mr. Tobin is entitled to the compensation consisting of $190,000 per year for base salary and other benefits such as family health and dental insurance coverage and eligibility to participate in profit-sharing, 401K, stock option, bonus and performance award plans that are generally made available to executive officers of the Company. In addition, Mr. Tobin received warrants to purchase 1,500,000 shares of the Company’s common stock at $1.00 per share. 375,000 of the warrant shares vested on September 1, 2015, an additional 375,000 warrant shares vested on the first anniversary date of the Employment Agreement, an additional 375,000 warrant shares will vest on the second anniversary date of the Employment Agreement, and an additional 375,000 warrant shares will vest on the third anniversary date of the Employment Agreement. On October 21, 2016, Mr. Tobin executed an amendment to his employment agreement pursuant to which a clause was added thereto stating that if the Company raises not less than $6,000,000 in funds from sales of its securities subsequent to the amendment, then Mr. Tobin’s base salary would increase from $190,000 to $225,000, the responsibilities of an executive vice president were added to Mr. Tobin’s duties and responsibilities thereunder, a clause permitting Mr. Tobin’s termination for “Good Reason” was added, and Mr. Tobin’s severance upon the termination was increased to six (6) months.

On June 19, 2015, the Company appointed Norman Allen of Power Strategies, LLC, as its Chief Technology Officer. It was agreed that Norman Allen will serve in his capacity as Chief Technology Officer as an independent contractor and that no employment relationship is formed between him and the Company. On November 4, 2015, the Company entered into an amendment to the Independent Contractor Agreement with Mr. Allen pursuant to which he is to be issued warrants to purchase 2,400,00 shares of the Company’s common stock at $1.00 per share. 1,200,00 of the warrants vested on November 4, 2015, an additional 600,000 warrants vested on the first anniversary date of the amendment, and an additional 600,000 warrants will vest on the second anniversary date of the amendment. On October 21, 2016, the Company entered into a second amendment to the Independent Contractor Agreement with Mr. Allen. The second amendment added in a clause stating that if the Company raises not less than $6,000,000 in funds from sales of its securities subsequent to the amendment, then the cash compensation under the Independent Contractor Agreement would be amended from a $1,500 daily fee to a $15,000 monthly fee.

Employment Agreements with Former Executives

On September 24, 2013, the Company and Robert J. Fasnacht entered into an Employment Agreement, as amended and restated on October 1, 2013, pursuant to which commencing October 1, 2013 Mr. Fasnacht was employed as President and Chief Operating Officer of the Company for a term of five years. The initial five year term of employment was automatically extended for additional one-year periods unless within 60 days prior to the end of the term a party gave written notice to the other of its decision not to renew the term. Under the agreement, Mr. Fasnacht was entitled to the compensation consisting of $360,000 per year for base salary (plus annual cost of living increases of 3% per year), an annual bonus at the discretion of the Board of the Directors and other benefits such as family health and dental insurance coverage and eligibility to participate in profit-sharing, 401K, stock option, bonus and performance award plans that are generally made available to executive officers of the Company. In October 2014, the Company and Mr. Fasnacht agreed to limit Mr. Fasnacht’s annual salary to $240,000 for the year of 2014. At year-end 2014, Mr. Fasnacht received $150,000 of his annual salary and deferred the balance of $90,000 until such time as the Board of Directors of the Company determined that the Company had sufficient funds to pay such deferred compensation. On February 5, 2015, Mr. Fasnacht agreed to defer a portion of his annual salary in excess of $190,000 until such time as the Board of Directors of the Company determined that the Company had sufficient funds to pay such deferred compensation. On May 8, 2015, Mr. Fasnacht executed an amendment to his employment agreement in which he agreed to permanently reduce his salary to $190,000 which reduction was effective retroactively to January 1, 2015. Further, on November 9, 2015, the Company agreed to issue warrants to Mr. Fasnacht to purchase 500,000 shares of the Company’s common stock in exchange for Mr. Fasnacht previously agreeing to forego a portion of his salary. Mr. Fasnacht resigned from his positions as the Company’s Executive Vice President and as a member of its Board of Directors on April 15, 2016.

On September 24, 2013, the Company and John D. Kuhns entered into an Employment Agreement, as amended and restated on October 1, 2013, pursuant to which commencing October 1, 2013 Mr. Kuhns was employed as Executive Chairman of the Board of the Company. Under the agreement, Mr. Kuhns was entitled to the compensation consisting of $400,000 per year for base salary (plus annual cost of living increases of 3% per year), an annual bonus at the discretion of the Board of the Directors and other benefits such as family health and dental insurance coverage and eligibility to participate in profit-sharing, 401K, stock option, bonus and performance award plans that are generally made available to executive officers of the Company. In October 2014, the Company and Mr. Kuhns agreed to limit Mr. Kuhns’ annual salary to $240,000 for the year of 2014. At year-end 2014, Mr. Kuhns received $133,333.32 of his annual salary and deferred the balance of $106,666.68 until such time as the Board of Directors of the Company determined that the Company had sufficient funds to pay such deferred compensation. In February 2015, the Company and Mr. Kuhns made further modifications to his Employment Agreement. Specifically, for 2015 and continuing through the remaining term of his Employment Agreement, Mr. Kuhns was to receive $210,000 annually with an additional amount of $190,000 annually being deferred until such time as the Board of Directors of the Company determined that the Company had sufficient funds to pay such deferred compensation.

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On March 18, 2015, the Company received correspondence from Mr. Kuhns’ counsel alleging that Mr. Kuhns has “Good Reason” to terminate the Employment Agreement for an alleged failure to pay his salary in full. On March 30, 2015, Mr. Kuhns advised that if the alleged breaches of the Employment Agreement are not cured there is a possibility that he will pursue litigation.

As of March 30, 2015, shareholders holding approximately 67.26% of the total outstanding shares of common stock of the Company that are entitled to vote on all Company matters approved by written consent the removal of Mr. Kuhns from his position as a member of the Company’s Board of Directors.

Mr. Kuhns’ removal was for “Cause” as defined under his Employment Agreement. The removal arose as a result of his documented conduct and statements, which breached his fiduciary duties to the Company in order to advance personal monetary and other interests, and thereby threatened serious financial injury to the Company, its shareholders and its debt holders.

On March 31, 2015, the Board of Directors terminated the Employment Agreement with Mr. Kuhns for Cause and removed him from his positions as co-Chief Executive Officer, and from all other officer positions he held with the Company and its subsidiaries and affiliates, and all director positions with the Company’s subsidiaries and affiliates.

Outstanding Equity Awards

The following table reflects the unexercised options, stock that has not vested and equity incentive plan awards for each named executive officer outstanding as of the end of the fiscal year ended December 31, 2015:

Option Awards

Name

Grant Date

Number of Securities Underlying Unexercised Options
(#)
Exercisable

Number of Securities Underlying Unexercised Options
(#)
Unexercisable

Equity Incentive

Plan Awards:

Number of Securities

Underlying Unexercised

Unearned Options
(#)

Option Exercise Price
($)

Option Expiration Date

Dean L. Ledger

Robert J. Fasnacht

Mark Tobin

Norman Allen

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Securities Authorized for Issuance Under Equity Compensation Plan

There were no unexercised options, stock that has not vested or equity incentive plan awards under the Company’s 2013 Equity Incentive Plan for any named executive officer outstanding as of December 31, 2015.

Equity Compensation Plan Information

On September 24, 2013 the directors of the Company unanimously approved the 2013 Equity Incentive Plan (the “Plan”) under which the Company has reserved a number of shares of its Common Stock equal to 10% of the Company’s fully diluted common stock for awards under the Plan of any stock option, stock appreciation right, restricted stock, performance share, or other stock-based award or performance-based cash awards under the Plan. The exercise price per share may not be less than the fair market value of a share on the date the option is granted. The maximum term of the options may not exceed ten years.

Director Compensation

The following table sets forth the compensation paid to our directors (other than those to the executive officers which have been disclosed in earlier this Section) during the years ended December 31, 2015 and 2014.

Name and Position	Year		Fees Earned or Paid in Cash ($)		Stock Awards ($)		All other Compensation ($)		Total ($)

John D. Kuhns (1)	2015	$	-	$	-	$	-	$	-
Executive Chairman	2014	$	-	$	-	$	-	$	-

Dean L. Ledger (2)	2015	$	-	$	-	$	-	$	-
Director	2014	$	-	$	-	$	-	$	-

Robert J. Fasnacht (3)	2015	$	-	$	-	$	-	$	-
Director	2014	$	-	$	-	$	-	$	-

(1)	Mr. Kuhns was the Company’s Executive Chairman between September 24, 2013 and March 30, 2015.
(2)	Mr. Ledger is serving as the Company’s director since September 24, 2013.
(3)	Mr. Fasnacht served as the Company’s director between September 24, 2013 and April 15, 2016.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company’s Board of Directors conducts an appropriate review of and oversees all related party transactions on a continuing basis and reviews potential conflict of interest situations where appropriate. The Board of Directors has not adopted formal standards to apply when it reviews, approves or ratifies any related party transaction. Our policy is that a contract or transaction either between the Company and a director, or between a director and another company in which he is financially interested is not necessarily void or voidable if the relationship or interest is disclosed or known to the Board of Directors and the stockholders are entitled to vote on the issue, or if it is fair and reasonable to our company. The Board of Directors believes that the related party transactions are fair and reasonable to the Company and on terms comparable to those reasonably expected to be agreed to with independent third parties for the same goods and/or services at the time they are authorized by the Board of Directors.

On February 26, 2014, the Company borrowed $150,000 under a short term note agreement with a related party, the Chief Executive Officer’s son. Under the terms of this agreement, the note was to be repaid within six months of funding. In November 2014, the note agreement was amended to extend the due date to February 26, 2015, and in April of 2015, the note agreement was amended to extend the maturity date to February 26, 2016 and set a 4% simple interest rate on the note. This note was paid in full in January of 2016 along with $509 of accrued interest.

On April 9, 2014, the Company sold and issued to Nina Ledger, the daughter of Dean L. Ledger, CEO of the Company and GPEC, 80,000 shares of common stock and warrants to purchase 80,000 shares of common stock at $2.50 per share for investment of a total of $100,000.

During the year ended December 31, 2015, the Company received advances from its Chief Executive Officer totaling $212,350 and repaid advances totaling $530,500. During the nine months ended September 30, 2016, the Company received advances from its Chief Executive Officer totaling $510,000. Advances payable had a balance of $110,000 and $350,000 at December 31, 2015 and September 30, 2016, respectively. Such advances do not accrue interest and are payable upon demand.

On June 19, 2015, the Company appointed J. Norman Allen as its Chief Technology Officer. It was agreed that J. Norman Allen would serve in his capacity as Chief Technology Officer as an independent contractor and that no employment relationship was to be formed between him and the Company. On November 4, 2015, the Company entered into an amendment to the Independent Contractor Agreement with Mr. Allen pursuant to which he was issued warrants to purchase 2,400,00 shares of the Company’s common stock at $1.00 per share. 1,200,00 of the warrants vested on November 4, 2015, an additional 600,000 warrants vested on the first anniversary date of the amendment, and an additional 600,000 warrants will vest on the second anniversary date of the amendment.

On September 1, 2015, the Company and Mark Tobin entered into an Employment Agreement, pursuant to which commencing September 1, 2015, Mr. Tobin is being employed as Chief Financial Officer of the Company. Under the agreement, Mr. Tobin received warrants to purchase 1,500,000 shares of the Company’s common stock at $1.00 per share. 375,000 of the warrant shares vested on September 1, 2015, an additional 375,000 warrant shares vested on the first anniversary date of the Employment Agreement, an additional 375,000 warrant shares will vest on the second anniversary date of the Employment Agreement, and an additional 375,000 warrant shares will vest on the third anniversary date of the Employment Agreement.

On November 5, 2015, the Company issued a warrant to purchase 3,000,000 shares of the Company’s common stock to the Company’s Chief Executive Officer, Dean Ledger, in exchange for services already performed. The warrants are immediately vested, have an exercise price of $1.00 and have a 10 year term. On July 31, 2016, the Company issued an unsecured promissory note in the aggregate principal amount of $400,000 to Dean Ledger, for advances made to the Company. Under the terms of this agreement, the note is to be repaid within six months of the issuance of the note or upon demand. Interest on the note accrues at 6% per annum. As of September 30, 2016, a balance of $350,000 remained outstanding.

On November 9, 2015, the Company issued a warrant to purchase 500,000 shares of the Company’s common stock to Robert J. Fasnacht, our former Executive Vice President and former member of our Board of Directors, in exchange for services already performed. The warrants vested immediately, have an exercise price of $1.00 and have a 10 year term.

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During the year ended December 31, 2015, the Company issued promissory notes to Ronald Foster, a majority shareholder, in an aggregate amount of $625,000 (“Notes #1 to #4”). The notes have a term ranging from 120 – 150 days from the effective date. 1,250,000 cashless warrants for the Company’s common shares were issued with the debt at a strike price of $0.50 per share in lieu of cash interest. On January 6, 2016, the Company issued an additional promissory note to Foster in the amount of $1,375,000 in exchange for a loan in that amount (“Note #5). The Company issued 2,750,000 warrants in connection with this Note #5, for the Company’s common stock at an exercise price of $0.50 per share. The total relative fair value of the warrants of $996,178 was recognized as a debt discount which is being amortized on a straight-line basis over the term of the notes. Notes #1 to #4 and Note #5 shall be collectively referred to herein as the “$2M Notes.”

On January 22, 2016, the Company entered into a Note Conversion Agreement (the “Conversion Agreement”) with Ronald Foster. Pursuant to the Conversion Agreement, Foster converted the $2M Notes, which totaled $2,000,000, into an investment of $2,000,000 into the Company’s private placement of convertible notes and warrants. This extinguishment of the $2M Notes resulted in a loss on extinguishment of debt of $3,163,303 which included an unamortized discount of $926,382 and $2,236,921 representing the fair value of 2,000,000 warrants issued in connection with the Note Conversion Agreement. Additionally, the Company recognized a beneficial conversion feature of $1,100,735 in accordance with the provisions of ASC 470-20 “Debt – Debt with Conversion and Other Options” which is reflected as an increase in additional paid-in-capital and a corresponding debt discount which was amortized on a straight line basis over the life of the note. On January 25, 2016, Foster converted the convertible note and accrued interest into 4,320,000 shares of the Company’s common stock and a warrant to purchase 4,320,000 shares of the Company’s common stock with a ten year term and an exercise price of $0.50. Of the 4,320,000 shares of common stock, 320,000 shares represent interest paid on the convertible note pursuant to the terms of the conversion agreement in the amount of $160,000. Upon conversion, the Company accelerated the recognition of all remaining debt discount and also recognized an additional interest expense of $899,265 associated with the warrants that were issued upon conversion. This contingent beneficial conversion feature was immediately recognized as interest expense with an offset to additional paid-in-capital.

As of December 31, 2015 and September 30, 2016, there was $62,469 and $0, respectively, due to Tobin, Tao & Company, of which Mark Tobin serves as Managing Partner, as compensation for consulting services previously rendered to the Company. On April 17, 2015, the Company issued to Tobin, Tao & Company warrants to purchase 200,000 shares of common stock at an exercise price of $0.50 per share as compensation for consulting services.

During the nine months ended September 30, 2016, the Company received advances from its Chief Executive Officer totaling $510,000 and repaid advances totaling $270,000. As of September 30, 2016, the aggregate outstanding balance of advances to related parties was $350,000.

Except the above transactions, neither GPEC nor the Company was a party to any transaction (where the amount involved exceeded the lesser of $120,000 or one percent of the average of our assets for the last two fiscal years) in which a director, executive officer, holder of more than five percent of our common stock, or any member of the immediate family of any such person have or will have a direct or indirect material interest and no such transactions are currently proposed.

Audit Committee Review

The Company currently does not have an audit committee, see “Risk Factors—Risks Related to the Business— If we fail to establish and maintain an effective system of internal control, we may not be able to report our financial results accurately or to prevent fraud. Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our common stock.” The Company’s Board will formally establish an Audit Committee and will adopt an Audit Committee charter.

Director Independence

The Company is quoted on the OTCQB, which does not require director independence requirements. We intend to maintain at least two independent directors on the Board. There are no family relationships among any of our directors or executive officers.

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PRINCIPAL STOCKHOLDERS

The following table sets forth the total number of shares of the Company’s common stock beneficially owned, as of November 29, 2016, by:

	●	each person known by us at that date to be the beneficial owner of more than 5% of the outstanding shares of our common stock based solely on such person’s filings with the Securities and Exchange Commission;
	●	each of our officers and directors as of such date; and
	●	each of our officers and directors as of such date, as a group.

Name and Address* of Officers and Directors	Office	Shares Beneficially Owned (1)			Percent of Class (2)
Dean L. Ledger	Chief Executive Officer, Director		5,061,667	(3)		8.13	%

Mark Tobin	Executive Vice President and Chief Financial Officer		950,000	(4)		1.58	%

J. Norman Allen	Chief Technology Officer		1,800,000	(5)		2.95	%

All officers and directors as a group (3 persons)			7,811,667			13.18	%

5% Securities Holders
Ronald B. Foster			35,934,960	(6)		47.11	%

(1)	Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants.
(2)	Based on 59,265,087 shares of the Company’s common stock outstanding as of the date of this prospectus.
(3)	Includes 3,000,000 shares of the Company’s common stock that may be issued upon exercise of immediately exercisable warrants. This also includes: (i) 2,061,667 shares issued to Dean Ledger Revocable Living Trust dated 12/13/2006 Dean Ledger, Trustee.
(4)	Includes 950,000 shares of the Company’s common stock that may be issued upon exercise of immediately exercisable warrants.
(5)	Includes 1,800,000 shares of the Company’s common stock that may be issued upon exercise of immediately exercisable warrants.
(6)	Includes 17,019,370 shares of the Company’s common stock that may be issued upon exercise of immediately exercisable warrants.

*	Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table. Unless otherwise indicated, the address of the beneficial owner is 17207 N. Perimeter Dr., Suite 210, Scottsdale, AZ 85255.

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DESCRIPTION OF CAPITAL STOCK

General

This prospectus describes the general terms of our capital stock. The following description is not complete and may not contain all the information you should consider before investing in our capital stock. For a more detailed description of these securities, you should read the applicable provisions of Florida law and our Certificate of Incorporation and our Bylaws, each as amended.

Our authorized capital stock consists of: (i) 500,000,000 shares of common stock, par value $0.0001 per share, of which there were 59,265,087 shares issued and outstanding as of the date of this prospectus; and (ii) 100,000,000 shares of preferred stock, par value $0.0001 per share, of which no share is issued and outstanding.

Common Stock

As of November 29, 2016, the Company had 59,265,087 shares of common stock issued and outstanding. The Company’s common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy, subject to any voting rights granted to holders of any preferred stock. Holders of the Company’s common stock representing fifty percent (50%) of the Company’s capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of the Company’s stockholders. The Company’s Articles of Incorporation do not provide for cumulative voting in the election of directors.

Subject to any preferential rights of any outstanding series of preferred stock created by the Company’s Board of Directors, the holders of shares of the Company’s common stock will be entitled to such cash dividends as may be declared from time to time by the Company’s Board of Directors from funds available therefore.

Subject to any preferential rights of any outstanding series of preferred stock created by the Company’s Board of Directors, upon liquidation, dissolution or winding up, the holders of shares of the Company’s common stock will be entitled to receive pro rata all assets available for distribution to such holders.

Holders of the Company’s common stock have no preemptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.

The Company’s common stock is quoted on the OTCQB Marketplace operated by the OTC Markets Group, Inc. under the symbol “OPVS.” The transfer agent and registrar for our common stock is VStock Transfer, LLC.

Preferred Stock

As of November 29, 2016, the Company currently does not have any preferred stock issued or outstanding. The Company’s Board of Directors is authorized by its Articles of Incorporation to issue preferred stock from time to time in one or more series with such designations, preferences and relative participating, optional or other special rights and qualifications, limitations or restrictions, thereof, as shall be stated in the resolutions adopted by the Company’s Board of Directors providing for the issuance of the preferred stock.

Warrants

As of November 29, 2016, there were outstanding warrants to purchase a total of 60,295,305 shares of our Common Stock, of which 58,957,805 are exercisable. Each warrant shall be exercisable at any time and from time to time as provided in the warrant. The exercise prices of the outstanding warrants range from $0.50 to $17.50 per share. Furthermore, as of November 29, 2016, outstanding warrants to purchase a total of 16,539,500 shares of our common stock have anti-dilution provisions and the exercise price of such warrants will be automatically reduced to a lower price if the Company issues securities in a subsequent offering at a price which is less than each such warrant’s then-effective exercise price. Of the Company’s warrants with anti-dilution provisions, outstanding warrants to purchase 7,489,500 shares of our Common Stock, as of November 29, 2016, also provide that the number of shares of our Common Stock that can be issued under such warrants will be adjusted in the event of a subsequent lower price issuance such that the aggregate exercise price of such warrants remain the same. The warrants are not listed on any national securities exchange. We intend to apply to list our warrants on the NYSE MKT under the symbol “NFPW”.

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Options

As of November 29, 2016, there were outstanding options to purchase a total of 13,000 shares of our Common Stock. The weighted average exercise price of the outstanding options are $0.54 per share.

Provisions of our Certificate of Incorporation and Bylaws that May Have an Anti-Takeover Effect

Certain provisions set forth in our Certificate of Incorporation and Bylaws, each as amended, could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Such provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management.

In particular, our Certificate of Incorporation and Bylaws, each as amended, among other things:

	●	authorize our Board of Directors to issue, without further action by the stockholders, up to 100,000,000 shares of undesignated preferred stock;
	●	provide that stockholders must provide advance notice to nominate persons for election to our Board of Directors;
	●	specify that special meetings of our stockholders, unless otherwise prescribed by statute, can be called only by the Board of Directors, the Chairperson or the President; and
	●	provide that vacancies on the Board of Directors may be filled by a majority of directors in office, although less than a quorum, or by the sole remaining director.

Disclosure of Commission Position on Indemnification for Securities Act Liabilities

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers or persons controlling us, we understand that it is the Securities and Exchange Commission’s opinion that such indemnification is against public policy as expressed in the Securities Act and may therefore be unenforceable.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been a limited public market for our common stock, and we cannot assure you that a liquid trading market for our common stock will develop or be sustained after this offering. Future sales of substantial numbers of shares of our common stock in the public market after this offering, or the anticipation of those sales, could adversely affect market prices of our common stock prevailing from time to time and could impair our ability to raise capital through sales of our equity securities.

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DESCRIPTION OF SECURITIES WE ARE OFFERING

The material terms and provisions of the securities being issued in this offering are summarized below. The following description is subject to, and qualified in its entirety by, the form of warrant, which has been filed as an exhibit to the registration statement of which this prospectus is a part. Prospective investors should carefully review the terms and provisions set forth in the form of warrant.

We are offering units. Each unit consists of one share of our common stock and one warrant exercisable for one share of our common stock. The units will not be certificated. The warrants part of the units are immediately separable and will be issued separately in this offering.

Common Stock

The material terms of our common stock and our other capital stock are described in the section of this prospectus entitled “Description of Capital Stock” beginning on page 56 of this prospectus.

Warrants to Purchase Common Stock

The warrants offered in this offering will be issued in a form filed as an exhibit to the registration statement of which this prospectus is a part. You should review a copy of the form of warrant for a complete description of the terms and conditions applicable to the warrants. The following is a brief summary of the warrants and is subject in all respects to the provisions contained in the form of warrant.

Each warrant represents the right to purchase one share of common stock at an exercise price per share equal to 125% of the common stock public offering price, subject to adjustment as described below. Each warrant may be exercised on or after the closing date of this offering through and including the close of business on the fifth anniversary of the date of issuance. Each warrant will have a cashless exercise right in the event that the shares of common stock underlying such warrants are not covered by an effective registration statement at the time of such exercise.

The exercise price and the number of shares underlying the warrants are subject to appropriate adjustment in the event of stock splits, stock dividends on our common stock, stock combinations or similar events affecting our common stock. In addition, in the event we consummate any merger, consolidation, sale or other reorganization event in which our common stock is converted into or exchanged for securities, cash or other property or we consummate a sale of substantially all of our assets, in each case within two years of the date of issuance, and the exercise price of the warrants exceeds the consideration paid in respect of our common stock in connection with such transaction, then in connection with following such event, the holders of the warrants will be entitled to receive an amount equal to the Black-Scholes value of the warrants as of the date of such transaction.

No fractional shares of common stock will be issued in connection with the exercise of a warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied by the market value of a share of common stock. A warrant may be transferred by a holder, upon surrender of the warrant, properly endorsed (by the holder executing an assignment in the form attached to the warrant).

The warrants are not exercisable by their holder to the extent (but only to the extent) that such holder or any of its affiliates would beneficially own in excess of 4.99% of our common stock.

Amendments and waivers of the terms of the warrants require the written consent of the holder of such warrant and us.

There is no established public trading market for the warrants issued in this offering. We intend to apply to list our warrants on the NYSE MKT under the symbol “NFPW” concurrently with the closing of this offering.

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UNDERWRITING

Aegis Capital Corp. is acting as the sole book-running manager of the offering and as representative of the underwriters, or the “Representative.” We have entered into an underwriting agreement, dated , 2017, with the Representative. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to each underwriter named below and each underwriter has severally and not jointly agreed to purchase from us, at the public offering price per share less underwriting discounts set forth on the cover page of this prospectus, the numbers of shares of common stock and warrants listed next to its name in the following table:

Underwriter	Number of Shares	Number of Warrants
Aegis Capital Corp.


Total

The underwriters are committed to purchase all of the shares of common stock and warrants offered by us other than those covered by the option to purchase additional shares and/or warrants described below, if they purchase any shares of common stock and warrants. The obligations of the underwriters may be terminated upon the occurrence of certain events specified in the underwriting agreement. Furthermore, pursuant to the underwriting agreement, the underwriters’ obligations are subject to customary conditions, representations and warranties contained in the underwriting agreement, such as receipt by the underwriters of officers’ certificates and legal opinions.

We have agreed to indemnify the underwriters against specified liabilities, including liabilities under the Securities Act of 1933, as amended, and to contribute to payments the underwriters may be required to make in respect thereof.

The underwriters are offering the shares and warrants, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel and other conditions specified in the underwriting agreement. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Over-allotment Option . We have granted the underwriters an over-allotment option. This option, which is exercisable for up to 45 days after the effective date of the registration statement of which this prospectus is a part, permits the underwriters to purchase a maximum of additional shares and/or additional warrants (15% of the shares and warrants sold in this offering) from us to cover over-allotments, if any. If the underwriters exercise all or part of this option, they will purchase shares and/or warrants covered by the option at the public offering price per share or per warrant that appears on the cover page of this prospectus, less the underwriting discount. If this option is exercised in full, the total price to the public will be $ and the total net proceeds, before expenses, to us will be $ .

Discount . The following table shows the public offering price, underwriting discount and proceeds, before expenses, to us. The information assumes either no exercise or full exercise by the underwriters of their over-allotment option.

Per

Share

Per

Warrant

Total

Without

Over-

Allotment

Option

Total With

Over-

Allotment

Option

Public offering price

Underwriting discount (7%)

Non-accountable expense allowance (1%) (1)

Proceeds, before expenses, to us

(1)	The non-accountable expense allowance of 1% is not payable with respect to the shares sold upon exercise of the underwriters’ over-allotment option.

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We have paid an expense deposit of $25,000 to the representative, which will be applied against actual out-of-pocket accountable expenses that will be paid by us to the underwriters in connection with this offering, and will be reimbursed to us to the extent not actually incurred in compliance with Financial Industry Regulatory Authority, or FINRA, Rule 5110(f)(2)(C) in the event of the termination of this offering.

In addition, we have also agreed to pay the following expenses of the underwriters relating to the offering, which amount will not exceed $135,000 in the aggregate for fees and expenses reimbursable to the underwriters upon closing of this offering: (a) all filing fees and communication expenses relating to the registration of the securities being sold in this offering (including the over-allotment securities) with the Securities and Exchange Commission (the “SEC”); (b) all fees, expenses and disbursements relating to background checks of our officers and directors in an amount not to exceed $5,000 per individual and $10,000 in the aggregate; (c) all filing fees associated with the review of this offering by FINRA and all fees and expenses relating to the listing of the securities being sold in this offering on the NYSE MKT; (d) all fees, expenses and disbursements relating to the registration, qualification or exemption of the securities being sold in this offering under the securities laws of any state or other jurisdiction designated by the underwriters, including the reasonable fees and expenses of the underwriter’s “blue sky” counsel up to $20,000; (e) $29,500 for the underwriters’ use of Ipreo’s book-building, prospectus tracking and compliance software for this offering; (f) the underwriters’ legal fees incurred in connection with this offering in an amount not to exceed $75,000; (g) $10,000 of the representative’s actual accountable road show expenses for the offering; and (h) the costs associated with bound volumes of the public offering materials as well as commemorative mementos and lucite tombstones in an amount not to exceed $2,500.

We estimate that the total expenses of the offering payable by us, excluding underwriting discounts and commissions, will be approximately $ .

Representative Warrants . Upon the closing of this offering, we have agreed to issue to the representative warrants, or the Representative’s Warrants, to purchase a number of shares of our common stock equal to 4% of the total shares of our common stock and warrants sold in this offering. The Representative’s Warrants will be exercisable at a per share exercise price equal to 110% of the initial public offering price. The Representative’s Warrants are exercisable at any time and from time to time, in whole or in part, during the four year period commencing one year from the effective date of the registration statement related to this offering. The Representative’s Warrants also provides for one demand registration of the shares of common stock underlying the Representative’s Warrants, and unlimited “piggyback” registration rights with respect to the registration of the shares of common stock underlying the Representative’s Warrants. The demand registration right provided will not be greater than five years from the effective date of the registration statement related to this offering in compliance with FINRA Rule 5110(f)(2)(G). The piggyback registration right provided will not be greater than seven years from the effective date of the registration statement related to this offering in compliance with FINRA Rule 5110(f)(2)(G).

The Representative’s Warrants and the shares of common stock underlying the Representative’s Warrants have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA. The representative, or permitted assignees under such rule, may not sell, transfer, assign, pledge, or hypothecate the Representative’s Warrants or the securities underlying the Representative’s Warrants, nor will the representative engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the Representative’s Warrants or the underlying shares of common stock for a period of 180 days from the effective date of the registration statement. Additionally, the Representative’s Warrants may not be sold transferred, assigned, pledged or hypothecated for a 180-day period following the effective date of the registration statement except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners. The Representative’s Warrants will provide for adjustment in the number and price of the Representative’s Warrants and the shares of common stock underlying such Representative’s Warrants in the event of recapitalization, merger, stock split or other structural transaction, or a future financing undertaken by us.

Right of First Refusal . For a period of twelve (12) months from the date of closing of this offering, the representative shall have an irrevocable right of first refusal to act as sole investment banker, sole book-runner and/or sole placement agent, at the representative’s sole discretion, for each and every future public and private equity and debt offerings for the Company, or any successor to or any subsidiary of the Company, including all equity linked financings, on terms customary to the representative; provided, however, that such right shall not apply to direct offerings by us, mergers and acquisitions and strategic transactions. The representative shall have the sole right to determine whether or not any other broker-dealer shall have the right to participate in any such offering and the economic terms of any such participation. The representative will not have more than one opportunity to waive or terminate the right of first refusal in consideration of any payment or fee.

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Lock-Up Agreements . Each of our directors, officers and any other 5% or greater holder of our outstanding shares of common stock as of the effective date of this registration statement have agreed to enter into customary “lock-up” agreements in favor of the representative pursuant to which such persons and entities will agree, for a period of three (3) months from the effective date of the registration statement, that they will neither offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any securities of the Company without the representative’s prior written consent and (ii) we and any of our successors have agreed, for a period of three (3) months from the effective date of the registration statement, that each will not (a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (b) file or caused to be filed any registration statement with the SEC relating to the offering of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock or (c) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our capital stock, whether any such transaction described in clause (a), (b) or (c) above is to be settled by delivery of shares of our capital stock or such other securities, in cash or otherwise.

Electronic Offer, Sale and Distribution of Securities . A prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters or selling group members, if any, participating in this offering and one or more of the underwriters participating in this offering may distribute prospectuses electronically. The Representative may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations. Other than the prospectus in electronic format, the information on these websites is not part of, nor incorporated by reference into, this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us or any underwriter in its capacity as underwriter, and should not be relied upon by investors.

Stabilization . In connection with this offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate-covering transactions, penalty bids and purchases to cover positions created by short sales.

	●	Stabilizing transactions permit bids to purchase securities so long as the stabilizing bids do not exceed a specified maximum, and are engaged in for the purpose of preventing or retarding a decline in the market price of the securities while the offering is in progress.
	●	Over-allotment transactions involve sales by the underwriters of securities in excess of the number of securities the underwriters are obligated to purchase. This creates a syndicate short position which may be either a covered short position or a naked short position. In a covered short position, the number of securities over-allotted by the underwriters is not greater than the number of securities that they may purchase in the over-allotment option. In a naked short position, the number of securities involved is greater than the number of securities in the over-allotment option. The underwriters may close out any short position by exercising their over-allotment option and/or purchasing securities in the open market.
	●	Syndicate covering transactions involve purchases of securities in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of securities to close out the short position, the underwriters will consider, among other things, the price of securities available for purchase in the open market as compared with the price at which they may purchase securities through exercise of the over-allotment option. If the underwriters sell more securities than could be covered by exercise of the over-allotment option and, therefore, have a naked short position, the position can be closed out only by buying securities in the open market. A naked short position is more likely to be created if the underwriters are concerned that after pricing there could be downward pressure on the price of the securities in the open market that could adversely affect investors who purchase in the offering.
	●	Penalty bids permit the Representative to reclaim a selling concession from a syndicate member when the securities originally sold by that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.

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These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our securities or preventing or retarding a decline in the market price of our securities. As a result, the price of our common stock and warrants in the open market may be higher than it would otherwise be in the absence of these transactions. Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of our securities. These transactions may be effected on the NYSE MKT, in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.

Passive Market Making. In connection with this offering, underwriters and selling group members may engage in passive market making transactions in our securities in accordance with Rule 103 of Regulation M under the Exchange Act, during a period before the commencement of offers or sales of the shares and extending through the completion of the distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, then that bid must then be lowered when specified purchase limits are exceeded.

Other Relationships. Certain of the underwriters and their affiliates have provided, and may in the future provide, various investment banking, commercial banking and other financial services for us and our affiliates for which they have received, and may in the future receive, customary fees. However, except as disclosed in this prospectus, we have no present arrangements with any of the underwriters for any further services.

Offer Restrictions Outside the United States

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

Australia

This prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly, (1) the offer of the securities under this prospectus is only made to persons to whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions set out in section 708 of the Australian Corporations Act, (2) this prospectus is made available in Australia only to those persons as set forth in clause (1) above, and (3) the offeree must be sent a notice stating in substance that by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (1) above, and, unless permitted under the Australian Corporations Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer for the offeree under this prospectus.

China

The information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People’s Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly to “qualified domestic institutional investors.”

European Economic Area — Belgium, Germany, Luxembourg and the Netherlands

The information in this document has been prepared on the basis that all offers of the shares of common stock and warrants will be made pursuant to an exemption under the Directive 2003/71/EC (“Prospectus Directive”), as implemented in Member States of the European Economic Area (each, a “Relevant Member State”), from the requirement to produce a prospectus for offers of securities.

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An offer to the public of the shares of common stock and warrants has not been made, and may not be made, in a Relevant Member State except pursuant to one of the following exemptions under the Prospectus Directive as implemented in that Relevant Member State:

	●	to legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
	●	to any legal entity that has two or more of (1) an average of at least 250 employees during its last fiscal year; (2) a total balance sheet of more than €43,000,000 (as shown on its last annual unconsolidated or consolidated financial statements) and (3) an annual net turnover of more than €50,000,000 (as shown on its last annual unconsolidated or consolidated financial statement);
	●	to fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)I of the Prospectus Directive) subject to obtaining the prior consent of the company or any underwriter for any such offer; or
	●	in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of the shares of common stock and warrants shall result in a requirement for the publication by the company of a prospectus pursuant to Article 3 of the Prospectus Directive.

France

This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code monétaire et financier) and Articles 211-1 et seq. of the General Regulation of the French Autorité des marchés financiers (“AMF”). The not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.

This document and any other offering material relating to the shares of common stock and warrants have not been, and will not be, submitted to the AMF for approval in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France.

Such offers, sales and distributions have been and shall only be made in France to (1) qualified investors (investisseurs qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D. 744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (2) a restricted number of non-qualified investors (cercle restreint d’investisseurs non-qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation.

Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the shares of common stock and warrants cannot be distributed (directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Monetary and Financial Code.

Ireland

The information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed with or approved by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the “Prospectus Regulations”). The shares of common stock and warrants have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of a public offering, except to (1) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations and (2) fewer than 100 natural or legal persons who are not qualified investors.

Israel

The shares of common stock and warrants offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority (the ISA), or ISA, nor have such shares of common stock and warrants been registered for sale in Israel. The shares and warrants may not be offered or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection with the offering or publishing the prospectus; nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the shares of common stock and warrants being offered. Any resale in Israel, directly or indirectly, to the public of the shares of common stock and warrants offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israeli securities laws and regulations.

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Italy

The offering of the shares of common stock and warrants in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione Nazionale per le Società e la Borsa, “CONSOB”) pursuant to the Italian securities legislation and, accordingly, no offering material relating to the shares of common stock and warrants may be distributed in Italy and such securities may not be offered or sold in Italy in a public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February 1998 (“Decree No. 58”), other than:

	●	to Italian qualified investors, as defined in Article 100 of Decree no. 58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999 (“Regulation no. 1197l”) as amended (“Qualified Investors”); and
	●	in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended.

Any offer, sale or delivery of the shares of common stock and warrants or distribution of any offer document relating to the shares of common stock and warrants in Italy (excluding placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:

	●	made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and
	●	in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws.

Any subsequent distribution of the shares of common stock and warrants in Italy must be made in compliance with the public offer and prospectus requirement rules provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure to comply with such rules may result in the sale of such shares of common stock and warrants being declared null and void and in the liability of the entity transferring the shares of common stock and warrants for any damages suffered by the investors.

Japan

The shares of common stock and warrants have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as amended (the “FIEL”) pursuant to an exemption from the registration requirements applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article 2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the shares of common stock and warrants may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional Investor who acquires the shares of common stock and warrants may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of the shares of common stock and warrants is conditional upon the execution of an agreement to that effect.

Portugal

This document is not being distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários) in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários). The shares of common stock and warrants have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in Portugal. This document and any other offering material relating to the shares of common stock and warrants have not been, and will not be, submitted to the Portuguese Securities Market Commission (Comissão do Mercado de Valores Mobiliários) for approval in Portugal and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of the shares of common stock and warrants in Portugal are limited to persons who are “qualified investors” (as defined in the Portuguese Securities Code). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.

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Sweden

This document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly, this document may not be made available, nor may the shares of common stock and warrants be offered for sale in Sweden, other than under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel med finansiella instrument). Any offering of the shares of common stock and warrants in Sweden is limited to persons who are “qualified investors” (as defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.

Switzerland

The shares of common stock and warrants may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the shares of common stock and warrants may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering material relating to the shares of common stock and warrants have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of the shares of common stock and warrants will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA).

This document is personal to the recipient only and not for general circulation in Switzerland.

United Arab Emirates

Neither this document nor the shares of common stock and warrants have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates, nor have we received authorization or licensing from the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or sell the shares of common stock and warrants within the United Arab Emirates. This document does not constitute and may not be used for the purpose of an offer or invitation. No services relating to the shares of common stock and warrants, including the receipt of applications and/or the allotment or redemption of such shares of common stock and warrants, may be rendered within the United Arab Emirates by us.

No offer or invitation to subscribe for the shares of common stock and warrants is valid or permitted in the Dubai International Financial Centre.

United Kingdom

Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended (“FSMA”)) has been published or is intended to be published in respect of the shares of common stock and warrants. This document is issued on a confidential basis to “qualified investors” (within the meaning of section 86(7) of FSMA) in the United Kingdom, and the shares of common stock and warrants may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances that do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.

Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the shares of common stock and warrants has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to us.

In the United Kingdom, this document is being distributed only to, and is directed at, persons (1) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (“FPO”), (2) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (3) to whom it may otherwise be lawfully communicated (together “relevant persons”). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

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LEGAL MATTERS

The validity of the issuance of securities offered by this prospectus will be passed upon for us by Pryor Cashman LLP, New York, New York. Loeb & Loeb LLP, New York, New York, is acting as counsel to the underwriters.

EXPERTS

The consolidated balance sheets of NanoFlex Power Corporation and its subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended have been incorporated herein and in the registration statement in reliance upon the report of Malone Bailey LLP, independent registered public accounting firm, and given upon the authority of said firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We file reports, proxy statements and other information with the Securities and Exchange Commission. Copies of our reports, proxy statements and other information may be inspected and copied at the Securities and Exchange Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Copies of these materials can also be obtained by mail at prescribed rates from the Public Reference Room of the Securities and Exchange Commission, 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. You can read our reports, proxy statements and other information, including the registration statement, over the Internet at the Securities and Exchange Commission’s website at www.sec.gov. In addition, we make available on or through our website at www.nanoflexpower.com copies of these reports as soon as reasonably practicable after we electronically file or furnish them to the Securities and Exchange Commission.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The documents we are incorporating by reference as of the date hereof are as follows:

	●	our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission on March 18, 2016;
	●	our Quarterly Reports on Form 10-Q for the quarter ended March 31, 2016, June 30, 2016 and September 30, 2016, filed with the Securities and Exchange Commission on May 11, 2016, August 15, 2016 and November 10, 2016, respectively; and
	●	our Current Reports on Form 8-K filed with the Securities and Exchange Commission on January 27, 2016, April 4, 2016, April 11, 2016 and October 26, 2016.

Any statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus shall be deemed modified, superseded or replaced for purposes of this prospectus to the extent that a statement contained in this prospectus, or in any subsequently filed document that also is deemed to be incorporated by reference in this prospectus, modifies, supersedes or replaces such statement. Any statement so modified, superseded or replaced shall not be deemed, except as so modified, superseded or replaced, to constitute a part of this prospectus. None of the information that we disclose under Item 2.02 or Item 7.01 of any Current Report on Form 8-K or any corresponding information, either furnished under Item 9.01 or included as an exhibit therein, that we may from time to time furnish to the Securities and Exchange Commission will be incorporated by reference into, or otherwise included in, this prospectus, except as otherwise expressly set forth in the relevant document. Subject to the foregoing, all information appearing in this prospectus is qualified in its entirety by the information appearing in the documents incorporated by reference.

You may obtain a copy of these filings, without charge, by writing us at NanoFlex Power Corporation, 17207 North Perimeter Drive, Suite 210, Scottsdale, AZ 85255, Attention: Investor Relations, or by calling us at (480) 585-4200.

You should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with different information. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front page of this prospectus.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements

NanoFlex Power Corporation and Subsidiaries

Unaudited Condensed Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015	F-3
Condensed Consolidated Statements of Operations for the Nine Months Ended September 30, 2016 and 2015	F-4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2015	F-5
Notes to Condensed Consolidated Financial Statements	F-6

Audited Financial Statements
Report of Independent Registered Public Accounting Firm	F-17
Consolidated Balance Sheets as of December 31, 2015 and 2014	F-18
Consolidated Statements of Operations for the Years Ended December 31, 2015 and 2014	F-19
Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2015 and 2014	F-20
Consolidated Statements of Cash Flows for the Years Ended December 31, 2015 and 2014	F-21
Notes to Consolidated Financial Statements	F-22

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CONTENTS

FINANCIAL STATEMENTS		Page

CONSOLIDATED BALANCE SHEETS (Unaudited)		F-3

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)		F-4

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)		F-5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)		F-6

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NANOFLEX POWER CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30, 2016			December 31, 2015
ASSETS

Current assets:
Cash	$	41,725		$	6,255
Accounts receivable		85,000			95,623
Prepaid expenses and other current assets		11,079			854
Total current assets		137,804			102,732

Property and equipment, net		8,589			13,735

Total assets	$	146,393		$	116,467

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Accounts payable	$	3,011,769		$	3,341,905
Accounts payable- related party		1,420			62,469
Accrued expenses		1,437,365			1,840,537
Warrant derivative liability		8,990,943			12,796,146
Conversion option derivative liability		3,590,660			5,411,187
Short-term debt, net of unamortized discounts		184,411			150,000
Short-term debt- related party, net of unamortized discounts		-			670,848
Convertible debt, net of unamortized discounts		1,554,733			1,123,818
Advances - related party		350,000			110,000
Total current liabilities		19,121,301			25,506,910
Total liabilities		19,121,301			25,506,910

Stockholders' deficit:
Common stock, 500,000,000 authorized, $0.0001 par value, 59,196,687 and 51,473,157 issued and outstanding as of September 30, 2016 and December 31, 2015, respectively		5,919			5,148
Additional paid-in capital		188,751,460			176,108,887
Accumulated deficit		(207,732,287	)		(201,504,478	)
Total stockholders' deficit		(18,974,908	)		(25,390,443	)

Total liabilities and stockholders' deficit	$	146,393		$	116,467

See accompanying notes to unaudited consolidated financial statements.

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NANOFLEX POWER CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015

Revenue	$	85,000		$	-		$	115,400		$	-
Cost of services		(97,829	)		-			(331,710	)		-
Gross loss		(12,829	)		-			(216,310	)		-
Operating expenses:
Research and development	$	299,500		$	327,253		$	1,475,847		$	828,002
Patent application and prosecution fees		649,378			321,643			1,187,145			1,490,657
Selling, general and administrative expenses		772,508			1,281,736			2,122,330			2,629,669
Total operating expenses		1,721,386			1,930,632			4,785,322			4,948,328

Loss from operations		(1,734,215	)		(1,930,632	)		(5,001,632	)		(4,948,328	)

Other income (expenses):
Gain (loss) on change in fair value of derivative		(3,274,387	)		(8,977,501	)		6,170,172			(11,418,423	)
Loss on extinguishment of debt		-			-			(3,756,985	)		(150,000	)
Interest expense		(760,050	)		(747,477	)		(3,639,364	)		(1,285,476	)
Total other income (expense)		(4,034,437	)		(9,724,978	)		(1,226,177	)		(12,853,899	)

Net loss	$	(5,768,652	)	$	(11,655,610	)	$	(6,227,809	)	$	(17,802,227	)

Net loss per common share:
Basic and diluted	$	(0.10	)	$	(0.24	)	$	(0.11	)	$	(0.38	)

Weighted average common shares outstanding:
Basic and diluted		58,973,457			49,488,166			57,103,514			46,759,780

See accompanying notes to unaudited consolidated financial statements.

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NANOFLEX POWER CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(6,227,809	)	$	(17,802,227	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		5,146			3,745
Warrants issued as compensation		1,662,364			817,049
Options issued as compensation		12,489			-
Interest expense of warrants related to conversion of debt		1,090,759			458,743
Amortization of debt discounts		2,225,077			765,006
Loss on extinguishment of debt		3,756,985			150,000
Warrants issued for interest expense		6,023			-
Derivative warrant issued for services		544,442			230,971
(Gain) loss on change in fair value of derivative liabilities		(6,170,172	)		11,418,423
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(10,225	)		3,836
Accounts receivable		10,623			-
Accounts payable		(330,136	)		1,624,216
Accounts payable - related party		(61,049	)		19,999
Accrued expenses		(113,757	)		(286,483	)
Net cash used in operating activities		(3,599,240	)		(2,596,722	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common shares and warrants		663,922			86,000
Proceeds from exercise of warrants		6,288			914,218
Borrowings from short-term debt		300,000			-
Proceeds from short-term debt		-			50,000
Borrowings on related party debt		1,375,000			300,000
Payments on related party debt		(150,000	)		-
Borrowings on convertible debt		1,199,500			1,657,500
Advances received from related party		510,000			193,350
Advances repaid to related party		(270,000	)		(451,500	)
Net cash provided by financing activities		3,634,710			2,749,568

NET INCREASE IN CASH		35,470			152,846
Cash, beginning of the period		6,255			168
Cash, end of the period	$	41,725		$	153,014

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest	$	11,435		$	-
Cash paid for income taxes	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES
Principal and interest converted into common stock		3,015,500			1,457,595
Debt discount on beneficial conversion feature and warrants issued with convertible debt		2,056,493			1,079,117
Debt discount due to warrants issued with promissory notes		1,231,366
Accrued liabilities settled with common shares and warrants		67,536
Reclassification of conversion option as derivative liabilities					5,743,021
Reclassification of warrants as derivative liabilities		-			76,368
Note modified to be convertible note and then converted		2,050,000			-
Accrued interest converted to debt		-			50,000
Issuance of common stock related to PIPE II anti-dilution provision		-			155

See accompanying notes to unaudited consolidated financial statements.

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NANOFLEX POWER CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BACKGROUND, BASIS OF PRESENTATION, AND GOING CONCERN:

Background

NanoFlex Power Corporation, formerly known as Universal Technology Systems, Corp., was incorporated in the State of Florida on January 28, 2013. On September 24, 2013, the Company completed the acquisition of Global Photonic Energy Corporation, a Pennsylvania corporation (“GPEC”), pursuant to a Share Exchange Agreement (the “Share Exchange Transaction”). Immediately following the closing of the Share Exchange Transaction, the Company owned 100% of equity interests of GPEC and GPEC became a wholly-owned subsidiary of the Company. On November 25, 2013, the Company changed its name from “Universal Technology Systems, Corp.” to “NanoFlex Power Corporation” and its trading symbol was changed to “OPVS” on December 26, 2013.

These technologies are targeted at certain broad applications, including: (a) mobile and field power generation, (b) building applied photovoltaics ("BAPV"), (c) building integrated photovoltaics ("BIPV"), (d) space vehicles and unmanned aerial vehicles ("UAVs"), (e) semi-transparent solar power generating windows or glazing, and (f) ultra-thin solar films or paints for automobiles or other consumer applications.

We believe these technologies have been demonstrated in a laboratory environment with our research partners. The Company is currently taking steps to pursue product development and commercialization on some of these technologies in collaboration with industry partners and potential customers.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures have been or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying consolidated financial statements include normal recurring adjustments that are necessary for a fair presentation of the results for the interim periods presented. These consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2015 included in our Annual Report on Form 10-K. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of results to be expected for the full fiscal year or any other periods.

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make a number of estimates and judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosures. Actual results may differ from these estimates.

Revision of Previously-Issued Financial Statements

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The Company assessed the effect of the above errors in the aggregate on prior periods’ financial statements in accordance with the SEC’s Staff Accounting Bulletins No. 99 and 108 and, based on an analysis of quantitative and qualitative factors, determined that the errors were not material to any of the Company’s prior interim and annual financial statements.

The Company determined that the correction of the cumulative amounts of the errors would be material to its consolidated financial statements for the three and six months ended June 30, 2016. Therefore, the Company revised its previously-issued financial statements as of December 31, 2015 and for the third and fourth quarters of fiscal 2015 and first quarter of fiscal 2016. The balance sheet as of December 31, 2015 and the statement of operations for the three and nine months ended September 30, 2015 included herein are revised as described below for those adjustments.

All financial information contained in the accompanying notes to these financial statements has been revised to reflect the correction of these errors.

The following tables present the effect of the aforementioned revisions on the Company’s consolidated balance sheet for the year ended December 31, 2015:

	As of December 31, 2015
	As Reported			Revision			As Revised
Conversion option derivative liability	$	8,145,160		$	(2,733,973	)	$	5,411,187
Convertible debt, net of unamortized discounts		1,051,545			72,273			1,123,818
Total current liabilities		28,168,610			(2,661,700	)		25,506,910
Total liabilities		28,168,610			(2,661,700	)		25,506,910
Accumulated deficit		(204,989,355	)		3,484,877			(201,504,478	)
Additional paid in capital		176,932,064			(823,177	)		176,108,887
Total stockholders' deficit		(28,052,143	)		2,661,700			(25,390,443	)

The following tables present the effect of the aforementioned revisions on the Company’s consolidated statement of operations for the three and nine months ended September 30, 2015:

	Three Months Ended September 30, 2015
	As Reported			Revision			As Revised
Gain (loss) on change in fair value of derivative	$	(10,461,536	)	$	1,484,035		$	(8,977,501	)
Interest expense		(526,378	)		(221,099	)		(747,477	)
Total other expense		(10,987,914	)		1,262,936			(9,724,978	)
Net loss		(12,918,546	)		1,262,936			(11,655,610	)
Net loss per share (basic and diluted)		(0.26	)		(0.02	)		(0.24	)

	Nine Months Ended September 30, 2015
	As Reported			Revision			As Revised
Gain (loss) on change in fair value of derivative	$	(12,902,458	)	$	1,484,035		$	(11,418,423	)
Interest expense		(1,064,377	)		(221,099	)		(1,285,476	)
Total other expense		(14,116,835	)		1,262,936			(12,853,899	)
Net loss		(19,065,163	)		1,262,936			(17,802,227	)
Net loss per share (basic and diluted)		(0.41	)		(0.03	)		(0.38	)

These revisions to the consolidated statements of cash flows for the nine months ended September 30, 2015 did not result in any changes to the amounts previously reported for net cash from (used in) operating, investing and financing activities.

Going Concern

The Company has generated limited revenue to date. The Company has a working capital deficit of $18,983,497 and an accumulated deficit of $207,732,287 as of September 30, 2016. The ability of the Company to continue as a going concern is dependent on raising capital to fund ongoing operations and carry out its business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. To date, the Company has funded its initial operations primarily by way of the sale of equity securities, convertible note financing, short term financing from private parties, and advances from related parties.

Fair Value

ASC 820 Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements. It defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

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Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; and model-driven valuations whose inputs are observable or whose significant value drivers are observable. Valuations may be obtained from, or corroborated by, third-party pricing services.

Level 3: Unobservable inputs to measure fair value of assets and liabilities for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based upon the best information at the time, to the extent that inputs are available without undue cost and effort.

As of September 30, 2016 the significant inputs to the Company’s derivative liability calculation were Level 3 inputs.

The following schedule summarizes the valuation of financial instruments at fair value in the balance sheets as of September 30, 2016 and December 31, 2015:

	Fair Value Measurements as of September 30, 2016
	Level 1		Level 2		Level 3
Assets
None	$		$		$
Total assets		-		-		-
Liabilities
Warrant derivative liability		-		-		8,990,943
Conversion option derivative liability		-		-		3,590,660
Total liabilities	$	-	$	-	$	12,581,603

	Fair Value Measurements as of December 31, 2015
	Level 1		Level 2		Level 3
Assets
None	$		$		$
Total assets		-		-		-
Liabilities
Warrant derivative liability		-		-		12,796,146
Conversion option derivative liability		-		-		5,411,187
Total liabilities	$	-	$	-	$	18,207,333

The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy:

	Significant Unobservable				Significant Unobservable
	Inputs				Inputs
	(Level 3)				(Level 3)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016			2015
Beginning balance	$	9,307,216	$	3,596,052	$	18,207,333		$	847,791
Change in fair value		3,274,387		8,977,501		(6,170,172	)		11,418,423
Additions reclassified from equity		-		5,743,021		-			5,819,389
Additions recognized as compensation expense		-		-		544,442			230,971
Ending balance	$	12,581,603	$	18,316,574	$	12,581,603		$	18,316,574

2. DEBT

Notes Payable

The Company has a note payable of $100,000 due to its former Chief Executive Officer and President. The note is due on demand and bears an interest rate at the minimum applicable rate for loans of similar duration, which was 0.5% as of September 30, 2016.

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During the year ended December 31, 2015, the Company issued a promissory note of $50,000. The term of the note expires 120 days from the effective date. 100,000 cashless warrants for the Company’s common shares were issued with the debt at a strike price of $0.50/share in lieu of cash interest.. The relative fair value of the warrants of $45,243 was recognized as a debt discount which is being amortized on a straight-line basis over the term of the note. The Company recognized interest expense of $45,243 associated with the amortization of debt discount for the year ended December 31, 2015. On May 12, 2016, this note was forgiven in exchange for a new convertible note that bears interest of 8% per annum, a maturity date of one year and is convertible into units at $0.50 per unit, with each unit consisting of a share of common stock and a warrant with a five year life from the date of conversion and an exercise price of $0.50 per share, subject to certain anti-dilution provisions. This modification qualifies as an extinguishment of debt. The fair value of 50,000 warrants issued in connection with the modification which have a term of 5 years and are exercisable at $0.50 per share resulted in a loss on extinguishment of debt of $44,044. The modified note also gave rise to a beneficial conversion feature of $37,584 which is recognized as additional paid in capital and a corresponding debt discount. All debt discounts are being recognized on a straight-line basis over the term of the note. The note also contains an additional warrant expense of $12,415 associated with the warrants that are to be issued upon conversion, which is to be recognized only upon conversion.

During the three months ended September 30, 2016, the Company issued a promissory note of $300,000. The term of the note expires one year from the effective date and has an interest rate of 10%. 600,000 cashless warrants for the Company’s common shares were issued with the debt at a strike price of $0.50/share in lieu of cash interest. The relative fair value of the warrants of $235,188 was recognized as a debt discount which is being amortized on a straight-line basis over the term of the note. The Company recognized interest expense of $19,599 associated with the amortization of debt discount for the three and nine months ended September 30, 2016.

As of September 30, 2016 and December 31, 2015, the aggregate outstanding balance of non-convertible notes payable was $400,000 and $150,000, respectively.

Notes Payable – Related Party

On February 26, 2014, the Company borrowed $150,000 under a short term note agreement with a related party, the Chief Executive Officer’s son. Under the terms of this agreement, the note was to be repaid within 6 months of funding. In November 2014, the note agreement was amended to extend the due date to February 26, 2015, and in April of 2015, the note agreement was amended to extend the maturity date to February 26, 2016 and set a 4% simple interest rate on the note. This note was paid in full in January of 2016 along with $509 of accrued interest.

In 2015, the Company issued promissory notes to a majority shareholder in aggregate of $625,000 (“Notes #1 to #4”). The notes have a term ranging from 120 – 150 days from the effective date. 1,250,000 cashless warrants for the Company’s common shares were issued with the debt at a strike price of $0.50/share in lieu of cash interest. On January 6, 2016, the Company issued an additional promissory note to the same majority shareholder in the amount of $1,375,000 in exchange for a loan in that amount (“Note #5). The Company issued 2,750,000 warrants in connection with this Note #5, for the Company’s common stock at an exercise price of $0.50 per share. The total relative fair value of the warrants of $996,178 was recognized as a debt discount which is being amortized on a straight-line basis over the term of the notes. Notes #1 to #4 and Note #5 shall be collectively referred to herein as the “$2M Notes.”

On January 22, 2016, the Company entered into a Note Conversion Agreement (the “Conversion Agreement”) with the holder of the $2 million notes. Pursuant to the Conversion Agreement, the investor converted the $2 million notes, which totaled $2,000,000, into an investment of $2,000,000 into the Company’s private placement of convertible notes and warrants. This extinguishment of the $2 million notes resulted in a loss on extinguishment of debt of $3,163,303 which included an unamortized discount of $926,382 and $2,236,921 representing the fair value of 2,000,000 warrants issued in connection with the Note Conversion Agreement. Additionally, the Company recognized a beneficial conversion feature of $1,100,735 in accordance with the provisions of ASC 470-20 “ Debt – Debt with Conversion and Other Options” which is reflected as an increase in additional paid-in-capital and a corresponding debt discount which was amortized on a straight line basis over the life of the note.

On January 25, 2016, the investor converted the convertible note and accrued interest into 4,320,000 shares of the Company’s common stock and a warrant to purchase 4,320,000 shares of the Company’s common stock with a ten year term and an exercise price of $0.50 per share. Of the 4,320,000 shares of common stock, 320,000 shares represent interest paid on the convertible note pursuant to the terms of the conversion agreement in the amount of $160,000. Upon conversion, the Company accelerated the recognition of all remaining debt discount and also recognized an additional interest expense of $899,265 associated with the warrants that were issued upon conversion. This contingent beneficial conversion feature was immediately recognized as interest expense with an offset to additional paid-in-capital.

As of September 30, 2016 and December 31, 2015, the aggregate outstanding balance of notes payable to related parties was $0 and $670,848, respectively, net of unamortized discounts of $0 and $104,152, respectively.

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Advances – Related Party

During the three and nine months ended September 30, 2016, the Company received advances from its Chief Executive Officer totaling $0 and $510,000, respectively, and repaid advances totaling $150,000 and $270,000, respectively.

As of September 30, 2016 and December 31, 2015, the aggregate outstanding balance of advances to related parties was $350,000 and $110,000, respectively.

Convertible Notes Payable

In addition to the $2,000,000 convertible note described above in the Notes Payable-Related Party section, on March 7, 2016, the Company received proceeds of $80,000 in exchange for a convertible note and the issuance of 80,000 warrants with a five year life and an exercise price of $0.50 per share. The convertible note has a principal amount of $80,000, interest of 8% per annum, a maturity date of one year and is convertible into 160,000 units, with each unit consisting of a share of common stock and a warrant with a five year life from the date of conversion and an exercise price of $0.50 per share, subject to certain anti-dilution provisions. The relative fair value of the 80,000 warrants issued with the debt was determined to be $38,205 and was recognized as a discount to the debt. This note also gave rise to a beneficial conversion feature of $22,290 which is recognized as additional-paid-in capital and a corresponding debt discount. All debt discounts are being recognized on a straight-line basis over the term of the note. The note also contains an additional warrant expense of $19,505 associated with the warrants that are to be issued upon conversion, which is to be recognized only upon conversion.

From April 18, 2016 through June 30, 2016, the Company received additional aggregate proceeds of $375,000 in exchange for eight convertible notes and the issuance of 375,000 warrants with a five year life and exercise price of $0.50 per share. The convertible notes have an aggregate principal amount of $375,000, interest of 8% per annum, a maturity date of one year and are convertible into an aggregate of 750,000 units, with each unit consisting of a share of common stock and a warrant with a five year life from the date of conversion and an exercise price of $0.50 per share, subject to certain anti-dilution provisions. The aggregate relative fair value of the 375,000 warrants issued with the debt was determined to be $158,423 and was recognized as a discount to the debt. These notes also gave rise to a beneficial conversion feature of $116,129 which is recognized as additional paid in capital and a corresponding debt discount. All debt discounts are being recognized on a straight-line basis over the term of the note. The note also contains an additional warrant expense of $100,449 associated with the warrants that are to be issued upon conversion, which is to be recognized only upon conversion.

On July 13, 2016, the Company entered into a note purchase agreement with an investor pursuant to which an investor purchased a promissory note from the Company and received 500,000 warrants with a seven year life and exercise price of $0.50 per share in exchange for $500,000. The promissory note had a clause that automatically modified it 30 days after issuance (on August 12, 2016) into a convertible note. The convertible note has a principal amount of $500,000, includes the issuance of 500,000 additional warrants, interest of 8% per annum, a maturity date of one year and is convertible into 1,000,000 units, with each unit consisting of a share of common stock and a warrant with a five year life from the date of conversion and an exercise price of $0.50 per share, subject to certain anti-dilution provisions. The relative fair value of the 500,000 warrants issued on July 13, 2016 was $161,010. The relative fair value of the 500,000 warrants issued on August 12, 2016 was $117,377. The total of $278,386 was recognized as a discount to the debt. This note also gave rise to a beneficial conversion feature of $123,233 which is recognized as additional paid in capital and a corresponding debt discount. All debt discounts are being recognized on a straight-line basis over the term of the note. The note also contains an additional warrant expense of $98,381 associated with the warrants that are to be issued upon conversion, which is to be recognized only upon conversion.

From July 6, 2016 through September 30, 2016, the Company received additional aggregate proceeds of $244,500 in exchange for 12 convertible notes and the issuance of 244,500 warrants with a five year life and exercise price of $0.50 per share. The convertible notes have an aggregate principal amount of $244,500, interest of 8% per annum, a maturity date of one year and are convertible into an aggregate of 489,000 units, with each unit consisting of a share of common stock and a warrant with a five year life from the date of conversion and an exercise price of $0.50 per share, subject to certain anti-dilution provisions. The aggregate relative fair value of the 244,500 warrants issued with the debt was determined to be $102,835 and was recognized as a discount to the debt. These notes also gave rise to a beneficial conversion feature of $78,673 which is recognized as additional paid in capital and a corresponding debt discount. All debt discounts are being recognized on a straight-line basis over the term of the note. The note also contains an additional warrant expense of $62,992 associated with the warrants that are to be issued upon conversion, which is to be recognized only upon conversion.

During the three months ended March 31, 2016, the full principal balances of certain notes of $30,000 with accrued interest of $790 were converted pursuant to the terms of the notes into 61,578 shares of the Company’s common stock and 61,578 warrants to purchase common stock. Upon conversion, the Company accelerated the recognition of all remaining debt discount and also recognized interest expense of $3,787 associated with the warrants that were issued upon conversion. This additional warrant expense was immediately recognized as interest expense with an offset to additional paid-in-capital.

During the three months ended June 30, 2016, the full principal balances of certain notes totaling $267,144 with accrued interest of $21,371 were converted pursuant to the terms of the notes into 577,031 shares of the Company’s common stock and 577,031 warrants to purchase common stock. Upon conversion, the Company accelerated the recognition of all remaining debt discount and also recognized additional interest expense of $56,197 associated with the warrants that were issued upon exercise. This additional warrant expense was immediately recognized as interest expense with an offset to additional paid-in-capital.

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During the three months ended September 30, 2016, the full principal balances of certain notes totaling $496,477 with accrued interest of $39,718 were converted pursuant to the terms of the notes into 1,072,390 shares of the Company’s common stock and 1,072,390 warrants to purchase common stock. Upon conversion, the Company accelerated the recognition of all remaining debt discount and also recognized additional interest expense of $131,510 associated with the warrants that were issued upon conversion. This additional warrant expense was immediately recognized as interest expense with an offset to additional paid-in-capital.

Aggregate amortization of the discounts on the convertible notes for the nine months ended September 30, 2016 and 2015 was $2,030,827 and $626,187, respectively. As of September 30, 2016 and December 31, 2015, the aggregate outstanding balance of convertible notes payable was $1,339,144 and $1,123,818, respectively, net of unamortized discounts of $625,856 and $561,728, respectively.

Derivative Liabilities - Convertible Notes

As of September 30, 2016, the fair value of the outstanding convertible note derivatives was determined to be $3,590,660 and recognized a gain of $1,820,527. There were no new convertible note derivatives that arose during the three or nine months ended September 30, 2016.

Accounts Payable - Related Party

As of September 30, 2016 and December 31, 2015, there is $1,420 and $62,469, respectively, due to a related party, the Company’s Chief Financial Officer, which is non-interest bearing and due on demand.

3. EQUITY

Common Stock

During the six months ended June 30, 2016, the Company issued 245,878 common shares and warrants to purchase 426,741 common shares of the Company’s common stock in exchange for proceeds of $67,536. The Company determined a fair value for the shares and warrants to be $617,174. The cash was received prior to December 31, 2015 and was recorded as an accrued liability at December 31, 2015. This transaction resulted in a loss on extinguishment of liability of $549,638.

During the three months ended March 31, 2016, the Company issued 372,263 common shares and warrants to purchase 1,140,662 common shares of the Company’s common stock in exchange for proceeds of $172,342, $40,062 of which was received subsequent to the end of the quarter.

During the three months ended June 30, 2016, the Company issued 1,007,535 common shares and warrants to purchase 3,031,050 common shares of the Company’s common stock in exchange for proceeds of $466,451.

During the three months ended June 30, 2016, the Company issued 12,577 common shares on exercise of warrant at price of $0.50 per share for a total of $6,288.

During the three months ended September 30, 2016, the Company issued 54,278 common shares and warrants to purchase 205,050 common shares of the Company’s common stock in exchange for proceeds of $25,129 and interest expense of $6,023.

Stock Options

A summary of stock option activity during the nine months ended September 30, 2016 is as follows:

					Weighted
			Weighted		Average
			Average		Remaining
	Number of		Exercise		Contractual
	Shares		Price		Life (years)
Outstanding at December 31, 2015		50,000	$	0.50		10.0
Granted		-
Exercised		-
Forfeited		-
Outstanding at September 30, 2016		50,000		0.50		9.2
Exercisable at September 30, 2016		10,000	$	0.50		9.2

Stock option awards are expensed on a straight-line basis over the requisite service period. During the three and nine months ended September 30, 2016 the Company recognized expense of $4,164 and $12,489, respectively, associated with stock option awards. During the three and nine months ended September 30, 2015 the Company recognized expense of $0 and $0, respectively, associated with stock option awards. At September 30, 2016, future stock compensation expense (net of estimated forfeitures) not yet recognized was $56,448 and will be recognized over a weighted average remaining vesting period of 3.4 years.

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The intrinsic value of the Company’s stock options outstanding was $26,311 at September 30, 2016.

Warrants

On September 1, 2015 the Company entered into an Employment Agreement (the “Employment Agreement”) with Mark Tobin in his capacity as the Company’s Chief Financial Officer. Pursuant to the Employment Agreement, on September 1, 2015 the Company issued Mr. Tobin warrants to purchase 1,500,000 shares of the Company’s common stock at $1.00 per share (the “Warrant Shares”). The fair value of the warrants was determined to be $2,835,061 using the Black-Scholes option pricing model. 375,000 of the Warrant Shares vested on September 1, 2015, an additional 375,000 warrant shares vested on the first anniversary date of the Employment Agreement, an additional 375,000 warrant shares will vest on the second anniversary date of the Employment Agreement, and, an additional 375,000 warrant shares will vest on the third anniversary date of the Employment Agreement. Warrant expense of $265,787 and $915,489 was recognized during the three and nine months ended September 30, 2016, respectively. The agreement contains an anti-dilution provision and therefore the exercise price at September 30, 2016 is $0.50 per share.

On September 23, 2016, the Company issued warrants to purchase 15,000 shares of the Company’s common stock at $1.00 per share to a consultant in exchange for services already performed. The warrants have a five year term and are immediately vested. The fair value of the warrants was determined to be $13,618 using the Black-Scholes option pricing model of which $13,618 was recognized as expense during the three and nine months ended September 30, 2016.

The following summarizes the warrant activity for the nine months ended September 30, 2016:

						Weighted
						Average
				Weighted		Remaining
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(in years)		Value
Outstanding as of December 31, 2015		40,026,431		$	1.83		4.6	$	54,932,218
Granted		19,254,051			-
Expired		(110,000	)		-
Exercised		(12,577	)		-

Outstanding as of September 30, 2016		59,157,905		$	0.83		4.9	$	60,709,026

Exercisable as of September 30, 2016		57,220,405		$	0.83		4.9	$	60,709,026

Derivative Liabilities - Warrants

The anti-dilution features in the freestanding warrants issued in the nine months ended September 30, 2016 cause the instruments to no longer be indexed to the Company’s own stock and requires that they be accounted for as derivative liabilities based on guidance in FASB ASC 815, Derivatives and Hedging.

The valuation of the derivative liability of the warrants was determined through the use of a Black Scholes options model, which the Company believes approximates fair value. Using this model, the Company had a balance of $12,796,146 at December 31, 2015. The Company recorded the change in the fair value of the warrant liabilities recognizing a gain of $4,349,645 and warrant expense of $1,277,699 for the nine months ended September 30, 2016, to reflect the value of the warrant derivative liability of $8,990,943 as of September 30, 2016.

On November 4, 2015, the Company entered into an amendment to the Independent Contractor Agreement (the “Amendment”) with a service provider pursuant to which the service provider is to be issued warrants to purchase 2,400,000 shares of the Company’s common stock at $1.00 per share (the “Warrant Shares”). 1,200,000 of the Warrant Shares vested on November 4, 2015, an additional 600,000 Warrant Shares vested on the first anniversary date of the Amendment, and an additional 600,000 Warrant Shares will vest on the second anniversary date of the Amendment. The fair value of the first 1,200,000 Warrants Shares was determined to be $1,115,964 using the Black-Scholes option pricing model and was recognized as expense during the year ended December 31, 2015. The fair value of the two tranches of 600,000 Warrant Shares was determined to total $1,195,985 as of September 30, 2016 using the Black-Scholes option pricing model of which $373,008 and $604,187 was recognized as expense during the three and nine months ended September 30, 2016, respectively.

On May 13, 2016, the Company entered into an agreement with a service provider pursuant to which the service provider is to be issued warrants to purchase 1,000,000 shares of the Company’s common stock at $1.00 per share (the “Warrant Shares”). 500,000 of the Warrant Shares vested on May 13, 2016, an additional 250,000 warrant shares will vest on the first anniversary date of the agreement, an additional 250,000 Warrant Shares will vest on the second anniversary date of the agreement. The fair value of the first 500,000 Warrant Shares was determined to be $388,888 using the Black-Scholes option pricing model and was recognized as expense and as derivative liabilities during the quarter ended June 30, 2016. The fair value of the two tranches of 250,000 Warrant Shares was determined to total $500,539 as of September 30, 2016 using the Black-Scholes option pricing model of which $92,842 and 517,958 was recognized as expense during the three and nine months ended September 30, 2016, respectively.

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On May 13, 2016, the Company entered into an agreement with a service provider pursuant to which the service provider is to be issued warrants to purchase 200,000 shares of the Company’s common stock at $1.00 per share (the “Warrant Shares”). The Warrant Shares are immediately vested. The fair value of the Warrant Shares was determined to total $199,905 as of September 30, 2016 using the Black-Scholes option pricing model of which $155,554 was recognized as expense during the three and nine months ended September 30, 2016.

The warrants were valued using the Black-Scholes pricing model with the following assumptions:

	Nine Months Ended September 30,
	2016	2015
Volatility	129-.70 % - 183.62%	113.46% - 141.78%
Risk-free interest rate	0.44% - 1.78%	0.08% - 1.88%
Expected term	2.25 - 10 years	0.25 - 5 years

4. NET LOSS PER SHARE

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015

Net loss	$	(5,768,652	)	$	(11,655,610	)	$	(6,227,809	)	$	(17,802,227	)

Basic weighted average common shares outstanding		58,973,457			49,488,166			57,103,514			46,759,780
Add incremental shares for:
Stock options		-			-			-			-
Diluted weighted average common shares outstanding		58,973,457			49,488,166			57,103,514			46,759,780

Net income loss per share:
Basic and diluted	$	(0.10	)	$	(0.24	)	$	(0.11	)	$	(0.38	)

5. COMMITMENTS AND CONTINGENCIES

Lease Commitments

In November 2013, the Company entered into a 60-month lease agreement for its corporation facility in Arizona. Total rent expense for the three and nine months ended September 30, 2016 was $21,039 and $64,375, respectively. Total rent expense for the three and nine months ended September 30, 2015 was $22,807 and $70,701, respectively.

Future minimum lease payments are as follows:

2016	$	20,770
2017		84,233
2018		71,797
2019		-
2020		-
Thereafter		-
Total	$	176,800

Concentrations

All of the Company’s revenue and accounts receivable are currently earned from one customer.

Legal Matters

As of March 30, 2015, shareholders holding approximately 67.26% of the total shares of common stock of NanoFlex Power Corporation (the “Company,” “we,” “our” or “us”) that are entitled to vote on all Company matters approved by written consent the removal of John D. Kuhns from his position as a member of the Company’s Board of Directors. Mr. Kuhns’ removal was for “Cause” as defined under his Employment Agreement as amended and dated as of October 1, 2013 (the “Employment Agreement”). The removal arose as a result of his documented conduct and statements, which breached his fiduciary duties to the Company in order to advance personal monetary and other interests, and thereby threatened serious financial injury to the Company, its shareholders and its debtholders.

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On March 31, 2015, the Board of Directors terminated the Employment Agreement with Mr. Kuhns for Cause and removed him from his positions as Co-CEO, and from all other officer positions he held with the Company and its subsidiaries and affiliates, and all director positions with the Company’s subsidiaries and affiliates.

The Response Letter was accompanied by a copy of a complaint (the “Complaint”) filed by John D, Kuhns (the “Plaintiff”) in the United States District Court Southern District of New York against the Company, Mr. Dean L. Ledger, our current CEO and member of our Board of Directors, Mr. Robert J. Fasnacht, our former Executive Vice President and former member of our Board of Directors and Mr. Ronald B. Foster, a shareholder of the Company (each, a “Defendant,” collectively, the “Defendants”). The Complaint alleges, among other things, that the Plaintiff was terminated by the Company in violation of Section 922 of the Dodd-Frank Act, that the Company wrongfully terminated the Employment Agreement, that the Defendants made false statements to shareholders regarding the Plaintiff, that the Defendants (other than the Company) tortuously interfered with the Plaintiff’s Employment Agreement, and that Mr. Ledger and Mr. Fasnacht breached their fiduciary duties to the Company and its shareholders.

Other than the foregoing, there have been no new developments in the case since the filing of the answer. The Company believes that the Plaintiff’s allegations and claims are without any merit and plans to continue to vigorously defend against the claims.

6. SUBSEQUENT EVENTS

On October 7, 2016 the Company entered into a note purchase agreement with an investor pursuant to which an investor purchased a promissory note from the Company in exchange for $100,000. In connection with the note, the investor was also issued a warrant to purchase 200,000 shares of the Company’s common stock with a 5 year term and $.50 exercise price and a cashless conversion feature. The Note automatically converted by its terms on November 7, 2016, 30 days after issuance into an investment in the principal amount of the note in the Company’s convertible notes and warrants, and upon automatic conversion, the investor was issued a one year promissory note for $100,000 convertible into shares of the Company’s Common Stock at a $.50 conversion price and 5 year warrants to purchase 100,000 shares of Common Stock with an exercise price of $.50 and a cashless conversion feature.

During October, 2016, the Company issued and sold a convertible promissory note totaling $25,000 together with warrants to purchase 25,000 shares of the Company’s Common Stock for gross proceeds of $25,000 pursuant to certain note subscription agreements entered into between the Company and an investor. Such warrants have an exercise price of $0.50 and a term of 5 years and a cashless conversion feature. As of the date of this report, the note has been converted pursuant to their terms into warrants to purchase shares of the Company’s Common Stock and shares of Common Stock as set forth below.

During October, 2016, the Company issued 122,400 shares of the Company’s Common Stock upon conversion of certain promissory notes.

During October, 2016, the Company issued warrants to purchase 122,400 shares of its Common Stock related to the conversion of certain convertible notes. Such warrants have an exercise price of $.50 and a term of 5 years and a cashless conversion feature.

On October 3, 2016, 50,000 stock options were granted to an employee of the Company. The options vest on a monthly basis of 1,000 shares per month beginning on October 3, 2016, over a 50 month period. The options expire 5 years after vesting.

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On October 21, 2016, the Company entered into an amendment to the Independent Contractor Agreement (the “Allen Amendment”) with Mr. Norman Allen; the Allen Amendment added in a clause stating that if the Company raises not less than $6,000,000 in funds from sales of its securities subsequent to the Allen Amendment then, the cash compensation under the Independent Contractor Agreement would be amended from a $1,500 daily fee to a $15,000 monthly fee. A copy of the Allen Amendment is filed herewith as Exhibit 10.1.

As reported by the Company in its current report on Form 8-K filed on October 26, 2016, on October 21, 2016, the Company entered into a second amendment to the Employment Agreement with Dean Ledger, the Company’s Chief Executive Officer (the “Ledger Amendment”). The Ledger Amendment added in a clause stating that if the Company raises not less than $6,000,000 in funds from sales of its securities subsequent to the Ledger Amendment, then Mr. Ledger’s base salary would increase from $210,000 to $240,000 and reduced Mr. Ledger’s severance upon the termination of Mr. Ledger in connection with a change of control transaction to six months. A copy of the Ledger Amendment was filed as Exhibit 10.1 to the Form 8-K. In the first amendment to the Employment Agreement dated May 8, 2015, Mr. Ledger agreed to a salary reduction of his base salary from $300,000 to $210,000. A copy of the first amendment to the Employment Agreement was filed as Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed on March 18, 2016. A copy of the Employment agreement was filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on November 25, 2013.

Further, as reported by the Company in its current report on Form 8-K filed on October 26, 2016, on October 21, 2016, the Company entered into an amendment (the “Tobin Amendment”) to the Employment Agreement with Mark Tobin, the Company’s Chief Financial Officer. The Tobin Amendment added in a clause stating that if the Company raises not less than $6,000,000 in funds from sales of its securities subsequent to the Tobin Amendment, then Mr. Tobin’s base salary would increase from $190,000 to $225,000 and added a termination for “Good Reason” clause, as well as a six month severance upon the termination of Mr. Tobin. The Tobin Amendment also added the responsibilities of an Executive Vice President to Mr. Tobin’s duties and responsibilities under his Employment Agreement. A copy of the Tobin Amendment was filed as Exhibit 10.2 to the Form 8-K. A copy of the Employment Agreement was filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ending September 30, 2015 filed on November 13, 2015 and is also field herewith as Exhibit 10.2.

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CONTENTS

FINANCIAL STATEMENTS	Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-17

CONSOLIDATED BALANCE SHEETS	F-18

CONSOLIDATED STATEMENTS OF OPERATIONS	F-19

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT	F-20

CONSOLIDATED STATEMENTS OF CASH FLOWS	F-21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	F-22

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of

NanoFlex Power Corporation

Scottsdale, Arizona

We have audited the accompanying consolidated balance sheets of NanoFlex Power Corporation and its subsidiaries (collectively the “Company”) as of December 31, 2015 and 2014, and the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for each of the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred losses from operation since inception and has a working capital deficit. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to this mater are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

March 18, 2016, except for Note 1, 2, 4 and 6, as to which the date is November 28, 2016

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NANOFLEX POWER CORPORATION

CONSOLIDATED BALANCE SHEETS

	December 31, 2015			December 31, 2014
ASSETS
Current assets:
Cash	$	6,255		$	168
Accounts receivable		95,623			-
Prepaid expenses and other current assets		854			5,519
Total current assets		102,732			5,687

Property and equipment, net		13,735			13,678

Total assets	$	116,467		$	19,365

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Accounts payable	$	3,341,905		$	1,857,911
Accounts payable- related party		62,469			48,064
Accrued expenses		1,840,537			1,958,403
Warrant derivative liability		12,796,146			847,791
Conversion option derivative liability		5,411,187			-
Short-term debt, net of unamortized discounts		150,000			100,000
Short-term debt- related party, net of unamortized discounts		670,848			150,000
Convertible debt, net of unamortized discounts		1,123,818			673,389
Advances - related party		110,000			428,150
Total current liabilities		25,506,910			6,063,708
Total liabilities		25,506,910			6,063,708

Stockholders' deficit:
Common stock, 500,000,000 authorized, $0.0001 par value, 51,473,157 and 44,306,278 issued and outstanding as of December 31, 2015 and December 31, 2014, respectively		5,148			4,431
Additional paid-in capital		176,108,887			172,139,185
Accumulated deficit		(201,504,478	)		(178,187,959	)
Total stockholders' deficit		(25,390,443	)		(6,044,343	)

Total liabilities and stockholders' deficit	$	116,467		$	19,365

See accompanying notes to consolidated financial statements.

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NANOFLEX POWER CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2015			2014

Revenue	$	119,998			-
Cost of services		(114,947	)		-
Gross profit		5,051			-
Operating expenses:
Research and development	$	2,325,539		$	1,174,473
Patent application and prosecution fees		1,724,988			2,394,118
Selling, general and administrative expenses		7,018,803			2,314,315
Total operating expenses		11,069,330			5,882,906

Loss from operations		(11,064,279	)		(5,882,906	)

Other income (expenses):
Gain (loss) on change in fair value of derivative		(10,193,218	)		38,497
Loss on extinguishment of debt		(150,000	)		-
Interest expense		(1,909,022	)		(80,522	)
Total other expense		(12,252,240	)		(42,025	)

Net loss	$	(23,316,519	)	$	(5,924,931	)

Net loss per share, basic and diluted	$	(0.49	)	$	(0.14	)

Weighted average common shares outstanding, basic and diluted		47,893,197			43,640,824

See accompanying notes to consolidated financial statements.

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NANOFLEX POWER CORPORATION

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

	Common Stock						Additional Paid in			Accumulated
	Shares			Amount			Capital			Deficit			Total
Balance at December 31, 2013		42,799,278		$	4,280		$	170,813,285		$	(172,263,028	)	$	(1,445,463	)
Common Stock and warrants issued for cash		1,507,000			151			1,883,599			-			1,883,750
Fair value of warrant derivative liability		-			-			(688,614	)		-			(688,614	)
Recognition of contingent beneficial conversion feature and warrants		-			-			130,915			-			130,915
Net loss		-			-						(5,924,931	)		(5,924,931	)
Balance at December 31, 2014		44,306,278		$	4,431		$	172,139,185		$	(178,187,959	)	$	(6,044,343	)
Common stock returned and cancelled for issuance of convertible note		(75,288	)		(7	)		(37,637	)		-			(37,644	)
Common stock and warrants issued for cash		186,000			19			135,981			-			136,000
Common stock issued for services		350,000			35			349,965			-			350,000
Warrants issued for services		-			-			4,615,154			-			4,615,154
Warrants exercised for cash		1,828,437			183			914,037			-			914,220
Additional common shares issued related to warrant reset		1,554,500			155			(155	)		-			-
Warrants reclassified as derivative liabilities		-			-			(76,368	)		-			(76,368	)
Warrants issued upon conversion of debt		-			-			494,730			-			494,730
Convertible debt reclassified as derivative liabilities		-			-			(5,743,021	)		-			(5,743,021	)
Conversion of debt to common stock and warrants		3,323,230			332			1,661,283			-			1,661,615
Beneficial conversion feature and warrants issued with debt		-			-			1,655,369			-			1,655,369
Options issued for services		-			-			364			-			364
Net loss		-			-			-			(23,316,519	)		(23,316,519	)
Balance at December 31, 2015		51,473,157		$	5,148		$	176,108,887		$	(201,504,478	)	$	(25,390,443	)

See accompanying notes to consolidated financial statements.

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NANOFLEX POWER CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(23,316,519	)	$	(5,924,931	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		5,785			3,819
Amortization of debt discounts		1,292,525			4,304
Loss (gain)on change in fair value of derivative liabilities		10,193,218			(38,497	)
Loss on extinguishment of debt		150,000			-
Derivative warrants issued for services		1,346,935			-
Warrants issued as compensation		4,615,154			-
Common shares issued for services		350,000			-
Stock options issued for services		364			-
Interest expense from warrants issued upon conversion of debt		494,730			-
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		4,665			8,126
Accounts receivable		(95,623	)		-
Accounts payable		1,483,994			1,168,792
Accounts payable - related party		14,405			48,064
Accrued expenses		(41,179	)		1,281,651
Net cash used in operating activities		(3,501,546	)		(3,448,672	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets		(5,842	)		(10,064	)
Net cash used in investing activities		(5,842	)		(10,064	)

CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on convertible debt		2,106,405			800,000
Proceeds from exercise of warrants		914,220			-
Borrowings from short-term debt		50,000			-
Advances received from related party		212,350			721,150
Proceeds from sale of common shares and warrants		136,000			1,883,750
Advances repaid to related party		(530,500	)		(293,000	)
Borrowings on related party debt		625,000			150,000
Net cash provided by financing activities		3,513,475			3,261,900

NET INCREASE (DECREASE) IN CASH		6,087			(196,836	)
Cash, beginning of the period		168			197,004
Cash, end of the period	$	6,255		$	168

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest	$	11,984		$	-
Cash paid for income taxes	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES
Warrants and common shares issued for debt	$	1,634,928		$	-
Debt discount on beneficial conversion feature and warrants issued with debt		1,655,369			130,915
Reclassification of conversion options as derivative liabilities		5,743,021			-
Reclassification of warrants as derivative liabilities		76,368			688,614
Accrued interest converted to debt		50,000			-
Warrants and common shares issued for accrued interest		26,687			-
Issuance of common stock related to PIPE II make-hold provisions		155			-
Common stock returned and cancelled for issuance of convertible notes		37,644			-

See accompanying notes to consolidated financial statements.

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NANOFLEX POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Background, Basis of Presentation

Background

NanoFlex Power Corporation, formerly known as Universal Technology Systems, Corp., was incorporated in the State of Florida on January 28, 2013. On September 24, 2013, the Company completed the acquisition of Global Photonic Energy Corporation, a Pennsylvania corporation (“GPEC”), pursuant to a Share Exchange Agreement (the “Share Exchange Transaction”). Immediately following the closing of the Share Exchange Transaction, the Company owned 100% of equity interests of GPEC and GPEC became a wholly-owned subsidiary of the Company. On November 25, 2013, the Company changed its name from “Universal Technology Systems, Corp.” to “NanoFlex Power Corporation” and its trading symbol was changed to “OPVS” on December 26, 2013.

GPEC was founded and incorporated on February 7, 1994 and is engaged in the research, development, and commercialization of advanced configuration solar technologies. The Company’s sponsored research programs at the University of Southern California (“USC”), the University of Michigan (“Michigan”), and Princeton University have resulted in an extensive portfolio of issued and pending patents worldwide. Pursuant to its sponsored research agreements, NanoFlex has obtained the exclusive worldwide license and right to sublicense any and all intellectual property resulting from the Company’s sponsored research programs. While each patent is issued in the name of the respective university that developed the subject technology, NanoFlex has exclusive commercial license rights to all of the patents and their attendant technologies and the patents are referred to herein as being NanoFlex’s patents.

These patented and patent-pending technologies fall into two general categories. Gallium Arsenide (GaAs) solar technologies involve fabrication processes and device architectures to substantially reduce the cost of ultra-high efficiency GaAs thin films. Organic Photovoltaics (OPV) technologies involve the materials, architectures, and fabrication processes for ultra-thin film semi-transparent solar cells. The technologies are targeted at, but not limited to, certain broad applications that require high power conversion efficiency, flexibility, and light weight. These applications include, but are not limited to: (a) portable power mats and sheets for military and field use, (b) building applied photovoltaics (“BAPV”), (c) building integrated photovoltaics (“BIPV”), (d) space vehicles and unmanned aerial vehicles (“UAVs”), (e) semi-transparent solar power generating glazing or windows, and (f) ultra-thin solar films for consumer applications such as mobile devices or automobiles. Laboratory feasibility prototypes have been developed by the engineering team at University of Michigan that successfully demonstrate key building block principles for these technology application areas and the Company is working with industry partners to commercialize its technologies.

Basis of Presentation

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, income taxes, inventory, long lived assets and contingencies. These estimates are based on management’s best knowledge of current events, historical experience, actions that we may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results could differ materially from these estimates and assumptions.

Revision of Previously-Issued Financial Statements 2014

During the three months ended June 30, 2015, the Company identified errors in its financial statements for the last quarter of the fiscal year ended December 31, 2013, all quarters of fiscal year ended December 31, 2014, and the first quarter of fiscal year ended December 31, 2015 as included in the Company’s 2013 annual report on Form 10-K, the Company’s 2014 interim reports on Form 10-Q, the Company’s 2014 annual report on Form 10-K, and Company’s first quarter of 2015 interim reports on Form 10-Q, respectively, related to an unrecorded derivative liability and the related gain or loss on the change in fair value of the derivative liability. The derivative liability is associated with certain warrants containing anti-dilution features that cause the instruments to no longer be indexed to the Company’s own stock. The Company has made adjustments in each period related to this.

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The Company determined that the correction of the cumulative amounts of the errors would be material to the year ended December 31, 2015 financial statements, and as such, the Company revised its previously-issued financial statements for each period in 2013, 2014 and 2015. The financial statements for the year ended December 31, 2014 included herein are revised as described below for those adjustments.

All financial information contained in the accompanying notes to these financial statements has been revised to reflect the correction of these errors.

The following table presents the effect of the aforementioned revision on the Company’s consolidated balance sheet as of December 31, 2014:

	As of December 31, 2014
	As Reported			Revision			As Revised
Warrant liability	$	-		$	847,791		$	847,791
Total current liabilities		5,215,917			847,791			6,063,708
Total liabilities		5,215,917			847,791			6,063,708
Accumulated deficit		(178,226,456	)		38,497			(178,187,959	)
Additional paid in capital		173,025,473			(886,288	)		172,139,185
Total stockholders' deficit		(5,196,552	)		(847,791	)		(6,044,343	)
Total liabilities and stockholders' deficit		19,365			-			19,365

The following tables present the effect of the aforementioned revisions on the Company’s consolidated statements of operations for the year ended December 31, 2014:

	Year Ended December 31, 2014
	As Reported			Revision			As Revised
Gain (loss) on change in fair value of derivative	$	-		$	38,497		$	38,497
Total other expense		(80,522	)		38,497			(42,025	)
Loss before income tax benefit		(5,963,428	)		38,497			(5,924,931	)
Net loss		(5,963,428	)		38,497			(5,924,931	)
Net loss per share (basic and diluted)		(0.14	)		(0.00	)		(0.14	)

The following tables present the effect of the aforementioned revisions on the Company’s consolidated statements of cash flows for the year ended December 31, 2014:

	Year Ended December 31, 2014
	As Reported			Revision			As Revised
Cash flows from operating activities:
Net loss	$	(5,963,428	)	$	38,497		$	(5,924,931	)
Adjustments to reconcile net loss to net cash used in operating activities:
(Gain) loss on change in fair value of derivative		-			(38,497	)		(38,497	)
NON-CASH INVESTING AND FINANCING ACTIVITIES
Reclassification of warrants as derivative liabilities		-			688,614			688,614

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Revision of Previously-Issued Financial Statements 2015

The Company determined that the correction of the cumulative amounts of the errors would be material to its consolidated financial statements for the three and six months ended June 30, 2016. Therefore, the Company revised its previously-issued financial statements as of December 31, 2015 and for the third and fourth quarters of fiscal 2015 and first quarter of fiscal 2016. The balance sheet as of December 31, 2015 and the statement of operations for the year ended December 31, 2015 included herein are revised as described below for those adjustments.

All financial information contained in the accompanying notes to these financial statements has been revised to reflect the correction of these errors.

The following tables present the effect of the aforementioned revisions on the Company’s consolidated balance sheet for the year ended December 31, 2015:

	As of December 31, 2015
	As Reported			Revision			As Revised
Conversion option derivative liability	$	8,145,160		$	(2,733,973	)	$	5,411,187
Convertible debt, net of unamortized discounts		1,051,545			72,273			1,123,818
Total current liabilities		28,168,610			(2,661,700	)		25,506,910
Total liabilities		28,168,610			(2,661,700	)		25,506,910
Accumulated deficit		(204,989,355	)		3,484,877			(201,504,478	)
Additional paid in capital		176,932,064			(823,177	)		176,108,887
Total stockholders' deficit		(28,052,143	)		2,661,700			(25,390,443	)

The following tables present the effect of the aforementioned revisions on the Company’s consolidated statement of operations for the year ended December 31, 2015:

	Year Ended December 31, 2015
	As Reported			Revision			As Revised
Loss on change in fair value of derivative	$	(13,901,957	)	$	3,708,739		$	(10,193,218	)
Interest expense		(1,685,160	)		(223,862	)		(1,909,022	)
Total other expense		(15,737,117	)		3,484,877			(12,252,240	)
Net loss		(26,801,396	)		3,484,877			(23,316,519	)
Net loss per share (basic and diluted)		(0.56	)		(0.07	)		(0.49	)

These revisions to the consolidated statements of cash flows for the nine months ended December 31, 2015 did not result in any changes to the amounts previously reported for net cash from (used in) operating, investing and financing activities.

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Sponsored Research Agreement

Research and development of the Technology is being conducted at the University of Southern California (“USC”) and, on a subcontractor basis, at the University of Michigan, beginning 2006 and currently under a 5-year Sponsored Research Agreement dated May 1, 2009. During this period, the Company has agreed to pay USC up to $6,338,341 for work to be performed. On December 20, 2013, the Company entered into a Research Agreement with USC (“2013 Research Agreement”) to amend and replace the 2009 Research Agreement to continue the sponsored research at USC and Michigan from February 1, 2014 through January 31, 2021. On the same day, they have also entered into a Third Amendment to the License Agreement which renews and extends the License Agreement by and between USC, Michigan, Princeton and GPEC (“Third Amendment to License Agreement”). GPEC assigned to the Company and the Company assumed all the rights and obligations under both the 2013 Research Agreement and the Third Amendment to License Agreement.

License Agreement

The Company possesses an exclusive worldwide license and the right to sublicense any and all inventions and intellectual property resulting from the Company’s research agreements. Royalties due under the agreement are 5% of net sales of licensed products or licensed processes used, leased or sold by the Company, 3% of revenues from sublicensing technology and 23% of revenues from any patent rights lawsuit proceeds. Minimum royalties are as follows:

Years ending December 31,
2016			50,000
2017			65,000
2018			75,000
2019			100,000
2020			100,000
2021 and thereafter			100,000

Note 2: Going Concern

The Company has only generated limited revenues to date. The Company has a working capital deficit of $25,404,178 and an accumulated deficit of $201,504,478 as of December 31, 2015. The ability of the Company to continue as a going concern is dependent on raising capital to fund ongoing operations and carry out its business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. To date, the Company has funded its initial operations primarily by way of the sale of equity securities, convertible note financing, short term financing from private parties, and advances from related parties. The Company currently needs to raise additional capital in order to maintain its sponsored research agreements, its patent portfolio, research and development activities and efforts to commercialize its technologies, as well as to make payments on existing liabilities. The Company is continuing to raise capital, as it did during the year ended December 31, 2015, in order to continue the Company’s business operations. The Company currently requires approximately $6 million to $8 million to continue its operations over the next twelve months. There can be no assurance that the Company will be able to continue to raise sufficient capital or that it will be available on terms that are acceptable to the Company and its shareholders. The Company’s management is also actively seeking strategic partners for licensing and/or joint development of Company technologies as well as prioritizing our current IP portfolio to identify opportunities for cost reduction. The Company’s management is also seeking to reduce costs. There can be no assurance that the Company’s management will be successful in its planned efforts, and a failure to do so may lead to the Company being unable to continue its operations.

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Note 3: Summary of Significant Accounting Policies

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its controlled subsidiaries. Intercompany transactions and balances are eliminated at consolidation. Equity investments in which we exercise significant influence, but do not control and are not the primary beneficiary, are accounted for using the equity method of accounting. Investments in which we do not exercise significant influence over the investee are accounted for using the cost method of accounting.

Accounts Receivable

Accounts receivable are carried at the original invoiced amount less an allowance for doubtful accounts based on the probability of future collection. Management reviews accounts receivable on a periodic basis to determine if any receivables will potentially be uncollectible. The Company reserves for receivables that are determined to be uncollectible, if any, in its allowance for doubtful accounts. After the Company has exhausted all collection efforts, the outstanding receivable is written off against the allowance.

Property and Equipment

Impairment of Long-lived Assets

Stock-Based Compensation

Use of Estimates

The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect certain reported amounts and disclosures in the financial statements and accompanying notes. The significant estimates relate useful lives of software licenses, valuation of beneficial conversion feature on convertible debts, valuation of warrants and stock options, and valuation allowance for deferred income taxes. Actual results could differ from those estimates.

Concentration of Credit Risk and Significant Customers

Cash is maintained in bank accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on cash.

All of the Company’s revenue and accounts receivable are currently earned from one customer.

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Revenue Recognition

The Company recognizes revenue from its services when it is probable that the economic benefits associated with the transactions will flow to the Company and the amount of revenue can be measured reliably. This is normally demonstrated when: (i) persuasive evidence of an arrangement exists; (ii) the fee is fixed or determinable; (iii) performance of service has been delivered; and (iv) collection is reasonably assured. Revenue from our joint development agreements are recognized as services are provided and are limited to the total dollar amount specified in the agreement. R&D engineering services, through joint development agreements are a core component of NanoFlex’s operations and business model, since they are a necessary prerequisite to obtaining IP licensing agreements with customers. As such, R&D engineering services are expected to be a sustained revenue stream for NanoFlex as it works with additional customers and the services constitute a portion of the Company's ongoing central operations. The terms of the joint development agreement require the counterparty to pay Nanoflex up to $120,000 for the Company’s engineering related expenses upon successful completion of a proof of concept. Terms of the invoices are net 30 days. As of December 31, 2015, the Company has entered into one joint development agreement.

Research and Development

Research and development costs are expensed in the period they are incurred in accordance with ASC 730, Research and Development unless they meet specific criteria related to technical, market and financial feasibility, as determined by management, including but not limited to the establishment of a clearly defined future market for the product, and the availability of adequate resources to complete the project. If all criteria are met, the costs are deferred and amortized over the expected useful life, or written off if a product is abandoned. At December 31, 2015 and 2014, the Company had no deferred development costs.

Fair Value of Financial Instruments

The carrying value of short-term financial instruments, including cash, accounts receivable, accounts payable and accrued expenses, and short-term borrowings approximate fair value due to the relatively short period to maturity for these instruments. The long-term borrowings approximate fair value since the related rates of interest approximates current market rates.

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse.

We have net operating loss carry-forwards available to reduce future taxable income. Future tax benefits for these net operating loss carry-forwards are recognized to the extent that realization of these benefits is considered more likely than not. To the extent that we will not realize a future tax benefit, a valuation allowance is established.

We recognize and measure benefits for uncertain tax positions using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that is it more likely than not that the tax positions will be sustained upon audit, including resolution of any related appeals or litigation processes. For tax positions that are more likely than not to be sustained upon audit, the second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon settlement. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Significant judgment is required to evaluate uncertain tax positions. Evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of tax audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in income tax expense in the period in which the change is made, which could have a material impact our effective tax position.

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Note 4: Fair Value of Financial Instruments

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

As of December 31, 2015 the significant inputs to the Company’s derivative liability calculation were Level 3 inputs.

The following schedule summarizes the valuation of financial instruments at fair value in the balance sheets as of December 31, 2015 and December 31, 2014:

	Fair Value Measurements as of December 31, 2015
	Level 1		Level 2		Level 3
Assets
None	$		$		$
Total assets		-		-		-
Liabilities
Warrant derivative liability		-		-		12,796,146
Conversion option derivative liability		-		-		5,411,187
Total liabilities		-		-		18,207,333

	Fair Value Measurements as of December 31, 2014
	Level 1		Level 2		Level 3
Assets
None	$		$		$
Total assets		-		-		-
Liabilities
Warrant derivative liability		-		-		847,791
Conversion option derivative liability		-		-		-
Total liabilities		-		-		847,791

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The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy:

	Significant Unobservable
	Inputs
	(Level 3)
	Year Ended December 31,
	2015		2014
Beginning balance		847,791		197,674
Change in fair value		10,193,218		(38,497	)
Additions reclassified from equity		5,819,389		-
Additions recognized as debt discounts		-		688,614
Additions recognized as compensation expense		1,346,935		-
Ending balance		18,207,333		847,791

Note 5: Recent Accounting Pronouncements

In the quarter ended June 30, 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. ASU 2015-03 is not expected to have a material impact on the Company’s consolidated financial statements.

In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments. This ASU 2015-16 simplifies the treatment of adjustments to provisional amounts recognized in the period for items in a business combination for which the accounting is incomplete at the end of the reporting period. The amendments in this ASU are effective for fiscal years beginning after December 15, 2015. As this applies to future business combinations, the adoption of this ASU has no impact on the Company’s current consolidated financial position, results of operations or cash flows.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 470): Balance Sheet Classification of Deferred Taxes. The amendments in ASU 2015-17 eliminate the requirement to bifurcate deferred taxes between current and non-current on the balance sheet and requires that deferred tax liabilities and assets be classified as noncurrent on the balance sheet. The amendments for ASU-2015-17 can be either applied prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented and early adoption is permitted. The Company is currently evaluating the effect of adoption of this standard, if any, on its consolidated financial position, results of operations or cash flows.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is not permitted. The Company is currently evaluating the effect its adoption of this standard, if any, on our consolidated financial position, results of operations or cash flows.

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On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) which includes a lessee accounting model that recognizes two types of leases - finance leases and operating leases. The standard requires that a lessee recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as a finance or operating lease. New disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases are also required. These disclosures include qualitative and quantitative requirements, providing information about the amounts recorded in the financial statements. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the effect its adoption of this standard, if any, on our consolidated financial position, results of operations or cash flows.

Note 6: Debt

Notes Payable

The Company has a note payable due to Mr. Seligsohn, its former Chief Executive Officer and President. The note is due on demand and bears an interest rate at the minimum applicable rate for loans of similar duration, which was 0.5% as of December 31, 2015. As of December 31, 2015, the outstanding balance under this note is $100,000.

As of December 31, 2015 and 2014, the aggregate outstanding balance of notes payable was $150,000 and $100,000, respectively.

Notes Payable – Related Party

On February 26, 2014, the Company borrowed $150,000 under a short term note agreement with a related party, the Chief Executive Officer’s son. Under the terms of this agreement, the note was to be repaid within 6 months of funding. In November 2014, the note agreement was amended to extend the due date to February 26, 2015, and in April of 2015, the note agreement was amended to extend the maturity date to February 26, 2016 and set a 4% simple interest rate on the note. As of December 31, 2015 and 2014, $509 and $22,784, respectively was recorded as accrued interest relating to this note. This note is currently past due and in default. The Company is in the process of renegotiating the terms of this agreement.

During the year ended December 31, 2015, the Company issued promissory notes to a majority shareholder in aggregate of $625,000. The notes have a term ranging from 120 – 150 days from the effective date. 1,250,000 cashless warrants for the Company’s common shares were issued with the debt at a strike price of $0.50/share in lieu of cash interest. As of December 31, 2015, the outstanding balance under these notes is $625,000. The relative fair value of the warrants of $418,332 was recognized as a debt discount which is being amortized on a straight-line basis over the term of the note. The Company recognized interest expense of $314,180 associated with the amortization of debt discount for the year ended December 31, 2015.

As of December 31, 2015 and 2014, the aggregate outstanding balance of notes payable to related parties was $670,848 and $150,000, respectively, net of unamortized discounts of $104,152 and $0.

Advances – Related Party

During the year ended December 31, 2014, the Company received advances from its Chief Executive Officer totaling $721,150 and repaid advances totaling $293,000. Such advances do not accrue interest and are payable upon demand.

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During the year ended December 31, 2015, the Company received advances from its Chief Executive Officer totaling $212,350, and repaid advances totaling $530,500. Such advances are payable upon demand and do not accrue interest. The Company paid interest of $7,989 during the year ended December 31, 2015.

As of December 31, 2015 and 2014, the aggregate outstanding balance of advances to related parties was $110,000 and $428,150, respectively.

Convertible Notes Payable

In July 2014, the Company borrowed $500,000 under two short term note agreements of $250,000 each. Under the terms of each agreement, the principal balance of $250,000 and interest of $16,500 was due to be repaid within 4 months of the date of the note. These agreements were amended on February 23, 2015 to extend the due date to July 21, 2015 and increase the interest amount to $25,000. The Company analyzed the amendment of the note under ASC 470 and concluded that the amendment did not qualify as a substantial modification. The agreements allow the holder to convert all or a portion of the principal and accrued interest into equity as a conversion rate of $1.25. On June 30, 2015, these notes and accrued interest of $50,000 were exchanged for two new convertible note agreements for $350,000 each and the issuance of 700,000 warrants with a five year life and an exercise price of $0.50 per share. The convertible note each have a principal amount of $350,000, interest of 8% per annum, a maturity date of June 30, 2016 and are convertible into 700,000 units, with each unit consisting of a share of common stock and a warrant with a five year life from the date of conversion and an exercise price of $0.50 per share, subject to certain anti-dilution provisions. The Company analyzed the amendment of the note under ASC 470 and concluded that the exchange gave rise to a debt extinguishment, which resulted in a loss on extinguishment of $150,000. The Company allocated the new proceeds to the warrants and the convertible debt based on their relative fair values, then, computed the effective conversion price of each instrument, noting that the convertible debt gave rise to a beneficial conversion feature in accordance with the provisions of ASC 470-20 “ Debt - Debt with Conversion and Other Options.” Based on this, $106,510 was allocated to the warrants, and $6,743 was allocated to the beneficial conversion feature, each of which are reflected in additional paid-in-capital. This allocation gave rise to a debt discount of $113,253 which is being amortized on a straight-line basis over the term of the note. The full principal balance of the notes was immediately converted pursuant to the terms of the note into shares of common stock and Warrants to purchase common stock on June 30, 2015. Upon conversion, the Company recorded amortization of debt discount of $113,253 and interest expense of $246,460 related to warrants issued at conversion.

On December 19, 2014, the Company received aggregate proceeds of $300,000 in exchange for a convertible note and the issuance of 200,000 warrants with a five year life and an exercise price of $2.50 per share. The convertible note has a principal amount of $300,000, interest of 8% per annum, a maturity date of December 19, 2015, and is convertible into 300,000 units, with each unit consisting of a share of common stock and a warrant with a five year life from the date of conversion and an exercise price of $1 per share, subject to certain anti-dilution provisions. The Company allocated the proceeds to the warrants and the convertible debt based on their relative fair values, then computed the effective conversion price of each instrument, noting that the convertible debt gave rise to a beneficial conversion feature in accordance with the provisions of ASC 470-20 “ Debt - Debt with Conversion and Other Options.” Of the $300,000 proceeds received, $71,369 was allocated to the warrants, and $59,546 was allocated to the beneficial conversion feature, each of which are reflected in additional paid-in-capital. This allocation gave rise to a debt discount of $130,915 which is being amortized on a straight-line basis over the term of the note. This note was modified on June 29, 2015 to change the conversion price and exercise price to $0.50 per share. The Company analyzed the modification of the note under ASC 470 and determined that it did not qualify as a substantial modification. This note is currently past due and in default. The Company is in the process of renegotiating the terms of this agreement. The note also contains an additional warrant expense of $96,771 associated with the warrants that are to be issued upon conversion, which is to be recognized only upon conversion

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In March 2015, the Company received aggregate proceeds of $700,000 in exchange for convertible notes and the issuance of 466,667 warrants with a five year life and an exercise price of $2.50 per share. The convertible notes have a principal amount of $700,000, interest of 8% per annum, a maturity date of March 2016 and are convertible into 700,000 units, with each unit consisting of a share of common stock and a warrant with a five year life from the date of conversion and an exercise price of $1 per share, subject to certain anti-dilution provisions. The Company allocated the proceeds to the warrants and the convertible debt based on their relative fair values, then, computed the effective conversion price of each instrument, noting that the convertible debt gave rise to a beneficial conversion feature in accordance with the provisions of ASC 470-20 “ Debt - Debt with Conversion and Other Options.” Of the $700,000 proceeds received, $137,863 was allocated to the warrants, and $87,563 was allocated to the beneficial conversion feature, each of which are reflected in additional paid-in-capital. This allocation gave rise to a debt discount of $225,426 which is being amortized on a straight-line basis over the term of the note. These notes were modified on June 29, 2015 to change the conversion price and exercise price to $0.50 per share. The Company analyzed the modification of the note under ASC 470 and determined that it did not qualify as a substantial modification. The note also contains an additional warrant expense of $206,620 associated with the warrants that are to be issued upon conversion, which is to be recognized only upon conversion.

In June 2015, the Company received aggregate proceeds of $530,000 in exchange for convertible notes and the issuance of 530,000 warrants with a five year life and an exercise price of $0.50 per share. The convertible notes have a principal amount of $530,000, interest of 8% per annum, a maturity date of June 2016 and are convertible into 1,060,000 units, with each unit consisting of a share of common stock and a warrant with a five year life from the date of conversion and an exercise price of $.50 per share, subject to certain anti-dilution provisions. The Company allocated the proceeds to the warrants and the convertible debt based on their relative fair values, then, computed the effective conversion price of each instrument, noting that the convertible debt gave rise to a beneficial conversion feature in accordance with the provisions of ASC 470-20 “ Debt - Debt with Conversion and Other Options.” Based on this, $80,643 was allocated to the warrants, and $5,106 was allocated to the beneficial conversion feature, each of which are reflected in additional paid-in-capital. This allocation gave rise to a debt discount of $85,749 which is being amortized on a straight-line basis over the term of the note. The note also contains an additional warrant expense of $186,605 associated with the warrants that are to be issued upon conversion, which is to be recognized only upon conversion.

From July 8, 2015 to December 31, 2015, the Company received aggregate proceeds of $914,049 in exchange for convertible notes and the issuance of 914,049 warrants with a five year life and an exercise price of $0.50 per share. The convertible notes have an aggregate principal amount of $914,049, interest of 8% per annum, a maturity date of one year and are convertible into 1,728,098 units, with each unit consisting of a share of common stock and a warrant with a five year life from the date of conversion and an exercise price of $.50 per share, subject to certain anti-dilution provisions. The aggregate relative fair value of the 914,049 warrants issued with the debt was determined to be $594,498 and was recognized as a discount to the debt. These notes also gave rise to a beneficial conversion feature of $172,869 which was recognized as additional paid-in-capital and a corresponding debt discount. All debt discounts are being recognized on a straight-line basis over the term of the note. The note also contains an additional warrant expense of $146,682 associated with the warrants that are to be issued upon conversion, which is to be recognized only upon conversion.

During the year ended December 31, 2016, certain notes with principal of $1,634,928 and accrued interest of $26,687 were converted pursuant to the terms of the notes into 3,323,230 shares of the Company’s common stock and 3,323,230 warrants to purchase common stock. Upon conversion, the Company accelerated the recognition of all remaining debt discount and also recognized additional interest expense of $494,730 associated with the warrants that were issued upon conversion. This additional warrant expense was immediately recognized as interest expense with an offset to additional paid-in-capital.

Aggregate amortization of the discounts on the convertible notes for the year ended December 31, 2015 and 2014 was $933,103 and $4,304, respectively. As of December 31, 2015 and 2014, the aggregate outstanding balance of convertible notes payable was $1,123,818 and $673,389, respectively, net of unamortized discounts of $385,303 and $0.

Derivative Liabilities - Convertible Notes

On July 13, 2015, the Company’s common stock began actively trading. As a result, the embedded conversion and anti-dilution features of the Company’s convertible debt agreements were determined to meet the definition of a derivative per ASC 815, Derivatives and Hedging. This resulted in the recording of a derivative liability on July 13, 2015, which was a reclassification out of additional paid-in capital of $5,743,021 representing the fair value of the conversion options in the outstanding derivative notes as of July 13, 2015. The fair value of the convertible feature was determined based on a fair value of $3,132,526 and $2,610,495 assigned to the warrant and conversion options, respectively. The Company recorded the change in fair value of the conversion option derivative liabilities recognizing a gain of $331,834 for the year ended December 31, 2015. As of December 31, 2015, the fair value of the outstanding convertible note derivatives was determined to be $5,411,187.

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The valuation of the derivative liabilities attached to the convertible debt was arrived at through the use of Black-Scholes Option Pricing Model and the following assumptions:

	Year Ended December 31,
	2015	2014
Volatility	135.41% - 197.50 %	-
Risk-free interest rate	0.16% - 1.54%	-
Expected term	0.25 - 4.25 years	-

Accounts Payable - Related Party

As of December 31, 2015 and 2014, there is $62,469 and $48,064, respectively, due to a related party, the Company’s Chief Financial Officer, which is non interest bearing due on demand.

Note 7. Equity

Common Stock

During the year ended December 31, 2014, the Company sold an aggregate of 1,507,000 units at $1.25 per unit for aggregate proceeds of $1,883,750. Each unit consisted of one common share and one warrant. Each warrant is exercisable for a period of five years from the date of issuance, at $2.50 per share.

During the year ended December 31, 2015, the Company sold an aggregate of 86,000 units, at $1.00 per unit for aggregate proceeds of $86,000, respectively. Each unit consisted of one common share and one warrant. Each warrant is exercisable for a period of five years from the date of issuance, at $1.00 per share.

During the year ended December 31, 2015, the Company issued an aggregate of 3,323,230 shares of its common stock related to the conversion of $1,634,928 of principal and $26,687 accrued interest expense on convertible notes. Of the common shares issued, 53,374 shares related to the payment of interest.

During the year ended December 31, 2015, the Company issued an aggregate of 1,828,437 shares of its common stock related to the exercise of 1,828,437 warrants and received cash proceeds of $914,220.

Pursuant to an anti-dilution provision in the subscription agreements executed by the $1.00 PIPE II and $1.25 PIPE II investors which provides for the issuance of a certain number of additional shares based on a formula in the subscription agreements, to these holders in the event that the company within 36 months of the completion of all PIPE II sales issues any common stock or securities convertible into or exercisable for shares of common stock at a lower price than the purchase price paid by the PIPE II investors. As a result of the Company's offering of such securities at a price lower than the price paid by the PIPE II investors, the Company issued 1,554,500 shares of common stock to the PIPE II investors in the year ended December 31, 2015.

On October 19, 2015, 75,288 shares of the Company’s common stock were cancelled in exchange for convertible notes of $37,644 and the issuance of 37,644 warrants with a five year life and an exercise price of $0.50 per share, as well as 75,288 warrants with a five year life and an exercise price of $2.50 per share. The convertible notes have a principal amount of $37,644, interest of 8% per annum, a one year term, and are convertible into 37,644 units, with each unit consisting of a share of common stock and a warrant with a five year life from the date of conversion and an exercise price of $0.50 per share, subject to certain anti-dilution provisions. The agreement was subsequently amended to include an additional 75,288 units with each unit consisting of a share of common stock with a five year life from the date of grant and an exercise price of $2.50 per share, subject to certain anti-dilution provisions.

On November 6, 2015, the Company issued 350,000 shares of its common stock in exchange for services pursuant to a consulting agreement. The shares were valued at $350,000 which was based on the stock price on the grant date.

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On December 9, 2015, the Company issued units which consisted of 100,000 shares and warrants to purchase 250,000 shares of its common stock exercisable at $0.50 per share and a term of 10 years in exchange for total proceeds of $50,000. The Company allocated the gross proceeds of $50,000 between common stock and warrants based on their relative fair value, estimated on the date of grant, valued common stock and the warrants at $14,532 and $35,468, respectively.

Stock Options

On April 28, 2013, the Board of Directors adopted the 2013 Stock Option Plan. Under the Plan, the Company may grant incentive stock options to employees and non-qualified stock options to employees, non-employee directors and/or consultants. The Plan provides for the granting of a maximum of 2,000,000 options to purchase common stock. The ISO exercise price per share may not be less than the fair market value of a share on the date the option is granted. The maximum term of the options may not exceed ten years.

On December 23, 2015, 50,000 stock options were granted to an employee of the Company. The options vest on a monthly basis of 1,000 shares per month over a 50 month period. The options expire in 2025. These options were valued based on the grant date fair value of the instruments, net of estimated forfeitures, using a Black-Scholes option pricing model with the following assumptions:

	Years Ended December 31,
	2015		2014

Volatility		122.87%		-
Risk-free interest rate		1.91%		-
Expected term		6.06 years		-

The volatility used was based on historical volatility of similar sized companies due to lack of historical data of the Company’s stock price. The risk free interest rate was determined based on treasury securities with maturities equal to the expected term of the underlying award. The expected term was determined based on the simplified method outlined in Staff Accounting Bulletin No. 110.

Stock option awards are expensed on a straight-line basis over the requisite service period. During the years ended December 31, 2015 and 2014, the Company recognized expense of $364 and $0, respectively, associated with stock option awards. At December 31, 2015, future stock compensation expense (net of estimated forfeitures) not yet recognized was $68,938 and will be recognized over a weighted average remaining vesting period of 4.2 years.

A summary of stock option activity during the year ended December 31, 2015 and 2014 is as follows:

	Number of			Weighted Average Exercise		Weighted Average Remaining Contractual
	Shares			Price		Life (years)
Outstanding at December 31, 2013		105,000		$	11.03		2.6
Granted		-			-
Exercised		-			-
Forfeited		(56,000	)		10.26
Outstanding at December 31, 2014		49,000			11.01
Granted		50,000			0.50
Exercised		-			-
Forfeited		(49,000	)		11.92
Outstanding at December 31, 2015		50,000		$	0.50		10.0

Exercisable at December 31, 2015		1,000		$	0.50		10.0

The intrinsic value of the Company’s stock options outstanding was $55,500 and $0 at December 31, 2015 and 2014, respectively.

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Warrants

During 2014, the Company modified an aggregate of 860,150 of warrants to reduce their exercise price from a range of $12.00 to $17.50 per share to $2.50 per share. All other terms and conditions remained the same. The Company determined that this transaction did not constitute a modification under ASC 718-10 or ASC 505-50 as it met the scope exceptions for a transaction with an investor or lender. Accordingly, no expense was recognized in connection with these transactions.

During the three months ended March 31, 2015, the Company offered to reduce the exercise price of certain warrants of the Company to $0.50 per share as an incentive to the holders to exercise such warrants (“Warrant Price Reduction”). As a result of the Warrant Price Reduction, a total of 649,650 shares of our Common Stock were issued after exercise of these warrants in exchange for $324,825 of proceeds. The Company determined that this transaction did not constitute a modification under ASC 718-10 or ASC 505-50 as it met the scope exceptions for a transaction with an investor. Accordingly, no expense was recognized in connection with these transactions.

In March 2015, the Company received aggregate proceeds of $700,000 in exchange for convertible notes and the issuance of 466,667 warrants with a five year life and an exercise price of $2.50 per share. The convertible notes are convertible into units, with each unit consisting of a share of common stock and a warrant with a five year life from the date of conversion and an exercise price of $1 per share, subject to certain anti-dilution provisions.

On April 15, 2015, the Company offered to reduce the exercise price of certain warrants of the Company to $0.50 per share as an incentive to the holders to exercise such warrants (“April 2015 Warrant Price Reduction”). Through December 31, 2015, warrant holders exercised their warrants for a total of 1,178,786 shares of our Common Stock, for proceeds received in the amount of $589,393. As a result of the decrease in the warrant price, the exercise price of certain of the Company’s outstanding warrants will be permanently reduced to $0.50 per share pursuant to their terms and certain of those warrants have a provision which will cause them to increase in number by multiplying the number by a fraction equal to the original warrant exercise price divided by the new warrant exercise price. The Company determined that this transaction does not constitute a modification under ASC 718-10 or ASC 505-50 as it met the scope exceptions for a transaction with an investor or lender. Accordingly, no expense was recognized in connection with these transactions.

On April 17, 2015, the Company amended the Engagement Agreement originally dated October 1, 2013, between the Company and Tobin Tao& Company, Inc. (“Tobin Tao”). This amendment grants Tobin Tao warrants to purchase 200,000 shares of the Company’s common stock at $0.50 per share. The anti-dilution features qualify these as a derivative instrument. The valuation of the derivative liability of the warrants was determined through the use of a Black Scholes options model for an amount of $102,654, which the Company believes approximates fair value. These warrants were recognized as derivative liabilities.

On May 26, 2015, the Company granted 250,000 warrants with a an exercise price of $0.50 and a five year term to Darren Ofsink in exchange for services. The anti-dilution features qualify these as a derivative instrument. The valuation of the derivative liability of the warrants was determined through the use of a Black Scholes options model for an amount of $128,317, which the Company believes approximates fair value. These warrants were recognized as derivative liabilities.

In June 2015, the Company received aggregate proceeds of $530,000 in exchange for convertible notes and the issuance of 530,000 warrants with a five year life and an exercise price of $0.50 per share. The convertible notes are convertible into units, with each unit consisting two shares of common stock and two warrants with a five year life from the date of conversion and an exercise price $0.50 per share, subject to certain anti-dilution provisions. During September 2015, the full principal balances of these notes were converted pursuant to the terms of the notes into shares of the Company’s common stock and warrants to purchase common stock.

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On June 30, 2015, the Company granted 700,000 warrants to two convertible debt holders in order to modify the outstanding convertible debt. An additional 1,400,000 warrants were issued as the modified notes were immediately converted. The warrants have a five year life and an exercise price of $0.50 per share.

During the three months ended September 30, 2015, the Company received aggregate proceeds of $377,500 in exchange for convertible notes and the issuance of 377,500 warrants with a five year life and an exercise price of $0.50 per share. The convertible notes are convertible into units, with each unit consisting two shares of common stock and two warrants with a five year life from the date of conversion and an exercise price $0.50 per share, subject to certain anti-dilution provisions.

During September 2015, the aggregate principal and interest of certain convertible notes totaling $757,595 were converted pursuant to the terms of the notes into 1,515,190 shares of the Company’s common stock and 1,515,190 warrants to purchase common stock.

On November 5, 2015, the Company issued a warrant to purchase 3,000,000 shares of the Company’s $.0001 par value common stock to the Company’s Chief Executive Officer, Dean Ledger, in exchange for services already performed. The warrants are immediately vested, have an exercise price of $1.00 and have a 10 year term.

On November 9, 2015, the Company issued a warrant to purchase 500,000 shares of the Company’s $.0001 par value common stock to Robert J. Fasnacht, our current Executive Vice President and member of our Board of Directors, in exchange for services already performed. The warrants are immediately vested, have an exercise price of $1.00 and have a 10 year term.

During the three months ended December 31, 2015, the Company received aggregate proceeds of $486,549 in exchange for convertible notes and the issuance of 486,549 warrants with a five year life and an exercise price of $0.50 per share. The convertible notes are convertible into units, with each unit consisting two shares of common stock and two warrants with a five year life from the date of conversion and an exercise price $0.50 per share, subject to certain anti-dilution provisions.

During the three months ended December 31, 2015, the aggregate principal and interest of certain convertible notes totaling $204,020 were converted pursuant to the terms of the notes into 408,040 shares of the Company’s common stock and 408,040 warrants to purchase common stock. See details in Note 6.

During the year ended December 31, 2015, the Company sold an aggregate of 86,000 units, respectively, at $1.00 per unit for aggregate proceeds of $86,000. Each unit consisted of one common share and one warrant. Each warrant is exercisable for a period of five years from the date of issuance, at $1.00 per share. During the year ended December 31, 2015, the Company granted an additional 86,000 warrants to the investors due to the reset provision.

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During the year ended December 31, 2015, the Company issued promissory notes in aggregate of $675,000. 1,350,000 cashless warrants for the Company’s common shares were issued with the debt at a strike price of $0.50/share in lieu of cash interest. The relative fair value of the warrants of $463,575 was recognized as a debt discount which is being amortized on a straight-line basis over the term of the note.

During the year ended December 31, 2015, the Company granted an additional 5,284,500 warrant to investors due to the reset provision.

The following summarizes the warrant activity for the years ended December 31, 2015 and 2014:

						Weighted
				Weighted		Average Remaining
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(in years)		Value
Outstanding as of December 31, 2013		19,556,983		$	3.60		4.7	$	-
Granted		1,707,000			2.50
Expired		(12,000	)
Exercised		-
Outstanding as of December 31, 2014		21,251,983		$	2.53		3.8	$	-
Granted		15,481,234			0.75
Warrants issued related to reset provision		5,284,500			2.50
Expired/Cancelled		(162,850	)		3.00
Exercised		(1,828,436	)		2.41

Outstanding as of December 31, 2015		40,026,431		$	1.83		4.6	$	54,932,218

Exercisable as of December 31, 2015		38,826,431		$	1.88		4.6	$	54,932,218

The reset shares are the result of reducing the exercise price of the warrants issued under Pipe I from $2.50 to $0.50, and Pipe II from $2.50 to $1.00. The increase in shares offset the reduced exercise price therefore the net value of the Pipe I & Pipe II warrants remain constant in total.

Derivative Liabilities - Warrants

The anti-dilution features in the freestanding warrants issued in the year ended December 31, 2015 cause the instruments to no longer be indexed to the Company’s own stock and requires that they be accounted for as derivative liabilities based on guidance in FASB ASC 815, Derivatives and Hedging.

The valuation of the derivative liability of the warrants was determined through the use of a Black Scholes options model, which the Company believes approximates fair value. Using this model, the Company had a balance of $197,674 at December 31, 2013. The Company determined a fair value of $688,614 at issuance date for warrants issued during the year ended December 31, 2014. The Company recorded the change in the fair value of the warrant liabilities recognizing a gain of $38,497 for the year ended December 31, 2014, to reflect the value of the warrant derivative liability of $847,791 at December 31, 2014.

The Company determined a fair value of $1,423,303 at issuance date for warrants issued during the year ended December 31, 2015 of which $76,368 was reclassified from additional paid-in capital and $1,346,935 was recognized as compensation expense. The Company recorded the change in the fair value of the warrant liabilities recognizing a loss of $10,525,052 for the year ended December 31, 2015, to reflect the value of the warrant derivative liability of $12,796,146 at December 31, 2015.

The warrants were valued using the Black-Scholes pricing model with the following assumptions:

	Year Ended December 31,
	2015	2014
Volatility	108.72% - 132.58%	98.25% - 102.46%
Risk-free interest rate	.725% - 2.27%	.670% - .825%
Expected term	3 - 10 years	4.25 - 5 years

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Note 8. Commitments and Contingencies

Contractual Agreements

Under the 2013 Research Agreement with USC, the Company is obligated to make certain payments to USC based on work performed by USC under that agreement, and by Michigan under its subcontractor agreement with USC. (See Note 1)

Under the terms of the 2013 Amended License Agreement, the Company is required to make minimum royalty payments to Princeton. (See Note 1)

The Company has agreements with three executive officers which provide for certain cash and other benefits upon termination of employment of the officer in connection with a change in control of the Company. Each executive is entitled to a lump-sum cash payment equal to three times the sum of the average annual base salary also they are entitled to a cash bonus.

Lease Commitments

In November 2013, the Company entered into a 60-month lease agreement for its corporation facility in Arizona. Total rent expense for the year ended December 31, 2015 and 2014 was $91,871 and $80,584, respectively.

Future minimum lease payments are as follows:

2016	$	81,925
2017		84,233
2018		71,797
2019		-
2020		-
Thereafter		-
Total	$	237,955

Concentrations

All of the Company’s revenue and accounts receivable are currently earned from one customer.

Legal Matters

On March 18, 2015, the Company received correspondence from the counsel of Mr. John Kuhns, the Company’s former Co-CEO and Executive Chairman alleging that Mr. Kuhns has “Good Reason” to terminate his Employment Agreement for an alleged failure to pay his salary in full. On March 30, 2015, Mr. Kuhns advised that if the alleged breaches of the Employment Agreement were not cured there was a possibility that he would pursue litigation.

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The Response Letter was accompanied by a copy of a complaint (the “Complaint”) filed by John D, Kuhns (the “Plaintiff”) in the United States District Court Southern District of New York against the Company, Mr. Dean L. Ledger, our current CEO and member of our Board of Directors, Mr. Robert J. Fasnacht, our current Executive Vice President and member of our Board of Directors and Mr. Ronald B. Foster, a shareholder of the Company (each, a “Defendant,” collectively, the “Defendants”). The Complaint alleges, among other things, that the Plaintiff was terminated by the Company in violation of Section 922 of the Dodd-Frank Act, that the Company wrongfully terminated the Employment Agreement, that the Defendants made false statements to shareholders regarding the Plaintiff, that the Defendants (other than the Company) tortuously interfered with the Plaintiff’s Employment Agreement, and that Mr. Ledger and Mr. Fasnacht breached their fiduciary duties to the Company and its shareholders.

On September 3, 2015 the Company filed a Motion to Dismiss portions of the Complaint in the United States District Court Southern District of New York. The Company believes that the allegations in the Complaint to be without any merit and will vigorously defend against the claims.

Note 9. Income Taxes

The Company has incurred losses since inception. As of December 31, 2015, the Company has net operating loss carry-forwards of approximately $61,000,000 that begin to expire in 2017. Pursuant to Sections 382 and 383 of the Internal Revenue Code, the utilization of NOLs and other tax attributes may be subject to substantial limitations if certain ownership changes occur during a three-year testing period (as defined by the Internal Revenue Code). A valuation allowance was established for all the net deferred tax assets because realization is not assured. The components of the deferred tax assets consist of the following:

	December 31,
	2015			2014
Net operating loss	$	21,000,000		$	19,000,000
Less: valuation allowance		(21,000,000	)		(19,000,000	)
Net deferred tax assets	$	-		$	-

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Note 10. Subsequent Events

Note Conversion Agreement

On January 6, 2016, the Company issued an additional promissory note to an investor in the amount of $1,375,000 in exchange for a loan in that amount. The Company issued 2,750,000 warrants in connection with this note, for the Company’s common stock at an exercise price of $0.50 per share in lieu of cash interest.

January 22, 2016, the Company entered into a note conversion agreement with the investor. Pursuant to this agreement, the investor converted the notes, which total $2,000,000, into an investment of $2,000,000 into the Company’s private placement of convertible notes and warrants.

For $2,000,000, the investor received a convertible note and a warrant to purchase 2,000,000 shares of common stock. The warrant has a ten year term and an exercise price of $0.50 per share. The convertible note accrues interest of 8% per annum, has a maturity date of one year and is convertible at $0.50 per unit, into units, with each unit consisting of a share of the Company’s common stock and a warrant to purchase a share of common stock with a ten year term and an exercise price of $.50 per share.

Pursuant to the conversion agreement, if the investor converted the convertible note within 30 days of its issuance, the Company was required to pay the investor the interest under the convertible note in shares of its common stock as if the investor did not convert the convertible note for a period of one year from the date of issuance. On January 25, 2016, the investor converted the convertible note into 4,320,000 shares of the Company’s common stock and a warrant to purchase 4,320,000 shares of the Company’s common stock with a ten year term and an exercise price of $.50. Of the 4,320,000 shares of Common Stock, 320,000 shares represent interest paid on the convertible note pursuant to the terms of the conversion agreement.

Other

Effective February 4, 2016, the Company agreed to pay $10,500 pursuant to a separation agreement relating to the termination of an employee.

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PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13.

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the fees and expenses incurred or expected to be incurred by the Company in connection with the issuance and distribution of the securities being registered hereby. All of the amounts shown are estimated except the Securities and Exchange Commission registration fee. Estimated fees and expenses can only reflect information that is known at the time of filing this registration statement and are subject to future contingencies, including additional expenses for future offerings.

Securities and Exchange Commission registration fee	$	4,574.86
Transfer agent’s fees and expenses	$	*
FINRA filing fees	$	6,420.87
NYSE MKT listing fees	$	*
Printing and engraving expenses	$	*
Legal fees and expenses	$	*
Accounting fees and expenses	$	*
Miscellaneous expenses	$	*
Total	$	*

*	To be filed by amendment.

ITEM 14.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Florida Business Corporation Act permits the indemnification of directors, employees, officers and agents of Florida corporations. Our bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by the Florida Business Corporation Act.

The provisions of the Florida Business Corporation Act that authorize indemnification do not eliminate the duty of care of a director, and in appropriate circumstances equitable remedies such as injunctive or other forms of non-monetary relief will remain available under Florida law. In addition, each director will continue to be subject to liability for:

	●	violations of criminal laws, unless the director had reasonable cause to believe his conduct was lawful or had no reasonable cause to believe his conduct was unlawful;
	●	deriving an improper personal benefit from a transaction;
	●	voting for or assenting to an unlawful distribution; and
	●	willful misconduct or conscious disregard for our best interests in a proceeding by or in the right of a shareholder.

The statute does not affect a director’s responsibilities under any other law, such as the federal securities laws. The effect of the foregoing is to require our company to indemnify our officers and directors for any claim arising against such persons in their official capacities if such person acted in good faith and in a manner that he reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

Our by-laws provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney’s fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on our behalf. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person’s promise to repay us therefore if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us, which we may be unable to recoup.

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ITEM 15.

RECENT SALES OF UNREGISTERED SECURITIES

During the three-year period preceding the date of the filing of this registration statement, we have issued securities in the transactions described below without registration under the Securities Act of 1933, as amended (the “Securities Act”).

Issuance of Common Stock

During the quarter ended September 30, 2016, the Company issued 1,057,320 shares of the Company’s Common Stock upon conversion of certain promissory notes.

During the quarter ended September 30, 2016, the Company issued 69,348 shares of the Company’s Common Stock upon conversion of certain promissory notes in connection with Rescission Agreements.

During October 2016, the Company issued 112,400 shares of the Company’s Common Stock upon conversion of certain promissory notes.

During the month of July 2016, the Company issued 928,800 shares of the Company’s common stock upon conversion of certain promissory notes.

During the month of July 2016, the Company issued 40,695 shares of the Company’s common stock upon conversion of certain promissory notes in connection with Rescission Agreements (as defined below).

During the three months ended June 30, 2016, the Company issued 1,007,535 shares of the Company’s common stock upon conversion of certain promissory notes in connection with Rescission Agreements.

During the three months ended June 30, 2016, the Company issued 577,031 shares of the Company’s common stock upon conversion of certain promissory notes.

On June 14, 2016, the Company issued 12,577 shares of its common stock to an investor upon the exercise of a warrant for gross proceeds of $6,288.50.

On May 6, 2016 the Company issued 100,000 shares of its common stock to an investor pursuant to a purchase agreement where the investor as payment for the shares, surrendered a $50,000 promissory note of the Company held by the investor.

On February 23, 2016, the Company issued 145,878 common shares and warrants to purchase 426,741 common shares of the Company’s common stock in exchange for proceeds of $67,536. The cash was received prior to December 31, 2015 and was recorded as an accrued liability at December 31, 2015. The Company determined a fair value for the shares and warrants to be $537,175. This transaction resulted in a loss on extinguishment of liability of $469,639.

During the three months ended December 31, 2015, the Company issued 408,040 shares of its common stock related to the conversion of $189,928 of convertible notes. Of the common shares issued, 28,184 shares related to the payment of interest of $14,092.

On November 6, 2015, the Company issued 350,000 shares of its common stock in exchange for services pursuant to a consulting agreement.

During the three months ended September 30, 2015, the Company issued 1,515,190 shares of its common stock related to the conversion of $745,000 of convertible notes. Of the common shares issued, 25,190 shares related to the payment of interest of $12,595.

During the three months ended June 30, 2015, the Company issued 1,400,000 shares of its common stock related to the conversion of $700,000 of convertible notes.

During April 28, 2015 through June 9, 2015, the Company issued a total of 1,103,499 shares of common stock as a result of the exercise of the Company’s warrants by some warrant holders.

During January 5, 2015 through March 16, 2015, the Company issued a total of 649,650 shares of common stock as a result of the exercise of the Company’s warrants by some warrant holders.

From January through September of 2014, the Company sold and issued to certain investors an aggregate of 1,483,000 shares of common stock and warrants to purchase an aggregate of 1,483,000 shares of common stock for gross proceeds of $1,853,750.

During November and December of 2013, the Company sold and issued to certain investors an aggregate of 426,000 shares of common stock and warrants to purchase an aggregate of 426,000 shares of common stock for gross proceeds of $532,500.

The above issuance of the Company’s securities were not registered under the Securities Act and the Company relied on an exemption from registration provided by Rule 506(b) of Regulation D promulgated under the 1933 Act for such issuances.

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Private Placement of the Company’s Notes

During the quarter ended September 30, 2016, the Company entered into a note purchase agreement with an investor pursuant to which an investor purchased a promissory note from the Company in exchange for $500,000. The note automatically converted by its terms 30 days after issuance into an investment in the principal amount of the note in the Company’s convertible notes and warrants, and upon automatic conversion, the investor was issued a one year promissory note for $500,000 convertible into shares of the Company’s Common Stock at a $.50 conversion price and 5 year warrants to purchase 500,000 share of Common Stock with an exercise price of $.50 and a cashless conversion feature. In connection with the note purchase agreement the investor was also issued a warrant to purchase 500,000 shares of Common Stock with a term of 7 years and an exercise price of $.50 and a cashless conversion feature.

During the quarter ended September 30, 2016, the company entered into a note purchase agreement with an investor pursuant to which the investor purchased a promissory note from the Company in exchange for $300,000. Pursuant to the note purchase agreement the investor was also issued a warrant to purchase 600,000 shares of the Company’s Common Stock with a 5 year term and $ .50 exercise price and a cashless conversion feature.

On October 7, 2016 the Company entered into a note purchase agreement with an investor pursuant to which an investor purchased a promissory note from the Company in exchange for $100,000. In connection with the note, the investor was also issued a warrant to purchase 200,000 shares of the Company’s common stock with a 5 year term and $.50 exercise price and a cashless conversion feature. The note automatically converts by its terms 30 days after issuance into an investment in the principal amount of the note in the Company’s convertible notes and warrants, and upon automatic conversion, the investor shall be issued a one year promissory note for $100,000 convertible into shares of the Company’s Common Stock at a $.50 conversion price and 5 year warrants to purchase 100,000 shares of Common Stock with an exercise price of $.50 and a cashless conversion feature.

On July 13, 2016, the Company entered into a note purchase agreement with an investor pursuant to which an investor purchased a promissory note from the Company in exchange for $500,000. The note automatically converts by its terms 30 days after issuance into an investment in the principal amount of the note in the Company’s convertible notes and warrants, upon automatic conversion, the investor shall be issued a one year promissory note convertible into shares of the Company’s common stock at a $0.50 conversion price and 5 year warrants with an exercise price of $0.50 and a cashless conversion feature.

During the three months ended March 31, 2016, the Company issued promissory notes to a shareholder in aggregate of $1,375,000. 2,750,000 cashless warrants for the Company’s common stock were issued with the debt at a strike price of $0.50 per share in lieu of cash interest. These notes were converted on January 22, 2016, into shares of the Company’s common stock and warrants to purchase shares of the Company’s common stock pursuant to the Conversion Agreement (defined below), described below in the section titled “Issuances Pursuant to Conversion Agreement” of this section.

During the year ended December 31, 2015, the Company issued promissory notes to a shareholder in aggregate of $625,000. 1,250,000 cashless warrants for the Company’s common stock were issued with the debt at a strike price of $0.50 per share in lieu of cash interest. The relative fair value of the warrants of $418,332 was recognized as a debt discount which is being amortized on a straight-line basis over the term of the note.

During the year ended December 31, 2015, the Company issued a promissory note of $50,000. 100,000 cashless warrants for the Company’s common shares were issued with the debt at a strike price of $0.50 per share in lieu of cash interest. The relative fair value of the warrants of $45,243 was recognized as a debt discount which is being amortized on a straight-line basis over the term of the note.

The above issuance of the Company’s securities were not registered under the Securities Act, and the Company relied on an exemption from registration pursuant to Section 4(2) of the Securities Act for such issuances.

Private Placement of the Company’s Convertible Notes

During the quarter ended September 30, 2016 the Company issued and sold convertible promissory notes totaling $744,500 together with warrants to purchase 744,500 shares of the Company’s Common Stock for gross proceeds of $744,500 pursuant to certain note subscription agreements entered into between the Company and investors. Such warrants have an exercise price of $.50 and a term of 5 years and a cashless conversion feature.

During the quarter ended September 30, 2016, the Company issued and sold convertible promissory notes totaling $56,281 together with warrants to purchase 56,281 shares of the Company’s Common Stock for gross proceeds of $56,281 in connection with certain Rescission Agreements entered into between the Company and investors pursuant to which the Company agreed to permit the investors to rescind the exercise of certain warrants and apply such funds used to exercise the warrants to an investment in the Company’s notes and warrants, in exchange for an additional investment by such investors in the Company’s notes and warrants as described above and pursuant to which the investors were issued replacement warrants (the “Replacement Warrants”) to replace the exercised warrants which exercise was agreed to be rescinded (the “Rescission Agreements”). During the quarter ended September 30, 2016, the Company issued 62,303 Replacement Warrants pursuant to Rescission Agreements. Such warrants have an exercise price of $.50 and a term of 5 years and a cashless conversion feature. The notes issued pursuant to the Rescission Agreements were simultaneously converted upon issuance into shares of the Company’s Common Stock and warrants to purchase shares of the Company’s Common Stock.

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During October 2016, the Company issued and sold a convertible promissory note totaling $25,000 together with warrants to purchase 25,000 shares of the Company’s Common Stock for gross proceeds of $25,000 pursuant to certain note subscription agreements entered into between the Company and an investor. Such warrants have an exercise price of $0.50 and a term of 5 years and a cashless conversion feature. As of the date of this report, the note has been converted pursuant to its terms into warrants to purchase shares of the Company’s Common Stock and shares of Common Stock.

During the quarter ending June 30, 2016, the Company issued and sold convertible promissory notes totaling $425,000 together with warrants to purchase 425,000 shares of the Company’s Common Stock for gross proceeds of $425,000 pursuant to certain note subscription agreements entered into between the Company and investors. Such warrants have an exercise price of $0.50 and a term of 5 years and a cashless conversion feature. As of the date of this registration statement, all $425,000 of the notes have been converted pursuant to their terms into warrants to purchase shares the Company’s common stock and shares of common stock as set forth below.

During the quarter ending June 30, 2016, the Company issued and sold convertible promissory notes totaling $777,891 together with warrants to purchase 777,891 shares of the Company’s common stock for gross proceeds of $777,891 in connection with certain Rescission Agreements entered into between the Company and investors pursuant to which the Company agreed to permit the investors to rescind the exercise of certain warrants and apply such funds used to exercise the warrants to an investment in the Company’s notes and warrants as described above, in exchange for an additional investment by such investors in the Company’s notes and warrants as described above and pursuant to which the investors were issued replacement warrants (the “Replacement Warrants”) to replace the exercised warrants which exercise was agreed to be rescinded (the “Rescission Agreements”). During the quarter ending June 30, 2016, the Company issued 662,842 Replacement Warrants pursuant to Rescission Agreements. Such warrants have an exercise price of $0.50 and a term of 5 years and a cashless conversion feature. The notes issued pursuant to the Rescission Agreements were simultaneously converted upon issuance into shares of the Company’s common stock and warrants to purchase shares of the Company’s common stock as described below.

During the month of July 2016, the Company issued and sold convertible promissory notes totaling $216,000 together with warrants to purchase 216,000 shares of the Company’s common stock for gross proceeds of $216,000 pursuant to certain note subscription agreements entered into between the Company and investors. Such warrants have an exercise price of $0.50 and a term of 5 years and a cashless conversion feature. As of the date of this registration statement, all $216,000 of the notes have been converted pursuant to their terms into warrants to purchase shares of the Company’s common stock and shares of common stock as set forth below.

During the month of July 2016, the Company issued and sold convertible promissory notes totaling $37,680 together with warrants to purchase 37,680 shares of the Company’s common stock for gross proceeds of $37,680 in connection with Rescission Agreements entered into between the Company and investors. During July of 2016, the Company issued 37,680 Replacement Warrants pursuant to Rescission Agreements. Such warrants have an exercise price of $0.50 and a term of 5 years and a cashless conversion feature. The notes issued pursuant to the Rescission Agreements were simultaneously converted upon issuance into shares of the Company’s common stock and warrants to purchase shares of the Company’s common stock as described below.

During the month of August 2016, the Company issued and sold a convertible promissory note totaling $8,500 together with warrants to purchase 8,500 shares of the Company’s common stock for gross proceeds of $8,500 pursuant to certain note subscription agreement entered into between the Company and an investor. Such warrants have an exercise price of $0.50 and a term of 5 years and a cashless conversion feature.

On March 7, 2016, the Company issued and sold convertible promissory notes together with warrants to purchase 80,000 shares of the Company’s common stock for gross proceeds of $80,000. Such warrants have an exercise price of $0.50 and a term of 5 years.

In March 2015, the Company issued and sold convertible promissory notes together with warrants to purchase 700,000 shares of the Company’s common stock for gross proceeds of $700,000.

In June 2015, the Company issued and sold convertible promissory notes together with warrants to purchase 530,000 shares of the Company’s common stock for gross proceeds of $530,000.

During the three months ended September 30, 2015, the Company issued and sold convertible promissory notes together with warrants to purchase 427,500 shares of the Company’s common stock for gross proceeds of $427,500.

On October 19, 2015, 75,288 shares of the Company’s common stock were cancelled in exchange for convertible notes of $37,644 and the issuance of 37,644 warrants to purchase 37,644 shares of the Company’s common stock. The agreement was subsequently amended to include an additional 75,288 warrants to purchase 75,288 shares of the Company’s common stock.

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During the three months ended December 31, 2015, the Company issued and sold convertible promissory notes together with warrants to purchase 448,905 shares of the Company’s common stock for gross proceeds of $448,905.

On December 19, 2014 and in March 2015, the Company issued and sold convertible promissory notes together with warrants to purchase 666,667 shares of the Company’s common stock for gross proceeds of $1,000,000.

The above issuance of the Company’s securities were not registered under the Securities Act, and the Company relied on an exemption from registration provided by Rule 506(b) of Regulation D promulgated under the Securities Act for such issuances.

Issuance of Units

On December 9, 2015, the Company issued units which consisted of 100,000 shares and warrants to purchase 250,000 shares of its common stock exercisable at $0.50 per share and a term of 10 years in exchange for total proceeds of $50,000. The Company allocated the gross proceeds of $50,000 between common stock and warrants based on their relative fair value, estimated on the date of grant, and valued the common stock and the warrants at $14,532 and $35,468, respectively.

Issuance of Warrants Upon Note Conversion

During the quarter ended September 30, 2016, the Company issued warrants to purchase 1,057,320 shares of its Common Stock related to the conversion of certain convertible notes. Such warrants have an exercise price of $.50 and a term of 5 years and a cashless conversion feature.

During the quarter ended September 30, 2016, the Company issued warrants to purchase 69,348 shares of its Common Stock related to the conversion of certain convertible notes which were issued in connection with Rescission Agreements. Such warrants have an exercise price of $.50 and a term of 5 years and a cashless conversion feature.

During October 2016, the Company issued warrants to purchase 112,400 shares of its Common Stock related to the conversion of certain convertible notes. Such warrants have an exercise price of $.50 and a term of 5 years and a cashless conversion feature.

During the month of July 2016, the Company issued warrants to purchase 78,375 shares of its common stock related to the conversion of certain convertible notes which were issued in connection with Rescission Agreements. Such warrants have an exercise price of $0.50 and a term of 5 years and a cashless conversion feature.

During the month of July 2016, the Company issued warrants to purchase 928,800 shares of its common stock related to the conversion of certain convertible notes. Such warrants have an exercise price of $0.50 and a term of 5 years and a cashless conversion feature.

During the three months ended June 30, 2016, the Company issued warrants to purchase 577,031 shares of its common stock related to the conversion of certain convertible notes. Such warrants have an exercise price of $0.50 and a term of 5 years and a cashless conversion feature.

During the three months ended June 30, 2016, the Company issued warrants to purchase 1,630,377 shares of its common stock related to the conversion of certain convertible notes which were issued in connection with Rescission Agreements. Such warrants have an exercise price of $0.50 and a term of 5 years and a cashless conversion feature.

During the three months ended March 31, 2016, the Company issued warrants to purchase 61,578 shares of its common stock related to the conversion of $30,000 of convertible notes. Of the common shares issuable upon exercise of the warrants, 1,578 shares related to the payment of interest. Such warrants have an exercise price of $0.50 and a term of 5 years.

During the three months ended September 30, 2015, the Company issued warrants to purchase 1,515,190 shares of its common stock related to the conversion of $745,000 of convertible notes. Of the common shares issuable upon exercise of the warrants, 25,190 shares related to the payment of interest of $12,595.

During the three months ended December 31, 2015, the Company issued warrants to purchase 408,040 shares of its common stock related to the conversion of $189,928 of convertible notes. Of the common shares issuable upon exercise of the warrants 28,184 shares related to the payment of interest of $14,092.

The above issuances of the Company’s securities were not registered under the Securities Act, and the Company relied on an exemption from registration pursuant to Section 4(2) of the Securities Act for such issuances.

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Issuance of Stock Options

The above issuance of the Company’s securities were not registered under the Securities Act of Securities and the Company relied on an exemption from registration pursuant to Section 4(2) of the Securities Act for such issuances.

Issuance of Warrants to Service Providers

During the quarter ended September 30, 2016, the Company issued warrants to purchase 15,000 shares of its Common Stock to a service provider in exchange for services provided to the Company. The warrants have an exercise price of $1 and a 5 year term.

On May 13, 2016 the Company issued warrants to purchase 1,200,000 shares of its common stock to two service providers in exchange for services provided to the Company. The warrants have an exercise price of $1 and a 10 year term. 500,000 of the warrants are subject to vesting and 250,000 warrants shall vest on May 13, 2017 and an additional 250,000 warrants shall vest on May 13, 2018. 200,000 of the warrants vested immediately.

On September 1, 2015 the Company entered into an Employment Agreement (the “Employment Agreement”) with Mark R. Tobin in his capacity as the Company’s Chief Financial Officer. Pursuant to the Employment Agreement, on September 1, 2015 the Company issued Mr. Tobin warrants to purchase 1,500,000 shares of the Company’s common stock at $1.00 per share (the “Warrant Shares”). 375,000 of the Warrant Shares vested on September 1, 2015, an additional 375,000 Warrant Shares vested on the first anniversary date of the Employment Agreement, an additional 375,000 Warrant Shares will vest on the second anniversary date of the Employment Agreement, and an additional 375,000 Warrant Shares will vest on the third anniversary date of the Employment Agreement.

On November 4, 2015, the Company modified a service agreement and granted 2,400,000 warrants to purchase 2,400,000 shares of the Company’s common stock. On such date, 1,200,000 warrants were issued, of which all of such warrants vested immediately. The Company will issue the remaining 1,200,000 warrants to purchase 1,200,000 shares of the Company’s common stock, which warrants will vest as follows: 600,000 warrants will vest 1-year from the amendment date, and the remaining 600,000 warrants will vest 2-years from the amendment date.

On November 5, 2015, the Company issued a warrant to purchase 3,000,000 shares of the Company’s common stock to the Company’s Chief Executive Officer, Dean L. Ledger, in exchange for services already performed. These warrants are immediately vested.

On November 9, 2015, the Company issued a warrant to purchase 500,000 shares of the Company’s common stock to Robert J. Fasnacht, our former Executive Vice President and member of our Board of Directors, in exchange for services already performed. These warrants are immediately vested.

Issuances Pursuant to Conversion Agreement

On January 22, 2016, the Company entered into a Note Conversion Agreement (the “Conversion Agreement”) with an investor (the “Investor”). Pursuant to the Conversion Agreement, the Investor converted his promissory notes in the Company, which totaled $2,000,000, into an investment of $2,000,000 into the Company’s private placement of convertible notes and warrants. For $2,000,000, the Investor received a convertible note (the “Convertible Note”) and a warrant to purchase 2,000,000 shares of common stock (the “Warrant”). The Warrant has a ten year term and an exercise price of $0.50 per share. The Convertible Note accrued interest of 8% per annum, had a maturity date of one year and was convertible at $0.50 per unit into units, with each unit consisting of a share of the Company’s common stock and a warrant to purchase a share of common stock with a ten year term and an exercise price of $0.50 per share.

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Pursuant to the Conversion Agreement, if the Investor converted the Convertible Note within thirty (30) days of its issuance, the Company was required to pay the Investor the interest under the Convertible Note in shares of its common stock as if the Investor did not convert the Convertible Note for a period of one (1) year from the date of issuance. On January 25, 2016, the Investor converted the Convertible Note into 4,320,000 shares of the Company’s common stock and a warrant to purchase 4,320,000 shares of the Company’s common stock with a ten year term and an exercise price of $0.50. Of the 4,320,000 shares of common stock, 320,000 shares represent interest paid on the Convertible Note pursuant to the terms of the Conversion Agreement.

The securities issued pursuant to the Conversion Agreement as referenced above were not registered under Securities Act and the relied on the exemptions under Rule 506 of Section 4(a)(2) of the Securities Act for such issuances and the Investor provided a written representation to the Company that he qualifies as an “accredited investor” as that term is defined in Rule 501 of Regulation D under the Securities Act.

PIPEs

From June 2014 through March 2015 (the “Second PIPE”), the Company sold and issued to certain investors in a private placement units of the Company’s securities (“Units”), with each Unit consisting of one share of common stock and one warrant to purchase one share of common stock (the “Second PIPE Warrant”) pursuant to a Subscription Agreement originally dated June 2014 and as amended on February 23, 2015. In the Second PIPE, the Company sold an aggregate of 1,065,000 Units for gross proceeds of $1,309,750.

The Second PIPE Warrants have a term of 5 years and are exercisable at a per share price of $2.50. The Second PIPE Warrants have anti-dilution provisions and in the event of a subsequent sale of the Company’s securities during the 36 months after the last closing of the Second PIPE at a price that is lower than the exercise price of the Second PIPE Warrant (a “Lower Price Issuance”), the effective warrant exercise price of the Second PIPE Warrants will be automatically reduced to be equal the product of (x) the exercise price prior to such Lower Price Issuance, multiplied by (y) the price of the securities sold in the Lower Price Issuance and divided by (z) the Second PIPE per Unit purchase price. In addition, the number of shares of common stock that can be issued under the Second PIPE Warrants will be adjusted in the event of a Lower Price Issuance so that the aggregate exercise price of the Second PIPE Warrants remain the same.

From November 23, 2013 through June 24 2014 (the “First PIPE”), the Company sold and issued to certain investors in a private placement units of the Company’s securities (“Units”), with each Unit consisting of one share of common stock and one warrant to purchase one share of common stock (the “First PIPE Warrant”) pursuant to a Subscription Agreement. In the First PIPE, the Company sold an aggregate of 954,000 Units for gross proceeds of $1,192,500.

The First PIPE Warrants have a term of 5 years and are exercisable at a per share price of $2.50. The First PIPE Warrants have full ratchet anti-dilution provisions and in the event of a subsequent sale of the Company’s securities after the last closing of the First PIPE at a price that is lower than the exercise price of the First PIPE Warrant (a “Lower Price Issuance”), the effective warrant exercise price of the First PIPE Warrants will be automatically reduced to be equal the product of the price of the securities sold in the Lower Price Issuance. In addition, the number of shares of common stock that can be issued under the First PIPE Warrants will be adjusted in the event of a Lower Price Issuance so that the aggregate exercise price of the First PIPE Warrants remain the same.

The above issuance of the Company’s securities were not registered under the Securities Act, and the Company relied on an exemption from registration pursuant to Rule 506(b) of Regulation D promulgated under the Securities Act for such issuances.

ITEM 16.

EXHIBITS

A list of exhibits filed herewith is contained in the exhibit index that immediately precedes such exhibits and is incorporated herein by reference. These exhibits are included with this filing.

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ITEM 17.

UNDERTAKINGS

The undersigned registrant hereby undertakes:

	(1)	To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

	(i)	To include any prospectus required by Section 10(a)(3) of the Securities Act;

	(ii)	To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933 if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

	(iii)	To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

	(2)	That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

	(3)	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

	(4)	That for the purpose of determining the liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(5)

That for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

	(i)	Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 under the Securities Act of 1933;

	(ii)	Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

	(iii)	The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

	(iv)	Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that it will:

(1)

for determining any liability under the Securities Act, treat the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant under Rule 424(b)(1), or (4) or 497(h) under the Securities Act of 1933 as part of this registration statement as of the time the Securities and Exchange Commission declared it effective.

(2)

for determining any liability under the Securities Act, treat each post-effective amendment that contains a form of prospectus as a new registration statement for the securities offered in the registration statement, and that offering of the securities at that time as the initial bona fide offering of those securities.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Scottsdale, State of Arizona, on November 29, 2016.

	NANOFLEX POWER CORPORATION

	By:	/s/ Dean L. Ledger
		Dean L. Ledger
		Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ Mark R. Tobin
		Mark R. Tobin
		Executive Vice President and
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Name	Position	Date

/s/ Dean L. Ledger	Chief Executive Officer and Director	November 29, 2016
Dean L. Ledger	(Principal Executive Officer)

/s/ Mark R. Tobin	Executive Vice President and Chief Financial Officer	November 29, 2016
Mark R. Tobin	(Principal Financial and Accounting Officer)

II- 9

Table of Contents

EXHIBIT INDEX

Exhibit Number		Description
1.1		Form of Underwriting Agreement by and among the Company and the underwriters named therein(*)
2.1		Share Exchange Agreement, dated September 24, 2013, between the Company and Global Photonic Energy Corporation (incorporated by reference to Exhibit 2.1 to Amendment No. 1 to the Current Report on Form 8-K/A as filed with the SEC on November 25, 2013)
3.1		Articles of Incorporation of the Company, as filed with the Florida Department of State on January 28, 2013 (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 as filed with the SEC on March 15, 2013)
3.2		Amended and Restated Bylaws of the Company(**)
3.3		Articles of Amendment to Articles of Incorporation of the Company, as filed with the Florida Department of State on November 25, 2013 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K as filed with the SEC on December 2, 2013)
4.1		Specimen Certificate of Common Stock (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1 as filed with the SEC on February 11, 2014)
4.2		Form of Warrant issued pursuant to the Conversion of Series A Preferred Stock (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K as filed with the SEC on September 30, 2013)
4.3		Form of Warrant issued pursuant to the Conversion of the Bridge Note (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K as filed with the SEC on September 30, 2013)
4.4		Form of Warrant issued pursuant to the Exchange of Warrant held by holders of Global Photonic Energy Corporation (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K as filed with the SEC on September 30, 2013)
4.5		Form of Option to Purchase Common Stock of the Company (incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K as filed with the SEC on September 30, 2013)
4.6		Form of Warrant issued in the First PIPE (incorporated by reference to Exhibit 4.6 to the Annual Report on Form 10-K as filed with the SEC on April 10, 2015)
4.7		Form of Warrant issued in the Second PIPE (incorporated by reference to Exhibit 4.7 to the Annual Report on Form 10-K as filed with the SEC on April 10, 2015)
4.8		Form of Note (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on January 27, 2016)
4.9		Form of Subscription Warrant issued pursuant to the First Debenture (*)
4.10		Form of Conversion Warrant issued pursuant to the First Debenture (*)
4.11		Form of Subscription Warrant issued pursuant to the Second Debenture (*)
4.12		Form of Conversion Warrant issued pursuant to the Second Debenture (*)
4.13		Form of Subscription Warrant issued pursuant to the Third Debenture (*)
4.14		Form of Conversion Warrant issued pursuant to the Third Debenture (*)
4.15		Form of Warrant issued pursuant to Rescission Transactions (*)
4.16		Form of Warrant issued pursuant to Non-Convertible Notes (*)
4.17		Form of Representative’s Warrant (included in Exhibit 1.1) (*)
4.18		Form of Warrant Agency Agreement between the Company and VStock Transfer, LLC(**)
5.1		Opinion of Pryor Cashman LLP(**)
10.1		Form of Subscription Agreement between the Company and certain purchasers and schedule of purchasers setting forth the number of shares of the Company’s common stock purchased by each purchaser on September 24, 2013 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on September 30, 2013)
10.2		2013 Company Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed with the SEC on September 30, 2013)
10.3		Employment Agreement between the Company and John D. Kuhns, as amended, dated October 22, 2013 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K as filed with the SEC on November 25, 2013)
10.4		Employment Agreement between the Company and Dean L. Ledger, as amended, dated October 22, 2013 (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K as filed with the SEC on November 25, 2013)
10.5		Employment Agreement between the Company and Robert J. Fasnacht, as amended, dated October 22, 2013 (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K as filed with the SEC on November 25, 2013)
10.6		Research Agreement, dated May 1, 1998, between Global Photonic Energy Corporation and the University of Southern California (incorporated by reference to Exhibit 10.6 to Amendment No. 1 to the Current Report on Form 8-K/A as filed with the SEC on November 25, 2013)
10.7		The University of Southern California Research Agreement, dated January 1, 2006, between Global Photonic Energy Corporation and the University of Southern California (incorporated by reference to Exhibit 10.7 to Amendment No. 1 to the Current Report on Form 8-K/A as filed with the SEC on November 25, 2013)
10.8		Letter Agreement, dated as of April 16, 2009, among Princeton University, the University of Southern California, the Regents of the University of Michigan, and Global Photonic Energy Corporation (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K as filed with the SEC on November 25, 2013)
10.9		Amended License Agreement, dated as of May 14, 1998, among Princeton University, the University of Southern California, and Global Photonic Energy Corporation (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K as filed with the SEC on November 25, 2013)

II- 10

Table of Contents

Exhibit Number		Description
10.10		Amendment No. 1 to the Amended License Agreement, dated May 15, 2006, among Princeton University, the University of Southern California, the Regents of the University of Michigan, and Global Photonic Energy Corporation (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K as filed with the SEC on November 25, 2013)
10.11		Research Agreement, dated December 20, 2013, between the Company and the University of Southern California (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on January 16, 2014)
10.12		Third Amendment to the Amended License Agreement, dated December 20, 2013, among Princeton University, the University of Southern California, the Regents of the University of Michigan, and Global Photonic Energy Corporation (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed with the SEC on January 16, 2014)
10.13		Subscription Agreement for the First PIPE, dated November 23, 2013 (incorporated by reference to Exhibit 10.13 to the Annual Report on Form 10-K as filed with the SEC on April 10, 2015)
10.14		Subscription Agreement for the Second PIPE, dated June 24, 2014 and as amended on February 23, 2015 (incorporated by reference to Exhibit 10.14 to the Annual Report on Form 10-K as filed with the SEC on April 10, 2015)
10.15		Amendment to Consulting Agreement, dated as of November 4, 2015, between J. Norman Allen and the Company (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q as filed with the SEC on November 13, 2015)
10.16		Conversion Agreement (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed with the SEC on January 27, 2016)
10.17		Amendment to Employment Agreement with Robert J. Fasnacht, dated May 8, 2015 (incorporated by reference to Exhibit 10.17 to the Annual Report on Form 10-K as filed with the SEC on March 18, 2016)
10.18		Amendment to Employment Agreement with Dean L. Ledger, dated May 8, 2015 (incorporated by reference to Exhibit 10.18 to the Annual Report on Form 10-K as filed with the SEC on March 18, 2016)
10.19		Second Amendment to Employment Agreement with Dean L. Ledger dated October 21, 2016 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on October 26, 2016)
10.20		Employment Agreement with Mark Tobin, dated September 1, 2015 (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q as filed with the SEC on November 13, 2015)
10.21		Amendment to Employment Agreement with Mark Tobin, dated October 21, 2016 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed with the SEC on October 26, 2016)
10.22		Consulting Agreement, dated as of October 25, 2014, between J. Norman Allen and the Company (incorporated by reference to Exhibit 10.19 to Post-Effective Amendment No. 1 to the Registration Statement on Form S-1 as filed with the SEC on June 25, 2015)
10.23		Agreement, dated October 1, 2013, between Global Photonic Energy Corporation and Tobin Tao & Company, Inc. (incorporated by reference to Exhibit 10.17 to Post-Effective Amendment No. 1 to the Registration Statement on Form S-1 as filed with the SEC on June 25, 2015)
10.24		Amendment to Tobin Tao & Company, Inc. 2013 Agreement, dated April 7, 2015, between the Company and Tobin Tao & Company, Inc. (incorporated by reference to Exhibit 10.18 to Post-Effective Amendment No. 1 to the Registration Statement on Form S-1 as filed with the SEC on June 25, 2015)
10.25		Research and License Letter Agreement, dated June 4, 2004, among Global Photonic Energy Corporation, Universal Display Corporation, the Trustees of Princeton University, Dr. Stephen R. Forrest, and Dr. Mark E. Thompson(*)
10.26		Office Lease Agreement, dated November 14, 2013, between the Company and DTR10, L.L.C.(*)
10.27		Indemnification Agreement, dated as of December 8, 2014, between the Company and Dean Ledger(*)
10.28		First Amendment to Research Agreement, dated August 8, 2016, the Company and the University of Southern California (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q as filed with the SEC on November 10, 2016)
10.29		Amendment No. 4 to Amended License Agreement, dated August 22, 2016, among Princeton University, the University of Southern California, the Regents of the University of Michigan, and the Company (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q as filed with the SEC on November 10, 2016)
10.30		Amendment to Independent Contractor Services Agreement, dated October 21, 2016, between the Company and Norman Allen (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q as filed with the SEC on November 10, 2016)
10.31		Roundtable Research Agreement, dated as of June 16, 2016, between the Company and the Regents of the University of Michigan ()(**)
10.32		Amendment No. 1 to Roundtable Research Agreement, dated as of July 21, 2016 and effective as of June 16, 2016, between the Company and the Regents of the University of Michigan (*)
10.33		Roundtable Research Agreement, dated as of June 16, 2016, between the Company and the Regents of the University of Michigan ()(**)
10.34		Amendment No. 1 to Roundtable Research Agreement, dated as of July 21, 2016 and effective as of June 16, 2016, between the Company and the Regents of the University of Michigan (*)
21.1		List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Registration Statement on Form S-1 as filed with the SEC on February 11, 2014)
23.1		Consent of Malone Bailey, LLP(*)
23.2		Consent of Pryor Cashman LLP (see Exhibit 5.1)

*	Filed herewith.
**	To be filed by amendment.
***	Portions of this exhibit have been redacted and are subject to a confidential treatment request filed with the Secretary of the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

II-11

Exhibit 1.1

UNDERWRITING AGREEMENT

between

NANOFLEX POWER CORPORATION

and

AEGIS CAPITAL CORP.,

as Representative of the Several Underwriters

UNDERWRITING AGREEMENT

New York, New York
[____], 2016

Aegis Capital Corp.
As Representative of the several Underwriters named on Schedule 1 attached hereto
810 Seventh Avenue, 18 ^th Floor
New York, New York 10019

Ladies and Gentlemen:

The undersigned, Nanoflex Power Corporation, a corporation formed under the laws of the State of Florida (collectively with its subsidiaries and affiliates, including, without limitation, all entities disclosed or described in the Registration Statement (as hereinafter defined) as being subsidiaries or affiliates of Nanoflex Power Corporation, the “ Company ”), hereby confirms its agreement (this “ Agreement ”) with Aegis Capital Corp. (hereinafter referred to as “you” (including its correlatives) or the “ Representative ”) and with the other underwriters named on Schedule 1 hereto for which the Representative is acting as representative (the Representative and such other underwriters being collectively called the “ Underwriters ” or, individually, an “ Underwriter ”) as follows:

1. Purchase and Sale of Securities .

1.1 Firm Securities .

1.1.1 Nature and Purchase of Firm Securities .

(i) On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the several Underwriters, an aggregate of [_______] shares (“ Firm Shares ”) of the Company’s common stock, par value $0.0001 per share (the “ Common Stock ”), and an aggregate of [____] Warrants (as hereinafter defined) to purchase an aggregate of [____] shares of Common Stock (the “ Firm Warrants ”). The Firm Shares and the Firm Warrants will be purchased separately and will be collectively referred to herein as the “ Firm Securities ”.

(ii) The Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Shares set forth opposite their respective names on Schedule 1 attached hereto and made a part hereof at the purchase price of $[____] per Firm Share (93% of the per Firm Share offering price). The Firm Shares are to be offered initially to the public at the offering price set forth on the cover page of the Prospectus (as defined in Section 2.1.1 hereof). The Underwriters, severally and not jointly, also agree to purchase from the Company the number of Firm Warrants set forth opposite their respective names on Schedule I attached hereto and made a part hereof at the purchase price of $[____] per Firm Warrant. The Firm Warrants are to be offered to the public at the offering price set forth on the cover page of the Prospectus.

1.1.2 Firm Securities Payment and Delivery .

(i) Delivery and payment for the Firm Securities shall be made at 10:00 a.m., Eastern time, on the third (3 ^rd ) Business Day following the effective date (the “ Effective Date ”) of the Registration Statement (as defined in Section 2.1.1 below) (or the fourth (4 ^th ) Business Day following the Effective Date if the Registration Statement is declared effective after 4:01 p.m., Eastern time) or at such earlier time as shall be agreed upon by the Representative and the Company, at the offices of Loeb & Loeb LLP, 345 Park Avenue, New York, NY 10154 (“ Representative Counsel ”), or at such other place (or remotely by facsimile or other electronic transmission) as shall be agreed upon by the Representative and the Company. The hour and date of delivery and payment for the Firm Securities is called the “ Closing Date .”

(ii) Payment for the Firm Securities shall be made on the Closing Date by wire transfer in Federal (same day) funds, payable to the order of the Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters) representing the Firm Securities (or through the facilities of the Depository Trust Company (“ DTC ”)) for the account of the Underwriters. The Firm Securities shall be registered in such name or names and in such authorized denominations as the Representative may request in writing at least two (2) full Business Days prior to the Closing Date. The Company shall not be obligated to sell or deliver the Firm Shares except upon tender of payment by the Representative for all of the Firm Securities. The term “ Business Day ” means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions are authorized or obligated by law to close in New York, New York.

1.2 Over-allotment Option .

1.2.1 Additional Securities . The Company hereby grants to the Representative an option (the “ Over-allotment Option ”) to purchase up to an additional [____] shares of Common Stock, representing up to 15% of the Firm Shares sold in the Offering (the “ Additional Shares ” and together with the Firm Shares, the “ Shares ”) and/or an additional [____] Warrants to purchase [___] shares of Common Stock, representing up to 15% of the Firm Warrants sold in the Offering (the “ Additional Warrants ” and together with the Firm Warrants, the “ Warrants ” ) for the purpose of covering over-allotments of such securities, if any. The Additional Shares and the Additional Warrants are collectively referred to herein as the “ Additional Securities ”. The Firm Securities and the Additional Securities are collectively referred to herein as the “ Securities .” The Securities shall be issued directly by the Company and shall have the rights and privileges described in the Registration Statement, the Disclosure Package and the Prospectus referred to below. The Warrants shall be issued pursuant to and shall have the rights and privileges set forth in the warrant agreement, dated on or before the Closing Date, between the Company and the Transfer Agent (as defined herein), as warrant agent (the “ Warrant Agreement ”). The offering and sale of the Securities is herein referred to as the “ Offering .”

1.2.2 Exercise of Option . The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative as to all (at any time) or any part (from time to time) of the Additional Securities within 45 days after the Effective Date. The purchase price to be paid per Additional Share shall be equal to the price per Firm Share set forth in Section 1.1.1(ii) hereof and the purchase price to be paid per Additional Warrant shall be equal to the price per Firm Warrant set forth in Section 1.1.1(ii) hereof. The Underwriters shall not be under any obligation to purchase any Additional Securities prior to the exercise of the Over-allotment Option. The Over-allotment Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed in writing by overnight mail or facsimile or other electronic transmission setting forth the number of Additional Securities to be purchased and the date and time for delivery of and payment for the Additional Securities (the “ Option Closing Date ”), which shall not be later than five (5) full Business Days after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of Representative Counsel or at such other place (including remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for the Additional Securities does not occur on the Closing Date, the Option Closing Date will be as set forth in the notice. Upon exercise of the Over-allotment Option with respect to all or any portion of the Additional Securities, subject to the terms and conditions set forth herein, (i) the Company shall become obligated to sell to the Underwriters the number of Additional Securities specified in such notice and (ii) each of the Underwriters, acting severally and not jointly, shall purchase that portion of the total number of Additional Securities then being purchased as set forth in Schedule 1 opposite the name of such Underwriter.

1.2.3 Payment and Delivery . Payment for the Additional Securities shall be made on the Option Closing Date by wire transfer in Federal (same day) funds, payable to the order of the Company upon delivery to you of certificates (in form and substance satisfactory to the Representative) representing the Additional Securities (or through the facilities of DTC) for the account of the Representative. The Additional Securities shall be registered in such name or names and in such authorized denominations as the Representative may request in writing at least two (2) full Business Days prior to the Option Closing Date. The Company shall not be obligated to sell or deliver the Additional Securities except upon tender of payment by the Representative for applicable Additional Securities. The Option Closing Date may be simultaneous with, but not earlier than, the Closing Date, and in the event that such time and date are simultaneous with the Closing Date, the term “Closing Date” shall refer to the time and date of delivery of the Firm Securities and Additional Securities.

1.3 Representative’s Warrants .

1.3.1 Purchase Warrants . As additional compensation for its services hereunder, the Company hereby agrees to issue to the Representative (and/or its designees) (i) on the Closing Date a Common Stock Purchase Warrant (a “ Representative’s Warrant ”) for the purchase of an aggregate of [____] shares of Common Stock, (which is equal to an aggregate of 4% of the Firm Shares sold in the Offering and (ii) on each Option Closing Date a Representative’s Warrant for the purchase of an aggregate of 4% of the Additional Shares sold in the Offering. The Representative’s Warrant, in the form attached hereto as Exhibit A , shall be exercisable, in whole or in part, commencing on a date which is one (1) year after the Effective Date and expiring on the five-year anniversary of the Effective Date at an initial exercise price per share of Common Stock of $[____], which is equal to 110% of the initial public offering price of the Firm Shares. The Representative’s Warrant and the shares of Common Stock issuable upon exercise thereof are hereinafter referred to together as the “ Representative’s Securities .” The Representative understands and agrees that there are significant restrictions pursuant to FINRA Rule 5110 against transferring the Representative’s Warrant and the underlying shares of Common Stock during the one hundred eighty (180) days after the Effective Date and by its acceptance thereof shall agree that it will not sell, transfer, assign, pledge or hypothecate the Representative’s Warrant, or any portion thereof, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of such securities for a period of one hundred eighty (180) days following the Effective Date to anyone other than (i) an Underwriter or a selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of the Representative or of any such Underwriter or selected dealer; and only if any such transferee agrees to the foregoing lock-up restrictions.

1.3.2 Delivery . Delivery of the Representative’s Warrant shall be made on the Closing Date and shall be issued in the name or names and in such authorized denominations as the Representative may request.

2. Representations and Warranties of the Company . The Company represents and warrants to the Underwriters as of the Applicable Time (as defined below), as of the Closing Date and as of the Option Closing Date, if any, as follows:

2.1 Filing of Registration Statement .

2.1.1 Pursuant to the Securities Act . The Company has filed with the U.S. Securities and Exchange Commission (the “ Commission ”) a registration statement, and an amendment or amendments thereto, on Form S-1 (File No. 333-[____]), including any related prospectus or prospectuses, for the registration of the Securities and the Representative’s Securities under the Securities Act of 1933, as amended (the “ Securities Act ”), which registration statement and amendment or amendments have been prepared by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and regulations of the Commission under the Securities Act (the “ Securities Act Regulations ”) and will contain all material statements that are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations. Except as the context may otherwise require, such registration statement, as amended, on file with the Commission at the time the registration statement became effective (including the Preliminary Prospectus included in the registration statement, financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a part thereof as of the Effective Date pursuant to paragraph (b) of Rule 430A of the Securities Act Regulations (the “ Rule 430A Information ”)), is referred to herein as the “ Registration Statement .” If the Company files any registration statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing, the term “ Registration Statement ” shall include such registration statement filed pursuant to Rule 462(b). The Registration Statement has been declared effective by the Commission on the date hereof.

Each prospectus used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “ Preliminary Prospectus .” The Preliminary Prospectus, subject to completion, dated [____], 2016, that was included in the Registration Statement immediately prior to the Applicable Time is hereinafter called the “ Pricing Prospectus .” The final prospectus in the form first furnished to the Underwriters for use in the Offering is hereinafter called the “ Prospectus .” Any reference to the “most recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus included in the Registration Statement.

“ Applicable Time ” means [TIME] [a.m./p.m.], Eastern time, on the date of this Agreement.

“ Issuer Free Writing Prospectus ” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act Regulations (“ Rule 433 ”), including, without limitation, any “free writing prospectus” (as defined in Rule 405 of the Securities Act Regulations) relating to the Securities that is (i) required to be filed with the Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the Offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).

“ Issuer General Use Free Writing Prospectus ” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors (other than a “ bona fide electronic road show,” as defined in Rule 433 (the “ Bona Fide Electronic Road Show ”)), as evidenced by its being specified in Schedule 2-B hereto.

“ Issuer Limited Use Free Writing Prospectus ” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.

“ Pricing Disclosure Package ” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the Pricing Prospectus and the information included on Schedule 2-A hereto, all considered together.

2.1.2 Pursuant to the Exchange Act. The Company has filed with the Commission a Form 8-A (File Number 000-[•]) providing for the registration pursuant to Section 12(b) under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), of the shares of Common Stock and the Warrants. The registration of the shares of Common Stock under the Exchange Act has been declared effective by the Commission on or prior to the date hereof. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the shares of Common Stock under the Exchange Act, nor has the Company received any notification that the Commission is contemplating terminating such registration.

2.2 Trading Market . The shares of Common Stock and Warrants have been approved for listing on the NYSE MKT, subject to official notice of issuance (the “ Exchange ”), and the Company has taken no action designed to, or likely to have the effect of, delisting the shares of Common Stock or Warrants from the Exchange, nor has the Company received any notification that the Exchange is contemplating terminating such listing except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

2.3 No Stop Orders, etc . Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued any order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied with each request (if any) from the Commission for additional information.

2.4 Disclosures in Registration Statement .

2.4.1 Compliance with Securities Act and 10b-5 Representation .

(i) Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus, including the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, and the Prospectus, at the time each was filed with the Commission, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection with this Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(ii) Neither the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

(iii) The Pricing Disclosure Package, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), did not, does not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Limited Use Free Writing Prospectus hereto does not conflict with the information contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, and each such Issuer Limited Use Free Writing Prospectus, as supplemented by and taken together with the Pricing Prospectus as of the Applicable Time, did not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements made or statements omitted in reliance upon and in conformity with written information furnished to the Company with respect to the Underwriters by the Representative expressly for use in the Registration Statement, the Pricing Prospectus or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of any Underwriter consists solely of the following disclosure contained in the “Underwriting” section of the Prospectus: (a) the information set forth under the sub-captions “Electronic Offer, Sale and Distribution of Shares”, “Other Relationships”, “Stabilization,” and “Passive Market Making” and (b) the table showing the number of Securities to be purchased by each Underwriter (the “ Underwriters’ Information ”); and

(iv) Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to the Underwriters’ Information.

2.4.2 Disclosure of Agreements . The agreements and documents described in the Registration Statement, the Pricing Disclosure Package and the Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company or any of its direct or indirect subsidiaries, including each entity disclosed or described in the Registration Statement, the Pricing Disclosure Package and the Prospectus as being a subsidiary of the Company (each a “ Subsidiary and collectively, the “ Subsidiaries ”) is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Pricing Disclosure Package and the Prospectus, or (ii) is material to the business of the Company or any Subsidiary, has been duly authorized and validly executed by the Company or any Subsidiary, is in full force and effect in all material respects and is enforceable against the Company or any Subsidiary and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments has been assigned by the Company or any Subsidiary, and neither the Company, any Subsidiary nor, to the Company’s knowledge, any other party is in default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the best of the Company’s knowledge, performance by the Company or any Subsidiary of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental or regulatory agency, body or court, domestic or foreign, having jurisdiction over the Company, any Subsidiary or any of their respective assets or businesses (each, a “ Governmental Entity ”), including, without limitation, those relating to environmental laws and regulations.

2.4.3 Prior Securities Transactions . Since September 24, 2013, no securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of, any person or persons controlling, controlled by or under common control with the Company, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Preliminary Prospectus.

2.4.4 Regulations . The disclosures in the Registration Statement, the Pricing Disclosure Package and the Prospectus concerning the effects of federal, state, local and all foreign laws, rules and regulations relating to (a) the Offering (b) the respective businesses of the Company and its Subsidiaries as currently conducted or contemplated are correct and complete in all material respects and no other such material laws, rules or regulations are required to be disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus which are not so disclosed.

2.5 Changes After Dates in Registration Statement .

2.5.1 No Material Adverse Change . Since the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse change in the financial position or results of operations of the Company or any Subsidiary, nor any change or development that, singularly or in the aggregate, would involve a material adverse change or a prospective material adverse change, in or affecting the condition (financial or otherwise), results of operations, business, assets or prospects of the Company or any Subsidiary (a “ Material Adverse Change ”); (ii) there have been no material transactions entered into by the Company or any Subsidiary, other than as contemplated pursuant to this Agreement; and (iii) no officer or director of the Company has resigned from any position with the Company.

2.5.2 Recent Securities Transactions, etc . Subsequent to the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.

2.6 Disclosures in Commission Filings . Since September 24, 2013, none of the Company’s filings with the Commission, at the time of such filings, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and the Company has made all filings with the Commission required under the Exchange Act and the rules and regulations promulgated of the Commission promulgated thereunder (the “ Exchange Act Regulations ”).

2.7 Independent Accountants . To the knowledge of the Company, MaloneBailey, LLP (the “ Auditor ”), whose report is filed with the Commission as part of the Registration Statement, the Pricing Disclosure Package and the Prospectus, is an independent registered public accounting firm as required by the Securities Act and the Securities Act Regulations and the Public Company Accounting Oversight Board. The Auditor has not, during the periods covered by the financial statements included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.

2.8 Financial Statements, etc . The financial statements, including the notes thereto and supporting schedules included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, fairly present the financial position and the results of operations of the Company at the dates and for the periods to which they apply; and such financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“ GAAP ”), consistently applied throughout the periods involved (provided that unaudited interim financial statements are subject to year-end audit adjustments that are not expected to be material in the aggregate and do not contain all footnotes required by GAAP); and the supporting schedules included in the Registration Statement present fairly the information required to be stated therein. Except as included therein, no historical or pro forma financial statements are required to be included in the Registration Statement, the Pricing Disclosure Package or the Prospectus under the Securities Act or the Securities Act Regulations. The pro forma and pro forma as adjusted financial information and the related notes, if any, included in the Registration Statement, the Pricing Disclosure Package and the Prospectus have been properly compiled and prepared in accordance with the applicable requirements of the Securities Act and the Securities Act Regulations and present fairly the information shown therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. All disclosures contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement, the Pricing Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a material current or future effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (a) neither the Company nor any of its Subsidiaries has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its capital stock, (c) there has not been any change in the capital stock of the Company or any of its Subsidiaries, or, (d) other than in the ordinary course of business and consistent with past practice, the Company has not made any grants under any stock compensation plan, and (e) there has not been any Material Adverse Change in the long-term or short-term debt of the Company or any Material Adverse Change in the long-term or short-term debt of any Subsidiary.

2.9 Authorized Capital; Options, etc . The Company had, at the date or dates indicated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions stated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing Date the adjusted stock capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Pricing Disclosure Package and the Prospectus, on the Effective Date, as of the Applicable Time and on the Closing Date and any Option Closing Date, there will be no stock options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued shares of Common Stock of the Company or any security convertible or exercisable into shares of Common Stock of the Company, or any contracts or commitments to issue or sell shares of Common Stock or any such options, warrants, rights or convertible securities.

2.10 Valid Issuance of Securities, etc .

2.10.1 Outstanding Securities . All issued and outstanding securities of the Company issued since September 24, 2013 have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission with respect thereto or the ability to force the Company to repurchase such securities, and are not subject to personal liability by reason of being such holders; and none of such securities were issued in violation of the preemptive rights, rights of first refusal or rights of participation of any holders of any security of the Company or similar contractual rights granted by the Company. The authorized shares of Common Stock conform in all material respects to all statements relating thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales of the outstanding shares of Common Stock, options, warrants, convertible notes and other rights to purchase or exchange such securities for shares of Common Stock were at all relevant times either registered under the Securities Act and the applicable state securities or “blue sky” laws or, based in part on the representations and warranties of the purchasers of such securities, exempt from such registration requirements. The descriptions of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, as described in the Registration Statement, Pricing Disclosure Package and the Prospectus, accurately and fairly present, in all material respects, the information required to be shown with respect to such plans, arrangements, options and rights.

2.10.2 Securities Sold Pursuant to this Agreement . The Securities and the Representative’s Securities have been duly authorized for issuance and sale and, when issued and paid for, will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders; the Securities and Representative’s Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Securities and Representative’s Securities has been duly and validly taken. The Securities and Representative’s Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. All corporate action required to be taken for the authorization, issuance and sale of the Warrants and the Representative’s Warrant has been duly and validly taken; the shares of Common Stock issuable upon exercise of the Warrants and the Representative’s Warrant have been duly authorized and reserved for issuance by all necessary corporate action on the part of the Company and when paid for and issued in accordance with the Warrant or the Representative’s Warrant , as the case may be, such shares of Common Stock will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders; and such shares of Common Stock are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company.

2.11 Registration Rights of Third Parties . Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, no holders of any securities of the Company or any options, warrants, rights, convertible notes or other securities, exercisable for or convertible or exchangeable into securities of the Company have the right to require the Company to register any such securities of the Company under the Securities Act or to include any such securities in the Registration Statement or any other registration statement to be filed by the Company.

2.12 Validity and Binding Effect of Agreements . The execution, delivery and performance of this Agreement, the Warrant Agreement (as hereinafter defined), the Warrants and the Representative’s Warrant have been duly and validly authorized by the Company, and, each of this Agreement, the Warrant Agreement, the Warrants and the Representative’s Warrant, when executed and delivered, will constitute, the valid and binding agreement of the Company, enforceable against the Company in accordance with their respective terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

2.13 No Conflicts, etc . The execution, delivery and performance by the Company of this Agreement, the Representative’s Warrant and all ancillary documents, the consummation by the Company of the transactions herein and therein contemplated and the compliance by the Company with the terms hereof and thereof do not and will not, with or without the giving of notice or the lapse of time or both: (i) result in a material breach of, or conflict with any of the terms and provisions of, or constitute a material default under, or result in the creation, modification, termination or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement or any other agreement or instrument to which the Company or any Subsidiary is a party or to which any property of the Company or any of its Subsidiaries is bound; (ii) result in any violation of the provisions of the Company’s Certificate of Incorporation (as the same may be amended or restated from time to time, the “ Charter ”), the by-laws of the Company, the certificate of incorporation of any Subsidiary or the bylaws of any Subsidiary; or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree of any Governmental Entity as of the date hereof (including, without limitation, those promulgated by the Food and Drug Administration of the U.S. Department of Health and Human Services (the “ FDA ”) or by any foreign, federal, state or local regulatory authority performing functions similar to those performed by the FDA).

2.14 No Defaults; Violations . No material default exists in the due performance and observance of any term, covenant or condition of any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by which the Company may be bound or to which any of the properties or assets of the Company is subject. The Company is not in violation of any term or provision of its Charter or by-laws, or in violation in any material respect of any material franchise, license, permit, applicable law, rule, regulation, judgment or decree of any Governmental Entity.

2.15 Corporate Power; Licenses; Consents .

2.15.1 Conduct of Business . Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, each of the Company and its Subsidiaries has all requisite corporate power and authority, and has all necessary consents, authorizations, approvals, orders, licenses, certificates, qualifications, registrations and permits (collectively, “ Authorization s”) of and from all Governmental Entities that it needs as of the date hereof to conduct its respective business purpose as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

2.15.2 Transactions Contemplated Herein . The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions and conditions hereof, and all Authorizations, required in connection therewith have been obtained. No Authorization of, and no filing with, any court or Governmental Entity is required for the valid issuance, sale and delivery of the Securities and the consummation of the transactions and agreements contemplated by this Agreement, the Warrant Agreement, the Warrants and the Representative’s Warrant and as contemplated by the Registration Statement, the Pricing Disclosure Package and the Prospectus, except with respect to applicable federal and state securities laws and the rules and regulations of the Financial Industry Regulatory Authority, Inc. (“ FINRA ”).

2.16 D&O Questionnaires . To the Company’s knowledge, all information contained in the questionnaires (the “ Questionnaires ”) completed by each of the Company’s directors, officers and beneficial holders of 5% or more of the Company’s Common Stock immediately prior to the Offering (the “ Insiders ”) as supplemented by all information concerning the Company’s directors, officers and principal shareholders as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, as well as in the Lock-Up Agreement (as defined in Section 2.27 below), provided to the Underwriters, is true and correct in all material respects and the Company has not become aware of any information which would cause the information disclosed in the Questionnaires to become inaccurate and incorrect.

2.17 Litigation; Governmental Proceedings . There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company, any of its Subsidiaries or, to the Company’s knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus or in connection with the Company’s listing application for the listing of the Securities on the Exchange.

2.18 Good Standing . The Company and each of its Subsidiaries has been duly organized and is validly existing as a corporation and is in good standing under the laws of its jurisdiction of incorporation as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify, singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.

2.19 Insurance . The Company and each of its Subsidiaries carries or is entitled to the benefits of insurance (including without limitation, as to directors’ and officers’ insurance coverage), with reputable insurers, in such amounts and covering such risks which the Company believes are adequate, and all such insurance is in full force and effect. The Company has no reason to believe that it or any of its Subsidiaries will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change.

2.20 Transactions Affecting Disclosure to FINRA .

2.20.1 Finder’s Fees . Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee by the Company or any Insider with respect to the sale of the Securities hereunder or any other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its shareholders that may affect the Underwriters’ compensation, as determined by FINRA.

2.20.2 Payments Within Twelve (12) Months . Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the Effective Date, other than the payment to the Underwriters as provided hereunder in connection with the Offering.

2.20.3 Use of Proceeds . None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.

2.20.4 FINRA Affiliation . There is no (i) officer or director of the Company, (ii) beneficial owner of 5% or more of any class of the Company’s securities or (iii) beneficial owner of the Company’s unregistered equity securities which were acquired during the 180-day period immediately preceding the filing of the Registration Statement that is an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).

2.20.5 Information . All information provided by the Company in its FINRA questionnaire to Representative Counsel specifically for use by Representative Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete in all material respects.

2.21 Foreign Corrupt Practices Act . Neither the Company nor any of its Subsidiaries or, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or its Subsidiaries nor any other person acting on behalf of the Company or its Subsidiaries, has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company or any of its Subsidiaries (or assist it in connection with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, might have had a Material Adverse Change or (iii) if not continued in the future, might adversely affect the assets, business, operations or prospects of the Company or any of its Subsidiaries. The Company and each of its Subsidiaries has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with the Foreign Corrupt Practices Act of 1977, as amended.

2.22 Compliance with OFAC . None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any of its Subsidiaries or any other person acting on behalf of the Company or any of its Subsidiaries, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“ OFAC ”), and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

2.23 Money Laundering Laws . The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “ Money Laundering Laws ”); and no action, suit or proceeding by or before any Governmental Entity involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.

2.24 [Reserved.]

2.25 Officers’ Certificate . Any certificate signed by any duly authorized officer of the Company and delivered to you or to Representative Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

2.26 Forward-Looking Statements . No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in either the Registration Statement, the Pricing Disclosure Package or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

2.27 Lock-Up Agreements . Schedule 3 hereto contains a complete and accurate list of the Company’s officers, directors and each owner of at least 5% of the Company’s outstanding shares of Common Stock (or securities convertible or exercisable into shares of Common Stock) (collectively, the “ Lock-Up Parties ”). The Company has caused each of the Lock-Up Parties to deliver to the Representative an executed Lock-Up Agreement, in the form attached hereto as Exhibit B ( the “ Lock-Up Agreement ”), prior to the execution of this Agreement. If (i) during the last 17 days of the Lock-Up Period (as defined herein), the Company issues an earnings release or material news or a material event relating to the Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the Lock-Up Period, the restrictions imposed by the Lock-Up Agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of such material news or material event, as applicable, unless the Representative waives, in writing, such extension.

2.28 Subsidiaries . All direct and indirect Subsidiaries of the Company are duly organized and in good standing under the laws of the place of organization or incorporation, and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify would not have a material adverse effect on the assets, business or operations of the Company taken as a whole. The Company’s ownership and control of each Subsidiary is as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus. No Subsidiary of the Company is prohibited or restricted, directly or indirectly, from paying any dividends to the Company, from making any other distributions on such Subsidiary’s capital stock, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary’s property or assets to the Company or any other Subsidiary of the Company, except as set forth or contemplated in the Registration Statement, the Disclosure Package and the Prospectus. As of the date of this Agreement, the Company’s sole Subsidiary is Global Photonic Energy Corporation, a Pennsylvania corporation.

2.29 Related Party Transactions .

2.29.1 Business Relationships . There are no business relationships or related party transactions involving the Company or any other person required to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus that have not been described as required.

2.29.2 No Relationships with Customers and Suppliers . No relationship, direct or indirect, exists between or among the Company on the one hand, and the directors, officers, 5% or greater stockholders, customers or suppliers of the Company or any of the Company’s affiliates on the other hand, which is required to be described in the Pricing Disclosure Package and the Prospectus or a document incorporated by reference therein and which is not so described.

2.29.3 No Unconsolidated Entities . There are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates (as such term is defined in Rule 405 of the Securities Act) and any unconsolidated entity, including, but not limited to, any structure finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the Company’s liquidity or the availability of or requirements for its capital resources required to be described in the Pricing Disclosure Package and the Prospectus or a document incorporated by reference therein which have not been described as required.

2.29.4 No Loans or Advances to Affiliates . There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective family members, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

2.30 Board of Directors . The Board of Directors of the Company is comprised of the persons set forth under the heading of the Pricing Prospectus and the Prospectus captioned “Management.” The qualifications of the persons serving as board members and the overall composition of the board comply with the Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder (the “ Sarbanes-Oxley Act ”) applicable to the Company and the listing rules of the Exchange. At least one member of the Audit Committee of the Board of Directors of the Company qualifies as an “audit committee financial expert,” as such term is defined under Regulation S-K and the listing rules of the Exchange. In addition, at least a majority of the persons serving on the Board of Directors qualify as “independent,” as defined under the listing rules of the Exchange.

2.31 Sarbanes-Oxley Compliance .

2.31.1 Disclosure Controls . The Company has developed and currently maintains disclosure controls and procedures that will comply with Rule 13a-15 or 15d-15 under the Exchange Act Regulations, and such controls and procedures are effective to ensure that all material information concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of the Company’s Exchange Act filings and other public disclosure documents.

2.31.2 Compliance . The Company is, or at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Sarbanes-Oxley Act applicable to it, and has implemented or will implement such programs and taken reasonable steps to ensure the Company’s future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions of the Sarbanes-Oxley Act.

2.32 Accounting Controls . The Company and each of its Subsidiaries maintain systems of “internal control over financial reporting” (as defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company is not aware of any material weaknesses in its internal controls. The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are known to the Company’s management and that have adversely affected or are reasonably likely to adversely affect the Company’ ability to record, process, summarize and report financial information; and (ii) any fraud known to the Company’s management, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.

2.33 No Investment Company Status . The Company is not and, after giving effect to the Offering and the application of the proceeds thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to register as an “investment company,” as defined in the Investment Company Act of 1940, as amended.

2.34 No Labor Disputes . No labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is imminent. The Company is not aware that any key employee or significant group of employees of the Company or any Subsidiary plans to terminate employment with the Company or such Subsidiary.

2.35 Intellectual Property Rights . The Company and each of its Subsidiaries owns or possesses or has valid rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights both U.S. and foreign (“ Intellectual Property Rights ”) necessary for the conduct of the business of the Company and its Subsidiaries as currently carried on and as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The Company has paid all required fees necessary to maintain these Intellectual Property Rights, except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To the knowledge of the Company, no action or use by the Company or any of its Subsidiaries necessary for the conduct of its business as currently carried on and as described in the Registration Statement and the Prospectus will involve or give rise to any infringement of, or license or similar fees for, any Intellectual Property Rights of others. Neither the Company nor any of its Subsidiaries has received any notice alleging any such infringement, fee or conflict with asserted Intellectual Property Rights of others. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change (A) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any of the Intellectual Property Rights owned by the Company or any of its Subsidiaries; (B) there is no pending or, to the knowledge of the Company, threatened action, suit, governmental review, proceeding or claim by others challenging the rights of the Company or any of its Subsidiaries in or to any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim, that would, individually or in the aggregate, together with any other claims in this Section 2.35, reasonably be expected to result in a Material Adverse Change; (C) the Intellectual Property Rights owned by the Company and its Subsidiaries and, to the knowledge of the Company, the Intellectual Property Rights licensed to the Company and its Subsidiaries have not been adjudged by a court of competent jurisdiction invalid or unenforceable, in whole or in part, and there is no pending or, to the Company’s knowledge, threatened action, suit, governmental review, proceeding or claim by others challenging the validity or scope of any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 2.35, reasonably be expected to result in a Material Adverse Change; (D) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company or any of its Subsidiaries infringes, misappropriates or otherwise violates any Intellectual Property Rights or other proprietary rights of others, neither the Company nor or any of its Subsidiaries has received any written notice of such claim and the Company is unaware of any other facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 2.35, reasonably be expected to result in a Material Adverse Change; and (E) to the Company’s knowledge, no employee of the Company or any of its Subsidiaries is in or has ever been in violation in any material respect of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s employment with the Company or any of its Subsidiaries, or actions undertaken by the employee while employed with the Company or any of its Subsidiaries and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To the Company’s knowledge, all material technical information developed by and belonging to the Company or any of its Subsidiaries which has not been patented has been kept confidential. Neither the Company nor or any of its Subsidiaries is a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus and are not described therein. The Registration Statement, the Pricing Disclosure Package and the Prospectus contain in all material respects the same description of the matters set forth in the preceding sentence. None of the technology employed by the Company or any of its Subsidiaries has been obtained or is being used by the Company or any of its Subsidiaries in violation of any contractual obligation binding on the Company or any of its Subsidiaries or, to the Company’s knowledge, any of its officers, directors or employees, or otherwise in violation of the rights of any persons.

2.36 Taxes . Each of the Company and its Subsidiaries has filed all returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof. Each of the Company and its Subsidiaries has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company or such respective Subsidiary. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriters, (i) no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from the Company or its Subsidiaries. The term “ taxes ” mean all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto. The term “ returns ” means all returns, declarations, reports, statements and other documents required to be filed in respect to taxes.

2.37 Compliance with Environmental Laws . Except as described in the Registration Statement, the Disclosure Package and the Prospectus, (i) to the Company’s knowledge, neither the Company nor any of its Subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “ Hazardous Materials ”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “ Environmental Laws ), (ii) the Company and each of its Subsidiaries has all material permits, authorizations and approvals required under any applicable Environmental Laws and is in compliance with their requirements, (iii) there are no pending or, to the Company’s knowledge, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its Subsidiaries and (iv) to the Company’s knowledge, there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its Subsidiaries relating to Hazardous Materials or any Environmental Laws.

2.38 ERISA Compliance . The Company and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ ERISA ”)) established or maintained by the Company or its “ERISA Affiliates” (as defined below) are in compliance in all material respects with ERISA. “ ERISA Affiliate ” means, with respect to the Company, any member of any group of organizations described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the “ Code ”) of which the Company is a member. No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates. No “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company nor any of its ERISA Affiliates has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and, to the knowledge of the Company, nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the execution of this Agreement, or consummation of the Offering does not constitute a triggering event under any employee benefit plan or any other employment contract, whether or not legally enforceable, which (either alone or upon the occurrence of any additional or subsequent event) will or may result in any payment (of severance pay or otherwise), acceleration, increase in vesting, or increase in benefits to any current or former participant, employee or director of the Company other than an event that is not material to the financial condition or business of the Company.

2.39 Compliance with Laws . The Company and each of its Subsidiaries: (A) is and at all times has been in compliance with all statutes, rules, or regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed by the Company (“ Applicable Laws ”), except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change; (B) has not received any FDA Form 483, notice of adverse finding, warning letter, untitled letter or other correspondence or notice from the U.S. Food and Drug Administration or any other governmental authority alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (“ Authorizations ”); (C) possesses all material Authorizations and such Authorizations are valid and in full force and effect and are not in material violation of any term of any such Authorizations; (D) has not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental Entity or third party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such governmental authority or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has not received notice that any Governmental Entity has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such governmental authority is considering such action; (F) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct on the date filed (or were corrected or supplemented by a subsequent submission); and (G) has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post-sale warning, “dear doctor” letter, or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect or violation and, to the Company’s knowledge, no third party has initiated, conducted or intends to initiate any such notice or action.

2.40 Ineligible Issuer . At the time of filing the Registration Statement and any post-effective amendment thereto, at the time of effectiveness of the Registration Statement and any amendment thereto, at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Securities and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.

2.41 Smaller Reporting Company . As of the time of filing of the Registration Statement and as of the Effective Date, the Company was a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act Regulations.

2.42 Industry Data . The statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.

2.43 Reverse Stock Split . The Company has taken all necessary corporate action to effectuate a reverse stock split of its shares of Common Stock on the basis of one (1) such share for each [___] ([__]) issued and outstanding shares thereof (the “ Reverse Stock Split ”).

2.44 Electronic Road Show . The Company has made available a Bona Fide Electronic Road Show in compliance with Rule 433(d)(8)(ii) of the Securities Act Regulations such that no filing of any “road show” (as defined in Rule 433(h) of the Securities Act Regulations) is required in connection with the Offering.

2.45 Margin Securities . The Company does not own any “margin securities” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the “ Federal Reserve Board ”), and none of the proceeds of Offering will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the shares of Common Stock to be considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve Board

2.46 Integration . Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Offering to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration of any such securities under the Securities Act.

2.47 Title . Except as described in the Registration Statement, the Disclosure Package and the Prospectus, the Company and each of its Subsidiaries has good and marketable title in fee simple to, or has valid rights to lease or otherwise use, all items of real or personal property that are material to its respective business, free and clear of all liens, encumbrances, security interests, claims and defects that do not, singularly or in the aggregate, materially affect the business of the Company or its Subsidiaries and do not interfere with the use made of such property by the Company or its Subsidiaries; and all of the leases and subleases material to the business of the Company and each of its Subsidiaries, and under which the Company or any of its Subsidiaries holds properties described in the Registration Statement, the Disclosure Package and the Prospectus, are, to the Company’s knowledge in full force and effect, and neither the Company nor any of its Subsidiaries has received any notice of any material claim of any sort that have been asserted by anyone adverse to the rights of the Company or such Subsidiaries under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such Subsidiaries to the continued possession of the leased or subleased premises under any such lease or sublease, which would result in a Material Adverse Change.

2.48 Corporate Records . The minute books of the Company have been made available to the Underwriters and counsel for the Underwriters, and such books (i) contain a summary of all meetings and actions of the board of directors (including each board committee) and stockholders of the Company since January 1, 2014 through the date of the latest meeting and action, and (ii) reflect all material transactions referred to in such minutes

2.49 Confidentiality and Non-Competition . To the Company’s knowledge, no director, officer, key employee or consultant of the Company is subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation with any employer or prior employer that could materially affect his ability to be and act in his respective capacity with the Company or be expected to result in a Material Adverse Change.

3. Covenants of the Company . The Company covenants and agrees as follows:

3.1 Amendments to Registration Statement . The Company shall deliver to the Representative, prior to filing, any amendment or supplement to the Registration Statement or the Prospectus proposed to be filed after the Effective Date and not file any such amendment or supplement to which the Representative shall reasonably object in writing.

3.2 Federal Securities Laws .

3.2.1 Compliance . The Company, subject to Section 3.2.2, shall comply with the requirements of Rule 424(b) and Rule 430A of the Securities Act Regulations, and will notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed; (ii) of the receipt of any comments from the Commission; (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information; (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification of the Securities and Representative’s Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the Securities Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the Offering of the Securities and Representative’s Securities. The Company shall effect all filings required under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company shall use its best efforts to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.

3.2.2 Continued Compliance . The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“ Rule 172 ”), would be) required by the Securities Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) amend or supplement the Pricing Disclosure Package or the Prospectus in order that the Pricing Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the Pricing Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the Securities Act or the Securities Act Regulations, the Company will promptly (A) give the Representative notice of such event; (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the Pricing Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representative with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representative or counsel for the Underwriters shall reasonably object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. The Company has given the Representative notice of any filings made pursuant to the Exchange Act or the Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company shall give the Representative notice of its intention to make any such filing from the Applicable Time until the later of the Closing Date and the exercise in full or expiration of the Over-allotment Option specified in Section 1.2 hereof and will furnish the Representative with copies of the related document(s) a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which the Representative or counsel for the Underwriters shall reasonably object.

3.2.3 Exchange Act Registration . For a period of three (3) years after the date of this Agreement, the Company shall use its best efforts to maintain the registration of the shares of Common Stock under the Exchange Act. The Company shall not deregister the shares of Common Stock under the Exchange Act without the prior written consent of the Representative.

3.2.4 Free Writing Prospectuses . The Company agrees that, unless it obtains the prior written consent of the Representative, it shall not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that the Representative shall be deemed to have consented to each Issuer General Use Free Writing Prospectus hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Representative. The Company represents that it has treated or agrees that it will treat each such free writing prospectus consented to, or deemed consented to, by the Underwriters as an “issuer free writing prospectus,” as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Underwriters and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

3.3 Delivery to the Underwriters of Registration Statements . The Company has delivered or made available or shall deliver or make available to the Representative and counsel for the Representative, without charge, signed copies of the Registration Statement as originally filed and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts, and will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

3.4 Delivery to the Underwriters of Prospectuses . The Company has delivered or made available or will deliver or make available to each Underwriter, without charge, as many copies of each Preliminary Prospectus, Disclosure Package and Prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations, would be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Preliminary Prospectus, the Pricing Disclosure Package and the Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

3.5 Effectiveness and Events Requiring Notice to the Representative . The Company shall use its best efforts to cause the Registration Statement to remain effective with a current prospectus for at least nine (9) months after the Applicable Time, and shall notify the Representative immediately and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of the happening of any event during the period described in this Section 3.5 that, in the judgment of the Company, makes any statement of a material fact made in the Registration Statement, the Pricing Disclosure Package or the Prospectus untrue or that requires the making of any changes in (a) the Registration Statement in order to make the statements therein not misleading, or (b) in the Pricing Disclosure Package or the Prospectus in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company shall make every reasonable effort to obtain promptly the lifting of such order.

3.6 Review of Financial Statements. For a period of five (5) years after the date of this Agreement, the Company, at its expense, shall cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company’s financial statements for each of the three fiscal quarters immediately preceding the announcement of any quarterly financial information.

3.7 Listing . The Company shall use its best efforts to maintain the quotation of the shares of Common Stock (including the Securities) on the OTCBB or on a national securities exchange for at least three years from the date of this Agreement.

3.8 Financial Public Relations Firm . The Company shall have retain a financial public relations firm reasonably acceptable to the Representative and the Company, which firm shall be experienced in assisting issuers in initial public offerings of securities and in their relations with their security holders, for a period of not less than two (2) years after the Effective Date.

3.9 Reports to the Representative .

3.9.1 Periodic Reports, etc . For a period of three (3) years after the date of this Agreement, the Company shall furnish to the Representative copies of such financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of any class of its securities and also promptly furnish to the Representative: (i) a copy of each periodic report the Company shall be required to file with the Commission under the Exchange Act and the Exchange Act Regulations; (ii) a copy of every press release and every news item and article with respect to the Company or its affairs which was released by the Company; (iii) a copy of each Form 8-K prepared and filed by the Company; (iv) five copies of each registration statement filed by the Company under the Securities Act; (v) a copy of each report or other communication furnished to stockholders and (vi) such additional documents and information with respect to the Company and the affairs of any future subsidiaries of the Company as the Representative may from time to time reasonably request; provided the Representative shall sign, if requested by the Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable to the Representative and Representative Counsel in connection with the Representative’s receipt of such information. Documents filed with the Commission pursuant to its EDGAR system shall be deemed to have been delivered to the Representative pursuant to this Section 3.9.1.

3.9.2 Transfer Agent; Transfer Sheets . For a period of three (3) years after the date of this Agreement, the Company shall retain a transfer agent and registrar acceptable to the Representative (the “ Transfer Agent ”) and shall furnish to the Representative at the Company’s sole cost and expense such transfer sheets of the Company’s securities as the Representative may reasonably request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and DTC. Securities Transfer Corporation is acceptable to the Representative to act as Transfer Agent for the shares of Common Stock.

3.10 Payment of Expenses

3.10.1 General Expenses Related to the Offering . The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date, if any, to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the Securities to be sold in the Offering (including the Additional Securities) with the Commission; (b) all COBRADesk filing fees associated with the review of the Offering by FINRA; all fees and expenses relating to the listing of the Securities on the Exchange and on such other stock exchanges as the Company and the Representative together determine; (c) all fees, expenses and disbursements relating to background checks of the Company's officers and directors in an amount not to exceed $1,500 per individual and $10,000 in the aggregate; (d) all fees, expenses and disbursements relating to the registration or qualification of the Securities under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, and the reasonable fees and disbursements of “blue sky” counsel, it being agreed that such fees and expenses will be limited to if the Offering is commenced on the Nasdaq Capital Market or on the Over the Counter Bulletin Board, the Company shall make a payment of $15,000 to such counsel upon the commencement of “blue sky” work by such counsel and an additional $5,000 at Closing); (e) all fees, expenses and disbursements relating to the registration, qualification or exemption of the Securities under the securities laws of such foreign jurisdictions as the Representative may reasonably designate; (f) the costs of all mailing and printing of the underwriting documents (including, without limitation, the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters. Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary; (g) the costs and expenses of the public relations firm; (h) the costs of preparing, printing and delivering certificates representing the Securities; (i) fees and expenses of the transfer agent for the Common Stock; (j) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Representative; (k) the costs associated with post-Closing advertising the Offering in the national editions of the Wall Street Journal and New York Times; (l) the costs associated with bound volumes of the public offering materials as well as commemorative mementos and lucite tombstones, each of which the Company or its designee shall provide within a reasonable time after the Closing in such quantities as the Representative may reasonably request; (m) the fees and expenses of the Company’s accountants; (n) the fees and expenses of the Company’s legal counsel and other agents and representatives; (o) the fees and expenses of the Underwriter’s legal counsel not to exceed $75,000; (p) the $29,500 cost associated with the use of Ipreo’s book building, prospectus tracking and compliance software for the Offering; and (q) up to $10,000 of the Representative’s actual accountable “road show” expenses for the Offering. The Representative may deduct from the net proceeds of the Offering payable to the Company on the Closing Date, or the Option Closing Date, if any, the expenses set forth herein to be paid by the Company to the Underwriters. The Company and the Representative acknowledge that the Company has previously paid to the Representative an advance in an amount of $25,000 (the “Advance”) against the Representative’s out-of pocket accountable expenses against such expense reimbursement, which shall limited to a maximum of $135,000 in the aggregate. Notwithstanding anything to the contrary in this Section 3.10.1, in the event that this Agreement is terminated pursuant to Section 8.2 hereof, or subsequent to a Material Adverse Change, the Company will pay the out-of pocket expenses actually incurred as allowed under FINRA Rule 5110 by the Underwriters through the date of such termination (including the fees and disbursements of Underwriters’ Counsel ), less the Advance, in an aggregate amount not to exceed $135,000 less the Advance previously paid.

3.10.2 Non-accountable Expenses . The Company further agrees that, in addition to the expenses payable pursuant to Section 3.10.1, on the Closing Date it shall pay to the Representative, by deduction from the net proceeds of the Offering contemplated herein, a non-accountable expense allowance equal to one percent (1%) of the gross proceeds received by the Company from the sale of the Firm Securities (excluding the Additional Securities), provided, however, that in the event that the Offering is terminated, the Company agrees to reimburse the Underwriters pursuant to Section 8.3 hereof.

3.11 Application of Net Proceeds . The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

3.12 Delivery of Earnings Statements to Security Holders . The Company shall make generally available to its security holders as soon as practicable, but not later than the first day of the fifteenth (15 ^th ) full calendar month following the date of this Agreement, an earnings statement (which need not be certified by an independent registered public accounting firm unless required by the Securities Act or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities Act) covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.

3.13 Stabilization . Neither the Company nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative) has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.

3.14 Internal Controls . The Company shall maintain and shall cause each of its Subsidiaries to maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

3.15 Accountants . As of the date of this Agreement, the Company shall retain an independent registered public accounting firm reasonably acceptable to the Representative, and the Company shall continue to retain a nationally recognized independent registered public accounting firm for a period of at least three (3) years after the date of this Agreement. The Representative acknowledges that the Auditor is acceptable to the Representative.

3.16 FINRA . The Company shall advise the Representative (who shall make an appropriate filing with FINRA) if it is or becomes aware that (i) any officer or director of the Company, (ii) any beneficial owner of 5% or more of any class of the Company’s securities or (iii) any beneficial owner of the Company’s unregistered equity securities which were acquired during the 180 days immediately preceding the filing of the Registration Statement is or becomes an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).

3.17 No Fiduciary Duties . The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other transactions contemplated by this Agreement.

3.18 Company Lock-Up Agreements .

3.18.1 Restriction on Sales of Capital Stock . The Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of three months after the date of this Agreement (the “ Lock-Up Period ”), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (ii) file or cause to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; or (iii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company, whether any such transaction described in clause (i), (ii) or (iii) above is to be settled by delivery of shares of capital stock of the Company or such other securities, in cash or otherwise.

The restrictions contained in this Section 3.18.1 shall not apply to (i) the Securities to be sold hereunder, (ii) the issuance by the Company of shares of Common Stock upon the exercise of a stock option or warrant or the conversion of a security outstanding on the date hereof, which is disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (iii) the issuance by the Company of shares of Common Stock upon exercise of the Warrants, or (iv) the issuance by the Company of stock options or shares of capital stock of the Company under any equity compensation plan of the Company.

Notwithstanding the foregoing, if (i) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating to the Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the Lock-Up Period, the restrictions imposed by this Section 3.18.1 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of such material news or material event, as applicable, unless the Representative waives, in writing, such extension.

3.18.2 Restriction on Continuous Offerings . Notwithstanding the restrictions contained in Section 3.18.1, the Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of 12 months after the date of this Agreement, directly or indirectly in any “at-the-market” or continuous equity transaction, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company.

3.19 Release of D&O Lock-up Period . If the Representative, in its sole discretion, agrees to release or waive the restrictions set forth in the Lock-Up Agreements described in Section 2.27 hereof for an officer, director or shareholder of the Company, the Representative shall provide the Company with notice of the impending release or waiver at least three (3) Business Days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit C hereto through a major news service at least two (2) Business Days before the effective date of the release or waiver.

3.20 Blue Sky Qualifications . The Company shall use its best efforts, in cooperation with the Underwriters, if necessary, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to complete the distribution of the Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.

3.21 Reporting Requirements . The Company, during the period when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations. Additionally, the Company shall report the use of proceeds from the issuance of the Securities as may be required under Rule 463 under the Securities Act Regulations.

3.22 Press Releases . Prior to the Closing Date and any Option Closing Date, the Company shall not issue any press release or other communication directly or indirectly or hold any press conference with respect to the Company, its condition, financial or otherwise, or earnings, business affairs or business prospects (except for routine oral marketing communications in the ordinary course of business and consistent with the past practices of the Company and of which the Representative is notified), without the prior written consent of the Representative, which consent shall not be unreasonably withheld, unless in the judgment of the Company and its counsel, and after notification to the Representative, such press release or communication is required by law.

3.23 Sarbanes-Oxley . The Company shall at all times use its reasonable best efforts to materially comply with all applicable provisions of the Sarbanes-Oxley Act in effect from time to time.

4. Conditions of Underwriters’ Obligations . The obligations of the Underwriters to purchase and pay for the Securities, as provided herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date hereof and as of each of the Closing Date and the Option Closing Date, if any; (ii) the accuracy of the statements of officers of the Company made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and (iv) the following conditions:

4.1 Regulatory Matters .

4.1.1 Absence of Certain Commission Actions; Required Filings . At each of the Closing Date and any Option Closing Date, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued or shall have been issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or the Prospectus has been issued or shall have been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the Commission for additional information. A prospectus containing the Rule 430A Information shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b) under the Securities Act Regulations (without reliance on Rule 424(b)(8)) or a post-effective amendment providing such information shall have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430B under the Securities Act Regulations.

4.1.2 FINRA Clearance . On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the amount of compensation allowable or payable to the Underwriters as described in the Registration Statement.

4.1.3 Exchange Stock Market Clearance . On the Closing Date, the Company’s shares of Common Stock and Warrants, including the Firm Shares and Firm Warrants, shall have been approved for listing on the Exchange, subject only to official notice of issuance. On the first Option Closing Date (if any), the Company’s shares of Common Stock and Warrants, including the Option Shares and Option Warrants, shall have been approved for listing on the Exchange, subject only to official notice of issuance.

4.2 Company Counsel Matters .

4.2.1 Closing Date Opinion of Counsel . On the Closing Date, the Representative shall have received the favorable opinion of Pryor Cashman LLP, (“ Company Counsel ”) and a written statement from Company Counsel providing certain “10b-5” negative assurances, each dated the Closing Date and addressed to the Representative, substantially in the form of Exhibit D attached hereto.

4.2.2 Opinion of Special Intellectual Property Counsel for the Company . On the Closing Date, the Representative shall have received the opinion of [_____], LLP, special intellectual property counsel for the Company, dated the Closing Date, addressed to the Representative substantially in the form of Exhibit E attached hereto.

4.2.3 Option Closing Date Opinions of Counsel . On the Option Closing Date, if any, the Representative shall have received the favorable opinions of each counsel listed in Sections 4.2.1 and 4.2.2, dated the Option Closing Date, addressed to the Representative and in form and substance reasonably satisfactory to the Representative, confirming as of the Option Closing Date, the statements made by such counsels in their respective opinions delivered on the Closing Date.

4.2.4 Reliance . In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the laws of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative) of other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact, to the extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Company, provided that copies of any such statements or certificates shall be delivered to Representative Counsel if requested. The opinions and negative assurance letter referred to in Sections 4.2.1 and 4.2.2 above and any related Option Closing Date opinions and negative assurance letter shall each include a statement to the effect that it may be relied upon by Representative Counsel in its opinion delivered to the Underwriters.

4.3 Comfort Letters .

4.3.1 Cold Comfort Letter . At the time this Agreement is executed you shall have received a cold comfort letter containing statements and information of the type customarily included in accountants’ comfort letters with respect to the financial statements and certain financial information contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus, addressed to the Representative and in form and substance satisfactory in all respects to the Representative and to Representative’s Counsel from the Auditor dated the date of this Agreement.

4.3.2 Bring-down Comfort Letter . At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received from the Auditor a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that the Auditor reaffirms the statements made in the letter furnished pursuant to Section 4.3.1, except that the specified date referred to shall be a date not more than one (1) business day prior to the Closing Date or the Option Closing Date, as applicable.

4.4 Officers’ Certificates .

4.4.1 Officers’ Certificate . The Company shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing Date (if such date is other than the Closing Date), of its Chief Executive Officer and its Chief Financial Officer stating that (i) such officers have carefully examined the Registration Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto, as of the Applicable Time, as of the date of this Agreement and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date) did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Pricing Disclosure Package, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), any Issuer Free Writing Prospectus as of its date and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since the effective date of the Registration Statement, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus, (iii) to the best of their knowledge after reasonable investigation, as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the representations and warranties of the Company in this Agreement are true and correct and the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date (or any Option Closing Date if such date is other than the Closing Date), and (iv) there has not been, subsequent to the date of the most recent audited financial statements included or incorporated by reference in the Pricing Disclosure Package, any Material Adverse Change in the financial position or results of operations of the Company, or any change or development that, singularly or in the aggregate, would involve a Material Adverse Change or a prospective Material Adverse Change, in or affecting the condition (financial or otherwise), results of operations, business, assets or prospects of the Company, except as set forth in the Prospectus.

4.4.2 Secretary’s Certificate . At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate of the Company signed by the Secretary of the Company, dated the Closing Date or the Option Date, as the case may be, respectively, certifying: (i) that each of the Charter and Bylaws is true and complete, has not been modified and is in full force and effect; (ii) that the resolutions of the Company’s Board of Directors and the Pricing Committee of the Board of Directors, if a Pricing Committee has been established, relating to the Offering are in full force and effect and have not been modified; (iii) as to the accuracy and completeness of all correspondence between the Company or its counsel and the Commission; and (iv) as to the incumbency of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.

4.5 No Material Changes . Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been no Material Adverse Change or development involving a prospective Material Adverse Change in the condition or prospects or the business activities, financial or otherwise, of the Company and no change in the capital stock or debt of the Company from the latest dates as of which such condition is set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any Insider before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding may materially adversely affect the business, operations, prospects or financial condition or income of the Company, except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; (iv) no action shall have been taken and no law, statute, rule, regulation or order shall have been enacted, adopted or issued by any Governmental Entity which would prevent the issuance or sale of the Securities or materially and adversely affect or potentially materially and adversely affect the business or operations of the Company; (v) no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued which would prevent the issuance or sale of the Securities or materially and adversely affect or potentially materially and adversely affect the business or operations of the Company and (vi) the Registration Statement, the Pricing Disclosure Package and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations and shall conform in all material respects to the requirements of the Securities Act and the Securities Act Regulations, and neither the Registration Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

4.6 No Material Misstatement or Omission . The Underwriters shall not have discovered and disclosed to the Company on or prior to the Closing Date and any Option Closing Date that the Registration Statement or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of counsel for the Underwriters, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading, or that the Registration Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus or the Prospectus or any amendment or supplement thereto contains an untrue statement of fact which, in the opinion of such counsel, is material or omits to state any fact which, in the opinion of such counsel, is material and is necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading

4.7 Corporate Proceedings . All corporate proceedings and other legal matters incident to the authorization, form and validity of each of this Agreement, the Representative’s Warrant, the Securities, the Representative’s Securities, the Registration Statement, the Pricing Disclosure Package, each Issuer Free Writing Prospectus, if any, and the Prospectus and all other legal matters relating to this Agreement, the Representative’s Warrant and the transactions contemplated hereby and thereby shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.

4.8 Delivery of Agreements .

4.8.1 Lock-Up Agreements . On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies of the Lock-Up Agreements from each of the persons listed in Schedule 3 hereto.

4.8.2 Warrant Agreement . On the Closing Date, the Company shall have delivered to the Representative an executed copy of the Warrant Agreement.

4.8.3 Representative’s Warrant . On the Closing Date, the Company shall have delivered to the Representative executed copies of the Representative’s Warrant.

4.9 Good Standing Certificates. On the Closing Date and the Option Closing Date, if any, the Company shall have delivered to the Representative a certificate of good standing from the State of Florida for each of the Company and its Subsidiary.

4.10 Additional Documents . At the Closing Date and at each Option Closing Date (if any) Representative Counsel shall have been furnished with such documents and opinions as they may require for the purpose of enabling Representative Counsel to deliver an opinion to the Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities and the Representative’s Securities as herein contemplated shall be satisfactory in form and substance to the Representative and Representative Counsel.

5. Indemnification .

5.1 Indemnification of the Underwriters .

5.1.1 General . Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each Underwriter, its affiliates and each of its and their respective directors, officers, members, employees, representatives and agents and each person, if any, who controls any such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively the “ Underwriter Indemnified Parties, ” and each an “ Underwriter Indemnified Party ”), against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (i) the Registration Statement, the Pricing Disclosure Package, the Preliminary Prospectus, the Prospectus or in any Issuer Free Writing Prospectus (as from time to time each may be amended and supplemented); (ii) any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the Offering, including any “road show” or investor presentations made to investors by the Company (whether in person or electronically); or (iii) any application or other document or written communication (in this Section 5, collectively called “ application ”) executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Securities and Representative’s Securities under the securities laws thereof or filed with the Commission, any state securities commission or agency, the Exchange or any other national securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon, and in conformity with, the Underwriters’ Information. With respect to any untrue statement or omission or alleged untrue statement or omission made in the Pricing Disclosure Package, the indemnity agreement contained in this Section 5.1.1 shall not inure to the benefit of any Underwriter Indemnified Party to the extent that any loss, liability, claim, damage or expense of such Underwriter Indemnified Party results from the fact that a copy of the Prospectus was not given or sent to the person asserting any such loss, liability, claim or damage at or prior to the written confirmation of sale of the Securities to such person as required by the Securities Act and the Securities Act Regulations, and if the untrue statement or omission has been corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of non-compliance by the Company with its obligations under Section 3.3 hereof.

5.1.2 Procedure . If any action is brought against an Underwriter Indemnified Party in respect of which indemnity may be sought against the Company pursuant to Section 5.1.1, such Underwriter Indemnified Party shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the reasonable approval of such Underwriter Indemnified Party) and payment of actual expenses. Such Underwriter Indemnified Party shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Underwriter Indemnified Party unless (i) the employment of such counsel at the expense of the Company shall have been authorized in writing by the Company in connection with the defense of such action, or (ii) the Company shall not have employed counsel to have charge of the defense of such action, or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events the reasonable fees and expenses of not more than one additional firm of attorneys selected by the Underwriter Indemnified Party (in addition to local counsel) shall be borne by the Company. Notwithstanding anything to the contrary contained herein, if any Underwriter Indemnified Party shall assume the defense of such action as provided above, the Company shall have the right to approve the terms of any settlement of such action, which approval shall not be unreasonably withheld.

5.2 Indemnification of the Company . Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors, its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to the several Underwriters, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and in strict conformity with, the Underwriters’ Information. In case any action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus, the Registration Statement, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall have the rights and duties given to the several Underwriters by the provisions of Section 5.1.2. The Company agrees promptly to notify the Representative of the commencement of any litigation or proceedings against the Company or any of its officers, directors or any person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, in connection with the issuance and sale of the Securities or in connection with the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus.

5.3 Contribution .

5.3.1 Contribution Rights . If the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 5.1 or 5.2 in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other, from the Offering of the Securities, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other, with respect to such Offering shall be deemed to be in the same proportion as the total net proceeds from the Offering of the Securities purchased under this Agreement (before deducting expenses) received by the Company, as set forth in the table on the cover page of the Prospectus, on the one hand, and the total underwriting discounts and commissions received by the Underwriters with respect to the shares of the Common Stock purchased under this Agreement, as set forth in the table on the cover page of the Prospectus, on the other hand. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 5.3.1 were to be determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 5.3.1 shall be deemed to include, for purposes of this Section 5.3.1, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5.3.1 in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the Offering of the Securities exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

5.3.2 Contribution Procedure . Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice of the commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party or its representative of the commencement thereof within the aforesaid 15 days, the contributing party will be entitled to participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution without the written consent of such contributing party. The contribution provisions contained in this Section 5.3.2 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or otherwise available. Each Underwriter’s obligations to contribute pursuant to this Section 5.3 are several and not joint.

6. Default by an Underwriter .

6.1 Default Not Exceeding 10% of Firm Securities or Additional Securities . If any Underwriter or Underwriters shall default in its or their obligations to purchase the Firm Securities or the Additional Securities, if the Over-allotment Option is exercised hereunder, and if the number of the Firm Securities or Additional Securities with respect to which such default relates does not exceed in the aggregate 10% of the number of Firm Securities or Additional Securities that all Underwriters have agreed to purchase hereunder, then such Firm Securities or Additional Securities to which the default relates shall be purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.

6.2 Default Exceeding 10% of Firm Securities or Additional Securities . In the event that the default addressed in Section 6.1 relates to more than 10% of the Firm Securities or Additional Securities, you may in your discretion arrange for yourself or for another party or parties to purchase such Firm Securities or Additional Securities to which such default relates on the terms contained herein. If, within one (1) Business Day after such default relating to more than 10% of the Firm Securities or Additional Securities, you do not arrange for the purchase of such Firm Securities or Additional Securities, then the Company shall be entitled to a further period of one (1) Business Day within which to procure another party or parties satisfactory to you to purchase said Firm Securities or Additional Securities on such terms. In the event that neither you nor the Company arrange for the purchase of the Firm Securities or Additional Securities to which a default relates as provided in this Section 6, this Agreement will automatically be terminated by you or the Company without liability on the part of the Company (except as provided in Sections 3.9 and 5 hereof) or the several Underwriters (except as provided in Section 5 hereof); provided, however, that if such default occurs with respect to the Additional Securities, this Agreement will not terminate as to the Firm Securities; and provided, further, that nothing herein shall relieve a defaulting Underwriter of its liability, if any, to the other Underwriters and to the Company for damages occasioned by its default hereunder.

6.3 Postponement of Closing Date . In the event that the Firm Securities or Additional Securities to which the default relates are to be purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company shall have the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five (5) Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure Package or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus that in the opinion of counsel for the Underwriter may thereby be made necessary. The term “ Underwriter ” as used in this Agreement shall include any party substituted under this Section 6 with like effect as if it had originally been a party to this Agreement with respect to such Securities.

7. Additional Covenants .

7.1 Board Composition and Board Designations . The Company shall ensure that: (i) the qualifications of the persons serving as members of the Board of Directors and the overall composition of the Board comply with the Sarbanes-Oxley Act, with the Exchange Act and with the listing rules of the Exchange or any other national securities exchange, as the case may be, in the event the Company seeks to have its Securities listed on another exchange or quoted on an automated quotation system, and (ii) if applicable, at least one member of the Audit Committee of the Board of Directors qualifies as an “audit committee financial expert,” as such term is defined under Regulation S-K and the listing rules of the Exchange.

7.2 Prohibition on Press Releases and Public Announcements . The Company shall not issue press releases or engage in any other publicity, without the Representative’s prior written consent, for a period ending at 5:00 p.m., Eastern time, on the first (1 ^st ) Business Day following the forty-fifth (45 ^th ) day after the Closing Date, other than normal and customary releases issued in the ordinary course of the Company’s business.

7.3 Right of First Refusal . Provided that the Firm Securities are sold in accordance with the terms of this Agreement, the Representative shall have an irrevocable right of first refusal (the “ Right of First Refusal ”), for a period of twelve (12) months after the Effective Date, to act as exclusive financial advisor, lead managing underwriter and/or book runner and investment banker for each and every future public and private equity and public debt offering during such twelve (12) month period of the Company, or any successor to or any subsidiary of the Company (each, a “ Subject Transaction ”). The Company shall notify the Representative of its intention to pursue a Subject Transaction, including the material terms thereof, by providing written notice thereof by registered mail or overnight courier service addressed to the Representative. If the Representative fails to exercise its Right of First Refusal with respect to any Subject Transaction within ten (10) Business Days after the mailing of such written notice, then the Representative shall have no further claim or right with respect to the Subject Transaction. The Representative may elect, in its sole and absolute discretion, not to exercise its Right of First Refusal with respect to any Subject Transaction; provided that any such election by the Representative shall not adversely affect the Representative’s Right of First Refusal with respect to any other Subject Transaction. The terms and conditions of any such engagements shall be set forth in separate agreements and may be subject to, among other things, satisfactory completion of due diligence by the Representative, market conditions, the absence of a Material Adverse Change to the Company’s business, financial condition and prospects, approval of the Representative’s internal committee and any other conditions that the Representative may deem appropriate for transactions of such nature.

8. Effective Date of this Agreement and Termination Thereof .

8.1 Effective Date . This Agreement shall become effective when both the Company and the Representative have executed the same and delivered counterparts of such signatures to the other party.

8.2 Termination . The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic or international event or act or occurrence has materially disrupted, or in your opinion will in the immediate future materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange or the Nasdaq Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction; or (iii) if the United States shall have become involved in a new war or an increase in major hostilities; or (iv) if a banking moratorium has been declared by a New York State or federal authority; or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets; or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in your opinion, make it inadvisable to proceed with the delivery of the Firm Securities or Additional Securities; or (vii) if the Company is in material breach of any of its representations, warranties or covenants hereunder; (viii) if any condition set forth in Section 4 hereof is not satisfied on or prior to any Closing Date; or (ix) if the Representative shall have become aware after the date hereof of such a Material Adverse Change in the conditions or prospects of the Company, or such adverse material change in general market conditions as in the Representative’s judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Securities or to enforce contracts made by the Underwriters for the sale of the Securities.

8.3 Expenses . Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters, pursuant to Section 6.2 above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable (including the fees and disbursements of Representative Counsel), less the Advance, up to $75,000 and upon demand the Company shall pay the full amount thereof to the Representative on behalf of the Underwriters; provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement. Notwithstanding the foregoing, the Advance received by the Representative will be reimbursed to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(f)(2)(C).

8.4 Indemnification . Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full force and effect and shall not be in any way affected by, such election or termination or failure to carry out the terms of this Agreement or any part hereof.

8.5 Representations, Warranties, Agreements to Survive . All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Securities.

9. Miscellaneous .

9.1 Notices . All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered or certified mail, return receipt requested), personally delivered or sent by facsimile transmission and confirmed and shall be deemed given when so delivered or faxed and confirmed or if mailed, two (2) days after such mailing.

If to the Representative:

Aegis Capital Corp.
810 Seventh Avenue, 18 ^th Floor
New York, New York 10019
Attn: Mr. David Bocchi, Managing Director of Investment Banking

Fax No.: (212) 813-1047

with a copy (which shall not constitute notice) to:

Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
Attn: Mitchell S. Nussbaum, Esq.
Fax No.: 212-407-4990

If to the Company:

17207 N. Perimeter Dr., Suite 210
Scottsdale, AZ 85255
Attention: Dean L. Ledger
Fax No: [_______]

with a copy (which shall not constitute notice) to:

Pryor Cashman LLP
7 Times Square

New York, NY 10036
Attention: M. Ali Panjwani, Esq.
Fax No: 212-798-6319

9.2 Headings . The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement.

9.3 Amendment . This Agreement may only be amended by a written instrument executed by each of the parties hereto.

9.4 Entire Agreement . This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. Notwithstanding anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms and conditions of that certain engagement letter between the Company and Aegis Capital Corp., dated October 4, 2016, shall remain in full force and effect.

9.5 Binding Effect . This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters, the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors, legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors and assigns” shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.

9.6 Governing Law; Consent to Jurisdiction; Trial by Jury . This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.1 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company agrees that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

9.7 Execution in Counterparts . This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission shall constitute valid and sufficient delivery thereof.

9.8 Waiver, etc . The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.

[Signature Page Follows]

If the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between us.

	Very truly yours,

	NANOFLEX POWER CORPORATION

	By:
		Name:
		Title:

Confirmed as of the date first written above mentioned, on behalf of itself and as Representative of the several Underwriters named on Schedule 1

hereto:

AEGIS CAPITAL CORP.

By:
	Name:	David Bocchi
	Title:	Managing Director of Investment Banking

[Signature Page]
Underwriting Agreement

SCHEDULE 1

Underwriter	Total Number of Firm Securities to be Purchased		Number of Additional Securities to be Purchased if Over-Allotment Option is Fully Exercised
	Firm Shares	Firm Warrants	Additional Shares	Additional Warrants
Aegis Capital Corp.

EX. A- 1

SCHEDULE 2-A

Pricing Information

Number of Firm Shares:

Number of Firm Warrants:

Number of Additional Shares:

Number of Additional Warrants:

Public Offering Price per Share: $

Public Offering Price per Warrant: $

EX. A- 2

SCHEDULE 2-B

Issuer General Use Free Writing Prospectuses

[None.]

EX. A- 3

SCHEDULE 3

List of Lock-Up Parties

EX. A- 4

EXHIBIT A

Form of Representative’s Warrant

THE REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF ONE HUNDRED EIGHTY DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER THAN (I) AEGIS CAPITAL CORP. OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF AEGIS CAPITAL CORP. OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.

THIS PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO _______, 20__. VOID AFTER 5:00 P.M., EASTERN TIME, _________, 20__.

COMMON STOCK PURCHASE WARRANT

For the Purchase of [____] Shares of Common Stock

NanoFlex Power Corporation

1. Purchase Warrant . THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of Aegis Capital Corp. (“ Holder ”), as registered owner of this Purchase Warrant, to NanoFlex Inc., a Florida corporation (the “ Company ”), Holder is entitled, at any time or from time to time from _______, 20__ (the “ Commencement Date ”), and at or before 5:00p.m., Eastern time, ________, 20__ (the ” Expiration Date ”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to ______ shares of common stock of the Company, par value $0.0001 per share (the “ Shares ”), subject to adjustment as provided in Section 6 hereof. If the Expiration Date is a day on which banking institutions are authorized by law to close, then this Purchase Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate this Purchase Warrant. This Purchase Warrant is initially exercisable at $______ per Share; provided , however , that upon the occurrence of any of the events specified in Section 6 hereof, the rights granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein specified. The term “ Exercise Price ” shall mean the initial exercise price or the adjusted exercise price, depending on the context.

EX. A- 5

2. Exercise .

2.1 Exercise Form . In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly executed and completed and delivered to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased payable in cash by wire transfer of immediately available funds to an account designated by the Company or by certified check or official bank check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented hereby shall cease and expire.

2.2 Cashless Exercise . If at any time after the Commencement Date there is no effective registration statement registering, or no current prospectus available for, the resale of the Shares by the Holder, then in lieu of exercising this Purchase Warrant by payment of cash or check payable to the order of the Company pursuant to Section 2.1 above, Holder may elect to receive the number of Shares equal to the value of this Purchase Warrant (or the portion thereof being exercised), by surrender of this Purchase Warrant to the Company, together with the exercise form attached hereto, in which event the issue to Holder, Shares in accordance with the following formula:

X	=	Y(A-B)
		A

Where,
	X	=	The number of Shares to be issued to Holder;
	Y	=	The number of Shares for which the Purchase Warrant is being exercised;
	A	=	The fair market value of on3e Share; and
	B	=	The Exercise Price.

For purposes of this Section 2.2, the fair market value of a Share is defined as follows:

	(i)	if the Company’s common stock is traded on a securities exchange, the value shall be deemed to be the closing price on such exchange prior to the exercise form being submitted in connection with the exercise of the Purchase Warrant; or

	(ii)	if the Company’s common stock is actively traded over-the-counter, the value shall be deemed to be the closing bid prior to the exercise form being submitted in connection with the exercise of the Purchase Warrant; if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Company’s Board of Directors.

2.3 Legend . Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless such securities have been registered under the Securities Act of 1933, as amended (the “ Act ”):

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “ Act ”), or applicable state law. Neither the securities nor any interest therein may be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement under the Securities Act, or pursuant to an exemption from registration under the Securities Act and applicable state law which, in the opinion of counsel to the Company, is available.”

EX. A- 6

3. Transfer .

3.1 General Restrictions . The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that such Holder will not: (a) sell, transfer, assign, pledge or hypothecate this Purchase Warrant for a period of one hundred eighty (180) days following the Effective Date to anyone other than: (i) Aegis Capital Corp. (“ Aegis ”) or an underwriter or a selected dealer participating in the Offering, or (ii) a bona fide officer or partner of Aegis or of any such underwriter or selected dealer, in each case in accordance with FINRA Conduct Rule 5110(g)(1), or (b) cause this Purchase Warrant or the securities issuable hereunder to be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of this Purchase Warrant or the securities hereunder, except as provided for in FINRA Rule 5110(g)(2). On and after 180 days after the Effective Date, transfers to others may be made subject to compliance with or exemptions from applicable securities laws. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto duly executed and completed, together with the Purchase Warrant and payment of all transfer taxes, if any, payable in connection therewith. The Company shall within five (5) Business Days transfer this Purchase Warrant on the books of the Company and shall execute and deliver a new Purchase Warrant or Purchase Warrants of like tenor to the appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of Shares purchasable hereunder or such portion of such number as shall be contemplated by any such assignment.

3.2 Restrictions Imposed by the Securities Act . The securities evidenced by this Purchase Warrant shall not be transferred unless and until: (i) the Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration under the Securities Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction of the Company (the Company hereby agreeing that the opinion of Loeb & Loeb LLP shall be deemed satisfactory evidence of the availability of an exemption), or (ii) a registration statement or a post-effective amendment to the Registration Statement relating to the offer and sale of such securities has been filed by the Company and declared effective by the U.S. Securities and Exchange Commission (the ” Commission ”) and compliance with applicable state securities law has been established.

4. Registration Rights .

4.1 Demand Registration .

4.1.1 Grant of Right . The Company, upon written demand (a “ Demand Notice ”) of the Holder(s) of at least 51% of the Purchase Warrants and/or the underlying Shares (“Majority Holders”), agrees to register, on one occasion, all or any portion of the Shares underlying the Purchase Warrants (collectively, the “ Registrable Securities ”). On such occasion, the Company will file a registration statement with the Commission covering the Registrable Securities within sixty (60) days after receipt of a Demand Notice and use its reasonable best efforts to have the registration statement declared effective promptly thereafter, subject to compliance with review by the Commission; provided , however , that the Company shall not be required to comply with a Demand Notice if the Company has filed a registration statement with respect to which the Holder is entitled to piggyback registration rights pursuant to Section 4.2 hereof and either: (i) the Holder has elected to participate in the offering covered by such registration statement or (ii) if such registration statement relates to an underwritten primary offering of securities of the Company, until the offering covered by such registration statement has been withdrawn or until thirty (30) days after such offering is consummated. The demand for registration may be made at any time during a period of four (4) years beginning on the Commencement Date. The Company covenants and agrees to give written notice of its receipt of any Demand Notice by any Holder(s) to all other registered Holders of the Purchase Warrants and/or the Registrable Securities within ten (10) days after the date of the receipt of any such Demand Notice.

EX. A- 7

4.1.2 Terms . The Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to Section 4.1.1, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. The Company agrees to use its reasonable best efforts to cause the filing required herein to become effective promptly and to qualify or register the Registrable Securities in such States as are reasonably requested by the Holder(s); provided , however , that in no event shall the Company be required to register the Registrable Securities in a State in which such registration would cause: (i) the Company to be obligated to register or license to do business in such State or submit to general service of process in such State, or (ii) the principal shareholders of the Company to be obligated to escrow their shares of capital stock of the Company. The Company shall cause any registration statement filed pursuant to the demand right granted under Section 4.1.1 to remain effective for a period of at least twelve (12) consecutive months after the date that the Holders of the Registrable Securities covered by such registration statement are first given the opportunity to sell all of such securities. The Holders shall only use the prospectuses provided by the Company to sell the shares covered by such registration statement, and will immediately cease to use any prospectus furnished by the Company if the Company advises the Holder that such prospectus may no longer be used due to a material misstatement or omission. Notwithstanding the provisions of this Section 4.1.2, the Holder shall be entitled to a demand registration under this Section 4.1.2 on only one (1) occasion and such demand registration right shall terminate on the fifth anniversary of the effectiveness of the registration statement in accordance with FINRA Rule 5110(f)(2)(G)(iv).

4.2 “Piggy-Back” Registration .

4.2.1 Grant of Right . In addition to the demand right of registration described in Section 4.1 hereof, the Holder shall have the right, for a period of no more than five (5) years from the date of effectiveness of the registration statement in accordance with FINRA Rule 5110(f)(2)(G)(v), to include the Registrable Securities as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or any equivalent form); provided , however , that if, solely in connection with any primary underwritten public offering for the account of the Company, the managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of shares of Common Stock which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included by such Holders; provided , however , that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities.

EX. A- 8

4.2.2 Terms . The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 4.2.1 hereof, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration statement filed by the Company until such time as all of the Registrable Securities have been sold by the Holder. The holders of the Registrable Securities shall exercise the “piggy-back” rights provided for herein by giving written notice within ten (10) days of the receipt of the Company’s notice of its intention to file a registration statement. Except as otherwise provided in this Purchase Warrant, there shall be no limit on the number of times the Holder may request registration under this Section 4.2.2; provided , however , that such registration rights shall terminate on the sixth anniversary of the Commencement Date.

4.3 General Terms .

4.3.1 Indemnification . The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20 (a) of the Securities Exchange Act of 1934, as amended (“ Exchange Act ”), against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Underwriters contained in Section 5.1 of the Underwriting Agreement between the Underwriters and the Company, dated as of [___________], 2016. The Holder(s) of the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section 5.2 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company.

EX. A- 9

4.3.2 Exercise of Purchase Warrants . Nothing contained in this Purchase Warrant shall be construed as requiring the Holder(s) to exercise their Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.

4.3.3 Documents Delivered to Holders . The Company shall furnish to each Holder participating in any of the foregoing offerings and to each underwriter of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of counsel to the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort” letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter dated the date of the closing under the underwriting agreement) signed by the independent registered public accounting firm which has issued a report on the Company’s financial statements included in such registration statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of securities. The Company shall also deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times as any such Holder shall reasonably request.

4.3.4 Underwriting Agreement . The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any Holders whose Registrable Securities are being registered pursuant to this Section 4, which managing underwriter shall be reasonably satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option, require that any or all the representations, warranties and covenants of the Company to or for the benefit of such underwriters shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or agreements with the Company or the underwriters except as they may relate to such Holders, their Shares and their intended methods of distribution.

EX. A- 10

4.3.5 Documents to be Delivered by Holder(s) . Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.

4.3.6 Damages . Should the registration or the effectiveness thereof required by Sections 4.1 and 4.2 hereof be delayed by the Company or the Company otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to the Holder(s), be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the necessity of posting bond or other security.

5. New Purchase Warrants to be Issued .

5.1 Partial Exercise or Transfer . Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant for cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax if exercised pursuant to Section 2.1 hereto, the Company shall cause to be delivered to the Holder without charge a new Purchase Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to purchase the number of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised or assigned.

5.2 Lost Certificate . Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase Warrant of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.

6. Adjustments .

6.1 Adjustments to Exercise Price and Number of Securities . The Exercise Price and the number of Shares underlying the Purchase Warrant shall be subject to adjustment from time to time as hereinafter set forth:

6.1.1 Share Dividends; Split Ups. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Shares is increased by a stock dividend payable in Shares or by a split up of Shares or other similar event, then, on the effective day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding Shares, and the Exercise Price shall be proportionately decreased.

6.1.2 Aggregation of Shares. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Shares is decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding Shares, and the Exercise Price shall be proportionately increased.

EX. A- 11

6.1.3 Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Shares other than a change covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of such Shares, or in the case of any share reconstruction or amalgamation or consolidation of the Company with or into another corporation (other than a consolidation or share reconstruction or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding Shares), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Purchase Warrant shall have the right thereafter (until the expiration of the right of exercise of this Purchase Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, share reconstruction or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the number of Shares of the Company obtainable upon exercise of this Purchase Warrant immediately prior to such event; and if any reclassification also results in a change in Shares covered by Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections 6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall similarly apply to successive reclassifications, reorganizations, share reconstructions or amalgamations, or consolidations, sales or other transfers.

6.1.4 Changes in Form of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant to this Section 6.1, and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in the Purchase Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Purchase Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the Commencement Date or the computation thereof.

6.2 Substitute Purchase Warrant . In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company with or into, another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in any reclassification or change of the outstanding Shares), the corporation formed by such consolidation or share reconstruction or amalgamation shall execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase Warrant then outstanding or to be outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant) to receive, upon exercise of such Purchase Warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation or share reconstruction or amalgamation, by a holder of the number of Shares of the Company for which such Purchase Warrant might have been exercised immediately prior to such consolidation, share reconstruction or amalgamation, sale or transfer. Such supplemental Purchase Warrant shall provide for adjustments which shall be identical to the adjustments provided for in this Section 6. The above provision of this Section shall similarly apply to successive consolidations or share reconstructions or amalgamations.

EX. A- 12

6.3 Elimination of Fractional Interests . The Company shall not be required to issue certificates representing fractions of Shares upon the exercise of the Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may be, to the nearest whole number of Shares or other securities, properties or rights.

7. Reservation and Listing . The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose of issuance upon exercise of the Purchase Warrants, such number of Shares or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants and payment of the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. The Company further covenants and agrees that upon exercise of the Purchase Warrants and payment of the exercise price therefor, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. As long as the Purchase Warrants shall be outstanding, the Company shall use its commercially reasonable efforts to cause all Shares issuable upon exercise of the Purchase Warrants to be listed (subject to official notice of issuance) on all national securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market) on which the Shares issued to the public in the Offering may then be listed and/or quoted.

8. Certain Notice Requirements .

8.1 Holder’s Right to Receive Notice . Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise, any of the events described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the shareholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder a copy of each notice given to the other shareholders of the Company at the same time and in the same manner that such notice is given to the shareholders.

8.2 Events Requiring Notice . The Company shall be required to give the notice described in this Section 8 upon one or more of the following events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company, (ii) the Company shall offer to all the holders of its Shares any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or share reconstruction or amalgamation) or a sale of all or substantially all of its property, assets and business shall be proposed.

EX. A- 13

8.3 Notice of Change in Exercise Price . The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section 6 hereof, send notice to the Holders of such event and change (“ Price Notice ”). The Price Notice shall describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by the Company’s Chief Financial Officer.

8.4 Transmittal of Notices . All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall be deemed to have been duly made when hand delivered, or mailed by express mail or private courier service: (i) if to the registered Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to following address or to such other address as the Company may designate by notice to the Holders:

If to the Holder:

Aegis Capital Corp.
810 Seventh Avenue, 11 ^th Floor
New York, New York 10019
Attn: Mr. David Bocchi, Managing Director of Investment Banking
Fax No.: (212) 813-1047

with a copy (which shall not constitute notice) to:

Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
Attn: Mitchell S. Nussbuam, Esq.
Fax No.: 212-407-4990

If to the Company:

17207 N. Perimeter Dr., Suite 210
Scottsdale, AZ 85255
Attention: Dean L. Ledger
Fax No: [_______]

with a copy (which shall not constitute notice) to:

Pryor Cashman LLP
7 Times Square

New York, NY 10036
Attention: M. Ali Panjwani, Esq.
Fax No: 212-798-6319

EX. A- 14

9. Miscellaneous .

9.1 Amendments . The Company and Aegis may from time to time supplement or amend this Purchase Warrant without the approval of any of the Holders in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company and Aegis may deem necessary or desirable and that the Company and Aegis deem shall not adversely affect the interest of the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against whom enforcement of the modification or amendment is sought.

9.3 Entire Agreement . This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection with this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.

9.4 Binding Effect . This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their permitted assignees, respective successors, legal representative and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions herein contained.

9.5 Governing Law; Submission to Jurisdiction; Trial by Jury . This Purchase Warrant shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 8 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and the Holder hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

EX. A- 15

9.6 Waiver, etc . The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.

9.7 Execution in Counterparts . This Purchase Warrant may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic transmission.

9.8 Exchange Agreement . As a condition of the Holder’s receipt and acceptance of this Purchase Warrant, Holder agrees that, at any time prior to the complete exercise of this Purchase Warrant by Holder, if the Company and Aegis enter into an agreement (“ Exchange Agreement ”) pursuant to which they agree that all outstanding Purchase Warrants will be exchanged for securities or cash or a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement.

[Signature Page Follows]

EX. A- 16

IN WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by its duly authorized officer as of the ____ day of _____________, 2016.

NANOFLEX POWER CORPORATION

By:
	Name:
	Title:

EX. A- 17

[Form to be used to exercise Purchase Warrant]

Date: __________, 20___

The undersigned hereby elects irrevocably to exercise the Purchase Warrant for ______ shares of common stock, par value $0.0001 per share (the “ Shares ”), of NanoFlex Power Corporation, a Florida corporation (the “ Company ”), and hereby makes payment of $____ (at the rate of $____ per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been exercised.

The undersigned hereby elects irrevocably to convert its right to purchase ___ Shares of the Company under the Purchase Warrant for ______ Shares, as determined in accordance with the following formula:

X	=	Y(A-B)
		A

Where,
	X	=	The number of Shares to be issued to Holder;
	Y	=	The number of Shares for which the Purchase Warrant is being exercised;
	A	=	The fair market value of one Share which is equal to $_____; and
	B	=	The Exercise Price which is equal to $______ per share

The undersigned agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement with respect to the calculation shall be resolved by the Company in its sole discretion.

Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been converted.

Signature

Signature Guaranteed

INSTRUCTIONS

FOR REGISTRATION OF SECURITIES

Name:
	(Print in Block Letters)
Address:

NOTICE: The signature to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.

EX. A- 18

[Form to be used to assign Purchase Warrant]

ASSIGNMENT

(To be executed by the registered Holder to effect a transfer of the within Purchase Warrant):

FOR VALUE RECEIVED, __________________ does hereby sell, assign and transfer unto the right to purchase shares of common stock, par value $0.0001 per share, of NanoFlex Power Corporation, a Florida corporation (the “ Company ”), evidenced by the Purchase Warrant and does hereby authorize the Company to transfer such right on the books of the Company.

Dated: __________, 20__

Signature

Signature Guaranteed

NOTICE: The signature to this form must correspond with the name as written upon the face of the within Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.

EX. A- 19

EXHIBIT B

Form of Lock-Up Agreement

[●], 2016

Aegis Capital Corp.
810 Seventh Avenue, 18 ^th Floor
New York, New York 10019

Ladies and Gentlemen:

The undersigned understands that Aegis Capital Corp. (the “ Representative ”) proposes to enter into an Underwriting Agreement (the “ Underwriting Agreement ”) with NanoFlex Power Corporation, a Florida corporation (the “ Company ”), providing for the public offering (the “ Public Offering ”) of shares of common stock, par value $.0001 per share (“ Common Stock ”), of the Company (the “ Shares ”) and warrants to purchase Common Stock (the “ Warrants ”).

To induce the Representative to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of the Representative, the undersigned will not, during the period commencing on the date hereof and ending 90 days after the date of the final prospectus (the “ Prospectus ”) relating to the Public Offering (the “ Lock-Up Period ”), (1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for shares of Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “ Lock-Up Securities ”); (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities; or (4) publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities. Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities without the prior written consent of the Representative in connection with (a) transactions relating to Lock-Up Securities acquired in open market transactions after the completion of the Public Offering; provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), shall be required or shall be voluntarily made in connection with subsequent sales of Lock-Up Securities acquired in such open market transactions; (b) transfers of Lock-Up Securities as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of a family member (for purposes of this lock-up agreement, “family member” means any relationship by blood, marriage or adoption, not more remote than first cousin); (c) transfers of Lock-Up Securities to a charity or educational institution; or (d) if the undersigned, directly or indirectly, controls a corporation, partnership, limited liability company or other business entity, any transfers of Lock-Up Securities to any shareholder, partner or member of, or owner of similar equity interests in, the undersigned, as the case may be; provided that in the case of any transfer pursuant to the foregoing clauses (b), (c) or (d), (i) any such transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the Representative a lock-up agreement substantially in the form of this lock-up agreement and (iii) no filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Lock-Up Securities except in compliance with this lock-up agreement.

EX. B- 1

If (i) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating to the Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the Lock-Up Period, the restrictions imposed by this lock-up agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of such material news or material event, as applicable, unless the Representative waives, in writing, such extension.

The undersigned agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement during the period from the date hereof to and including the 34 ^th day following the expiration of the initial Lock-Up Period, the undersigned will give notice thereof to the Company and will not consummate any such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period (as may have been extended pursuant to the previous paragraph) has expired.

EX. B- 2

If the undersigned is an officer or director of the Company, (i) the undersigned agrees that the foregoing restrictions shall be equally applicable to any issuer-directed or “friends and family” Shares that the undersigned may purchase in the Public Offering; (ii) the Representative agrees that, at least three (3) business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of Lock-Up Securities, the Representative will notify the Company of the impending release or waiver; and (iii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two (2) business days before the effective date of the release or waiver. Any release or waiver granted by the Representative hereunder to any such officer or director shall only be effective two (2) business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer of Lock-Up Securities not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this lock-up agreement to the extent and for the duration that such terms remain in effect at the time of such transfer.

No provision in this agreement shall be deemed to restrict or prohibit the exercise, exchange or conversion by the undersigned of any securities exercisable or exchangeable for or convertible into Shares, as applicable; provided that the undersigned does not transfer the Shares acquired on such exercise, exchange or conversion during the Lock-Up Period, unless otherwise permitted pursuant to the terms of this lock-up agreement. In addition, no provision herein shall be deemed to restrict or prohibit the entry into or modification of a so-called “10b5-1” plan at any time (other than the entry into or modification of such a plan in such a manner as to cause the sale of any Lock-Up Securities within the Lock-Up Period).

The undersigned understands that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns.

The undersigned understands that, if the Underwriting Agreement is not executed by [•], 2017, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares and Warrants to be sold thereunder, then this lock-up agreement shall be void and of no further force or effect.

EX. B- 3

Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Representative.

	Very truly yours,


	(Name - Please Print)


	(Signature)


	(Name of Signatory, in the case of entities - Please Print)


	(Title of Signatory, in the case of entities - Please Print)

	Address:

EX. B- 4

EXHIBIT C

Form of Press Release

NanoFlex Power Corporation

[Date]

NanoFlex Power Corporation (the “Company”) announced today that Aegis Capital Corp., acting as representative for the underwriters in the Company’s recent public offering of _______ shares of the Company’s common stock and __________ warrants to purchase _______ shares of the Company’s common stock, is [waiving] [releasing] a lock-up restriction with respect to _________ shares of the Company’s common stock held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take effect on _________, 20___, and the shares may be sold on or after such date.

This press release is not an offer or sale of the securities in the United States or in any other jurisdiction where such offer or sale is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act of 1933, as amended.

EX. C- 1

EXHIBIT D

Form of Opinion of Counsel

[TO BE PROVIDED UNDER SEPARATE COVER]

EX. D- 1

Exhibit E

Form of IP Counsel Opinion

[TO BE PROVIDED UNDER SEPARATE COVER]

Ex. E-1

Exhibit 4.9

WARRANT HOLDER:

(Name)

(Street)

(City, State, Zip)

NUMBER OF WARRANT SHARES: _____________

THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (REASONABLY ACCEPTABLE TO THE COMPANY), IN AN ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.

No. N- _______

Issuance Date: ___________________

NANOFLEX POWER CORPORATION

Common Stock Purchase Warrant

NanoFlex Power Corporation, a Florida corporation, for value received, hereby grants to the holder as indicated at the beginning of this Warrant, its successors and permitted assigns (collectively, the "Holder"), this right (the "Warrant"), subject to the terms set forth below, to purchase at the exercise price per share as defined in Section 2.1 below (the "Exercise Price"), up to that number of Shares (defined below), subject to adjustment as herein provided (such total number of Shares that may be purchased hereunder being referred to herein as the "Warrant Shares"). This Warrant is offered to the Holder pursuant to a Note Subscription Agreement by and between the Holder and the Company, dated ________________, 2014 (the "Subscription Agreement"). Capitalized terms not defined herein shall have the meanings ascribed to them in the Subscription Agreement.

1. Definitions . As used herein, the following terms, unless the context otherwise requires, have the following respective meanings:

1.1. "Company" shall include NanoFlex Power Corporation, a Florida corporation, and, unless otherwise noted to the contrary, any company which shall succeed to, by merger, consolidation or similar arrangement of the Company's and assume the obligations of NanoFlex Power Corporation hereunder.

1.2. "Other Securities" refers to any stock (other than the Shares) and other securities of the Company or any other person (corporate or otherwise) that the Holder at any time shall be entitled to receive, or shall have received, on the exercise of this Warrant, in lieu of or in addition to Shares, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Shares.

1.3. "Shares" means (a) the Company's Common Stock, as authorized on the date of this Warrant and (b) if the class of securities described in (a) shall cease to be issued and outstanding, securities of the same class issued in exchange for or in respect of the securities described in (a) pursuant to a plan of merger, consolidation, recapitalization or reorganization, the sale of substantially all of the Company's assets or a similar transaction.

2. Exercise of Warrant .

2.1. Exercise Price . The Warrant may be exercised, subject to the adjustments in Section 5 hereof, at the initial exercise price of $2.50 per Share (the "Exercise Price").

2.2. Exercise Period . The Warrant may be exercised (the "Exercise Period") at any time from the date of grant to and including the fifth anniversary of the Issuance Date (the "Expiration Date").

2.3. Shares . The number of shares that the Holder is entitled to purchase under this warrant shall be _____________________ shares, which is equal to (x) the principal amount of the Note purchased by the Holder pursuant to the Subscription Agreement, divided by (y) $1.00, the conversion price of the Note, and multiplied by (z) sixty-six point six seven percent (66.67%).

2.4. Exercise in Full . Subject to the limitations stated above, this Warrant may be exercised in full at the option of the Holder by surrender of this Warrant, with the form of subscription at the end hereof duly executed by the Holder, to the Company at its principal office in the United States, accompanied by payment, in cash or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of Shares for which this Warrant may be exercised by the Exercise Price.

2.5. Partial Exercise . This Warrant may be exercised in part by surrender of this Warrant in the manner and at the place provided in subsection 2.4 along with payment in the amount determined by multiplying (a) the number of Shares designated by the holder in the subscription at the end hereof by (b) the Exercise Price. On any such partial exercise, the Company at its expense will forthwith issue and deliver to or upon the order of the Holder a new Warrant or Warrants of like tenor, in the name of the Holder or as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, calling in the aggregate on the face or faces thereof for the number of Shares for which such Warrant or Warrants may still be exercised.

2.6. Cashless Exercise . If at any time this Warrant is exercised following the one year anniversary of the date of issuance of this Warrant, but before the Expiration Date and on the Trading Day immediately preceding the Holder's delivery of an Exercise Notice in respect of such exercise, a registration statement (as defined covering the Warrant Shares that are the subject of the Exercise Notice (the "Unavailable Warrant Shares") is not available for the resale of such Unavailable Warrant Shares, the Holder of this Warrant may also exercise this Warrant as to any or all of such Unavailable Warrant Shares and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate Exercise Price, elect instead to receive upon such exercise a reduced number of shares of Common Stock (the "Net Number") determined according to the following formula (a "Cashless Exercise"):

	Net Number =	(A x B) - (A x C)
		B

For purposes of the foregoing formula:

A= the total number of shares with respect to which this Warrant is then being exercised in a Cashless Exercise.

B= the Market Price on the Trading Day immediately preceding the date of the Exercise Notice.

C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

There cannot be a Cashless Exercise unless "B" exceeds "C."

For the purpose of this Warrant, the term "Trading Day" means (x) if the Common Stock is not listed on the NYSE Euronext or NYSE AMEX but sale prices of the Common Stock are reported on Nasdaq Global Market, Nasdaq Global Select Market, Nasdaq Capital Market or another automated quotation system, a day on which trading is reported on the principal automated quotation system on which sales of the Common Stock are reported, (y) if the Common Stock is listed on the NYSE Euronext or NYSE AMEX, a day on which there is trading on such stock exchange, or (z) if the foregoing provisions are inapplicable, a day on which quotations are reported by National Quotation Bureau Incorporated.

3. Delivery of Share Certificates on Exercise .

3.1. As soon as practicable after the exercise of this Warrant in full or in part, the Company, at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder, or as the Holder (upon payment by the Holder of any applicable transfer taxes) may direct, a certificate or certificates for the number of fully paid and non-assessable Shares (or Other Securities) to which the Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which the Holder would otherwise be entitled, cash equal to such fraction multiplied by the then current market value of one full share, together with any other stock or other securities and property (including cash, where applicable) to which the Holder is entitled upon such exercise pursuant to Section 2 or otherwise.

4. Covenants as to Shares .

4.1. Issuance of Shares upon Exercise . All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof. The Company will at all times have authorized and reserved, free from preemptive rights, a sufficient number of its Shares to provide for the exercise of the rights represented by this Warrant.

Each Warrant and each certificate for Shares issued to the Holder and any subsequent holder that have not been sold to the public pursuant to an effective registration statement under the Securities Act or as to which the restrictions on transfer have not been removed as hereinafter provided, shall bear a restrictive legend reciting that the same have not been registered pursuant to the Securities Act and may not be transferred in the absence of an effective registration statement under the Securities Act, the holder thereof shall give written notice to the Company of its intention to effect such transfer. Each such notice shall describe the manner of the proposed transfer and shall be accompanied by an opinion of counsel experienced in federal securities laws matters and reasonably acceptable to the company and its counsel to the effect that the proposed transfer may be effected without registration under the Securities Act, whereupon, the holder of such Registrable Common Stock shall be entitled to transfer such securities in accordance with the terms of its notice and such opinion. Restrictions imposed under this Section 4 upon the transferability of the Warrants or of Shares shall cease when:

(a) a registration statement covering such Shares becomes effective under the Securities Act, or

(b) the Company receives from the holder thereof an opinion of counsel experienced in federal securities laws matters, which counsel shall be reasonably acceptable to the Company, that such restrictions are no longer required in order to insure compliance with the Securities Act.

5. Adjustment of Exercise Price and Number of Warrant Shares .

5.1. Reorganization, Consolidation or Merger . If at any time or from time to time, the Company shall (a) effect a plan of merger, consolidation, recapitalization or reorganization or similar transaction with a corporation (the "Acquiror") whereby the shareholders of the Company will exchange their shares of the Company for the shares of the parent corporation of the Acquiror, or (b) transfer all or substantially all of its properties or assets to any other person, under any plan or arrangement contemplating the dissolution of the Company (which along with any transactions set forth in (a) hereof shall be an "Extraordinary Transaction"), then, in each such case, the holder of this Warrant, on the exercise hereof as provided in Section 2 at any time after the completion of any Extraordinary Transaction shall receive, such Shares or Other Securities and property (including cash) to which such holder would have been entitled in any Extraordinary Transaction as if such holder had so exercised this Warrant, immediately prior thereto.

Upon any Extraordinary Transaction, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the securities, Shares and Other Securities and property receivable on the exercise of this Warrant after the consummation of reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, any Extraordinary Transaction and shall be binding upon the party or parties to the Extraordinary Transaction and their successors, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 7.

5.2. Subdivisions, Combinations, Stock Dividends and other Issuances . If the Company shall, at any time while this Warrant is outstanding, (i) pay a stock dividend or otherwise make a distribution or distributions on any equity securities (including instruments or securities convertible into or exchangeable for such equity securities) in shares of Common Stock, (ii) subdivide outstanding shares of Common Stock into a larger number of shares, or (iii) combine outstanding Common Stock into a smaller number of shares, then the Exercise Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding before such event and the denominator of which shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section 5 shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination. The number of shares which may be purchased hereunder shall be increased proportionately to any reduction in Exercise Price pursuant to this Section 5(b), so that after such adjustments the aggregate Exercise Price payable hereunder for the increased number of shares shall be the same as the aggregate Exercise Price in effect just prior to such adjustments.

5.3. Other Distributions . If at any time after the date hereof the Company distributes to holders of its Common Stock, other than as part of its dissolution, liquidation or the winding up of its affairs, any shares of its capital stock, any evidence of indebtedness or any of its assets (other than Common Stock), then the number of Warrant Shares for which this Warrant is exercisable shall be increased to equal: (i) the number of Warrant Shares for which this Warrant is exercisable immediately prior to such event, (ii) multiplied by a fraction. (A) the numerator of which shall be the Fair Market Value (as defined below) per share of Common Stock on the record date for the dividend or distribution, and (B) the denominator of which shall be the Fair Market Value price per share of Common Stock on the record date for the dividend or distribution minus the amount allocable to one share of Common Stock of the value (as jointly determined in good faith by the Board of Directors of the Company and the Holder) of any and all such evidences of indebtedness, shares of capital stock, other securities or property, so distributed. For purposes of this Warrant, "Fair Market Value" shall equal the average closing trading price of the Common Stock on the Principal Market for the five (5) Trading Days preceding the date of determination or, if the Common Stock is not listed or admitted to trading on any Principal Market, and the average price cannot be determined as contemplated above, the Fair Market Value of the Common Stock shall be as reasonably determined in good faith by the Company's Board of Directors and the Holder. If the Fair Market Value of the Common Stock cannot be determined by the Company's Board of Directors and the Holder after five (5) business days, such determination shall be made by a third party appraisal firm mutually agreeable by the Board of Directors and the Holder, at the expense of the Company (the "Independent Appraiser"). The fair market value as determined by the Independent Appraiser shall be final. The Exercise Price shall be reduced to equal: (i) the Exercise Price in effect immediately before the occurrence of any event (ii) multiplied by a fraction, (A) the numerator of which is the number of Warrant Shares for which this Warrant is exercisable immediately before the adjustment, and (B) the denominator of which is the number of Warrant Shares for which this Warrant is exercisable immediately after the adjustment.

5.4 Reclassification, etc . If at any time after the date hereof there shall be a reorganization or reclassification of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, then the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares or other securities or property resulting from such reorganization or reclassification, which would have been received by the Holder for the shares of stock subject to this Warrant had this Warrant at such time been exercised.

6. Voluntary Adjustment by the Company . The Company may at its option, at any time during the term of this Warrant, reduce but not increase the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

7. Notices of Record Date, etc .

In the event of:

7.1. any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, or

7.2. any merger, consolidation or capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company any other person, or

7.3. any voluntary or involuntary dissolution, liquidation or winding-up of the Company, then and in each such event the Company will mail or cause to be mailed to the Holder a notice specifying (a) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, and (b) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Shares (or Other Securities) shall be entitled to exchange their Shares (or Other Securities) for securities or other property deliverable on such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up. Such notice shall be mailed at least 10 days prior to the date specified in such notice on which any such action is to be taken.

8. Transfers .

8.1. The Warrant and the Warrant Shares are not transferable, in whole or in part, without compliance with the Securities Act of 1933, as amended (the "Securities Act"), and any applicable state securities laws.

8.2. Subject to subsection 8.1, this Warrant, or any portion hereof, may be transferred by the Holder's execution and delivery of the form of assignment attached hereto along with this Warrant. Any transferee shall be required, as a condition to the assignment, to deliver all such documentation as the Company deems appropriate. However, until such assignment and such other documentation are presented to the Company at its principal offices in the United States, the Company shall be entitled to treat the registered holder hereof as the absolute owner hereof for all purposes.

8.3. Upon a transfer of this Warrant in accordance with this Section 8, the Company, at its expense, will issue and deliver to or on the order of the Holder a new Warrant or Warrants of like tenor, in the name of the Holder or as the Holder (on payment by the Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the Shares called for on the face or faces of the Warrant or Warrants so surrendered. If this Warrant is divided into more than one Warrant, or if there is more than one Holder thereof, all references herein to "this Warrant" shall be deemed to apply to the several Warrants, and all references to "the Holder" shall be deemed to apply to the several Holders, except in either case to the extent that the context indicates otherwise.

9. Replacement of Warrants .

9.1. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction of any Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of such Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

10. Notices .

10.1. All notices required hereunder shall be deemed to have been given and shall be effective only when personally delivered or sent by Federal Express, UPS or other express delivery service or by certified or registered mail to the address of the Company's principal office in the United States as follows:

NanoFlex Power Corporation

17207 N. Perimeter Dr., Suite 210,

Scottsdale, AZ 85255

in the case of any notice to the Company, and until changed by notice to the Company, to the address of the Holder set forth above in the case of any notice to the Holder.

11. Miscellaneous .

11.1. This Warrant and any term hereof may be changed, waived, discharged or terminated, other than on expiration, only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. This Warrant shall be construed and enforced in accordance with and governed by the laws of the State of Florida. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. This Warrant embodies the entire agreement and understanding between the Company and the other parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof.

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized.

	NANOFLEX POWER CORPORATION

	By:
		Dean L. Ledger,
		Chief Executive Officer

FORM OF SUBSCRIPTION

(To be signed only on exercise of Warrant)

TO NANOFLEX POWER CORPORATION:

The undersigned hereby elects to purchase, pursuant to the provisions of the Warrant, as follows:

	_________	___________ shares of Common Stock pursuant to the terms of the Warrant, and tenders herewith payment in cash of the Exercise Price for the Warrant Shares in full, together with all applicable transfer taxes, if any.

	_________	Cashless Exercise with respect to the Net Number of shares of Common Stock.

The undersigned hereby represents and warrants that the representations and warranties in Section 2 of the Subscription Agreement, are true and correct as of the date hereof.

Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:

_____________________________

	HOLDER:


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)



	(Address)

Dated as of: ___________ _____, 201_

Name in which shares should be registered: ______________________________________________

Address at which shares should be registered: ________________________________________

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto _______________________________________________ whose address is _________________________________________________________ the right represented by the attached Warrant to purchase_________________ Shares (as defined in the Warrant Agreement governing the attached Warrant) to which the within Warrant relates, and appoints______________________________ Attorney to transfer such right on the books of_________________________________ with full power of substitution in the premises.

Dated: __________________________


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)



	(Address)

Signature Guaranteed: ________________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

Exhibit 4.10

WARRANT HOLDER:	(Name)
	(Street)
	(City, State, Zip)

NUMBER OF WARRANT SHARES: _______________

No. N- ________

Issuance Date: _______________

NANOFLEX POWER CORPORATION

Common Stock Purchase Warrant

NanoFlex Power Corporation, a Florida corporation, for value received, hereby grants to the holder as indicated at the beginning of this Warrant, its successors and permitted assigns (collectively, the "Holder"), this right (the "Warrant"), subject to the terms set forth below, to purchase at the exercise price per share as defined in Section 2.1 below (the "Exercise Price"), up to that number of Shares (defined below), subject to adjustment as herein provided (such total number of Shares that may be purchased hereunder being referred to herein as the "Warrant Shares"). This Warrant is offered to the Holder pursuant to a Note Subscription Agreement by and between the Holder and the Company, dated ___________, 2015 (the “Subscription Agreement”). Capitalized terms not defined herein shall have the meanings ascribed to them in the Subscription Agreement.

1. Definitions . As used herein, the following terms, unless the context otherwise requires, have the following respective meanings:

2. Exercise of Warrant .

2.1. Exercise Price . The Warrant may be exercised, subject to the adjustments in Section 5 hereof, at the initial exercise price of $2.50 per Share (the "Exercise Price").

2.2. Exercise Period . The Warrant may be exercised (the "Exercise Period") at any time from the date of grant to and including the fifth anniversary of the Issuance Date (the “Expiration Date”) .

2.3. Shares . The number of shares that the Holder is entitled to purchase under this warrant shall be ______________ shares.

2.6. Call Right . The Company shall have the right to call the exercise of all, or the remaining portion of this Warrant outstanding and unexercised at the Exercise Price in the event (i) the Volume Weighted Average Price (“VWAP”) of the Company’s Common Stock equals or exceeds Five Dollars Cents ($5.00) per share during any ten (10) consecutive trading days, (ii) the average trading volume of the Company’s Common Stock during any ten (10) consecutive trading days is at least $100,000 per day, and (iii) all Shares for which this Warrant is exercisable are registered for resale by the Holder (the “Call Conditions”). For the purposes of this Warrant, the “VWAP” shall be the volume weighted average price reported by Bloomberg for the Common Stock. In the event the Call Conditions are satisfied and the Company desires to exercise its call rights under this section the Company shall deliver a notice to each registered Holder of the Warrants setting for the number of Warrants held and the dollar amount due to exercise the Warrants (the “Call Notice”). Each Holder shall have thirty (30) calendar days from the receipt of the Call Notice to exercise the unexercised portion of the Warrants (the “Call Period”). Upon the expiration of the Call Period, any unexercised Warrant shall automatically expire.

3. Delivery of Share Certificates on Exercise .

4. Covenants as to Shares .

4.2 Restrictions on Transfer . Holder represents to the company that it is acquiring the Warrants for its own investment account and without a view to the subsequent public distribution of the Warrants or Shares otherwise than pursuant to an effective registration statement under the Securities Act. Each Warrant and each certificate for Shares issued to the Holder and any subsequent holder that have not been sold to the public pursuant to an effective registration statement under the Securities Act or as to which the restrictions on transfer have not been removed as hereinafter provided, shall bear a restrictive legend reciting that the same have not been registered pursuant to the Securities Act and may not be transferred in the absence of an effective registration statement under the Securities Act, the holder thereof shall give written notice to the Company of its intention to effect such transfer. Each such notice shall describe the manner of the proposed transfer and shall be accompanied by an opinion of counsel experienced in federal securities laws matters and reasonably acceptable to the company and its counsel to the effect that the proposed transfer may be effected without registration under the Securities Act, whereupon, the holder of such Registrable Common Stock shall be entitled to transfer such securities in accordance with the terms of its notice and such opinion. Restrictions imposed under this Section 4 upon the transferability of the Warrants or of Shares shall cease when:

(a) a registration statement covering such Shares becomes effective under the Securities Act, or

5. Adjustment of Exercise Price and Number of Warrant Shares.

5.3. Other Distributions . If at any time after the date hereof the Company distributes to holders of its Common Stock, other than as part of its dissolution, liquidation or the winding up of its affairs, any shares of its capital stock, any evidence of indebtedness or any of its assets (other than Common Stock), then the number of Warrant Shares for which this Warrant is exercisable shall be increased to equal: (i) the number of Warrant Shares for which this Warrant is exercisable immediately prior to such event, (ii) multiplied by a fraction, (A) the numerator of which shall be the Fair Market Value (as defined below) per share of Common Stock on the record date for the dividend or distribution, and (B) the denominator of which shall be the Fair Market Value price per share of Common Stock on the record date for the dividend or distribution minus the amount allocable to one share of Common Stock of the value (as jointly determined in good faith by the Board of Directors of the Company and the Holder) of any and all such evidences of indebtedness, shares of capital stock, other securities or property, so distributed. For purposes of this Warrant, “Fair Market Value” shall equal the average closing trading price of the Common Stock on the Principal Market for the five (5) Trading Days preceding the date of determination or, if the Common Stock is not listed or admitted to trading on any Principal Market, and the average price cannot be determined as contemplated above, the Fair Market Value of the Common Stock shall be as reasonably determined in good faith by the Company’s Board of Directors and the Holder. If the Fair Market Value of the Common Stock cannot be determined by the Company’s Board of Directors and the Holder after five (5) business days, such determination shall be made by a third party appraisal firm mutually agreeable by the Board of Directors and the Holder, at the expense of the Company (the “Independent Appraiser”). The fair market value as determined by the Independent Appraiser shall be final. The Exercise Price shall be reduced to equal: (i) the Exercise Price in effect immediately before the occurrence of any event (ii) multiplied by a fraction, (A) the numerator of which is the number of Warrant Shares for which this Warrant is exercisable immediately before the adjustment, and (B) the denominator of which is the number of Warrant Shares for which this Warrant is exercisable immediately after the adjustment.

5.4 Reclassification, etc. If at any time after the date hereof there shall be a reorganization or reclassification of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, then the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares or other securities or property resulting from such reorganization or reclassification, which would have been received by the Holder for the shares of stock subject to this Warrant had this Warrant at such time been exercised.

7. Notices of Record Date, etc.

In the event of:

7.2. any merger, consolidation or capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company any other person, or

8. Transfers .

9. Replacement of Warrants .

10. Notices .

NanoFlex Power Corporation

17207 N. Perimeter Dr., Suite 210,

Scottsdale, AZ 85255

in the case of any notice to the Company, and until changed by notice to the Company, to the address of the Holder set forth above in the case of any notice to the Holder.

11. Miscellaneous .

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized.

	NANOFLEX POWER CORPORATION

	By:
		Dean L. Ledger,
		Co-Chief Executive Officer

FORM OF SUBSCRIPTION

(To be signed only on exercise of Warrant)

TO NANOFLEX POWER CORPORATION:

The undersigned hereby elects to purchase, pursuant to the provisions of the Warrant, as follows:

_________

________ shares of Common Stock pursuant to the terms of the Warrant, and tenders herewith payment in cash of the Exercise Price for the Warrant Shares in full, together with all applicable transfer taxes, if any.

The undersigned hereby represents and warrants that the representations and warranties in Section 2 of the Subscription Agreement, are true and correct as of the date hereof.

Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:

___________________________

	HOLDER:


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)




	(Address)

Dated as of: __________ _____, 201_

Name in which shares should be registered: __________________________________________

Address at which shares should be registered: ________________________________________

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto _______________________ ____________________________________________________________________________________ whose address is __________________________________________________________________________the right represented by the attached Warrant to purchase _____________ Shares (as defined in the Warrant Agreement governing the attached Warrant) to which the within Warrant relates, and appoints __________________________ Attorney to transfer such right on the books of ____________________________ with full power of substitution in the premises.

Dated: ____________________

	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)




	(Address)

Signature Guaranteed: ___________________________________________

Exhibit 4.11

WARRANT HOLDER:

(Name)

(Street)

(City, State, Zip)

NUMBER OF WARRANT SHARES: _____________

No. N- _______

Issuance Date: ___________________

NANOFLEX POWER CORPORATION

Common Stock Purchase Warrant

NanoFlex Power Corporation, a Florida corporation, for value received, hereby grants to the holder as indicated at the beginning of this Warrant, its successors and permitted assigns (collectively, the "Holder"), this right (the "Warrant"), subject to the terms set forth below, to purchase at the exercise price per share as defined in Section 2.1 below (the "Exercise Price"), up to that number of Shares (defined below), subject to adjustment as herein provided (such total number of Shares that may be purchased hereunder being referred to herein as the "Warrant Shares"). This Warrant is offered to the Holder pursuant to a Note Subscription Agreement by and between the Holder and the Company, dated _____________, 2015 (the “Subscription Agreement”) in which the Holder subscribed to purchase Convertible Promissory Notes (each a “Note” and together the “Notes”). Capitalized terms not defined herein shall have the meanings ascribed to them in the Subscription Agreement.

1. Definitions . As used herein, the following terms, unless the context otherwise requires, have the following respective meanings:

2. Exercise of Warrant .

2.1. Exercise Price . The Warrant may be exercised, subject to the adjustments in Section 5 hereof, at the initial exercise price of $.50 per Share (the "Exercise Price").

2.3. Shares. The number of shares that the Holder is entitled to purchase under this warrant shall be_____________ shares, which is equal to 5 0% of the number of Common Stock into
which the Note is convertible on the issuance date of the Note.

2.6. Cashless Exercise . If at any time this Warrant is exercised following the one year anniversary of the date of issuance of this Warrant, but before the Expiration Date and on the Trading Day immediately preceding the Holder’s delivery of an Exercise Notice in respect of such exercise, a registration statement (as defined covering the Warrant Shares that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares, the Holder of this Warrant may also exercise this Warrant as to any or all of such Unavailable Warrant Shares and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate Exercise Price, elect instead to receive upon such exercise a reduced number of shares of Common Stock (the “Net Number”) determined according to the following formula (a “Cashless Exercise”):

	Net Number =	(A x B) - (A x C)
		B

For purposes of the foregoing formula:

A= the total number of shares with respect to which this Warrant is then being exercised in a Cashless Exercise.

B= the Market Price on the Trading Day immediately preceding the date of the Exercise Notice.

C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

There cannot be a Cashless Exercise unless “B” exceeds “C.”

For the purpose of this Warrant, the term “Trading Day” means (x) if the Common Stock is not listed on the NYSE Euronext or NYSE AMEX but sale prices of the Common Stock are reported on Nasdaq Global Market, Nasdaq Global Select Market, Nasdaq Capital Market or another automated quotation system, a day on which trading is reported on the principal automated quotation system on which sales of the Common Stock are reported, (y) if the Common Stock is listed on the NYSE Euronext or NYSE AMEX, a day on which there is trading on such stock exchange, or (z) if the foregoing provisions are inapplicable, a day on which quotations are reported by National Quotation Bureau Incorporated.

3. Delivery of Share Certificates on Exercise .

4. Covenants as to Shares .

(a) a registration statement covering such Shares becomes effective under the Securities Act, or

5. Adjustment of Exercise Price and Number of Warrant Shares .

5.3. Other Distributions . If at any time after the date hereof the Company distributes to holders of its Common Stock, other than as part of its dissolution, liquidation or the winding up of its affairs, any shares of its capital stock, any evidence of indebtedness or any of its assets (other than Common Stock), then the number of Warrant Shares for which this Warrant is exercisable shall be increased to equal: (i) the number of Warrant Shares for which this Warrant is exercisable immediately prior to such event, (ii) multiplied by a fraction, (A) the numerator of which shall be the Fair Market Value (as defined below) per share of Common Stock on the record date for the dividend or distribution, and (B) the denominator of which shall be the Fair Market Value price per share of Common Stock on the record date for the dividend or distribution minus the amount allocable to one share of Common Stock of the value (as jointly determined in good faith by the Board of Directors of the Company and the Holder) of any and all such evidences of indebtedness, shares of capital stock, other securities or property, so distributed. For purposes of this Warrant, “Fair Market Value” shall equal the average closing trading price of the Common Stock on the Principal Market for the five (5) Trading Days preceding the date of determination or, if the Common Stock is not listed or admitted to trading on any Principal Market, and the average price cannot be determined as contemplated above, the Fair Market Value of the Common Stock shall be as reasonably determined in good faith by the Company’s Board of Directors and the Holder. If the Fair Market Value of the Common Stock cannot be determined by the Company’s Board of Directors and the Holder after five (5) business days, such determination shall be made by a third party appraisal firm mutually agreeable by the Board of Directors and the Holder, at the expense of the Company (the “Independent Appraiser”). The fair market value as determined by the Independent Appraiser shall be final. The Exercise Price shall be reduced to equal: (i) the Exercise Price in effect immediately before the occurrence of any event (ii) multiplied by a fraction, (A) the numerator of which is the number of Warrant Shares for which this Warrant is exercisable immediately before the adjustment, and (B) the denominator of which is the number of Warrant Shares for which this Warrant is exercisable immediately after the adjustment.

7. Notices of Record Date, etc .

In the event of:

7.2. any merger, consolidation or capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company any other person, or

8. Transfers .

9. Replacement of Warrants .

10. Notices .

NanoFlex Power Corporation

17207 N. Perimeter Dr., Suite 210,

Scottsdale, AZ 85255

in the case of any notice to the Company, and until changed by notice to the Company, to the address of the Holder set forth above in the case of any notice to the Holder.

11. Miscellaneous .

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized.

	NANOFLEX POWER CORPORATION

	By:
		Dean L. Ledger,
		Chief Executive Officer

FORM OF SUBSCRIPTION

(To be signed only on exercise of Warrant)

TO NANOFLEX POWER CORPORATION:

The undersigned hereby elects to purchase, pursuant to the provisions of the Warrant, as follows:

	_________	___________ shares of Common Stock pursuant to the terms of the Warrant, and tenders herewith payment in cash of the Exercise Price for the Warrant Shares in full, together with all applicable transfer taxes, if any.

	_________	Cashless Exercise with respect to the Net Number of shares of Common Stock.

The undersigned hereby represents and warrants that the representations and warranties in Section 2 of the Subscription Agreement, are true and correct as of the date hereof.

Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:

	HOLDER:


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)



	(Address)

Dated as of: ___________ _____, 201_

Name in which shares should be registered: ______________________________________________

Address at which shares should be registered: ________________________________________

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto __________________________________________ whose address is _________________________________________________ the right represented by the attached Warrant to purchase_________ Shares (as defined in the Warrant Agreement governing the attached Warrant) to which the within Warrant relates, and appoints______________________ Attorney to transfer such right on the books of________________________ with full power of substitution in the premises.

Dated: __________________________


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)



	(Address)

Signature Guaranteed: ________________________________________________

Exhibit 4.12

WARRANT HOLDER:

(Name)

(Street)

(City, State, Zip)

NUMBER OF WARRANT SHARES: _____________

No. N- _______

Issuance Date: ___________________

NANOFLEX POWER CORPORATION

Common Stock Purchase Warrant

NanoFlex Power Corporation, a Florida corporation, for value received, hereby grants to the holder as indicated at the beginning of this Warrant, its successors and permitted assigns (collectively, the "Holder"), this right (the "Warrant"), subject to the terms set forth below, to purchase at the exercise price per share defined in Section 2.1 below (the "Exercise Price"), up to that number of Shares (defined below), subject to adjustment as herein provided (such total number of Shares that may be purchased hereunder being referred to herein as the "Warrant Shares"). This Warrant is offered to the Holder pursuant to a Note Subscription Agreement by and between the Holder and the Company, dated _____________, 2015 (the “Subscription Agreement”) in which the Holder subscribed to purchase Convertible Promissory Notes (each a “Note” and together the “Notes”). Capitalized terms not defined herein shall have the meanings ascribed to them in the Subscription Agreement.

1. Definitions . As used herein, the following terms, unless the context otherwise requires, have the following respective meanings:

2. Exercise of Warrant .

2.1. Exercise Price . The Warrant may be exercised, subject to the adjustments in Section 5 hereof, at the initial exercise price of $.50 per Share (the "Exercise Price").

2.3. Shares. The number of shares that the Holder is entitled to purchase under this warrant shall be____________ shares, which is equal to 100% of the number of shares of Common Stock into which the Note was convertible on the issuance date of the Note.

3. Delivery of Share Certificates on Exercise .

4. Covenants as to Shares .

(a) a registration statement covering such Shares becomes effective under the Securities Act, or

5. Adjustment of Exercise Price and Number of Warrant Shares .

5.3. Other Distributions . If at any time after the date hereof the Company distributes to holders of its Common Stock, other than as part of its dissolution, liquidation or the winding up of its affairs, any shares of its capital stock, any evidence of indebtedness or any of its assets (other than Common Stock), then the number of Warrant Shares for which this Warrant is exercisable shall be increased to equal: (i) the number of Warrant Shares for which this Warrant is exercisable immediately prior to such event, (ii) multiplied by a fraction, (A) the numerator of which shall be the Fair Market Value (as defined below) per share of Common Stock on the record date for the dividend or distribution, and (B) the denominator of which shall be the Fair Market Value price per share of Common Stock on the record date for the dividend or distribution minus the amount allocable to one share of Common Stock of the value (as jointly determined in good faith by the Board of Directors of the Company and the Holder) of any and all such evidences of indebtedness, shares of capital stock, other securities or property, so distributed. For purposes of this Warrant, “Fair Market Value” shall equal the average closing trading price of the Common Stock on the Principal Market for the five (5) Trading Days preceding the date of determination or, if the Common Stock is not listed or admitted to trading on any Principal Market, and the average price cannot be determined as contemplated above, the Fair Market Value of the Common Stock shall be as reasonably determined in good faith by the Company’s Board of Directors and the Holder. If the Fair Market Value of the Common Stock cannot be determined by the Company’s Board of Directors and the Holder after five (5) business days, such determination shall be made by a third party appraisal firm mutually agreeable by the Board of Directors and the Holder, at the expense of the Company (the “Independent Appraiser”). The fair market value as determined by the Independent Appraiser shall be final. The Exercise Price shall be reduced to equal: (i) the Exercise Price in effect immediately before the occurrence of any event (ii) multiplied by a fraction, (A) the numerator of which is the number of Warrant Shares for which this Warrant is exercisable immediately before the adjustment, and (B) the denominator of which is the number of Warrant Shares for which this Warrant is exercisable immediately after the adjustment.

7. Notices of Record Date, etc .

In the event of:

7.2. any merger, consolidation or capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company any other person, or

8. Transfers .

9. Replacement of Warrants .

10. Notices .

NanoFlex Power Corporation

17207 N. Perimeter Dr., Suite 210,

Scottsdale, AZ 85255

in the case of any notice to the Company, and until changed by notice to the Company, to the address of the Holder set forth above in the case of any notice to the Holder.

11. Miscellaneous .

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized.

	NANOFLEX POWER CORPORATION

	By:
		Dean L. Ledger,
		Chief Executive Officer

FORM OF SUBSCRIPTION

(To be signed only on exercise of Warrant)

TO NANOFLEX POWER CORPORATION:

The undersigned hereby elects to purchase, pursuant to the provisions of the Warrant, as follows:

_________

shares of Common Stock pursuant to the terms of the Warrant, and tenders herewith payment in cash of the Exercise Price for the Warrant Shares in full, together with all applicable transfer taxes, if any.

The undersigned hereby represents and warrants that the representations and warranties in Section 2 of the Subscription Agreement, are true and correct as of the date hereof.

Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:

___________________________________

	HOLDER:


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)



	(Address)

Dated as of: ___________ _____, 201_

Name in which shares should be registered: ______________________________________________

Address at which shares should be registered: ________________________________________

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

Dated: __________________________


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)



	(Address)

Signature Guaranteed: ________________________________________________

Exhibit 4.13

WARRANT HOLDER:	Name
	Address

NUMBER OF WARRANT SHARES: ______

No. ____

Issuance Date: _______

NANOFLEX POWER CORPORATION

Common Stock Purchase Warrant

NanoFlex Power Corporation, a Florida corporation, for value received, hereby grants to the holder as indicated at the beginning of this Warrant, its successors and permitted assigns (collectively, the "Holder"), this right (the "Warrant"), subject to the terms set forth below, to purchase at the exercise price per share defined in Section 2.1 below (the "Exercise Price"), up to that number of Shares (defined below), subject to adjustment as herein provided (such total number of Shares that may be purchased hereunder being referred to herein as the "Warrant Shares"). This Warrant is offered to the Holder pursuant to a Note Subscription Agreement by and between the Holder and the Company, dated _______________ (the “Subscription Agreement”) in which the Holder subscribed to purchase Convertible Promissory Notes (each a “Note” and together the “Notes”). Capitalized terms not defined herein shall have the meanings ascribed to them in the Subscription Agreement.

1. Definitions . As used herein, the following terms, unless the context otherwise requires, have the following respective meanings:

2. Exercise of Warrant .

2.1. Exercise Price . The Warrant may be exercised, subject to the adjustments in Section 5 hereof, at the initial exercise price of $.50 per Share (the "Exercise Price").

2.3. Shares . The number of shares that the Holder is entitled to purchase under this warrant shall be ___________ shares, which is equal to 50% of the number of shares of Common Stock into which the Note was convertible on the issuance date of the Note.

2.6. Cashless Exercise . If at any time this Warrant is exercised following the one year anniversary of the date of issuance of this Warrant, but before the Expiration Date and on the Trading Day immediately preceding the Holder’s delivery of an Exercise Notice in respect of such exercise, a registration statement (as defined covering the Warrant Shares that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares, the Holder of this Warrant may also exercise this Warrant as to any or all of such Unavailable Warrant Shares and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate Exercise Price, elect instead to receive upon such exercise a reduced number of shares of Common Stock (the “Net Number”) determined according to the following formula (a “Cashless Exercise”):

	Net Number =	(A x B) - (A x C)
		B

For purposes of the foregoing formula:

A= the total number of shares with respect to which this Warrant is then being exercised in a Cashless Exercise.

B= the Market Price on the Trading Day immediately preceding the date of the Exercise Notice.

C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

There cannot be a Cashless Exercise unless “B” exceeds “C.”

3. Delivery of Share Certificates on Exercise .

4. Covenants as to Shares .

(a) a registration statement covering such Shares becomes effective under the Securities Act, or

5. Adjustment of Exercise Price and Number of Warrant Shares.

5.3. Other Distributions . If at any time after the date hereof the Company distributes to holders of its Common Stock, other than as part of its dissolution, liquidation or the winding up of its affairs, any shares of its capital stock, any evidence of indebtedness or any of its assets (other than Common Stock), then the number of Warrant Shares for which this Warrant is exercisable shall be increased to equal: (i) the number of Warrant Shares for which this Warrant is exercisable immediately prior to such event, (ii) multiplied by a fraction, (A) the numerator of which shall be the Fair Market Value (as defined below) per share of Common Stock on the record date for the dividend or distribution, and (B) the denominator of which shall be the Fair Market Value price per share of Common Stock on the record date for the dividend or distribution minus the amount allocable to one share of Common Stock of the value (as jointly determined in good faith by the Board of Directors of the Company and the Holder) of any and all such evidences of indebtedness, shares of capital stock, other securities or property, so distributed. For purposes of this Warrant, “Fair Market Value” shall equal the average closing trading price of the Common Stock on the Principal Market for the five (5) Trading Days preceding the date of determination or, if the Common Stock is not listed or admitted to trading on any Principal Market, and the average price cannot be determined as contemplated above, the Fair Market Value of the Common Stock shall be as reasonably determined in good faith by the Company’s Board of Directors and the Holder. If the Fair Market Value of the Common Stock cannot be determined by the Company’s Board of Directors and the Holder after five (5) business days, such determination shall be made by a third party appraisal firm mutually agreeable by the Board of Directors and the Holder, at the expense of the Company (the “Independent Appraiser”). The fair market value as determined by the Independent Appraiser shall be final. The Exercise Price shall be reduced to equal: (i) the Exercise Price in effect immediately before the occurrence of any event (ii) multiplied by a fraction, (A) the numerator of which is the number of Warrant Shares for which this Warrant is exercisable immediately before the adjustment, and (B) the denominator of which is the number of Warrant Shares for which this Warrant is exercisable immediately after the adjustment.

5.4 Reclassification, etc. If at any time after the date hereof there shall be a reorganization or reclassification of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, then the Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares or other securities or property resulting from such reorganization or reclassification, which would have been received by the Holder for the shares of stock subject to this Warrant had this Warrant at such time been exercised.

7. Notices of Record Date, etc.

In the event of:

7.2. any merger, consolidation or capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company any other person, or

8. Transfers .

9. Replacement of Warrants .

10. Notices .

NanoFlex Power Corporation

17207 N. Perimeter Dr., Suite 210,

Scottsdale, AZ 85255

in the case of any notice to the Company, and until changed by notice to the Company, to the address of the Holder set forth above in the case of any notice to the Holder.

11. Miscellaneous .

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized.

	NANOFLEX POWER CORPORATION

	By:
		Dean L. Ledger,
		Chief Executive Officer

FORM OF SUBSCRIPTION

(To be signed only on exercise of Warrant)

TO NANOFLEX POWER CORPORATION:

The undersigned hereby elects to purchase, pursuant to the provisions of the Warrant, as follows:

	_______	__________ shares of Common Stock pursuant to the terms of the Warrant, and tenders herewith payment in cash of the Exercise Price for the Warrant Shares in full, together with all applicable transfer taxes, if any.

	_______	Cashless Exercise with respect to the Net Number of shares of Common Stock.

The undersigned hereby represents and warrants that the representations and warranties in Section 2 of the Subscription Agreement, are true and correct as of the date hereof.

Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:

___________________________

	HOLDER:


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)




	(Address)

Dated as of: __________ _____, 201_

Name in which shares should be registered: __________________________________________

Address at which shares should be registered: ________________________________________

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto ___________________ whose address is ____________________________________________the right represented by the attached Warrant to purchase _____________ Shares (as defined in the Warrant Agreement governing the attached Warrant) to which the within Warrant relates, and appoints __________________________ Attorney to transfer such right on the books of ____________________________ with full power of substitution in the premises.

Dated: ____________________

	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)




	(Address)

Signature Guaranteed: ___________________________________________

Exhibit 4.14

WARRANT HOLDER:

(Name)

(Street)

(City, State, Zip)

NUMBER OF WARRANT SHARES: _____________

No. N- _______

Issuance Date: ___________________

NANOFLEX POWER CORPORATION

Common Stock Purchase Warrant

NanoFlex Power Corporation, a Florida corporation, for value received, hereby grants to the holder as indicated at the beginning of this Warrant, its successors and permitted assigns (collectively, the "Holder"), this right (the "Warrant"), subject to the terms set forth below, to purchase at the exercise price per share defined in Section 2.1 below (the "Exercise Price"), up to that number of Shares (defined below), subject to adjustment as herein provided (such total number of Shares that may be purchased hereunder being referred to herein as the "Warrant Shares"). This Warrant is offered to the Holder pursuant to a Note Subscription Agreement by and between the Holder and the Company, dated _____________, 2015 (the “Subscription Agreement”) in which the Holder subscribed to purchase Convertible Promissory Notes (each a “Note” and together the “Notes”). Capitalized terms not defined herein shall have the meanings ascribed to them in the Subscription Agreement.

1. Definitions . As used herein, the following terms, unless the context otherwise requires, have the following respective meanings:

2. Exercise of Warrant .

2.1. Exercise Price . The Warrant may be exercised, subject to the adjustments in Section 5 hereof, at the initial exercise price of $.50 per Share (the "Exercise Price").

2.2. Exercise Period . The Warrant may be exercised (the "Exercise Period") at any time from the date of grant to and including the fifth anniversary of the Issuance Date (the “Expiration Date”).

2.3. Shares . The number of shares that the Holder is entitled to purchase under this warrant shall be____________ shares, which is equal to 100% of the number of shares of Common Stock into which the Note was convertible on the issuance date of the Note.

2.6. Cashless Exercise . If at any time this Warrant is exercised following the one year anniversary of the date of issuance of this Warrant, but before the Expiration Date and on the Trading Day immediately preceding the Holder’s delivery of an Exercise Notice in respect of such exercise, a registration statement (as defined covering the Warrant Shares that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares, the Holder of this Warrant may also exercise this Warrant as to any or all of such Unavailable Warrant Shares and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate Exercise Price, elect instead to receive upon such exercise a reduced number of shares of Common Stock (the “Net Number”) determined according to the following formula (a “Cashless Exercise”):

	Net Number =	(A x B) - (A x C)
		B

For purposes of the foregoing formula:

A= the total number of shares with respect to which this Warrant is then being exercised in a Cashless Exercise.

B= the Market Price on the Trading Day immediately preceding the date of the Exercise Notice.

C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

There cannot be a Cashless Exercise unless “B” exceeds “C.”

3. Delivery of Share Certificates on Exercise .

4. Covenants as to Shares .

(a) a registration statement covering such Shares becomes effective under the Securities Act, or

5. Adjustment of Exercise Price and Number of Warrant Shares .

5.3. Other Distributions . If at any time after the date hereof the Company distributes to holders of its Common Stock, other than as part of its dissolution, liquidation or the winding up of its affairs, any shares of its capital stock, any evidence of indebtedness or any of its assets (other than Common Stock), then the number of Warrant Shares for which this Warrant is exercisable shall be increased to equal: (i) the number of Warrant Shares for which this Warrant is exercisable immediately prior to such event, (ii) multiplied by a fraction, (A) the numerator of which shall be the Fair Market Value (as defined below) per share of Common Stock on the record date for the dividend or distribution, and (B) the denominator of which shall be the Fair Market Value price per share of Common Stock on the record date for the dividend or distribution minus the amount allocable to one share of Common Stock of the value (as jointly determined in good faith by the Board of Directors of the Company and the Holder) of any and all such evidences of indebtedness, shares of capital stock, other securities or property, so distributed. For purposes of this Warrant, “Fair Market Value” shall equal the average closing trading price of the Common Stock on the Principal Market for the five (5) Trading Days preceding the date of determination or, if the Common Stock is not listed or admitted to trading on any Principal Market, and the average price cannot be determined as contemplated above, the Fair Market Value of the Common Stock shall be as reasonably determined in good faith by the Company’s Board of Directors and the Holder. If the Fair Market Value of the Common Stock cannot be determined by the Company’s Board of Directors and the Holder after five (5) business days, such determination shall be made by a third party appraisal firm mutually agreeable by the Board of Directors and the Holder, at the expense of the Company (the “Independent Appraiser”). The fair market value as determined by the Independent Appraiser shall be final. The Exercise Price shall be reduced to equal: (i) the Exercise Price in effect immediately before the occurrence of any event (ii) multiplied by a fraction, (A) the numerator of which is the number of Warrant Shares for which this Warrant is exercisable immediately before the adjustment, and (B) the denominator of which is the number of Warrant Shares for which this Warrant is exercisable immediately after the adjustment.

7. Notices of Record Date, etc .

In the event of:

7.2. any merger, consolidation or capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company any other person, or

8. Transfers .

9. Replacement of Warrants .

10. Notices .

NanoFlex Power Corporation

17207 N. Perimeter Dr., Suite 210,

Scottsdale, AZ 85255

in the case of any notice to the Company, and until changed by notice to the Company, to the address of the Holder set forth above in the case of any notice to the Holder.

11. Miscellaneous .

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized.

	NANOFLEX POWER CORPORATION

	By:
		Dean L. Ledger,
		Chief Executive Officer

FORM OF SUBSCRIPTION

(To be signed only on exercise of Warrant)

TO NANOFLEX POWER CORPORATION:

The undersigned hereby elects to purchase, pursuant to the provisions of the Warrant, as follows:

_________

___________ shares of Common Stock pursuant to the terms of the Warrant, and tenders herewith payment in cash of the Exercise Price for the Warrant Shares in full, together with all applicable transfer taxes, if any.

The undersigned hereby represents and warrants that the representations and warranties in Section 2 of the Subscription Agreement, are true and correct as of the date hereof.

Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:

________________________________

	HOLDER:


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)



	(Address)

Dated as of: ___________ _____, 201_

Name in which shares should be registered: ______________________________________________

Address at which shares should be registered: ________________________________________

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto __________________________________________ whose address is _________________________________________________ the right represented by the attached Warrant to purchase_________ Shares (as defined in the Warrant Agreement governing the attached Warrant) to which the within Warrant relates, and appoints_____________________ Attorney to transfer such right on the books of_______________________ with full power of substitution in the premises.

Dated: __________________________


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)



	(Address)

Signature Guaranteed: ________________________________________________

Exhibit 4.15

WARRANT HOLDER:

NUMBER OF WARRANT SHARES:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION, AND MAY NOT BE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.

IN ADDITION, THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED OR ENCUMBERED WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY TO SUCH PROPOSED SALE, PLEDGE, TRANSFER OR ENCUMBRANCE AND TO THE PROPOSED ASSIGNEE, PLEDGEE OR TRANSFEREE.

Warrant No.

Issuance Date:

NANOFLEX POWER CORPORATION

Common Stock Purchase Warrant

NanoFlex Power Corporation (formerly, Universal Technology Systems Corp.), a Florida corporation, for value received, hereby grants to the holder as indicated at the beginning of this Warrant, its successors and permitted assigns (collectively, the "Holder"), this right (the "Warrant"), subject to the terms set forth below, to purchase at the purchase price per share as defined in Section 2.1 below (the "Purchase Price"), up to that number of Shares (defined below), subject to adjustment as herein provided (such total number of Shares that may be purchased hereunder being referred to herein as the "Warrant Shares").

1. Definitions . As used herein, the following terms, unless the context otherwise requires, have the following respective meanings:

1.1. "Company" shall include NanoFlex Power Corporation (formerly known as Universal Technology Systems Corp.), a Florida corporation, and, unless otherwise noted to the contrary, any company which shall succeed to, by merger, consolidation or similar arrangement of the Company's and assume the obligations of NanoFlex Power Corporation hereunder.

1.4. "Registrable Common Stock" means the number of shares of common stock underlying the warrants issued hereunder. As to any particular Registrable Common Stock, such securities will cease to be Registrable Common Stock when they (a) have been effectively registered under the Securities Act of 1933, as amended (the "Act") and obtained or disposed of in accordance with the registration statement covering them, (b) have been transferred pursuant to Rule 144 under the Act (or any similar provision then in force), or (c) are no longer subject to restrictions under transfer pursuant to the provisions of Rule 144(k) under the Act.

1.5. "Registration Expenses" means all expenses incident to the Company's performance of or compliance with this Agreement, including all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses, expenses and fees for listing the securities to be registered on exchanges on which similar securities issued by the Company are then listed, and fees and disbursements of counsel for the Company (but not of counsel to the Shareholder) and of all independent certified public accountants, underwriters (other than Underwriting Commissions) and other persons retained by the Company.

1.6. "Underwriting Commissions" means all underwriting discounts or commissions relating to the sale of securities of the Company.

2. Exercise of Warrant .

2.1. Purchase Price . The Warrant may be exercised, subject to the terms specified herein, at the purchase price of $0.50 per Share (the "Purchase Price").

2.2. Exercise Period . The Warrant may be exercised (the "Exercise Period") at any time from the date of grant to and including the fifth anniversary date of the Issuance Date.

2.3. Shares . The number of shares subject to this warrant is , subject to the terms specified herein.

2.5. Partial Exercise . This Warrant may be exercised in part by surrender of this Warrant in the manner and at the place provided in subsection 2.4 along with payment in the amount determined by multiplying (a) the number of Shares designated by the holder in the subscription at the end hereof by (b) the Purchase Price. On any such partial exercise, the Company at its expense will forthwith issue and deliver to or upon the order of the Holder a new Warrant or Warrants of like tenor, in the name of the Holder or as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, calling in the aggregate on the face or faces thereof for the number of Shares for which such Warrant or Warrants may still be exercised.

	Net Number =	(A x B) - (A x C)
		B

For purposes of the foregoing formula:

A= the total number of shares with respect to which this Warrant is then being exercised in a Cashless Exercise.

B= the Market Price on the Trading Day immediately preceding the date of the Exercise Notice.

C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

There cannot be a Cashless Exercise unless "B" exceeds "C."

3. Delivery of Share Certificates on Exercise .

4. Covenants as to Shares .

4.1 Issuance of Shares upon Exercise . All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof. The Company will at all times have authorized and reserved, free from preemptive rights, a sufficient number of its Shares to provide for the exercise of the rights represented by this Warrant.

(a)

a registration statement covering such Shares becomes effective under the Securities Act, or

(b)

the Company receives from the holder thereof an opinion of counsel experienced in federal securities laws matters, which counsel shall be reasonably acceptable to the Company, that such restrictions are no longer required in order to insure compliance with the Securities Act.

5. Adjustment for Reorganization, Consolidation or Merger .

5.2. Dissolution . If the Company dissolves following the transfer of all or substantially all of its properties or assets, the Company, prior to such dissolution, shall at its expense deliver or cause to be delivered to the Holder the stock and other securities and property (including cash, where applicable) receivable by the Holder after the effective date of such dissolution pursuant to this Section 5.

5.3. Continuation of Terms . Upon any Extraordinary Transaction, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the securities, Shares and Other Securities and property receivable on the exercise of this Warrant after the consummation of reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, any Extraordinary Transaction and shall be binding upon the party or parties to the Extraordinary Transaction and their successors, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 7.

6. Adjustments for Other Events .

6.1. Changes in Capital Structure . If the Company shall (a) issue additional Shares as a dividend or other distribution on outstanding Shares, (b) subdivide its outstanding Shares, or (c) combine its outstanding Shares into a smaller number of Shares, then, in each such event, the Shares immediately prior to such event shall, simultaneously with the happening of such event, be adjusted by multiplying the Warrant Shares by a fraction, the numerator of which shall be the total number of Shares issued and outstanding immediately after such event and the denominator of which shall be the total number of Shares issued and outstanding immediately prior to such event, and the product so obtained shall thereafter be the Warrant Shares then in effect. The Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 6. After any such event specified in this subsection 6.1, the original Purchase Price shall continue to apply to any exercise of the Warrant, except that the Purchase Price shall be adjusted in any such event by multiplying the Purchase Price by a fraction the numerator of which shall be the total number of Shares issued and outstanding immediately before such event and the denominator of which shall be the total number of shares issued and outstanding immediately after such event, provided, however, the Warrant Shares shall not be issued at a discount from the par value stated in the Company's Articles of Incorporation.

7. Notices of Record Date, etc . In the event of:

7.2. any merger, consolidation or capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company any other person, or

8. Transfers .

8.1. The Warrants are not transferable, in whole or in part, without compliance with the Securities Act of 1933, as amended (the "Securities Act"), and any applicable state securities laws.

8.4. To the extent the Holder is a party to the Registration Rights Agreement, the Warrants issued hereunder shall be subject to the transfer restrictions and other provisions set forth therein.

9. Replacement of Warrants .

10. Piggyback Registrations .

(a) Right to Piggyback . Whenever the Company proposes to register under the Act any of its common stock for sale to the public for cash in an underwritten offering, and the registration form to be used would permit inclusion thereto of the Registrable Common Stock (a "Piggyback Registration"), the Company will give prompt written notice to Shareholder and will include in such Piggyback Registration, subject to the allocation provisions below, all Registrable Common Stock with respect to which the Company has received from the Shareholder a written request for inclusion within 30 days after the Company's sending of such notice; provided however , that the Company shall not be required to effect any registration of Registrable Common Stock if (i) the registration is the Company's underwritten offering, (ii) registration is effected by the Company on behalf of a shareholder exercising registration rights that pursuant to the terms thereof prohibit the shareholder's shares from being included in such registration (a "Limited Demand Registration"), (iii) the Registrable Common Stock was previously included in a Registration Statement, whether an underwritten offering or otherwise, or (iv) the registration statement is filed or effected on Form S-4 or Form S-8, each as promulgated under the 1933 Act, or their then equivalents.

(b) Piggyback Expenses . In a Piggyback Registration, the Company will pay the Registration Expenses related to the sale of Registrable Common Stock by the Shareholder, but the Shareholder will pay the Underwriting Commissions related to the sale of such Registrable Common Stock; provided, however, that the Shareholder will pay its pro rata share of Registration Expenses incurred by the Company in connection with the registration if required to do so in connection with any Blue Sky law clearance sought by the Company.

(c) Mandated Reduction of Registrable Shares . If, for any reason, the Commission requires that the number of Registrable Shares to be registered for resale pursuant to the Registration Statement in connection with any Registration Statement, be reduced, such reduction (the "Cut Back Shares") shall be allocated pro rata among the holders whose shares have been included in such Registration Statement until the reduction required by the Commission is effected.

(d) Indemnification .

(i) In connection with any registration statement in which the Shareholder is participating, the Company will indemnify, to the extent permitted by law, Shareholder, its officers and directors, and each person who controls such holder (within the meaning of the Act), against all losses, claims, damages, liabilities and expenses arising out of or resulting from any untrue or alleged untrue statement of material fact contained in such registration statement, prospectus or preliminary prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by or on behalf of the Shareholder or such other indemnified party expressly for use therein or by the failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished the underwriters with a sufficient number of copies of the same.

(ii) In connection with any registration statement in which the Shareholder is participating, the Shareholder will furnish to the Company in writing such information as is reasonably requested by the Company for use in any such registration statement or prospectus and will indemnify, to the extent permitted by law, the Company, its directors and officers and each person who controls the Company (within the meaning of the Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue or alleged untrue statement of material fact or any omission or alleged omission of a material fact required to be stated in the registration statement or prospectus or any amendment thereof or supplement thereto or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in information so furnished in writing by the Shareholder specifically for use in preparing the registration statement.

(iii) Any person entitled to indemnification hereunder will (a) give prompt notice (and in all events within 30 days) to the indemnifying party of any claim with respect to which it seeks indemnification and (b) unless a conflict of interest exists with respect to such claim that prohibits the parties from using counsel selected by the indemnifying party, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). An indemnifying party who is not entitled, or elects not, to assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim.

(e) Participation in Underwritten Registrations . The Shareholder may not participate in any registration hereunder unless such holder (i) agrees to sell such holder's securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements under Section 10(e), and (ii) completes and executes all questionnaires, powers of attorney, custody agreements, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

(f) Subsequent Registration Rights . The Shareholder acknowledges that, from
and after the date of this Agreement, the Company may enter into agreements with any holder or prospective holder of any securities of the Company that would allow such holders or prospective holders to include such securities in any registration, whether such registration is pursuant to a demand registration or a piggyback registration.

11. Notices .

11.1. All notices required hereunder shall be deemed to have been given and shall be effective only when personally delivered or sent by Federal Express, DHL or other express delivery service or by certified or registered mail to the address of the Company's principal office in the United States as follows:

NanoFlex Power Corporation

17207 N. Perimeter Dr.

Suite 210

Scottsdale, AZ 85255

in the case of any notice to the Company, and until changed by notice to the Company, to the address of the Holder set forth above in the case of any notice to the Holder.

12. Miscellaneous .

12.1. This Warrant and any term hereof may be changed, waived, discharged or terminated, other than on expiration, only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. This Warrant shall be construed and enforced in accordance with and governed by the laws of the State of Nevada. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. This Warrant embodies the entire agreement and understanding between the Company and the other parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized.

	NANOFLEX POWER CORPORATION

	By:
		Dean L. Ledger,
		Chief Executive Officer

FORM OF SUBSCRIPTION

(To be signed only on exercise of Warrant)

TO NANOFLEX POWER CORPORATION:

The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise such Warrant for, and to purchase thereunder, _____________ Shares (as defined in the attached Warrant) and herewith makes payment of $___________ therefor, and requests that the certificates for such shares be issued in the name of, and delivered to ______________________ whose address is __________________________________

Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:

____________________________________________

Dated: ___________________________

	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)




	(Address)

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto ______________________________________ whose address is _____________________________________________ the right represented by the attached Warrant to purchase____________ Shares (as defined in the Warrant Agreement governing the attached Warrant) to which the within Warrant relates, and appoints _____________________________________ Attorney to transfer such right on the books of ____________________________ with full power of substitution in the premises.

Dated: ____________________

	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)




	(Address)

Signature Guaranteed: ____________________________

Exhibit 4.16

WARRANT HOLDER:

NUMBER OF WARRANT SHARES: _____________

No. N- _______

Issuance Date: ___________________

NANOFLEX POWER CORPORATION

Common Stock Purchase Warrant

NanoFlex Power Corporation, a Florida corporation, for value received, hereby grants to the holder as indicated at the beginning of this Warrant, its successors and permitted assigns (collectively, the "Holder"), this right (the "Warrant"), subject to the terms set forth below, to purchase at the exercise price per share defined in Section 2.1 below (the "Exercise Price"), up to that number of Shares (defined below), subject to adjustment as herein provided (such total number of Shares that may be purchased hereunder being referred to herein as the "Warrant Shares"). This Warrant is offered to the Holder pursuant to a Loan Agreement by and between the Holder and the Company, dated __________________ (the "Loan Agreement") in which the Company agreed to issue this Warrant to the Holder. Capitalized terms not defined herein shall have the meanings ascribed to them in the Loan Agreement.

1. Definitions . As used herein, the following terms, unless the context otherwise requires, have the following respective meanings:

2. Exercise of Warrant .

2.1. Exercise Price . The Warrant may be exercised, subject to the adjustments in Section 5 hereof, at the initial exercise price of $.50 per Share (the "Exercise Price").

2.2. Exercise Period . The Warrant may be exercised (the "Exercise Period") at any time from the date of grant to and including the fifth anniversary of the Issuance Date (the "Expiration Date").

2.3. Shares. The number of shares that the Holder is entitled to purchase under this warrant shall be shares.

	Net Number =	(A x B) - (A x C)
		B

For purposes of the foregoing formula:

A= the total number of shares with respect to which this Warrant is then being exercised in a Cashless Exercise.

B= the Market Price on the Trading Day immediately preceding the date of the Exercise Notice.

C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

There cannot be a Cashless Exercise unless "B" exceeds "C."

3. Delivery of Share Certificates on Exercise .

4. Covenants as to Shares .

(a) a registration statement covering such Shares becomes effective under the Securities Act, or

5. Adjustment of Exercise Price and Number of Warrant Shares .

5.3. Other Distributions . If at any time after the date hereof the Company distributes to holders of its Common Stock, other than as part of its dissolution, liquidation or the winding up of its affairs, any shares of its capital stock, any evidence of indebtedness or any of its assets (other than Common Stock), then the number of Warrant Shares for which this Warrant is exercisable shall be increased to equal: (i) the number of Warrant Shares for which this Warrant is exercisable immediately prior to such event, (ii) multiplied by a fraction, (A) the numerator of which shall be the Fair Market Value (as defined below) per share of Common Stock on the record date for the dividend or distribution, and (B) the denominator of which shall be the Fair Market Value price per share of Common Stock on the record date for the dividend or distribution minus the amount allocable to one share of Common Stock of the value (as jointly determined in good faith by the Board of Directors of the Company and the Holder) of any and all such evidences of indebtedness, shares of capital stock, other securities or property, so distributed. For purposes of this Warrant, "Fair Market Value" shall equal the average closing trading price of the Common Stock on the Principal Market for the five (5) Trading Days preceding the date of determination or, if the Common Stock is not listed or admitted to trading on any Principal Market, and the average price cannot be determined as contemplated above, the Fair Market Value of the Common Stock shall be as reasonably determined in good faith by the Company's Board of Directors and the Holder. If the Fair Market Value of the Common Stock cannot be determined by the Company's Board of Directors and the Holder after five (5) business days, such determination shall be made by a third party appraisal firm mutually agreeable by the Board of Directors and the Holder, at the expense of the Company (the "Independent Appraiser"). The fair market value as determined by the Independent Appraiser shall be final. The Exercise Price shall be reduced to equal: (i) the Exercise Price in effect immediately before the occurrence of any event (ii) multiplied by a fraction, (A) the numerator of which is the number of Warrant Shares for which this Warrant is exercisable immediately before the adjustment, and (B) the denominator of which is the number of Warrant Shares for which this Warrant is exercisable immediately after the adjustment.

7. Notices of Record Date, etc .

In the event of:

7.2. any merger, consolidation or capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company any other person, or

8. Transfers .

9. Replacement of Warrants .

10. Notices .

NanoFlex Power Corporation

17207 N. Perimeter Dr., Suite 210,
Scottsdale, AZ 85255

in the case of any notice to the Company, and until changed by notice to the Company, to the address of the Holder set forth above in the case of any notice to the Holder.

11. Miscellaneous .

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized.

	NANOFLEX POWER CORPORATION

	By:
		Dean L. Ledger,
		Chief Executive Officer

FORM OF SUBSCRIPTION

(To be signed only on exercise of Warrant)

TO NANOFLEX POWER CORPORATION:

The undersigned hereby elects to purchase, pursuant to the provisions of the Warrant, as follows:

	_________	___________ shares of Common Stock pursuant to the terms of the Warrant, and tenders herewith payment in cash of the Exercise Price for the Warrant Shares in full, together with all applicable transfer taxes, if any.

	_________	Cashless Exercise with respect to the Net Number of shares of Common Stock.

Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:

__________________________________

	HOLDER:


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)



	(Address)

Dated as of: ___________ _____, 201_

Name in which shares should be registered: ______________________________________________

Address at which shares should be registered: ________________________________________

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto ________________________________________________ whose address is ____________________________________________________________ the right represented by the attached Warrant to purchase__________________ Shares (as defined in the Warrant Agreement governing the attached Warrant) to which the within Warrant relates, and appoints______________________________ Attorney to transfer such right on the books of________________________________ with full power of substitution in the premises.

Dated: __________________________


	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)



	(Address)

Signature Guaranteed: ________________________________________________

Exhibit 10.25

CONFIDENTIAL

June 4, 2004

VIA OVERNIGHT MAIL

Mr. John F. Ritter

Office of Technology and Trademark Licensing

Princeton University

4 New South Building

P.O. Box 36

Princeton, NJ 08544

Re: Clarification of UDC/GPEC Research and License Arrangements

Dear John,

Under the 2002 Amended Research Agreement between Universal Display Corporation (“UDC”) and Princeton University, and by extension the subcontract between Princeton University and the University of Southern California (“USC”), no other commercial entity can fund Dr. Stephen R. Forrest’s or Dr. Mark E. Thompson’s work in the area of thin film organic electronics for displays, lasers, lighting, organic tft's, organic memories and other thin-film organic devices, but not including thin film organic photovoltaic cells for solar energy conversion. Similarly, under the new 2004 Research Agreement between Global Photonic Energy Corporation (“GPEC”) and Princeton University, and by extension the subcontract between Princeton University and USC, no other commercial entity can fund Dr. Forrest’s or Dr. Thompson’s work in the area of organic photovoltaic cells for solar energy conversion.

It is agreed that an “organic photovoltaic cell for solar energy conversion,” also known as a photovoltaic (“PV”) device or solar cell, is a type of photosensitive optoelectronic device that is specifically used to generate electrical power. The attached definitions are to be used for further clarification of the differences between PV devices and other classes of photosensitive optoelectronic devices. As a general rule, a photovoltaic cell provides power to a circuit, device or equipment, but does not provide a signal or current to control detection circuitry. In contrasts, a photodetector or photoconductor provides a signal or current to control detection circuitry, or the output of information from the detection circuitry, or the output of information from the detection circuitry but does not provide power to the circuitry, device or equipment.

Based on the foregoing and in order to eliminate any confusion moving forward, it is agreed that all intellectual property developed following the date hereof based on work conducted by Dr. Forrest and/or Dr. Thompson or their research teams under the UDC 2002 Amended Research Agreement and/or the new GPEC 2004 Research Agreement will be exclusively licensed to UDC under the UDC License Agreement with Princeton University and USC, and/or through GPEC on fair and reasonable terms but at no added cost, in the area of thin film organic electronics for displays, lasers, lighting, organic tft’s, organic memories and other thin-film organic devices but not including thin film organic photovoltaic cells for solar energy conversion, as clarified in the attached definitions. Similarly, it is agreed that all intellectual property developed following the date hereof based on work conducted by Dr. Forrest and/or Dr. Thompson or their research teams under the new GPEC 2004 Research Agreement and/or the UDC 2002 Amended Research Agreement will be exclusively licensed to GPEC under the GPEC License Agreement with Princeton University and USC, and/or through UDC on fair and reasonable terms but at no added cost, in the area of organic photovoltaic cells for solar energy conversion, as clarified in the attached definitions. Consistent with the foregoing, Princeton University and/or USC shall inform both GPEC and UDC of their development under either or both research agreements of any intellectual property reasonably believed to have potential application in both areas.

375 Phillips Boulevard ● Ewing, NJ 08618 ● (609) 671-0980 ● Fax (609) 671-0995

CONFIDENTIAL

Mr. John F. Ritter

Princeton University

June 4, 2004

Page 2

We trust that Princeton University, Dr. Forrest and Dr. Thompson concur with the views of UDC and GPEC expressed in this letter. If so, please acknowledge as such by having this letter signed in the appropriate spaces provided below and delivering a signed copy of this letter to each of us.

Sincerely yours,		Sincerely yours,

/s/ Steven V. Abramson		/s/ Aaron L. Wadell
Steven V. Abramson		Aaron L. Wadell
President		President
Universal Display Corporation		Global Photonic Energy Corporation

Acknowledged and agreed to on behalf of The Trustees of Princeton University:

By:	/s/ John F. Ritter	Date: 6/7/04
Name:	John F. Ritter
Title:	Director, OTL

Read and Understood by:

/s/ Stephen R. Forrest		Date: 6/4/04
Dr. Stephen R. Forrest

/s/ Mark E. Thompson		Date: 6/14/04
Dr. Mark E. Thompson

375 Phillips Boulevard ● Ewing, NJ 08618 ● (609) 671-0980 ● Fax (609) 671-0995

CONFIDENTIAL

Definitions

[0001] Optoelectronic devices rely on the optical and electronic properties of materials to either produce or detect electromagnetic radiation electronically or to generate electricity from ambient electromagnetic radiation.

[0002] Photosensitive optoelectronic devices convert electromagnetic radiation into electricity. Solar cells, also called Photovoltaic (PV) devices, are a type of photosensitive optoelectronic device that is specifically used to generate electrical power. PV devices, which may generate electrical energy from light sources other than sunlight, can be used to drive power consuming loads to provide, for example, lighting, heating, or to power electronic circuitry or devices such as calculators, radios, computers or remote monitoring or communications equipment. These power generation applications also often involve the charging of batteries or other energy storage devices so that operation may continue when direct illumination from the sun or other light sources is not available, or to balance the power output of the PV device with a specific application’s requirements. As used herein the term “resistive load” refers to any power consuming or storing circuit, device, equipment or system.

[0003] Another type of photosensitive optoelectronic device is a photoconductor cell. In this function, signal detection circuitry monitors the resistance of the device to detect changes due to the absorption of light.

[0004] Another type of photosensitive optoelectronic device is a photodetector. In operation a photodetector is used in conjunction with a current detecting circuit which measures the current generated when the photodetector is exposed to electromagnetic radiation and may have an applied bias voltage. A detecting circuit as described herein is capable of providing a bias voltage to a photodetector and measuring the electronic response of the photodetctor to electromagnetic radiation.

[0005] These three classes of photosensitive optoelectronic devices may be characterized according to whether a rectifying junction as defined below is present and also according to whether the device is operated with an external applied voltage, also known as a bias or bias voltage. A photoconductor cell does not have a rectifying junction and is normally operated with a bias. A PV device has at least one rectifying junction and is operated with no bias. A photodetector has at least one rectifying junction and is usually but not always operated with a bias.

375 Phillips Boulevard ● Ewing, NJ 08618 ● (609) 671-0980 ● Fax (609) 671-0995

Exhibit 10.26

Office Lease Agreement

Perimeter Gateway IV

between

DTR10, L.L.C.,
an Arizona limited liability company

as “Landlord”

and

Universal Technology Systems Corp.,

a Florida corporation
as “Tenant”

BASIC LEASE INFORMATION

Effective Date:	For identification purposes only, the Effective Date of this Lease is November 15, 2013.

Landlord:	DTR10, LLC, an Arizona limited liability company

Tenant:	Universal Technology Systems Corp., a Florida corporation

Project:	That portion of Scottsdale Perimeter Center commonly known as Perimeter Gateway IV and depicted on Exhibit A-1 to this Lease

Building:	The building located at 17207 North Perimeter Drive, Scottsdale, Arizona and depicted on Exhibit A-1 to this Lease

Premises:	The 3,077 square feet of Rentable Area located at Suite 210 on the second floor of the Building and more specifically shown on Exhibit A-2 .

Rentable Area of Building:	Approximately 60,000 square feet of Rentable Area

Rentable Area of Premises	Approximately 3,077 square feet of Rentable Area. The Premises will have a load factor equal to 14.95%.

Annual Base Rent:	Months 1-12	$25.00 per square foot of Rentable Area
	Months 13-24	$25.75 per square foot of Rentable Area
	Months 25-36	$26.50 per square foot of Rentable Area
	Months 37-48	$27.25 per square foot of Rentable Area
	Months 49-60	$28.00 per square foot of Rentable Area

	The Annual Base Rent schedule set forth above does not include applicable rental tax, currently estimated at 2.15%. Within five (5) days of the Effective Date, Tenant shall pay, in advance, the Monthly Base Rent for the first month.

Term:	Base Term : From the Rent Commencement Date through and including sixty (60) months following the Rent Commencement Date plus the fractional calendar month, if any during which the Rent Commencement Date occurs.

	Renewal Term : One (1) five (5) year Renewal Option, upon expiration of the Base Term.

Scheduled Commencement Date:	The Effective Date of this Lease.

Expiration Date:	Sixty (60) months following the Rent Commencement Date, unless earlier terminated

Security Deposit:	$19,615.88

Proportionate Share:	Estimated Building Proportionate Share: 5.13% Estimated Project Proportionate Share: 5.13%

Expense Stop:	$9.50 per square foot of Rentable Area

Landlord’s Address	DTR10, L.L.C.
for Payment of Rent:	17207 North Perimeter Drive, Suite 200
	Scottsdale, Arizona 85255
	Attn: Accounting Department

Standard HVAC Hours:	Between 7:00 a.m. and 6:00 p.m., Monday through Friday; between 8:00 a.m. and 12:00 p.m. on Saturday, excluding legal holidays in the State of Arizona. HVAC usage outside of Standard HVAC Hours will be available at a cost of $7.00/hour for each zone.

Landlord’s Address	DTR10, L.L.C.
For Notices:	17207 North Perimeter Drive, Suite 200
	Scottsdale, Arizona 85255
	Attn: Gary S. Elbogen, Esq.
	Fax: (480) 585-7803

	With copy of any Default Notice to:

	Chester & Shein, P.C.
	8777 North Scottsdale Road, Suite 191
	Scottsdale, Arizona 85258
	Attn: David E. Shein, Esq.
	Fax: (480) 922-3969

Tenant’s Address
For Notices:

Universal Technology Systems Corp.

17207 North Perimeter Drive, Suite 210
Scottsdale, Arizona 85255
Attn.: Dean Ledger
Fax: (___ )___ -____

Property Manager:	Troon Management Company
	17207 North Perimeter Drive, Suite 200
	Scottsdale, Arizona 85255
	Attn: Property Manager
	Phone: (480) 563-5247
	Fax: (480) 585-7803

Business Day:

Each day which is not a Saturday, Sunday or legal holiday in the State of Arizona

The Basic Lease Information set forth above is an integrated component of the Lease. If there is any inconsistency or conflict between any Basic Lease Information and any term or provision of the Lease, the Lease will control.

LEASE EXHIBITS

Exhibit A-1:	Project Site Plan
Exhibit A-2:	Depiction of Premises Location
Exhibit B:	Rules and Regulations
Exhibit C:	Schedule of Landlord’s Property
Exhibit D:	Guaranty

iii

Office Lease Agreement

This Office Lease Agreement (“ Lease ”) is entered into and shall be effective as of November 15, 2013, (“ Effective Date ”), by and between: (i) DTR10, L.L.C., an Arizona limited liability company (“ Landlord ”);; and (ii) Universal Technology Systems Corp., a Florida corporation (“ Tenant ”). Landlord and Tenant (collectively, “ Parties ” and individually, a “ Party ”), agree as follows:

1. Premises .

(a) Lease. On the terms and subject to the conditions set forth in this Lease, Landlord hereby leases the Premises to Tenant, and Tenant hereby agrees to lease the Premises from Landlord.

(b) Project & Premises. The “ Project ” is the commercial office complex described in the Basic Lease Information and generally depicted on Exhibit A-1 to this Lease. The “ Premises ” are a portion of the two-story office building identified as the “ Building ” in the Basic Lease Information and generally depicted on Exhibit A-1 to this Lease. In addition to the Premises and as further set forth in this Lease, Tenant will also have certain rights and obligations relating to the Parking Facilities and the Common Areas (both as defined below). The location of the Premises within the Building is depicted on Exhibit A-2 to this Lease.

(c) Rentable Area. The Premises contains 3,077 square feet of rentable area (“ Rentable Area ”), based on a calculation generally in conformance with BOMA Standard Method for Measuring Rentable Area in Office Buildings, ANSI Z 65.1-2010.

(d) Common Areas. During the Term, Tenant and its agents, employees and invitees shall have the nonexclusive right with others designated by Landlord to use all of the common areas (“ Common Areas ”) situated on or within the Project. Common Areas include, but are not limited to, elevators, sidewalks, Parking Facilities, driveways, hallways, landscaped areas, stairways, public bathrooms, common entrances, lobby areas and other similar public areas and access ways which are not part of the Premises or leased to, or used exclusively by, a specific tenant within the Building or the Project.

(e) Project Operations. Landlord shall cause the Building and Common Areas to be maintained in compliance with all applicable laws, ordinances, regulations and restrictive covenants. The Common Areas of the Project and the exterior of the Building, including all related landscaping, shall be maintained and operated by Landlord in a manner consistent with Class A low-rise office buildings in Scottsdale, Arizona, free from any disruptive or annoying activities or events. Landlord represents and warrants to Tenant that as of the Commencement Date, the Building and the Premises will comply in all material respects with applicable laws, ordinances, rules, regulations and codes.

( f) Tenant’s Proportionate Share. Tenant’s proportionate share of those expenses that become payable to Landlord as Additional Rent under this Lease is the “ Proportionate Share ”. Tenant’s Proportionate Share of Operating Expenses (as defined below) and Taxes (as defined below) shall be a fraction, the numerator of which is the Rentable Area of the Premises, and the denominator of which is the rentable area of the Building. Tenant’s Proportionate Share shall be adjusted from time to time during the Term, upon written notice to Tenant, as additional rentable area is added to, or deleted from, the Project or the Building, as the case may be. The effective date of any adjustment shall be: (i) with respect to additional rentable area added to the Project or Building, as the case may be, the earlier of the date that (A) a Certificate of Occupancy is issued with respect to the additional rentable area, or (B) a tenant commences the payment of rent with respect to the additional rentable area; or (ii) with respect to rentable area deleted from the Project or Building, as the case may be, the effective date of the deletion.

2. Term & Possession .

(a) Base Term & Commencement Date. The initial term of this Lease (“ Base Term ”) shall commence on the Commencement Date and, unless sooner terminated, shall expire on the Expiration Date described in the Basic Lease Information (“ Expiration Date ”). The Commencement Date will occur on the Effective Date of this Lease (“ Commencement Date ”).

(b) Renewal Term. Provided that (i) this Lease is in full force and effect, (ii) Tenant is not in Default under this Lease; and (iii) Tenant is occupying the entire Premises and has not subleased any portion of the Premises to a sub-tenant, then Tenant shall have the option (“ Renewal Option ”), to extend the Term of the Lease (for all, but not less than all of the Premises) for one (1) additional five (5) year period (“ Renewal Term ”) by providing written notice to Landlord (“ Renewal Notice ”) no less than nine (9) months prior to the expiration of the Base Term. The Annual Base Rent payable during the Renewal Term will be at Landlord’s then current asking rates for similar space within the Project, but in any event not less than Tenant’s then-current Rent rate. As used in this Lease, the word “Term” shall refer to the Base Term or any Renewal Term, as applicable.

3. Rent .

(a) Annual Base Rent. The Annual Base Rent for the Base Term shall be the amounts set forth on Basic Lease Information. Annual Base Rent shall be paid by Tenant in monthly installments equal to one-twelfth (1/12) of the Annual Base Rent for the applicable period (“ Monthly Base Rent ”), commencing on the Commencement Date and continuing thereafter for the balance of the Term. Tenant shall pay each installment of Monthly Base Rent in advance, without notice, offset or demand, on or before the first calendar day of each and every calendar month to the party specified in the Basic Lease Information or to such other person or at such other address as Landlord may designate by written notice to Tenant from time to time. If the Commencement Date occurs on a date other than the first (1st) calendar day of a month, the first installment of Monthly Base Rent shall be prorated based upon a thirty (30)-day calendar month. Within five (5) days of the Effective Date, Tenant shall pay, in advance, the Monthly Base Rent for the first month.

(b) Additional Rent.

(i) Definitions .

(A) “ Operating Expenses ” means, subject to the limitations set forth below, all reasonable and necessary actual costs incurred by Landlord in managing, operating, maintaining and repairing the Building and all Common Areas as a Class A low-rise office complex with related facilities and amenities in Scottsdale, Arizona, including, without limitation, all costs, expenditures, fees and charges for:

(aa) operation, maintenance and repair of the Building and the Common Areas, including maintenance, repair and replacement of exterior light fixtures, common signage, glass and landscaping and maintenance and repair of the roof covering or membrane;

(bb) utilities and services (including telecommunications facilities and equipment, recycling programs to the extent they reduce Operating Expenses, and trash removal), and associated supplies and materials;

(cc) compensation (including employment taxes and fringe benefits) for persons who perform duties in connection with the operation, management, maintenance and repair, such compensation to be appropriately allocated for persons who also perform duties unrelated to the Building and Project;

(dd) accounting, legal, engineering and other professional services incurred solely in connection with the operation of the Building or all Common Areas and the calculation of Operating Expenses and Taxes;

(ee) property management fees equal to five percent (5%) of the gross rental revenue received by Landlord for the Building (whether denominated as rent, additional rent, Common Area operating costs, taxes or otherwise), exclusive of any revenues from the Parking Facilities;

(ff) all risk (including coverage for earthquake and flood if carried by Landlord), liability, rental income and other insurance relating to the Building or Common Areas maintained by Landlord or applicable owner’s association, and expenditures for deductible amounts paid thereunder;

(gg) non-capital expenses for construction licenses, permits and inspections;

(hh) complying with the requirements of any law, statute, ordinance or governmental rule or regulation (collectively, “ Laws ”), but only to the extent such Laws are enacted after the Commencement Date;

(ii) amortization of capital improvements required to comply with Laws enacted after the Commencement Date, or which reduce Operating Expenses or improve the utility, efficiency or capacity of any Building system, with interest on the unamortized balance at the rate paid by Landlord on funds borrowed to finance such capital improvements (or, if Landlord finances such improvements out of Landlord’s funds without borrowing, the rate that Landlord would have paid to borrow such funds, as determined in good faith by Landlord), over such useful life as is designated in manufacturer specifications or if none, as provided by generally accepted accounting principles;

(jj) contesting in good faith for the benefit of the Building or Project or the office tenants the validity or applicability of any Laws enacted after the Commencement Date that may negatively affect the Building or Project; and

(kk) any other actual cash cost, whether or not described in this Section 3(b)(i)(A), which, in accordance with generally accepted accounting principles, is a non-capitalized expense of managing, operating, maintaining and repairing the Building and all Common Areas and which is not otherwise excluded pursuant to this Lease.

(B) Operating Expenses shall not include any of the following:

(aa) except as provided by clause (ii) above, any capital expenditure and/or financing costs;

(bb) any costs of special services or benefits rendered to or for the benefit of fewer than all Building tenants;

(cc) any costs of services or other benefits which are not available to Tenant but which are available to any other tenant or tenants or occupant or occupants or other user or users of the Building or the Project;

(dd) any costs for which Landlord is reimbursed by any other tenants or occupants or users of any of the Project other than through Project tenants’ payment of their pro-rata shares of Operating Expenses;

(ee) any leasing commissions, attorneys’ fees or any other expenses (including without limitation advertising and other promotional expenses) incurred in connection with leasing or subleasing space in the Project or enforcing any such leases or subleases or buying, selling or financing the Project;

(ff) any fines, penalties or other costs incurred due to Landlord’s or any other occupant’s violation of any Law;

(gg) any payments in respect to overhead or profit to subsidiaries or affiliates of Landlord (other than the property management fees described in clause 3(b)(i)(A)(ee) above);

(hh) any costs of decorating, redecorating, cleaning or other services not provided on a regular basis to all tenants of the Building;

(ii) any costs relating to relocation of tenants within the Building or the Project;

(jj) any costs of correcting latent defects in the construction of the Building;

(kk) any costs of any repairs made by Landlord because of the total or partial destruction of the Building or the condemnation of a portion of the Building except to the extent of any costs incurred pursuant to deductibles permitted to be maintained under the insurance required by this Lease;

(ll) any increase in insurance premium to the extent such increase is caused or attributable to the use, occupancy or act of Landlord or any other Project tenants or occupants;

(mm) any costs of overtime or other expense in curing Landlord’s defaults or performing work expressly provided in this Lease to be borne at Landlord’s expense;

(nn) any costs incurred because Landlord or any other person or entity (except Tenant) violated the terms of any lease, sublease or other agreement;

(oo) any costs incurred to (i) rectify any failure of the Building to comply with the Americans With Disabilities Act (“ ADA ”) in effect on the Commencement Date; or (ii) test, survey, cleanup, contain, abate, remove or otherwise remedy hazardous wastes or materials from the Project (the foregoing does not limit Tenant’s obligations under Section 6, below);

(pp) any Taxes (provided, however, that Taxes are separately charged to Tenant as provided below); or

(qq) any costs for repair or maintenance of telecommunication facilities that are or may be leased or licensed to third party providers for income.

(C) “ Taxes ” means all real property taxes and general, special or district assessments or other governmental impositions, of whatever kind, nature or origin, imposed on or by reason of the ownership or use of the Building and all Common Areas; any state, county or municipal governmental property lease excise tax or the equivalent thereof; and the reasonable cost of contesting by appropriate proceedings the amount or validity of any Taxes described above but only to the extent those Taxes are reduced or avoided and (on a pro-rata basis) Tenant receives a reduction or refund of those Taxes contested and paid. “ Taxes ” shall exclude any of the foregoing items charged directly to, and paid by, other Project tenants, occupants and users (including Tenant), interest or penalties incurred by reason of late payment of taxes, franchise taxes or similar taxes on Landlord’s business, inheritance, gift, transfer, net income and profit taxes, capital levies, special assessments levied against property other than real estate.

(ii) Payment of Additional Rent.

(A) Tenant shall pay Landlord as additional rent (“ Additional Rent ”) for each calendar year, or portion of each calendar year: (i) Tenant’s applicable Proportionate Share of Operating Expenses and Taxes that relate to the Project, generally; plus (ii) Tenant’s applicable Proportionate Share of Operating Expenses and Taxes that relate exclusively to the Building, but only to the extent the total of items (i) and (ii) exceed the Expense Stop (as set forth in the Basic Lease Information).

(B) The Operating Expenses that vary based on occupancy (i.e. janitorial and utilities) payable by Tenant shall be subject to a 100% gross-up if actual occupancy of the Building falls below 100% during the Term.

(C) Commencing on the Commencement Date, and thereafter with respect to each full or partial calendar year during the Term, Tenant shall pay Landlord, together with each installment of the Monthly Base Rent, an amount equal to the estimated Additional Rent for the applicable period. On or prior to the Commencement Date, and within thirty (30) days prior to the commencement of each calendar year during the Term, Landlord shall provide Tenant with an estimate of the monthly Additional Rent for the applicable period which shall be utilized for the purpose of calculating Tenant’s Additional Rent payment obligations under this Lease. Within ninety (90) days following the end of each calendar year, Landlord shall provide Tenant with a written statement (“ Statement ”) of Landlord’s actual Operating Expenses and Taxes for the prior calendar year (or applicable portion thereof). If Landlord’s estimate of the Additional Rent of the applicable period was less than the actual Additional Rent as set forth in the Statement, Tenant shall, within fifteen (15) Business Days following receipt of the Statement, pay the difference to Landlord. If Landlord’s estimate of the Additional Rent for the applicable period was greater than the actual Additional Rent as set forth in the Statement, Tenant shall receive a credit equal to the difference which shall be applied against the next monthly installment of Rent. Each Statement shall be sufficient to enable Tenant to compare the Statement to the definitions of Operating Expenses and Taxes set forth in this Lease. Each Statement shall provide detail reasonably sufficient for Tenant to differentiate between Operating Expenses that are attributable to one hundred percent (100%) to the Premises and Operating Expenses that are subject to Tenant’s Proportionate Share. Tenant shall have the right to examine and copy at Landlord’s office during Landlord’s normal business hours after reasonable notice to Landlord any relevant back-up information or documentation: (i) requested in good faith by Tenant within forty five (45) days after receipt by Tenant of each Statement; and (ii) which is reasonably required to enable Tenant to understand each Statement. Absent fraud or manifest error by Landlord, each Statement will be final if Tenant does not object within sixty (60) days after receipt.

(D) All Operating Expenses, Taxes and Additional Rent shall be computed on an accrual basis, provided that no prepayment of any Operating Expense or Tax before its due date shall, regardless of date of payment, be included prior to its due date. Each Statement and all estimates of Operating Expenses and Taxes and reconciliation statements shall be prepared by Landlord according to generally accepted accounting principles, applied in a consistent manner.

(c) Payment of Rent. All amounts payable or reimbursable by Tenant under this Lease, including Annual Base Rent, Additional Rent, Parking Fees (as defined below) late charges and interest (collectively, “ Rent ”), shall constitute and be payable and recoverable as rent, in the manner provided in this Lease. All other sums payable to Landlord shall be payable, not more frequently than monthly, on the later of: (a) the due dates for such payments as set forth in this Lease; or (b) five (5) Business Days after Tenant’s receipt of Landlord’s statement therefor. All Rent shall, except as otherwise specifically provided in (or by way of recoupment of matured and liquidated obligations of Landlord under) this Lease, be paid without offset, recoupment or deduction in lawful money of the United States of America to Landlord at Landlord’s Address for Payment of Rent as set forth in the Basic Lease Information, or to such other person or at such other place as Landlord may from time to time designate. All other Rent items will be billed no more frequently than monthly, and will be included in one monthly statement.

(d) Rental Taxes. Tenant shall pay to Landlord with each installment of Monthly Base Rent, Operating Expenses, Parking Fees, Taxes, Additional Rent, or other Rent, the amount of any gross receipts, transaction privilege, sales or similar tax, exclusive of any state or federal franchise tax or personal or corporate income tax measured by the income of Landlord, payable by Landlord on account of this Lease or Tenant’s payment of such items to, or on behalf of, Landlord.

(e) Late Charge & Interest. If any payment of Rent is not received by Landlord within five (5) Business Days after its due date, Tenant shall pay to Landlord as a late charge (“ Late Charge ”) a sum equal to five percent (5%) of the late payment. A late charge shall not be imposed more than once on any particular installment not paid when due, but imposition of a late charge on any payment not made when due does not eliminate late charges imposed on other payments not made when due or preclude imposition of a late charge on any other payments not made when due. To the extent the payment of any sums by either Landlord or Tenant under this Lease require or permit the imposition of interest, the interest rate charged (“ Interest Rate ”) shall be eighteen percent (18%) per annum.

4. Security Deposit . Concurrently with the execution of this Lease, Tenant shall deposit with Landlord a sum equal to $19,615.88 as a deposit (“ Security Deposit ”) for Tenant’s full and faithful performance of all the terms and conditions required under this Lease. Provided Tenant has not been in default during the Term and is not then in default under this Lease pursuant to a notice of default previously given by Landlord to Tenant (subject to any applicable cure period), Landlord shall apply the Security Deposit against the thirteenth (13 ^th ) and fourteenth (14 ^th ) Monthly Base Rent payments owed by Tenant (and the Security Deposit shall be deemed to be accordingly reduced), and tenant shall not be required to pay the thirteenth (13 ^th ) and fourteenth (14 ^th ) Monthly Base Rent payments to the extent the Security Deposit held by Landlord is sufficient to satisfy the thirteenth (13 ^th ) and fourteenth (14 ^th ) Monthly Base Rent payments. At the Expiration Date, Landlord will return to Tenant any remaining portions of the Security Deposit, without interest, provided that if Tenant fails to pay any amounts due Landlord or perform any covenants when due after any applicable notice and cure periods during the Term, Landlord may apply any portions of the Security Deposit toward curing such default, and Tenant shall replenish the Security Deposit immediately upon invoice by Landlord. Tenant will not be entitled to any interest or other yield upon the Security Deposit at any time, and Landlord is free to commingle, invest or otherwise use said Deposit, subject to Landlord’s obligation to return the Security Deposit.

5. Tenant Improvements & Alterations .

(a) Tenant Improvements. On the Commencement Date, Landlord shall, at its own cost, deliver possession of the Premises to Tenant “AS-IS” and “WHERE IS” in its current condition. Landlord, at its cost, agrees to make certain limited improvements (collectively, the “ Tenant Improvements ”) to the Premises subsequent to delivering possession of the Premises to Tenant, all subject to the terms and conditions in this Section 5. The Tenant Improvements shall be limited to and consist only of the following:

(i) Landlord shall re-paint the interior walls of the Premises with standard commercial grade paint consistent with the existing paint quality and color scheme in the Premises, all as reasonably approved by Landlord; provided, however, Landlord may utilize any method or process as it deems appropriate in connection with the Tenant Improvements (if any) to any DIRTT Systems Furniture walls; and

(ii) Landlord shall install new floor carpet with commercial grade carpet consistent with the existing carpet quality and color scheme in the Premises, all as reasonably approved by Landlord and Tenant.

Landlord shall commence the Tenant Improvements at such time as it elects in its sole and absolute discretion; provided, however, that Landlord anticipates the Tenant Improvements will be commenced on or about December 16, 2013, subject to availability of materials and labor. Landlord shall provide Tenant with reasonable notice prior to commencing the Tenant Improvements. Tenant agrees that upon substantial completion of the Tenant Improvements, Tenant will accept the Premises “AS IS” and “WHERE IS”, in its then-existing condition.

(b) Cooperation. Landlord shall, at its cost, move Tenant’s furniture located in the Premises to complete the Tenant Improvements; provided, however: (i) Tenant shall not move any furniture into the Premises (other than furniture without which Tenant is unable to operate its business) prior to completion of the Tenant Improvements; (ii) Landlord shall not be required to move any of Tenant’s equipment, delicate property or data equipment, all as reasonably determined by Landlord; (iii) Landlord shall not be required to complete the Tenant Improvements to the extent Tenant fails to comply with the requirements of this Paragraph 5(b); and (iv) Tenant shall indemnify Landlord, its employees, agents and contractors against all costs, expenses, liabilities, losses, damages, injunctions, suits, fines, penalties, claims, and demands, including reasonable attorneys’ fees, in connection with the Tenant Improvements. Once commenced, Landlord shall promptly complete the Tenant Improvements and use commercially reasonable efforts to minimize interruption to Tenant’s business; provided however, Tenant expressly acknowledges the Tenant Improvements will cause periodic and temporary interruptions and closures to Tenant’s business. Tenant agrees to cooperate with Landlord and implement any required closures at Landlord’s direction. Tenant shall not be entitled to any compensation or abatement or reduction of Rent for any expense, inconvenience, interference or closure of Tenant’s business or damage to Tenant’s property associated directly or indirectly with the Tenant Improvements, and Tenant hereby waives and releases any such claims against Landlord, its agents, employees and contractors. The provisions of this Section 5 shall survive the expiration of the Term or earlier termination of this Lease.

(c) Tenant Alterations. Tenant shall not make any alterations, improvements or similar structural or non-structural changes to the Premises (“ Alterations ”), without Landlord’s prior consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that Tenant shall not be required to obtain Landlord’s prior consent for interior nonstructural changes with a total project cost under $10,000.00. Notwithstanding anything to the contrary in this Lease, Tenant shall not paint, puncture or hang any material on any portions of the DIRTT Systems Furniture Walls within the Premises, without Landlord’s consent and coordination. Any Alterations shall be completed by Tenant at Tenant’s sole cost and expense: (i) with due diligence, in a good and workmanlike manner, using good materials; (ii) in compliance with plans and specifications approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed; (iii) in compliance with any construction rules and regulations which have then been promulgated uniformly and in good faith and communicated by Landlord to Tenant; (iv) in accordance with all applicable Laws (including all work, whether structural or nonstructural, inside or outside the Premises, required to comply fully with all applicable Laws and necessitated by Tenant’s work); and (v) subject to the conditions set forth in the following sentence which Landlord may in Landlord’s good faith discretion impose at the time of giving the consent. The conditions permissibly imposed by Landlord shall be limited to requirements for Tenant to: (i) provide payment or performance bonds or additional insurance (from Tenant or Tenant’s contractors or design professionals, if the cost of work undertaken as a single project exceeds $50,000.00 and if Landlord would require such bonds or insurance if the contractors or professionals were retained by Landlord); (ii) use contractors or subcontractors approved by Landlord, which approval shall not be unreasonably withheld or delayed (or withheld without a written explanation of the reason therefor) or delayed; and (iii) remove all or part of the Alterations (except Tenant Improvements or Alterations paid for in whole or in part by Landlord) within thirty (30) days after expiration or termination of the Term, as designated by Landlord at least ninety (90) days prior thereto, or such Alterations will then become the property of Landlord. If any work outside the Premises, or any work on or adjustment to any of the Building systems, is required in connection with or as a result of Tenant’s Alterations, such work shall be performed at Tenant’s expense by contractors designated by Tenant but approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed. Landlord’s right to review and approve (or withhold approval of) Tenant’s plans, drawings, specifications, contractors and other aspects of construction work for any Alterations proposed by Tenant is intended solely to protect Landlord, the Project and Landlord’s interests in the Project, and Landlord shall not withhold, condition or delay any such approval or any consent for any other reason. No approval or consent by Landlord shall be deemed or construed to be a representation or warranty by Landlord as to the adequacy, sufficiency, fitness or suitability thereof or compliance thereof with applicable Laws or other requirements. In addition to any Alteration paid for in whole or in part by Landlord, and subject to the following sentence, all Alterations which would be fixtures under Arizona law if Tenant owned fee title to the Project shall upon installation become part of the Building and be the property of Landlord. Tenant may from time to time replace any Alterations upon satisfaction of all applicable requirements of this Section 5, provided that if any Alterations so replaced are the property of Landlord the replacement Alterations shall also be the property of Landlord.

6. Use of Premises .

(a) Tenant shall use and occupy the Premises for general office purposes related to the design and patent of intellectual property for solar and light technologies (including related activities such as file storage) and for no other purpose without Landlord’s prior consent. Tenant, at its expense, shall comply with the laws, rules and regulations of any federal, state or municipal authority, or the Arizona Fire Underwriters Rating Bureau, or with any notice from any public officer pursuant to law, or with any notice from any insurance company pertaining to Tenant’s occupancy or use of the Premises. Tenant shall immediately discontinue any use of the Premises which is declared by any governmental authority having jurisdiction to be in violation of law or the certificate of occupancy for the Building or the Premises. Tenant will not use or permit the Premises to be used for any purposes that interfere with the use and enjoyment of the Building by Landlord or the other tenants, or which, in Landlord’s reasonable discretion, impair the reputation of the Building.

(b) Tenant shall not do, or permit anything to be done in the Premises, or bring or keep anything therein, which will in any way increase the rate of fire insurance on the Building, or violate, invalidate or conflict with fire insurance policies on the Building, fixtures or on property kept therein; provided, however, that Tenant’s normal conduct of its business shall not violate this paragraph.

(c) Tenant and Tenant’s employees and agents shall not handle, use, manufacture, store, release or dispose of any oil, petroleum or chemical liquids or solids, liquid or gaseous products or any hazardous waste or hazardous substance (collectively, “ Hazardous Materials ”), as those terms are used in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, or in any other federal, state or local law governing hazardous substances (collectively, “ Act ”), as such laws may be amended from time to time at, upon, under or within the Premises or the Building or the land on which it is built, or into the plumbing or sewer or water system servicing the Premises or the Building, nor shall Tenant, its employees or agents cause or permit the discharge, spillage, uncontrolled loss, seepage or filtration of any Hazardous Materials at, upon, under or within the Premises or the Building or the land or into the plumbing or sewer or water system servicing the same. Tenant shall comply in all respects with the requirements of the Act and related regulations, and shall notify Landlord immediately if Tenant discovers any Hazardous Materials at, upon, under or within the Premises or the Building or the land. Notwithstanding the foregoing, normal quantities and use of those Hazardous Materials customarily used in the conduct of general office activities, such as copier fluids and cleaning supplies, may be used and stored at the Premises without Landlord’s prior consent.

(d) Tenant shall indemnify Landlord against all costs, expenses, liabilities, losses, damages, injunctions, suits, fines, penalties, claims, and demands, including reasonable attorneys’ fees, arising out of any violation of or default in the covenants of this Section 6. The provisions of this Section 6 shall survive the expiration of the Term.

7. Rules & Regulations . Tenant shall at all times comply with: (i) the rules and regulations attached to this Lease as Exhibit B to the extent those rules and regulations are not in conflict with any term or provision of this Lease; and (ii) any reasonable rules and regulations adopted by Landlord for all tenants of the Building after the Effective Date, but only to the extent such rules and regulations are reasonably designed for the safety, care, order or cleanliness of the Common Areas, do not unreasonably and materially interfere with Tenant’s conduct of its business or Tenant’s use and enjoyment of the Premises, the Parking Facilities and the Common Areas, and do not require the payment of additional money by Tenant (collectively, “ Rules and Regulations ”). Landlord shall not be responsible to Tenant or to any other person for any violation of, or failure to observe, the Rules and Regulations by any other tenant or other person (except Landlord), provided that notwithstanding any provision of the Rules and Regulations to the contrary, Landlord shall not unreasonably or selectively enforce the Rules and Regulations against Tenant.

8. Subletting & Assignment .

(a) Consent. Tenant will not transfer or assign this Lease, or sublet the Premises or any part thereof or transfer possession or occupancy of the Premises to any person, firm or corporation other than a Tenant Affiliate (as defined below) without the prior written consent of Landlord which shall be in Landlord’s sole and absolute discretion (collectively, “ Permitted Transfer ”). Tenant may transfer or assign this Lease, or sublet the Premises or any part thereof or transfer possession or occupancy of the Premises to a Tenant Affiliate without the consent of Landlord if (and only if) the credit of Tenant’s Affiliate is comparable to Tenant’s credit, the intended use of the Premises will not materially change, and Tenant provides Landlord at least fifteen (15) days prior written notice. A sale, transfer, assignment or other conveyance of more than a fifty-one percent (51%) interest in the partnership interest(s) of Tenant in a single or series of related transactions to a party other than a Tenant Affiliate shall be an assignment for purposes of this Section 8. The term, “ Tenant Affiliate ” shall mean any entity controlling, controlled by or under common control with Tenant or a successor to Tenant by reason of merger, consolidation or other form of reorganization, conversion to a different form of entity or acquisition of substantially all of the assets of Tenant as a going concern.

(b) Tenant Liability. Unless expressly released by Landlord, if there is any assignment or Permitted Transfer of this Lease or subletting of the Premises, Tenant shall remain liable to Landlord for payment of the Rent and any other amounts due to Landlord under this Lease and all other covenants and conditions of Tenant contained in this Lease.

(c) Sale of Premises or Assignment by Landlord. The term “Landlord” as used in this Lease shall mean the owner of the Project at the time in question. If there is a transfer (whether voluntary or involuntary) by such owner of its interest in the Project, such owner shall thereupon be released and discharged from all covenants and obligations of the Lease thereafter accruing (but not from liability for any uncured Default existing on the date of transfer) if: (i) the new owner expressly agrees in writing to assume all of Landlord’s obligations under this Lease; and (ii) any Tenant funds that Landlord is holding are delivered to the new owner.

9. Services & Utilities .

(a) Building Standard Services & Utilities. Landlord shall, at Landlord’s expense but as a component of the Operating Expenses, furnish to the Premises: (i) reasonable amounts of heat, ventilation and air-conditioning to maintain temperatures for comfortable use and occupancy of the Premises during all Standard HVAC Hours specified in the Basic Lease Information (“ Standard HVAC Hours ”); (ii) electricity at all times that provides electric current in reasonable amounts for all normal office and administrative purposes; (iii) janitorial and trash removal services each Sunday through Thursday (except public holidays) after 6:30 p.m.; (iv) automatic passenger elevator service at all times on a non-exclusive basis through the elevator located in the Building’s lobby; (v) hot and cold running water at all times sufficient for drinking, lavatory, toilet and ordinary cleaning purposes to be drawn from approved fixtures in the Premises; (vi) building standard fluorescent lamp, lighting tube, bulb and lamp ballast replacement or their reasonable equivalent as determined by Landlord; (vii) perimeter window washing, inside (once each year) and out (at least twice each year); (viii) extermination and pest control when and as reasonably required; (ix) maintenance of all Common Areas, including cleaning, HVAC, illumination, signage, lawn care and landscaping maintenance; (x) Common Area toilet room supplies; (xi) maintenance, lighting, cleaning and striping of the Parking Facilities; and (xii) fiber and copper phone wire (via Century Link, or its reasonable equivalent). All services described in the preceding sentence shall be at least consistent with those customarily furnished in Class A low-rise office buildings in Scottsdale, Arizona. Any additional utilities or services that Landlord may agree to provide (including lamp or tube replacement for other than building standard lighting fixtures) shall be at Tenant’s sole expense.

(b) Additional Services. Landlord shall furnish HVAC services at times other than Standard HVAC Hours, which Tenant may obtain by operating thermostats or other controls for distinct zones in the Premises. Tenant will be charged for after-hours HVAC use, in addition to all other amounts due under this Lease, and shall pay Landlord for after-hours HVAC services on an hourly basis at the rate of $7.00 per hour, per zone, which Landlord, in its sole discretion, may increase by three percent (3%) annually during the Term.

(c) Interruption of Service. Landlord shall not be liable to Tenant for any interruption or failure in the supply of any utilities (including, without limitation, cable, phone and /or fiber) to the Premises. Landlord reserves the right to interrupt service of the heat, plumbing, air conditioning, cooling, electric, and sewer and water systems, when reasonably necessary, by reason of accident, or of repairs, alterations or improvements which in the good faith judgment of Landlord are desirable or necessary to be made, until such repairs, alterations or improvements shall have been completed; and Landlord shall have no responsibility or liability for failure to supply heat, plumbing, air conditioning, cooling, electric, and sewer and water service, or other service or act for the benefit of Tenant, when prevented from so doing by Force Majeure or by orders or regulations of any federal, state, county, or municipal authority (Landlord and Tenant shall each adhere to and abide by such orders and regulations without any reduction in rent or in any of Tenant’s other obligations hereunder), and Tenant agrees that Tenant shall have no claim for damages nor shall there be any abatement of Annual Base Rent if any of said systems or service shall be discontinued or shall fail to function for any reason other than Landlord’s negligence or failure to perform its obligations under this Lease. Landlord shall use commercially reasonable efforts to minimize interference with Tenant’s business.

(d) Excessive Electrical & Water Usage. Tenant will not install or operate in the Premises any heavy duty electrical or plumbing equipment or machinery, without obtaining the prior written consent of Landlord which consent may be withheld in Landlord in its sole discretion. If, in Landlord’s reasonable discretion and due to Tenant’s use of any heavy duty electrical or plumbing equipment or machinery, Tenant consumes any utilities or services in excess of the normal consumption for general office use (excepting those customary office uses that are typical for tenants in similarly situated office buildings) Tenant agrees to pay Landlord for the cost of such excess consumption of utilities or services upon receipt of a statement of such costs from Landlord at the same time as payment of the Rent.

10. Maintenance & Repairs .

(a) Landlord shall maintain or cause to be maintained in reasonably good order, condition and repair, all structural portions of the roof, foundations, floors, and exterior walls of the Building, any demising walls in the Building constructed by Landlord, all Building systems and all public and Common Areas of the Project (including, without limitation, the Parking Facilities, elevators and Common Area restrooms, building standard electrical, lighting, mechanical, plumbing, heating, air conditioning systems, building standard fluorescent light bulbs and ballasts) in a manner comparable with other Class A low-rise office buildings in Scottsdale, Arizona; provided, however, that Tenant shall pay the cost of repairs for any physical damage to the Project or the Premises occasioned by the misuse or primary negligence of Tenant or Tenant’s employees, agents or invitees, to the extent (if any) not covered by Landlord’s property insurance or the insurance Landlord is required to carry pursuant to this Lease. Tenant shall promptly report in writing to Landlord any defective condition actually known to Tenant which Landlord is required to repair. All repairs, replacements and maintenance required of Landlord shall be made: (i) within a reasonable time (depending on the nature of the repair, replacement or maintenance required) after receiving notice from Tenant or having actual knowledge, without duty of inquiry, of the need for such repair, replacement or maintenance; and (ii) in a manner that does not unreasonably interfere with Tenant’s ability to conduct Tenant’s business in the Premises. To any extent that Tenant’s ability to use and enjoy the Premises is impaired by Landlord’s breach of the preceding sentence, Tenant shall receive a proportionate abatement of Rent for the period of such impairment.

(b) Tenant will keep the Premises and the fixtures and equipment therein in reasonably good order and condition, normal wear and tear excepted. During the Term, and subject to Landlord’s cleaning, repair and maintenance obligations, Tenant at Tenant’s expense, but under the good faith direction of Landlord, shall repair and maintain the interior of the Premises, including the interior walls, floor coverings, ceiling (ceiling tiles and grid), interior Tenant Improvements and any appliances (as approved by Landlord) in the Premises, and keep the Premises in a clean, safe and orderly condition.

(c) Subject to the requirements of this Lease, Landlord reserves the right at any time and from time to time, without the same constituting an actual or constructive eviction and without incurring any liability to Tenant or otherwise affecting Tenant’s obligations under this Lease, to make changes, alterations, additions, deletions, improvements, repairs, relocations or replacements in or to the Building and the fixtures and equipment thereof, as well as in or to the street entrances, halls, passages, stairways and other Common Areas, and to change the name by which the Building is commonly known and/or the Building’s address. Landlord reserves the right from time to time to install, use, maintain, repair and replace Building signage, pipes, ducts, conduits, wires and appurtenant meters and equipment for service to other parts of the Building, including other spaces for occupancy by other tenants, above the ceiling surfaces, below the floor surfaces, within the walls and in the central core areas, and to relocate any Building signage, pipes, ducts, conduits, wires and appurtenant meters and equipment included in the Premises which are located in the Premises or located elsewhere outside the Premises. Nothing contained in this paragraph shall be deemed to relieve Tenant of any duty, obligation or liability with respect to making any repair, replacement or improvement or complying with any law, order or requirement of any government or other authority and nothing contained herein shall be deemed or construed to impose upon Landlord any obligation, responsibility or liability whatsoever, for the care, supervision or repair of the Building, or any part thereof, other than as expressly provided in this Lease.

(d) Except as otherwise expressly provided in this Lease, any and all injury, breakage or damage of any type whatsoever to the Premises or to other portions of the Building, arising from any act or omission of Tenant or its agents, employees, licensees, invitees or contractors, shall be repaired by Landlord at the sole expense of Tenant (net of insurance proceeds received by Landlord). Tenant shall reimburse Landlord for the costs of such repairs within five (5) Business Days of receipt of written notice from Landlord of such costs. This provision shall be construed as an additional remedy granted to Landlord and not in limitation of any other rights and remedies which Landlord may have.

11. Signs & Advertisements .

(a) Landlord agrees to display, at Tenant’s sole cost and expense, Tenant’s name on the Building directory or directories in the size and style or lettering typically used by Landlord for tenants leasing space of similar sizes to the Premises. The number of individual names listed on the Building directory or directories shall be subject to such limitation as shall be established from time to time by Landlord. Landlord further agrees to provide Tenant, at Tenant’s sole cost and expense, suite entry signage at the entrance to the Premises in Building standard color, size and style of lettering.

(b) No sign, advertisement or notice shall be inscribed, painted, affixed or displayed on any part of the outside or the inside of the Building, or inside of the Premises where it may be visible from outside or from the public areas of the Building, except with Landlord’s prior written consent and then only in such location, number, size, color and style (i.e., Building standard lettering) as is authorized by Landlord. If any such sign, advertisement or notice is exhibited without first obtaining Landlord’s written consent, Landlord shall have the right to remove same, and Tenant shall be liable for any and all expenses incurred by Landlord in connection with said removal. Tenant shall be permitted interior adhesive based building signage above Tenant’s entry door at Tenants sole cost and expense. The size, design, and all other specifications of the Tenants interior adhesive based building signage shall be consistent with Landlord’s standard guidelines, subject to the reasonable approval of the Landlord, which approval shall not be unreasonable withheld. Tenant acknowledges and agrees that it shall not be permitted to place a sign on the exterior of the Building.

(c) Landlord shall have the right to prohibit any published advertisement of Tenant which in Landlord’s good faith opinion tends to impair the image or reputation of the Building or its desirability as a Class A office building. Upon written notice from Landlord, Tenant shall immediately refrain from and discontinue any such advertisement.

12. Excessive Floor Load . Landlord shall have the right to prescribe the weight and method of installation and position of safes, filing facilities or other heavy fixtures or equipment. Tenant will not, without Landlord’s prior written approval, install in the Premises any fixtures, equipment or machinery that will place a load upon the floor exceeding the designed floor load capacity. Tenant shall be liable for all damage (other than normal and reasonable wear and tear) done to the Building by installing or removing a safe or any other article of Tenant’s office equipment, or due to its being in the Premises.

13. Moving and Deliveries . Except upon initial move-in and move-out, no freight, furniture or other bulky matter of any description shall be received into the Building or carried in the elevators, except through Tenant’s freight delivery facility and in coordination with Landlord’s property manager. Tenant shall promptly remove from the public areas within or adjacent to the Building any of Tenant’s property delivered or deposited there, and shall be responsible for any damage to the Building or the Premises caused by its moving and deliveries.

14. Parking Facilities .

(a) Landlord will at all times during the Term maintain parking for Tenant based on a total parking ratio of 4.0 parking spaces/1,000 square feet of Rentable Area (“ Maximum Parking Ratio ”) for Tenant’s use, which, based on the Premises consisting of 3,077 square feet of Rentable Area, shall be administered and paid for as follows:

(i) Covered Parking. Landlord will maintain (A) three (3) covered reserved parking spaces located directly beneath the Building (“ Covered Reserved Parking Spaces ”) for Tenant’s exclusive use, and (B) three (3) covered unreserved parking spaces located directly beneath the Building (“ Covered Unreserved Parking Spaces ”) for Tenant’s non-exclusive use. Commencing on the Commencement Date, and continuing until the Expiration Date or earlier termination of this Lease, Tenant shall pay Landlord a monthly fee (“ Parking Fee ”) at the rate of $65.00 per space per month for each Covered Reserved Parking Spaces and $55.00 per space per month for each Covered Unreserved Parking Spaces. All Parking Fees shall be payable, in advance and without demand, together (if applicable) with each installment of Monthly Base Rent.

(ii) Uncovered Parking. Landlord will maintain, on a non-exclusive basis, six (6) uncovered, unreserved parking spaces located on the Building’s surface parking lot (“ General Parking Spaces ”); for Tenant’s nonexclusive use at no additional charge to Tenant.

(b) General. The Covered Reserved Parking Spaces, Covered Unreserved Parking Spaces and General Parking Spaces shall be referred to collectively in this Lease as the “ Parking Facilities .” Tenant shall not use any Parking Facilities or other parking or storage areas in the Project for the overnight storage of vehicles. It is understood and agreed that Landlord assumes no responsibility, and shall not be held liable, for any damage or loss to any automobiles parked in the Parking Facilities or to any personal property located therein, or for any injury sustained by any person in or about the Parking Facilities.

15. Access .

(a) Access to Building & Common Areas. Tenant shall have access to the Building and the Common Areas twenty-four (24) hours per day, seven (7) days per week, by means of a key or an electronic security system. Tenant shall, upon termination of the Lease, return to Landlord all keys to the Building. Landlord reserves the right to require a refundable deposit on Building keys and security access cards, which deposit shall be returned to Tenant at the time such keys and cards are returned to Landlord. Additional keys or security access cards required by Tenant for any reason will be provided upon Tenant’s payment of a fee as reasonably determined by Landlord. If Tenant installs separate or replacement locks or access devises on or within the Premises, Tenant shall promptly provide Landlord with all necessary keys, access cards and access codes in order to insure that Landlord has and maintains access to the Premises as otherwise provided in this Lease.

(b) Landlord’s Access to Premises. Landlord, its agents, employees and contractors shall have the right to enter the Premises at all reasonable times, including emergencies determined by Landlord, (a) to make inspections or to make repairs to the Premises or other premises as Landlord may deem necessary; (b) to perform nightly cleaning of the Premises; (c) to exhibit the Premises to prospective tenants during the last six (6) months of the Term; and (d) for any purpose whatsoever relating to the safety, protection or preservation of the Building. Landlord shall use reasonable efforts to minimize interference to Tenant’s business when making repairs or otherwise accessing the Premises pursuant to the terms of this Lease, but Landlord shall not be required to perform the repairs at any time other than during normal working hours.

(c) Restricted Access. No additional locks, other devices or systems, including without limitation alarm systems, which would restrict access to the Premises shall be placed upon any doors without the prior written consent of Landlord. Landlord reserves the right to require a refundable deposit on Building keys and security access cards, which deposit shall be returned to Tenant at the time such keys and cards are returned to Landlord. Additional keys or security access cards required by Tenant for any reason will be provided upon Tenant’s payment of a fee as reasonably determined by Landlord. Tenant will keep such system in good operating condition and repair, the cost of which will be Tenant’s sole responsibility. Unless access to the Premises is provided during the hours when cleaning service is normally rendered, Landlord shall not be responsible for providing such service to the Premises or to those portions thereof which are inaccessible. Such inability by Landlord to provide cleaning service to inaccessible areas shall not entitle Tenant to any adjustment in Rent.

16. Liability .

(a) Tenant Personal Property. All personal property of Tenant (including but not limited to furniture, equipment, trade fixtures and merchandise) located in the Premises or in the Building shall be at the sole risk of Tenant. Landlord, its agents and employees shall not be liable for any damage thereto, unless such damage is directly attributable to the negligent or willful acts of Landlord, its agents or employees. Landlord, its agents and employees shall not be liable for any accident or damage to property of Tenant resulting from the use or operation of elevators or of the heating, cooling, electrical or plumbing apparatus, unless caused by and due to the negligent or willful acts of Landlord, its agents or employees. Tenant hereby expressly releases Landlord, its agents and employees from any liability incurred or claimed by reason of damage to Tenant’s property except for damage caused by the negligent or willful misconduct of Landlord, its agents or employees. Landlord, its agents and employees shall not be liable in damages, nor shall this Lease be affected, for conditions arising or resulting, and which affect the Building, due to construction on contiguous premises.

(b) Criminal Acts of Third Parties. Landlord, its agents and employees shall not be liable in any manner to Tenant, its agents, employees, licensees or invitees for any injury or damage to Tenant, Tenant’s agents, employees, licensees or invitees or their property caused by the criminal or intentional misconduct of third parties unless such injury or damage is the proximate result of Landlord’s breach of any term or provision of this Lease.

(c) Tenant Indemnity. Subject to the terms and conditions otherwise set forth in this Lease, Tenant shall indemnify Landlord, Landlord’s property manager, and their respective owners, members, employees and agents, and save them harmless from and against any and all claims, actions, damages, liabilities and expense in connection with loss of life, personal injury and/or damage to property arising from or out of any occurrence in, upon or at the Premises and/or the Common Areas, or the occupancy or use by Tenant of the Premises and/or the Common Areas or any part thereof, or occasioned wholly or in part by any act or omission of Tenant, its agents, employees, contractors, invitees or licensees. If Landlord, the property manager, or their respective agents or employees shall, without fault on its or their part, be made a party to any litigation commenced by or against Tenant, then Tenant shall protect and hold the same harmless and shall pay all costs, expenses and reasonable attorneys’ fees incurred or paid in connection with such litigation.

(d) Landlord Indemnity. Subject to the terms and conditions otherwise set forth in this Lease, Landlord shall indemnify Tenant, and Tenant’s respective shareholders, officers, directors, employees and agents and save them harmless from and against any and all claims, actions, damages, liabilities and expenses in connection with loss of life, personal injury and/or damage to property arising from or out of the occurrence in, upon or at the Premises and/or the Common Areas, or the occupancy or use by Landlord of the Premises and/or the Common Areas or any part thereof, or occasioned wholly or in part by any act or omission of Landlord, its agents, employees, contractors, invitees or licensees. If Tenant or its respective agents or employees shall, without fault on its or their part, be made a party to any litigation commenced by or against Landlord, then Landlord shall protect and hold the same harmless and shall pay all costs, expenses and reasonable attorneys’ fees incurred or paid in connection with such litigation.

17. Insurance .

(a) Liability Insurance. Each Party shall maintain in full force throughout the Term commercial general liability insurance providing coverage on an occurrence form basis with limits of not less than Two Million Dollars ($2,000,000.00) each occurrence for bodily injury and property damage combined and Two Million Dollars ($2,000,000.00) annual general aggregate coverage,. Each Party’s liability insurance policy or policies shall: (i) include premises liability broad form property damage coverage and personal injury coverage; (ii) provide that the insurance company has the duty to defend all insureds under the policy; (iii) provide that defense costs are paid in addition to and do not deplete any of the policy limits; (iv) cover liabilities arising out of or incurred in connection with the Premises or the Project, as applicable; and (v) extend coverage to cover liability for the actions of each Party’s employees, agents and invitees. Each policy of liability insurance required by this Section 17 shall: (i) contain a cross liability endorsement or separation of insureds clause; (ii) provide that any waiver of subrogation rights or release prior to a loss does not void coverage; (iii) provide that it is primary to and not contributing with, any policy of insurance carried by the other Party covering the same loss; (iv) provide that any failure to comply with the reporting provisions shall not affect coverage provided to the other Party; and (v) name the non-procuring Party, and the Property Manager identified in the Basic Lease Information (“ Property Manager ”), and such other parties in interest as the non-procuring Party may from time to time reasonably designate to the procuring Party in writing, as additional insureds. Such additional insureds shall be provided at least the same extent of coverage as is provided to the procuring Party under such policies.

(b) Property Insurance. Each Party shall at all times maintain in effect with respect to its personal property at the Project (including, with respect to Tenant, any Alterations and trade fixtures owned by Tenant), commercial property insurance providing coverage, on an “all risk” or “special form” basis, in an amount equal to at least 100% of the full replacement cost of the covered property. Either Party may carry such insurance under a blanket policy, provided that such policy provides coverage equivalent to a separate policy. During the Term, the proceeds from any such policies of insurance relating to losses incurred with respect to the Project shall be used for the repair or replacement of the property so insured. In each case, the non-procuring Party shall be provided coverage under such insurance to the extent of its insurable interest (if any) and, if requested by the non-procuring Party, both Landlord and Tenant shall sign all documents reasonably necessary or proper in connection with the settlement of any claim or loss under such insurance. Landlord will have no obligation to carry insurance on any Alterations or on Tenant’s trade fixtures or personal property, and Tenant will have no obligation to carry insurance on any of Landlord’s personal property.

(c) Building Insurance. Landlord shall maintain in effect insurance on the Building and Parking Facilities and Tenant Improvements with responsible insurers, on an “all risk” or “special form” basis, insuring the Building and Parking Facilities and Tenant Improvements in the amount of the full replacement cost thereof, excluding land. The insurance shall include an extended coverage endorsement of the kind required by an institutional lender to repair and restore the Building (including the Tenant Improvements) and the Parking Facilities. Landlord may, but shall not be obligated to, carry insurance against additional perils and/or in greater amounts. Landlord’s liability coverage on the Common Areas will insure Tenant against liability for the acts or omissions of Landlord and its employees, agents and representatives.

(d) Requirements For All Policies. Each policy of insurance required under this Section 17 shall: (i) be in a form, and written by an insurer, reasonably acceptable to the non-procuring Party; (ii) be maintained at the procuring Party’s sole cost and expense; and (iii) require at least thirty (30) days’ (or such lesser period as is reasonably available) written notice to the non-procuring Party prior to any cancellation, nonrenewal or modification of insurance coverage. All insurance companies issuing such policies shall be admitted carriers licensed to do business in Arizona. Each Party shall provide to the other, upon request, evidence that the insurance required to be carried by it pursuant to this Section 17, including any endorsement effecting additional insured status, is in full force and effect and that premiums therefor have been paid.

(e) Updating Coverage. The amounts of insurance required by this Section 17 shall be reviewed and revised, three years after the Commencement Date and each three years thereafter, to maintain approximately the same level of coverage that exists on the Commencement Date, considering the coverage then carried by prudent landlords and tenants for Class A low-rise office buildings in Scottsdale, Arizona.

(f) Proof of Insurance. Prior to occupancy of the Premises by Tenant, and not less than thirty (30) days prior to expiration of any policy thereafter, each Party shall furnish to the other Party reasonably acceptable proof of insurance reflecting that the insurance required by this Section 17 is in force, accompanied by an endorsement showing the required additional insureds reasonably requested by the other Party. Such proof may consist of a certificate or a certified copy of each insurance policy required to be in force at any time pursuant to the requirements of this Lease.

(g) Notice of Fire and Accident. Tenant shall give Landlord prompt notice in case of fire, theft, or accidents in the Premises, and in case of fire, theft or accidents in the Building if involving Tenant, its agents, employees or invitees.

(h) Waiver of Subrogation. Neither Landlord nor Tenant shall be liable (by way of subrogation or otherwise) to the other party (or to any insurance company insuring the other party) for any loss or damage to the Premises or to the property of either party covered by insurance to the extent of such insurance and all casualty insurance and other insurance carried either by Landlord or Tenant covering losses arising out of destruction or damage to the Premises or its contents or to other portions of the Building shall provide for a waiver of subrogation against Landlord and Tenant respectively on the part of the insurance company, and Landlord and Tenant mutually waive all right of recovery against each other, their agents, or employees for any loss, damage or injury of any nature whatsoever to property or person for which either party is required by this Lease to carry insurance.

18. Damage by Casualty .

(a) Fire or Casualty Damage. If there is damage or destruction of the Premises by fire or any other casualty, this Lease shall not be terminated, except as provided in Section 18(c), but the Premises shall be promptly and fully repaired and restored by Landlord to the extent of available insurance proceeds.

(b) Untenantability. If the condition referred to in Section 18(a) is such so as to make the entire Premises untenantable, then the rent which Tenant is obligated to pay hereunder shall abate as of the date of the occurrence until the Premises have been fully and completely restored by Landlord. If the Premises are partially damaged or destroyed, then during the period until Landlord completes restoration of the damaged portion of the Premises, Tenant shall be required to pay rent covering only that part of the Premises that it is able to occupy, based on the Rentable Area of the Premises that can be occupied compared to the total Rentable Area of the Premises. Any repair or restoration to be performed by Landlord under this Section 18 shall be limited to those portions of the Premises which were constructed by Landlord or are Landlord’s responsibility to maintain or repair. Tenant, at its own expense, shall repair or replace its furniture, trade fixtures, equipment, personal property and other items belonging to Tenant, and any leasehold improvements constructed by Tenant, which are damaged or destroyed by fire or other casualty. Except as hereinabove set forth, no compensation, or claim, or diminution of rent will be allowed or paid by Landlord, by reason of inconvenience, annoyance, or injury to business, arising from the necessity of repairing the Premises or any portion of the Building of which they are a part.

(c) Right to Terminate. If the Premises are substantially or totally destroyed by fire or other casualty so as to be substantially untenantable, and it shall require more than one hundred twenty (120) days for Landlord to commence restoration of same, or at the time of the casualty less than one (1) year remains of the Term, Landlord, upon written notice to Tenant, may terminate this Lease, in which case the Rent shall be apportioned and paid to the date of said fire or other casualty. If the Premises are substantially or totally destroyed by fire or other casualty so as to be substantially untenantable and Landlord does not elect to terminate the Lease pursuant to this paragraph, or does not timely complete Landlord’s repair obligations, then Tenant may elect to terminate this Lease by giving Landlord fifteen (15) days prior written notice, in which case the Rent shall be apportioned and paid to the dates of said fire or other casualty.

19. Condemnation . If the whole or a substantial part of the Project or the Building shall be taken for any public or quasi-public purpose by any lawful power or authority by exercise of the right of appropriation, condemnation or eminent domain, or sold to said authority to prevent such taking (collectively, a “ Taking ”), Landlord shall have the right to terminate this Lease effective as of the date possession is required to be surrendered to said authority, and Rent shall be apportioned as of that date. For purposes of this Section 19, a substantial part of the Premises or the Building shall be considered to have been taken if, in Landlord’s good faith opinion, the taking shall render the Building commercially impractical or undesirable for Landlord to permit this Lease to continue or to continue operating the Building. Tenant shall not assert any claim against Landlord or the taking authority for any compensation arising out of or related to such taking and Landlord shall be entitled to receive the entire amount of any award without deduction for any estate or interest of Tenant. If Landlord does not elect to terminate this Lease, the Annual Base Rent and Additional Rent payable by Tenant pursuant to Section 3 shall be adjusted (based on the ratio that the number of square feet of Rentable Area taken from the Premises bears to the number of rentable square feet in the Premises immediately prior to such taking) as of the date possession is required to be surrendered to said authority. Nothing contained in this Section shall be deemed to give Landlord any interest in any award made to Tenant for the taking of personal property, fixtures or the leasehold interest belonging to Tenant, as long as such award is made in addition to and separately stated from any award made to Landlord for the Premises and the Building or any loss of income associated with the condemnation. Landlord shall have no obligation to contest any taking.

20. Defaults and Remedies .

(a) Default. Each of the following shall be deemed a default (“ Default ”) by Tenant and a breach of this Lease:

(i) A failure by Tenant to pay any Rent when due if such payment is not made within five (5) Business Days after the applicable due date; or

(ii) An assignment of this Lease or subletting of the Premises in violation of Section 8; or

(iii) A failure by Tenant to cure or correct any violation, breach or failure in the observance or performance of any other term, covenant, agreement or condition of this Lease on the part of Tenant to be observed or performed, within thirty (30) days after receipt by Tenant of written notice describing, in reasonable detail, the nature of the Default or, if such failure cannot reasonably be cured within such thirty (30) day period, Tenant fails within such thirty (30) day period to commence, and thereafter to diligently proceed to completion with, all actions necessary to cure the Default as soon as reasonably possible; or

(iv) Tenant’s abandonment of or suspension of business in the Premises; or

(v) Any fraudulent or material and adverse misrepresentation by Tenant to Landlord in connection with the negotiation and/or execution of this Lease.

(b) Remedies. Upon the occurrence of a Default by Tenant, Landlord shall be entitled to remedy such default as follows:

(i) Landlord shall have the right, immediately or at any time thereafter, without further notice to Tenant, to enter the Premises, without terminating this Lease or being guilty of trespass, and do any and all acts as Landlord may deem reasonably necessary, proper or convenient to cure such Default, for the account and at the expense of Tenant, and Tenant agrees to pay to Landlord as Additional Rent all damage and/or expense reasonably incurred by Landlord in so doing.

(ii) Landlord shall have the right to terminate this Lease and Tenant’s right to possession of the Premises and, with or without legal process, take possession of the Premises and remove Tenant, any occupant and any property therefrom, using such force as may be reasonably necessary, without being guilty of trespass and without relinquishing any right of Landlord against Tenant. No act or thing done by Landlord shall be deemed to be an acceptance of a surrender of the Premises unless Landlord shall execute a written agreement of surrender with Tenant. Tenant’s liability shall not be terminated by the execution of a new lease of the Premises by Landlord. After such a dispossession or removal, (1) the Rent and other charges which are the obligation of Tenant shall be paid up to the date Landlord’s re-entry, (2) Landlord may re-let the Premises or any part or parts thereof either in the name of Landlord or otherwise, for a term or terms which may, at the option of Landlord, be less than or exceed the period which would otherwise have constituted the balance of the term of this Lease, and (3) Tenant shall pay to Landlord any deficiency between the sum of the Rent and other charges due hereunder plus the reasonable costs of relating the Premises (including broker’s and attorneys’ fees, and the cost of alterations, repairs and replacements reasonably necessary to re-let the Premises) and the amount of rents and other charges collected on account of the new lease or leases of the Premises for each month of the period which would otherwise have constituted the balance of the term of this Lease (not including any renewal periods, the commencement of which shall not have occurred prior to such dispossession or removal). Such deficiency shall be paid by Tenant in monthly installments on the dates specified in this Lease for payment of Rent, and any suit brought to collect the amount of the deficiency for any month shall not prejudice in any way the rights of Landlord to collect the deficiency for any subsequent month by a similar proceeding. In the alternative, Landlord shall have the right to exercise all or any of the rights and remedies afforded Landlord under law including, but not limited to, the right to terminate this Lease and recover Landlord’s damages incurred as a result thereof. The damages Landlord may recover against Tenant include, but are not limited to, any Late Charge(s) otherwise due the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss for the same period that the Tenant proves could be reasonably avoided, together with interest on all unpaid sums at the Interest Rate. Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future laws if Tenant is being evicted or being dispossessed for any cause, or in the event of Landlord obtaining possession of the Premises by reason of the default by Tenant of any of the covenants and conditions of this Lease.

(c) Right of Landlord to Cure Tenant’s Default If Tenant defaults in the making of any payment to any third party, or doing any act required to be made or done by Tenant relating to the Premises, then Landlord may, but shall not be required to, make such payment or do such act. The amount of any resulting expense or cost to Landlord, including attorneys’ fees, with interest thereon at the Interest Rate, accruing from the date paid by Landlord, shall be paid by Tenant to Landlord and shall constitute Additional Rent hereunder, due and payable by Tenant upon receipt of a written statement of costs from Landlord. The making of such payment or the doing of such act by Landlord shall not operate to cure Tenant’s default, nor shall it prevent Landlord from the pursuit of any remedy to which Landlord would otherwise be entitled.

(d) Lien for Rent. Upon any Default by Tenant, Landlord shall have a lien upon the property of Tenant in the Premises for the amount of any unpaid Rent. In such event, Tenant shall not remove any of Tenant’s property from the Premises except with the prior written consent of Landlord, and Landlord shall have the right and privilege, at its option, to take possession of all property of Tenant in the Premises, to store the same on the Premises, or to remove it and store it in such place as may be selected by Landlord, at Tenant’s risk and expense. Notwithstanding any conflicting provision of this Lease or any other provision of the Arizona Revised Statutes, Landlord shall never have any lien on or other right of any nature in, on or with respect to any records, media, files, computers or other items containing any confidential or privileged information relating to Tenant’s business or clients.

(e) Attorneys’ Fees. Tenant agrees to pay all costs and expenses of collection (including reasonable attorneys’ fees) on any part of any sums due Landlord that may be collected by an attorney, suit, distress or foreclosure; and further, if Tenant fails to promptly and fully perform and comply with each and every condition and covenant hereunder and the matter is turned over to Landlord’s attorney, Tenant shall pay Landlord a reasonable attorneys’ fee plus costs, where necessary, whether suit is instituted or not.

(f) Landlord’s Remedies Cumulative. All rights and remedies of Landlord herein enumerated shall be cumulative, and none shall exclude any other right or remedy allowed by law. For the purposes of any suit brought or based hereon, this Lease shall be construed to be a divisible contract, to the end that successive actions may be maintained on this Lease as successive periodic sums mature hereunder.

(g) Landlord’s Default.

(i) If Landlord fails to perform or comply in any material manner with any provision of this Lease, Tenant may give Landlord notice of the default and Landlord shall have: (i) ten (10) Business Days to cure the default, if the default can be cured by the payment of money; and (ii) thirty (30) days to cure the default, if the default cannot be cured by the payment of money, but if a non-monetary default cannot reasonably be cured within such thirty (30)-day period, Landlord will have such additional time as may be reasonably necessary to cure the default so long as Landlord promptly commences to cure the default within the 30-day period and diligently proceeds to complete such cure.

(ii) If any default by Landlord continues beyond the applicable cure period set forth in Section 20(g)(i), above, Tenant may pursue its rights and remedies under this Lease and Arizona Law, excepting only the right of offset or deduction of Rent, unless such remedy is expressly conferred by this Lease. In addition, Tenant may cure a default on Landlord’s behalf, and the costs expended by Tenant in good faith in do so shall be paid by Landlord upon demand together with interest thereon at the Interest Rate.

(h) Non-Waiver. Acceptance of partial payment of Rent or other partial performance, with or without the accepting Parties’ knowledge of a Default or default by the other Party, or failure of either Party to take any action on account of a Default or default by the other Party, or to enforce its rights under this Lease, other than the acceptance of full payment of a cure of the Default or default, shall not be deemed a waiver of any Default or default.

21. Encumbrances & Public Notice .

(a) Subordination & Attornment. This Lease is made subject and subordinate to any existing or future encumbrance created by Landlord and covering all or any portion of the Project; provided, however, that such subordination shall only be effective as to any encumbrance if the holder of the encumbrance agrees that this Lease shall survive the termination of the encumbrance by lapse of time, foreclosure or otherwise and that all holders of the encumbrance will be bound by this Lease and by all of Tenant’s rights under the Lease and Tenant agrees to attorn to the holders of such encumbrance(s). Provided the conditions of the preceding sentence are satisfied, Tenant shall execute and deliver to Landlord, within fifteen (15) days after written request by Landlord and in a form reasonably requested by Landlord and consistent with this Section 21, any additional documents evidencing the subordination of this Lease, the nondisturbance agreement of all holders of encumbrances and Tenant’s agreement to attorn. If the interest of Landlord in the Project is transferred pursuant to, or in lieu of proceedings for enforcement of, any encumbrance and provided that the new owner of the Project complies with the requirements of this Section 21, Tenant shall immediately and automatically following notice of such transfer attorn to the new owner, and this Lease shall continue in full force and effect as a direct lease between the transferee and Tenant on the terms, and subject to the conditions, otherwise set forth in this Lease.

(c) New Financing. If any future mortgagee requires, as a good faith condition of any financing, that modifications to this Lease be obtained, and provided that such modifications: (i) are reasonable; (ii) do not adversely affect Tenant’s use and enjoyment of the Premises and the Common Areas or change the character of the Building from a Class A low-rise office building; (iii) do not materially alter the Approved Plan for the Premises; and (iv) do not increase the Rent and other sums required to be paid by Tenant, then Landlord may submit to Tenant a written amendment to this Lease incorporating mortgagee’s required modifications, and, if Tenant does not execute and return to Landlord such written amendment within ten (10) Business Days after the same has been submitted to Tenant, then Landlord shall thereafter have the right, at its sole option, to cancel this Lease. Such option shall be exercisable by Landlord giving Tenant written notice of cancellation, immediately whereupon this Lease shall be cancelled and terminate, and any money held by Landlord on Tenant’s behalf shall be returned to Tenant, and both Landlord and Tenant shall thereupon be relieved from any and all further liability or obligation under this Lease.

22. Estoppel Certificates . Tenant agrees, at any time and from time to time, upon not less than ten (10) days prior written notice by Landlord, to execute, acknowledge and deliver to Landlord a written estoppel certificate: (i) certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, stating the nature of same); (ii) stating the Commencement Date of the Lease Term; (iii) stating the amounts of Annual Base Rent and Additional Rent and the dates to which the Annual Base Rent and Additional Rent have been paid by Tenant; (iv) stating the amount of any Security Deposit, if any; (v) stating whether or not to the best knowledge of Tenant, Landlord is in default in the performance of any covenant, agreement or condition contained in this Lease, and, if so, specifying each such default of which Tenant may have knowledge; (vi) stating that Tenant has no right to setoff and no defense against payment of the Annual Base Rent or Additional Rent, (vii) stating the address to which notices to Tenant should be sent; and (viii) certifying such other matters as may be reasonably requested by Landlord. Any such certificate delivered pursuant hereto may be relied upon by an owner of the Building, any prospective purchaser of the Building, any mortgagee or prospective mortgagee of the Building or of Landlord’s interest therein, or any prospective assignee of any such mortgage. Failure to deliver the aforesaid certificate within the ten (10) days shall be conclusive upon Tenant for the benefit of Landlord and any successor to Landlord that this Lease is in full force and effect and has not been modified except as may be represented by the party requesting the certificate. Further, if Tenant fails to deliver the certificate within the ten (10) days, Tenant irrevocably constitutes and appoints Landlord as its attorney-in-fact to execute and deliver the certificate to any third party.

23. Surrender and Inspection . Upon the Expiration Date or other termination of the Term of this Lease, Tenant shall quit and surrender the Premises to Landlord broom clean and in as good order and condition as when received, ordinary and reasonable wear and tear excepted, and Tenant shall remove all of its personal property from the Premises by the Expiration Date or other termination of this Lease. Tenant’s obligation to observe or perform this covenant shall survive the expiration or other termination of this Lease. If Tenant does not remove Tenant’s furniture, equipment, machinery, trade fixtures, floor coverings and all other items of personal property from the Premises prior to the Expiration Date, then Tenant shall be conclusively presumed to have conveyed the same to Landlord without further payment or credit by Landlord to Tenant, and Landlord may dispose of such personal property at Tenant’s cost.

24. Tenant Holdover . If Tenant continues to remain in the Premises after the expiration of the Lease Term, Tenant shall become a tenant of sufferance only, at a base monthly rent which is one hundred fifty percent (150%) of the Base Monthly Rent applicable to the last month of the Term, and otherwise subject to the terms, covenants and conditions herein specified. Tenant expressly agrees to hold Landlord harmless from all loss and damages, direct and consequential, which Landlord may suffer in defense of claims by other parties against Landlord arising out of the holding over by Tenant, including without limitation attorneys’ fees which may be incurred by Landlord in defense of such claims. Acceptance of rent by Landlord subsequent to the expiration of the Term shall not constitute consent to any holding over.

25. Quiet Enjoyment . So long as Tenant shall observe and perform all the covenants and agreements binding on Tenant under this Lease, Tenant shall at all times during the Term, peacefully and quietly have and enjoy possession of the Premises and nonexclusive use of the Common Areas without any encumbrance or hindrance by, from or through Landlord, except as provided for elsewhere under this Lease.

26. Limitation of Landlord’s Liability . It is understood and agreed that the liability of Landlord under this Lease shall be limited solely to Landlord’s interest in the Project of which the Premises form a part; and that neither Landlord’s members nor its officers, employees and agents, shall be personally liable for any obligations of Landlord arising out of or related to this Lease.

27. Time of the Essence . Landlord and Tenant acknowledge that time is of the essence in the performance of any and all obligations, terms, and provisions of this Lease.

28. Waiver of Trial by Jury . Landlord and Tenant waive their right to trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other (except for personal injury or property damage) on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant’s use of or occupancy of the Premises, and any emergency statutory or any other statutory remedy.

29. Notices . All notices required or desired to be given by either Party to the other shall be given in person, or sent by Federal Express or by certified or registered mail, postage prepaid, return receipt requested, addressed as specified in the Basic Lease Information. Either Party may, by like written notice, designate a new address to which such notices shall be directed. Notice shall be deemed to be effective when delivered in person or by Federal Express, or three (3) days after mailing.

30. Brokers . Except as separately agreed, in writing, by Landlord and: (i) Colliers International (attention: Phillip Wurth) (“ Tenant’s Broker ”); and (ii) CBRE (attention: Jerry Roberts and Corey Hawley) (“ Landlord’s Broker ”), Landlord and Tenant each represents and warrants to the other that it has not employed any broker in connection with this Lease transaction. Tenant’s Broker represents Tenant in connection with this Lease and Landlord’s Broker represents Landlord in connection with this Lease. Landlord and Tenant each shall indemnify, defend and hold harmless the other for, from and against any claims, liability, loss, damage, expense, action, demand, suit or obligation arising out of or relating to a breach by such party of this representation.

31. Force Majeure . Landlord’s obligations under this Lease, including Landlord’s obligations to deliver the Premises shall be subject to force majeure delays (“ Force Majeure Delays ”). For the purpose of this Lease, the term Force Majeure Delays shall include delays caused by strikes, fire, unusually severe and adverse weather conditions, acts or delays of public agencies or governmental bodies, any moratorium on the issuance of governmental approvals or utility service connections or other similar government actions, freight embargoes, unanticipated shortages of necessary labor or materials or for other reasons beyond the reasonable control of Landlord. If the Commencement Date is postponed as a result of a Force Majeure Delay, the Expiration Date shall also be postponed for the same period of time.

32. Landlord’s Property . Tenant acknowledges that Landlord furnished the Premises with certain furniture and equipment (“ Landlord’s Property ”). Landlord shall not be required to furnish the Premises with any additional furniture other than Landlord’s Property. On or before the Commencement Date, Landlord will inventory Landlord’s Property and create a schedule of Landlord’s Property to attach to this Lease as Exhibit C . Tenant acknowledges that Tenant has inspected the Premises and Landlord’s Property to Tenant’s complete satisfaction and Tenant accepts the Premises and Landlord’s Property, “AS IS,” “WHERE IS” and “WITH ALL FAULTS”. Tenant shall properly maintain, repair and/or replace, if necessary, Landlord’s Property during the Term of this Lease. Upon the expiration of this Lease, Landlord’s Property shall be returned to Landlord in the same condition at it was on the Commencement Date, subject to ordinary wear and tear.

33. Guaranty . As an express condition precedent to the effectiveness of this Lease and concurrently with the execution of this Lease, Dean Ledger, shall execute and deliver to Landlord a written Guaranty of Tenant’s obligations under this Lease, in the form attached to this Lease as Exhibit D .

34. Miscellaneous Provisions .

(a) Governing Law. The laws of the State of Arizona (excluding conflict of laws principles) shall govern the validity, performance and enforcement of this Lease.

(b) Covenants. The parties hereto agree that all the provisions of this Lease are to be construed as covenants and agreements as though the words importing such covenants and agreements were used in each separate provision.

(c) Successors. All rights, remedies and liabilities herein given to or imposed upon either of the parties hereto, shall extend to, be binding upon and inure to the benefit of their respective heirs, executors, administrators, successors and permitted assigns. This provision shall not be deemed to grant Tenant any right to assign this Lease or to sublet the Premises.

(d) No Partnership. Nothing contained in this Lease shall be deemed or construed to create a partnership or joint venture of or between Landlord and Tenant, or to create any other relationship between the parties other than that of Landlord and Tenant.

(e) No Representations by Landlord. Neither Landlord nor any agent of Landlord has made any representations or promises with respect to the Premises or the Building except as herein expressly set forth, and no rights, privileges, easements or licenses are granted to Tenant except as herein expressly set forth.

(f) Captions. All Section and paragraph captions herein are for the convenience of the parties only, and neither limit nor amplify the provisions of this Lease.

(g) Invalidity of Particular Provisions. If any term or provision of this Lease or applications thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remaining terms and provisions of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and enforced to the fullest extent permitted by law.

(h) Counterparts. This Lease may be executed in several counterparts, but all such counterparts shall constitute one and the same legal document.

(i) Entire Agreement; Modification. This Lease and all Exhibits hereto contain all the agreements and conditions made between the parties and may not be modified orally or in any other manner than by an agreement in writing, signed by the parties hereto.

(j) Interpretation. This Lease shall not be construed for or against Landlord or Tenant, but this Lease shall be interpreted in accordance with the general tenor of the language in an effort to reach the intended result.

(k) Authority. Landlord and Tenant hereby covenant that each has full right, power and authority to enter into this Lease upon the terms and conditions herein set forth. If Tenant signs as a corporation, each of the persons executing this Lease on behalf of Tenant does hereby covenant and warrant that Tenant is a duly authorized and existing corporation, qualified to do business in the jurisdiction in which the Premises is located, that the corporation has full right and authority to enter into this Lease, and that each and both of the persons signing on behalf of the corporation were authorized to do so. If Tenant signs as a partnership, each of the persons executing this Lease on behalf of Tenant does hereby covenant and warrant that Tenant is a duly formed and validly existing partnership, that the partnership has full right and authority to enter into this Lease, and that each of the persons signing on behalf of the partnership were authorized to do so.

(1) Examination of Lease. Submission of this Lease for examination or signature by Tenant shall not constitute an offer to lease or a reservation of or option for Lease, and the same shall not be effective as a Lease or otherwise until execution and delivery by both Landlord and Tenant.

(m) Landlord Assignment. Landlord may, at any time after the Effective Date, assign this Lease to any party without Tenant’s consent; provided, however, that: (i) Landlord shall provide Tenant with written notice of the assignment no less than thirty (30) days prior to its effective date; (ii) any assignee shall (A) be (or become on the effective date of the assignment) fee owner of the Building, and (B) agree, in writing, to become “Landlord” under this Lease and assume all of Landlord’s obligations from and after the effective date of assignment; and (iii) DTR10, L.L.C., shall remain liable for any matters that accrued prior to the effective date of assignment.

[SIGNATURES ON FOLLOWING PAGE]

Dated as of the Effective Date, by:

	LANDLORD:

	DTR10, L.L.C., an Arizona limited liability company

	By:
		Its:	Authorized Agent

	TENANT:

	Universal Technology Systems Corp., a Florida corporation

	By:	/s/ Dean Ledger
	Name:	Dean Ledger
	Title:	Chief Executive Officer

EXHIBIT A-1

(Project Site Plan)

A- 1

EXHIBIT A-2

(Depiction of Premises Location)

A- 2

EXHIBIT B

RULES AND REGULATIONS

The following rules and regulations (“ Rules and Regulations ”) govern Tenant’s use of the Premises and Project. Tenant will also cause its employees, agents, contractors, customers, guests, invitees and, if permitted, subleasees to comply with these Rules and Regulations.

1. The sidewalks, entries, passages, elevators, public corridors, vestibules, halls, stairways and other public areas of the Building shall not be obstructed or used for any other purpose than ingress and egress.

2. Tenant shall not install or permit the installation of any projection, awnings, shades, mylar films, or sun filters on windows or to the outside walls of the Building.

3. All window blinds provided by Landlord shall be left down at all times. No curtains, blinds, shades or screens visible from the exterior of the Building may be attached to or used in connection with any window or door of the Building without the prior written consent of Landlord. Tenant shall not place anything or allow anything to be placed near or against glass partitions, doors, walls or windows which would be visible from the exterior of the Premises.

4. The doors from the corridors and other means of entry to the Premises shall be kept closed during business hours, except when being used for ingress or egress. No Building or suite doors shall be propped open at any time. Tenant will keep its valuable items locked up and doors locked after Business Hours and at other times the Premises are not in use to prevent theft.

5. No tenant shall make, or permit to be made, any excessive noises, cause disturbances or vibrations or other sound or other waves or disturbances which may be heard outside of such Tenant’s Premises or disturb or interfere with other tenants or occupants of the Building or neighboring buildings or premises whether by the use of any musical instrument, radio, television set, or other audio device, unmusical noise, whistling, singing, or in any other way. Nothing shall be thrown out, or off, of any doors, windows, balconies or skylights or down any passageways.

6. Floor distribution boxes for electric and telephone wires shall remain accessible at all times.

7. Bicycles, skateboards, motor scooters or any other type of vehicle shall not be brought into the Building, lobby, elevators, or into the Premises, or parked on the sidewalk or parking spaces, except as required by law other than appropriate vehicles necessary for assisting the disabled. Such vehicles will be allowed only in areas designated by Landlord.

8. No animal (other than a seeing-eye dog) shall be permitted within the Premises or anywhere in the Building at any time.

B- 1

9. Tenant will not conduct any activity within the Premises which will create excessive traffic anywhere in the Building.

10. Tenant parking shall be as set forth in the Lease. Tenant will not park or permit parking in any areas designated by Landlord for parking by visitors of the Project or for the exclusive use of other tenants or occupants of the Project. Only passenger vehicles may be parked in the parking areas. Parking is prohibited in areas not striped for parking, in aisles where “no parking” signs are posted, on ramps, in cross-hatched areas, in loading areas, fire lanes or in such other areas as may be designated by Landlord. Any violation of the parking rules set forth in this Paragraph shall subject the vehicle to removal at the vehicle owner’s expense. Nothing in these Rules and Regulations shall modify Landlord’s obligations regarding the Parking Facilities as otherwise set forth in the Lease.

11. Parking stickers or any other device or form of identification supplied by Landlord as a condition of use of the parking facilities must be displayed as requested. Such devices are not transferable and any device in the possession of an unauthorized holder will be void. Each user of the parking area may be required to sign a parking agreement, as a condition to parking, which agreement may provide for the manner of payment of any parking charges and other matters not inconsistent with this Lease.

12. No overnight or extended term parking or storage of vehicles is permitted.

13. All responsibility for damage, loss or theft to vehicles and the contents thereof is assumed by the person parking their vehicle.

14. Tenant shall not make any room-to-room solicitation of business from other tenants in the Building and Tenant acknowledges that canvassing and peddling of any kind in the Building are prohibited. Tenant shall not distribute any handbills or other advertising matter on automobiles parked in the parking area. Canvassing, soliciting, and peddling in the Building are prohibited, and each tenant shall cooperate in seeking their prevention.

15. Immediately upon the sounding of the Building fire alarm, Tenant, its agents, employees and invitees shall use marked exits and exit stairways to evacuate the Building and will comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency.

16. Smoking of any tobacco product is prohibited in the Building and exterior areas located within 25 feet of the Building except as designated and redesignated in writing from time to time by Landlord in its sole discretion, and Tenant will not smoke anywhere within the Project, including, without limitation, the Premises and the sidewalks, entrances, passages, corridors, halls, elevators and stairways of the Building, other than the smoking areas, if any, designated in writing by Landlord. All smoking materials must be disposed of in ashtrays or other appropriate receptacles provided for that purpose.

17. Eating and drinking are prohibited in the public areas of the Building.

B- 2

18. No showcases or other articles, including furniture, shall be put on the balcony, in front of or affixed to any part of the exterior of the Premises, or placed in the halls, corridors, vestibules, balconies or other appurtenant or public parts of the Building.

19. Any water and wash closets, drinking fountains and other plumbing fixtures in any Premises or the Building shall not be used for any purposes other than those for which they were constructed, and no sweepings, rubbish, rags, or other substances (including, without limitation, coffee grounds) shall be thrown therein.

20. No tenant shall bring or keep, or permit to be brought or kept, any inflammable, combustible, or explosive fluid, material, chemical, or substance in or about the space demised to such tenant.

21. Except for the hanging of artwork, bulletin boards or similar items on interior walls, no tenant shall make, paint, drill into, or in anyway deface, any part of the interior or exterior of the Building or the space demised to such tenant. No boring, cutting, or stringing of wires shall be permitted.

22. No tenant shall cause or permit any odors, obnoxious or harmful fumes, smoke or other discharges which may be offensive to the other occupants of the Building or otherwise create any nuisance to emanate from the space demised to such tenant.

23. Tenant shall promptly report to Landlord any cracked or broken glass on the Premises.

24. Landlord shall have the right to prohibit any advertising by any tenant which, in Landlord’s opinion, tends to impair the reputation of the Building or its desirability as a building for offices, and upon notice from Landlord, such tenant shall refrain from or discontinue such advertising. Tenant will not use the name of the Building or the Project in connection with or in promoting or advertising the business of Tenant except as Tenant’s address.

25. Each tenant, before closing and leaving the space demised to such tenant at any time, shall see that all entrance doors are locked.

26. No space demised to any tenant shall be used, or permitted to be used, for lodging or sleeping. The Premises will not be used for cooking (other than the heating of food from one or more microwave ovens) or for any immoral or illegal purpose.

27. All equipment and machinery belonging to any tenant which causes noise, vibration or electrical interference that may be transmitted to the structure of the Building, to any space therein, or that may unreasonably interfere with the operation of any device, equipment, computer, video, radio, television broadcasting or reception from or within the project to such degree to be objectionable to Landlord and any tenant in the Building shall be installed and maintained by each such tenant, at such tenant’s expense, on vibration eliminators or other devices sufficient to eliminate such noise or vibration.

B- 3

28. Tenant will not waste electricity, water or air conditioning and shall reasonably cooperate with any efforts of Landlord to conserve energy and ensure the most effective operation of the Building’s heating, air conditioning, ventilation and utility systems. Tenant will not use any method of heating or air conditioning (including, without limitation, fans or space heaters) other than those approved in writing by Landlord.

29. No utilities serving the Premises will be overloaded.

30. No additional locks or similar devices will be attached to any door or window and no keys other than those provided by Landlord will be made for any door or window.

31. All loading, unloading, receiving or delivery of goods, supplies, furniture or other items will be made only through entryways provided for such purposes. Deliveries during normal office hours will be limited to normal office supplies and other small items. No deliveries will be made which impede or interfere with other occupants of the Building. No equipment, materials, furniture, packages, supplies, merchandise or other property will be received in the Building or carried in the passenger elevators except between such hours and in such elevators as may be designated by Landlord.

32. Tenant will not use at the Project any hand truck except those equipped with rubber tires and side guards or such other material-handling equipment as Landlord may approve.

33. Tenant shall store all its trash and garbage in proper receptacles within its Premises or in other facilities provided for such purpose by Landlord. Tenant shall not place in any trash box or receptacle any material which cannot be disposed of in the ordinary and customary manner of trash and garbage disposal. All garbage and refuse disposal shall be made in accordance with directions issued from time to time by Landlord. Tenant will cooperate with any recycling program at the Project.

34. Landlord will have the right to specify the proper position of any safe, equipment or other heavy article, which shall only be used by Tenant in a manner which will not interfere with or cause damage to the Premises or the Building. Tenant will not overload the floors or structure of the Building.

35. Persons may enter the Building only in accordance with such regulations as Landlord may provide, and persons entering or departing from the Building may be questioned as to their business in the Building. The right is reserved to require the use of an identification card or other access devices or procedures an/or the registering of persons as to the hour of entry and departure, nature of visit, and other information deemed necessary by Landlord for the protection of the Building.

36. All janitorial services for the Premises shall be provided exclusively through Landlord. Tenant shall not cause any unnecessary janitorial labor by carelessness or indifference to the cleanliness of the Project.

37. Landlord reserves the right to exclude or expel from the project any person who, in Landlord’s judgment, is intoxicated or under the influence of liquor or drugs or who is in violation of any of these Rules and Regulations.

* * *

B- 4

EXHIBIT C

(Schedule of Landlord’s Property)

Furniture Description	Total Quantity
Wood Desk (with file drawers) w/ glass top		7
Wood Desk (w/out file drawers) w/ glass top		2
Wood Credenza (30” tall x 72” wide) w/ no glass top		1
Leather Chair (brown)		14
Black Chair		5
Wood File Cabinet (30” tall x 36” wide) w/ glass top		5
Wood File Cabinet (30” tall x 48” wide) w/ no glass top		1
Wood File Cabinet (30” tall x 60” wide) w/ no glass top		1
Wood Book Shelf (30” tall x 40” wide) w/ glass top		4
Tall Wood Corner Book Shelf (+1-7 feet tall)		1
Wood Book Shelf (+/- 5 feet tall x 30” wide)		1
Granite Conference Table		1
Round Wood Conference Table		1
Desk Lamp		6
Decorative Pot/Plant		3

C- 1

EXHIBIT D

(Guaranty)

Lease Guaranty Agreement

THIS LEASE GUARANTY AGREEMENT (“ Guaranty ”) is entered into and shall be effective as of______________________ , 20 (“ Effective Date ”), by Dean Ledger, a Single Man (“ Guarantor ”), in favor of DTR10, L.L.C., an Arizona limited liability company (“ Landlord ”).

Background

A. Universal Technology Systems Corp., a Florida corporation (“Tenant”), has entered into an Office Lease Agreement with Landlord, dated as of the Effective Date (“Lease”). The Lease covers approximately 3,077 square feet of rentable area in the commercial office building located at 17207 North Perimeter Drive, Scottsdale, Arizona.

B. Guarantor has represented to Landlord that Guarantor is: (i) a single man; and (ii) a principal of Tenant, and has requested that Landlord enter into the Lease. Landlord has declined to enter into the Lease unless Guarantor guarantees the Lease as provided in this Guaranty.

C. On the terms and subject to the conditions and limitations set forth in this Guaranty, Guarantor has agreed to guaranty the payment performance of Tenant’s obligations under the Lease.

Guaranty

1. Definitions . Capitalized terms not otherwise defined in this Guaranty will have the meanings given them in the Lease.

2. Unconditional Guaranty . Guarantor unconditionally and irrevocably guarantees to Landlord, and the successors and assigns of Landlord, the full and punctual payment and performance by Tenant of all Tenant’s obligations under the Lease, of any type or nature. If, at any time, Tenant defaults in the payment or performance of any of Tenant’s obligations under the Lease, including, without limitation, the payment of any Monthly Base Rent or Additional Rent, Guarantor will promptly pay, perform or otherwise discharge the defaulted obligation. Guarantor’s obligations under this Guaranty and the Lease shall be primary.

3. Continuing Guaranty . This Guaranty and Guarantor’s obligations under this Guaranty are unconditional and continuing in nature and will survive: (a) any amendment to, modification, extension or renewal of, or waiver of rights under, the Lease; (b) the voluntary or involuntary termination of the Lease; and/or (c) Tenant’s release from all or any portion(s) of its obligations under the Lease. Guarantor’s liability under this Guaranty will not be affected or diminished by: (t) Tenant’s bankruptcy or insolvency (or any related proceedings or events); (u) any court proceeding, judgment or ruling involving Tenant or the Lease; (v) any sublease or assignment of the Lease; (w) any amendment, extension or renewal of the Lease (in which case, Guarantor’s obligations under this Guaranty will include the amendment, extension or renewal, as the case may be); (x) Landlord’s termination of the Lease based on a Tenant default; (y) the exercise by Landlord of any rights or remedies under the Lease; or (z) any other proceeding, claim or defense purporting to affect or modify Tenant’s obligations under the Lease, of any type or nature.

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4. Notice of Default . Landlord will provide Guarantor with a copy of any default notice required or permitted under the Lease in the manner set forth in Paragraph 10(h), below; provided, however, Landlord’s failure to provide any notice to Guarantor under the Lease, this Guaranty or any other document or agreement will not reduce, impair, delay or otherwise amend Guarantor’s obligations under this Guaranty.

5. Guarantor Waivers . Guarantor waives and relinquishes any right to review or approve any amendment or modification to the Lease. To the fullest extent permitted under Arizona law, Guarantor waives, and agrees not to assert or take advantage of: (a) the provisions Of ARIZONA REVISED STATUTES §§ 12-1641 through 12-1646 inclusive, Rule 17(f) of the ARIZONA RULES OF CIVIL PROCEDURE, and any other similar or analogous statutory, common laws or procedural rules of any jurisdiction relevant to guarantors, indemnitors, sureties, co-makers or accommodation parties; (b) any right to require Landlord to seek or exhaust remedies against Tenant as a prerequisite to enforcing this Guaranty if an event of default occurs under the Lease; (c) any claim or defense otherwise available to Tenant with respect to the Lease; and (d) any other circumstance or defense which might otherwise constitute a legal or equitable defense or discharge of a surety or a guarantor (except for payment and/or performance, in full, of Tenant’s obligations under the Lease). The liability of Guarantor under this Guaranty will not be affected or impaired by any full or partial release of, settlement with, or agreement not to sue, Tenant or any other guarantor or surety with respect to the Lease.

6. No Joinder Required . If any claim or cause of action accrues under the Lease or this Guaranty, Guarantor covenants and agrees Landlord may join Guarantor in any action brought against Tenant or commence action against Guarantor (and/or any other guarantor or surety) separately and independently and in any order. Guarantor waives any right to assert Tenant (and/or any other guarantor or surety) is an indispensible party under Rule 19, ARIZONA RULES OF CIVIL PROCEDURE, or any similar or analogous statute, rule or holding.

7. No Subrogation; Subordination . Until all of Tenant’s obligations under the Lease are fully performed, Guarantor: (a) shall have no right of subrogation, contribution or reimbursement against Tenant by reason of any payments or acts of performance by Guarantor under this Guaranty; (b) waives any right to enforce any remedy which Guarantor now or hereafter may have against Tenant; and (c) subordinates any liability or indebtedness of Tenant now or hereafter held by Guarantor to Tenant’s obligations to Landlord under the Lease. Subject to the foregoing, so long as there is no continuing Default under the Lease, Tenant may pay Guarantor’s normal compensation and other sums payable to Guarantor in the ordinary course of Tenant’s business.

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8. WAIVER OF JURY TRIAL . IN THE INTEREST OF OBTAINING A SPEEDY AND LESS COSTLY ADJUDICATION OF ANY DISPUTE, LANDLORD AND GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WANE TRIAL BY JURY IN ANY ACTION, PROCEEDING, COUNTERCLAIM OR CROSS-CLAIM BROUGHT BY EITHER PARTY AGAINST THE OTHER, AND ANY RIGHTS TO A TRIAL BY JURY UNDER ANY STATUTE, RULE OF LAW OR PUBLIC POLICY IN CONNECTION WITH ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY RELATING TO THIS GUARANTY OR THE LEASE.

9. Tenant’s Management & Financial Condition . Guarantor represents and warrants to Landlord that Guarantor is an owner and manager of Tenant, with full access to Tenant’s financial records and Guarantor is aware of the present financial condition of Tenant. Guarantor assumes responsibility for remaining informed of Tenant’s ongoing financial condition, any change in Tenant’s financial condition (and associated risk of Tenant’s default under the Lease) and any amendments to the Lease agreed to by Landlord and Tenant that may impact Guarantor’s liability under this Guaranty. This obligation, as well as Guarantor’s obligations under this Guaranty, will survive any change in ownership or management of Tenant.

10. Miscellaneous .

a. No Waiver by Landlord. No waiver or delay on the part of Landlord in exercising any right(s) under the Lease or this Guaranty shall operate as a waiver of such right or of any other right of Landlord under the Lease or under this Guaranty, nor shall any delay, omission or waiver on any one or more occasions be deemed a bar to or a waiver of the same or any other right on any other future occasion.

b. Joint & Several Liability. The liability of Guarantor, Tenant and any other guarantor or surety with respect to the Lease shall be joint and several.

c. Entire Agreement; Amendment. This Guaranty constitutes the entire agreement between Landlord and Guarantor with respect to the Lease guaranty transactions and supersedes and replaces all prior oral or written agreements. This Guaranty may not be changed, modified, discharged or terminated orally or in any manner other than by an agreement in writing signed by Guarantor and Landlord.

d. Applicable Law; Venue. This Guaranty shall be governed by and construed in accordance with the laws of the State of Arizona. Venue shall be in Maricopa County.

e. Guarantor’s Successors. Guarantor’s obligations under this Guaranty shall be binding on the successors, heirs and assigns of Guarantor by operation of law or otherwise (including any receiver or bankruptcy trustee). Guarantor shall not be released by virtue of any assignment or delegation by it of its obligations or duties under this Guaranty.

f. Attorneys’ Fees. If Landlord enforces Guarantor’s obligations under this Guaranty by legal proceedings, the prevailing party shall be entitled to recover, in addition to any other award, all costs incurred, including without limitation reasonable attorneys’ fees.

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g. Bankruptcy Preferences. If Landlord is required to turn over any amounts received under the Lease or this Guaranty to any bankruptcy court or state insolvency proceeding, as a “preference” or otherwise, Guarantor shall promptly pay Landlord such amount as a reinstated obligation under this Guaranty.

h. Notices. Any notice provided by Landlord to Guarantor shall be in writing and shall sent via Certified Mail, Return Receipt Requested, or FedEx (or other reputable overnight currier) to the address set forth in Guarantor’s signature block, below (or such new address as Guarantor provides to Landlord from time to time in the manner required for notices under the Lease).

i. Captions; Interpretation; Severability. The section and subsection headings appearing herein are for purposes of identification and reference only and shall not be used in interpreting this Guaranty. If any provision of this Guaranty or the application of any provision to any person or any circumstance shall be determined to be invalid or unenforceable to any extent, such determination shall not affect any other provision of this Guaranty or the application of such provision to the fullest extent permitted or to any other person or circumstance, all of which other provisions shall remain in full force and effect to the fullest extent permitted. If any term or provision of this Guaranty is susceptible to two or more constructions, one of which would render the provision valid, the term or provision shall have the meaning which renders it valid.

This Guaranty is executed and delivered as of the Effective Date, by:

		GUARANTOR :

Address:


		Dean Ledger, a Single Man

STATE OF ____________ )

) ss.

County of ____________ )

The foregoing instrument was acknowledged before me this ____ day of ___________________, ______, by Dean Ledger, a Single Man.


	Notary Public

My Commission Expires:

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Lease Guaranty Agreement

This Lease Guaranty Agreement (“ Guaranty ”) is entered into and shall be effective as of November 15, 2013 (“ Effective Date ”), by Dean Ledger, a Single Man (“ Guarantor ”), in favor of DTR10, L.L.C., an Arizona limited liability company (“ Landlord ”).

Background

A. Universal Technology Systems Corp., a Florida corporation (“ Tenant ”), has entered into an Office Lease Agreement with Landlord, dated as of the Effective Date (“ Lease ”). The Lease covers approximately 3,077 square feet of rentable area in the commercial office building located at 17207 North Perimeter Drive, Scottsdale, Arizona.

C. On the terms and subject to the conditions and limitations set forth in this Guaranty, Guarantor has agreed to guaranty the payment performance of Tenant’s obligations under the Lease.

Guaranty

1. Definitions . Capitalized terms not otherwise defined in this Guaranty will have the meanings given them in the Lease.

2. Unconditional Guaranty. Guarantor unconditionally and irrevocably guarantees to Landlord, and the successors and assigns of Landlord, the full and punctual payment and performance by Tenant of all Tenant’s obligations under the Lease, of any type or nature. If, at any time, Tenant defaults in the payment or performance of any of Tenant’s obligations under the Lease, including, without limitation, the payment of any Monthly Base Rent or Additional Rent, Guarantor will promptly pay, perform or otherwise discharge the defaulted obligation. Guarantor’s obligations under this Guaranty and the Lease shall be primary.

5. Guarantor Waivers . Guarantor waives and relinquishes any right to review or approve any amendment or modification to the Lease. To the fullest extent permitted under Arizona law, Guarantor waives, and agrees not to assert or take advantage of: (a) the provisions of ARIZONA REVISED STATUTES §§ 12-1641 through 12-1646 inclusive, Rule 17(f) of the ARIZONA RULES OF CIVIL PROCEDURE, and any other similar or analogous statutory, common laws or procedural rules of any jurisdiction relevant to guarantors, indemnitors, sureties, co-makers or accommodation parties; (b) any right to require Landlord to seek or exhaust remedies against Tenant as a prerequisite to enforcing this Guaranty if an event of default occurs under the Lease; (c) any claim or defense otherwise available to Tenant with respect to the Lease; and (d) any other circumstance or defense which might otherwise constitute a legal or equitable defense or discharge of a surety or a guarantor (except for payment and/or performance, in full, of Tenant’s obligations under the Lease). The liability of Guarantor under this Guaranty will not be affected or impaired by any full or partial release of, settlement with, or agreement not to sue, Tenant or any other guarantor or surety with respect to the Lease.

8. WAIVER OF JURY TRIAL . IN THE INTEREST OF OBTAINING A SPEEDY AND LESS COSTLY ADJUDICATION OF ANY DISPUTE, LANDLORD AND GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, COUNTERCLAIM OR CROSS-CLAIM BROUGHT BY EITHER PARTY AGAINST THE OTHER, AND ANY RIGHTS TO A TRIAL BY JURY UNDER ANY STATUTE, RULE OF LAW OR PUBLIC POLICY IN CONNECTION WITH ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY RELATING TO THIS GUARANTY OR THE LEASE.

10. Miscellaneous .

b. Joint & Several Liability. The liability of Guarantor, Tenant and any other guarantor or surety with respect to the Lease shall be joint and several.

d. Applicable Law; Venue. This Guaranty shall be governed by and construed in accordance with the laws of the State of Arizona. Venue shall be in Maricopa County.

This Guaranty is executed and delivered as of the Effective Date, by:

	GUARANTOR :

Address :
9290 E. Thompson PK Parkway	/s/ Dean Ledger
Scottsdale, AZ 85255	Dean Ledger, a Single Man
LOT 134

STATE OF Arizona . )

) ss.

County of Maricopa . )

The foregoing instrument was acknowledged before me this 15 ^th day of November , 2013 , by Dean Ledger, a Single Man.

	/s/ Larry Malcuit
	Notary Public

My Commission Expire:
April 14, 2016

Exhibit 10.27

INDEMNIFICATION AGREEMENT

AGREEMENT, dated as of December 8, 2014, by and between NanoFlex Power Corporation, with an address at 17207 N. Perimeter Dr., Suite 210, Scottsdale, AZ 85255 (" Indemnitor ") and Dean Ledger, residing at 9290 E. Thompson Peak Parkway, Lot 134, Scottsdale AZ 85255 ("Indemnitee").

WHEREAS, Indemnitee has provided a personal guaranty (the "Guaranty") for the office space lease for Indemnitor for the premises located at 17207 N. Perimeter Dr., Suite 210, Scottsdale, AZ 85255 (the "Premises"); and

WHEREAS, in consideration of the Guaranty, the Board of Directors of the Indemnitor has approved an indemnity for Indemnitee with respect to the Guaranty and the Premises on the terms set forth herein;

NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged and agreed, the parties hereto agree as follows:

1. Certain Definitions . In addition to terms defined elsewhere herein, the following terms have the following meanings when used in this Agreement:

	(a)	Agreement : shall mean this Indemnification Agreement, as amended from time to time hereafter.

	(b)	Claim : means any threatened, asserted, pending or completed civil, criminal, administrative, investigative or other action, suit or proceeding of any kind whatsoever, including any arbitration or other alternative dispute resolution mechanism, or any appeal of any kind thereof, or any inquiry or investigation, whether instituted by the Company, any governmental agency or any other party, that the Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, administrative, investigative or other, including any arbitration or other alternative dispute resolution mechanism or any action taken under the Company's charter or by laws which relates to the Guaranty or the Premises.

	(c)	Indemnifiable Expenses : means all expenses and liabilities, including judgments, fines, penalties, interest, amounts paid in settlement, and counsel fees and disbursements (including, without limitation, experts' fees, court costs, retainers, transcript fees, duplicating, printing and binding costs, as well as telecommunications, postage and courier charges) paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in, any Claim, whether occurring before, on or after the date of this Agreement (any such event, an "Indemnifiable Event").

	(d)	Person : means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.

2. Basic Indemnification Arrangement; Advancement of Expenses .

(a) In the event that the Indemnitee was, is or becomes subject to, a party to or witness or other participant in, or is threatened to be made subject to, a party to or witness or other participant in, a Claim, Indemnitor shall indemnify the Indemnitee, against each and every Indemnifiable Expense to the fullest extent permitted by applicable law.

(b) If so requested by the Indemnitee, the Indemnitor shall advance, or cause to be advanced (within five business days of such request), any and all Indemnifiable Expenses incurred or which may reasonably be incurred by the Indemnitee (an " Expense Advance "). The Indemnitor shall, in accordance with such request (but without duplication), either (it) pay, or cause to be paid, such Indemnifiable Expenses on behalf of the Indemnitee, or (ii) reimburse, or cause the reimbursement of, the Indemnitee for such Indemnifiable Expenses. The Indemnitee's right to an Expense Advance is absolute.

3. Partial Indemnity, Etc . If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Indemnitor for some or a portion of the Indemnifiable Expenses in respect of a Claim but not, however, for all of the total amount thereof, the Indemnitor shall nevertheless indemnify the Indemnitee for the portion thereof to which the Indemnitee is entitled.

4. Nonexclusivity, Etc . The rights of the Indemnitee hereunder shall be in addition to any other rights the Indemnitee may have under the Company's Articles of Organization, Operating Agreement or similar documents or under applicable law.

5. Amendments, Etc . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

6. Defense of Claims . The Indemnitee shall have the sole right to conduct the defense of any Claim with counsel chosen by Indemnitee.

7. Binding Effect, Etc . This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.

8. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable and to give effect to the terms of this Agreement.

9. Specific Performance, Etc . The parties recognize that if any provision of this Agreement is violated by the parties hereto, the Indemnitee may be without an adequate remedy at law. Accordingly, in the event of any such violation, the Indemnitee shall be entitled, if the Indemnitee so elects, to institute proceedings, either in law or at equity, to obtain damages, to enforce specific performance, to enjoin such violation, or to obtain any relief or any combination of the foregoing as the Indemnitee may elect to pursue.

10. Notices . All notices, requests, consents and other communications hereunder to any party shall be deemed to be sufficient if contained in a written document delivered in person or sent by telecopy, nationally recognized overnight courier or personal delivery, addressed to such party at the address set forth below or such other address as may hereafter be designated on the signature pages of this Agreement or in writing by such party to the other party. Ali such notices, requests, consents and other communications shall be deemed to have been given or made if and when received (including by overnight courier) by the parties at the above addresses or sent by electronic transmission, with confirmation received, to the telecopy numbers or e-mail addresses specified (or at such other address or telecopy number for a party as shall be specified by like notice).

11. Counterparts . This Agreement may be executed in counterparts, in PDF or electronic form, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

12. Headings . The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction or interpretation thereof.

13. Governing Law . This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York applicable to contracts made and to be performed in such state without giving effect to the principles of conflicts of laws.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

INDEMNITOR		INDEMNITEE
NanoFlex Power Corporation

By:	/s/ John D. Kuhns	/s/ Dean L. Ledger
	John D. Kuhns, Executive Chairman	Dean L. Ledger

Exhibit 10.31

Note: Throughout this document, certain confidential material contained herein has been omitted and has been filed separately with the Securities and Exchange Commission. Each omission has been marked with an ***.

ROUNDTABLE RESEARCH AGREEMENT

THIS AGREEMENT effective this 16 day of June, 2016, by and between NANOFLEX POWER CORPORATION (hereinafter “Sponsor”) and the REGENTS OF THE UNIVERSITY OF MICHIGAN, a non-profit educational institution of the State of Michigan (hereinafter “University”).

WHEREAS, the research program contemplated by this Agreement is of mutual interest and benefit to University and to Sponsor, will further the instructional and research objectives of University in a manner consistent with its status as a non-profit, tax-exempt, educational institution, and may derive benefits for both Sponsor and University through inventions, improvements, and discoveries;

NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, the parties hereto agree to the following:

ARTICLE 1 - DEFINITIONS

As used herein, the following terms shall have the following meanings:

1.1 “Project” shall mean the research project described in ORSP 16-PAF06416 under the direction of Stephen Forrest as Project Director entitled “GaAs Research and Development” attached hereto as Appendix A.

1.2 “Contract Period” is from May 1, 2016, through April 30, 2017, unless earlier terminated pursuant to this Agreement. The parties may agree to extend the Project into years 2 and 3 pursuant to Appendix A by entering into a modification pursuant to Article 13 hereof.

1.3 “Copyrightable Material” shall mean any material or other property that is or may be copyrightable or otherwise protectable under Title 17 of the United States Code.

1.4 “Invention” shall mean any discovery that is or may be patentable or otherwise protectable under Title 35 of the United States Code.

1.5 “Project Intellectual Property” shall mean all Copyrightable Material, Inventions, trade secrets, data, computer software, and know-how conceived or made in the performance of the Project.

1.6 “University Project Intellectual Property” shall mean all Project Intellectual Property made by University personnel.

1.7 “Sponsor Project Intellectual Property” shall mean all Project Intellectual Property made by Sponsor personnel without the use of University facilities, resources, equipment or funds.

1.8 “Joint Project Intellectual Property” shall mean all Project Intellectual Property made jointly by University personnel and Sponsor personnel, or made solely by Sponsor personnel using University facilities, resources, equipment or funds.

ARTICLE 2 - RESEARCH WORK

2.1 University and Sponsor shall use reasonable efforts to perform and complete the Project in accordance with the terms and conditions of this Agreement.

2.2 University shall not knowingly incorporate or utilize in the performance of the Project any third party intellectual property that would affect any rights granted to Sponsor hereunder.

2.3 In the event that the Project Director becomes unable or unwilling to continue Project, and a mutually acceptable substitute is not available, each of University or and Sponsor shall have the option to terminate the Project upon written notice.

2.4 University represents that neither the University nor the Project Director has any agreement with any third party that would prevent it/him from fulfilling obligations or granting rights to Sponsor as provided in this Agreement.

ARTICLE 3 - REPORTS AND CONFERENCES

3.1 Sponsor shall be given access to data from the Project as it is collected. Written program reports shall be provided by University to Sponsor monthly and a final report shall be submitted by University to Sponsor upon completion of the testing described in the Project.

3.2 During the term of this Agreement, representatives of University shall meet with representatives of Sponsor upon reasonable request at times and places mutually agreed upon to discuss the progress and results as well as ongoing plans, or changes therein, of the Project to be performed hereunder.

ARTICLE 4 - COSTS, BILLINGS, AND OTHER SUPPORT

4.1 It is agreed that total costs to Sponsor hereunder shall not exceed One Hundred Fifty Thousand Dollars ($150,000.00) as described in Appendix A. University may rebudget within this total as reasonable and necessary.

4.2 Sponsor shall pay in advance promptly upon full execution of the Anticipated Amendment, one quarter of the annual agreed to cost (“Advance Payment”). On or as near the first day of each calendar quarter thereafter, University shall provide Sponsor with an itemized invoice for the prior calendar quarter for actual charges incurred by the University. University shall deduct that amount of the invoice from the Advance Payment. Upon receipt of invoice, Sponsor shall pay invoiced amount so as to bring the Advance Payment held by University back to the level of one quarter of the annual agreed to cost. Any portion of the Advance Payment that has not been used for actual charges incurred by the University during the Contract Period shall be returned to Sponsor within sixty (60) days.

4.3 University shall retain title to any equipment purchased with funds provided by Sponsor under this Agreement. Equipment so purchased shall be described generally in monthly reports and itemized specifically in each invoice submitted by University to Sponsor pursuant to Section 4.1.

4.4 In the event of early termination of the Project by Sponsor pursuant to this Agreement, Sponsor shall pay all costs accrued by University as of the date of termination, including non-cancelable obligations, which shall include all non-cancelable contracts and fellowships or postdoctoral associate appointments called for in Project, incurred prior to the date of notice of termination. After non-early termination, any obligation of Sponsor for fellowships or postdoctoral associates shall end. University shall use its best efforts to terminate cancelable obligations and mitigate non-cancelable obligations upon notice of termination.

ARTICLE 5 - PUBLICITY

Sponsor will not use the name of University, nor of any member of University’s Project staff, in any publicity, advertising or news release without the prior written approval of an authorized representative of University. University will not use the name of Sponsor, or any employee of Sponsor, in any publicity, advertising or news release without the prior written approval of an authorized representative of Sponsor. Nothing herein shall restrict either party’s right to disclose the existence of this Agreement, the identity of the parties, or the nature and scope of the Project. University’s authorized representative for purposes of this approval is the Director of Research Administration or his designee; Sponsor’s authorized representative for purposes of this approval shall be any corporate officer of Sponsor.

ARTICLE 6 - PUBLICATIONS

Sponsor recognizes that under University policy, the results of the Project must be available for publication and agrees that researchers engaged in Project shall be permitted to present at symposia, national, or regional professional meetings, and to publish in journals, theses or dissertations, or otherwise of their own choosing, methods and results of the Project, provided, however, that Sponsor shall have been furnished copies of any proposed publication or presentation for review at least one month in advance of the submission of such proposed publication or presentation to a journal, editor, or other third party. Sponsor shall have one month after receipt of said copies, to object to such proposed presentation or proposed publication because there is patentable subject matter that needs protection or because Confidential Information disclosed pursuant to Article 14, below, is contained therein. In the event that Sponsor makes such objection, said researcher(s) shall refrain from making such publication or presentation for a maximum of four months from date of receipt of such objection in order for University to file patent application(s) with the United States Patent and Trademark Office or foreign patent office(s) directed to the patentable subject matter contained in the proposed publication or presentation. University shall comply with Sponsor’s request to delete Confidential Information from any such proposed publication or presentation.

ARTICLE 7 - INTELLECTUAL PROPERTY

7.1 Title to any Inventions first conceived and reduced to practice by University personnel in the performance of the work funded under this Agreement shall vest in University. All such Inventions and any patents or patent applications relating thereto will, upon creation, automatically be included within the “Patent Rights” exclusively licensed to Sponsor under the Amended License Agreement by and among Princeton University, the University of Southern California, the Regents of the University of Michigan, and Global Photonic Energy Corporation and all existing and subsequent amendments thereto (“Amended License Agreement”).

7.2 University shall promptly provide a complete written disclosure for each and every Invention first conceived and reduced to practice in the performance of the work funded under this Agreement. All such Inventions shall automatically become subject to the Amended License Agreement. University shall provide timely input for the preparation and filing of intellectual property protection for Invention disclosures made to Sponsor under this Agreement.

7.3 Title to any Inventions first conceived jointly by personnel from University and Sponsor shall vest jointly in the names of University and Sponsor as appropriate, and shall be subject to the Amended License Agreement.

7.4 Ownership. All rights, title and interest to University Project Intellectual Property shall belong to University. All rights, title and interest to Sponsor Project Intellectual Property shall belong to Sponsor. All rights, title and interest to Joint Project Intellectual Property shall belong jointly to University and Sponsor. Determination of inventorship of Project Intellectual Property shall be made in accordance with the rules of inventorship under United States patent law.

7.5 Notification. University will notify Sponsor in writing of any University Project Intellectual Property or Joint Project Intellectual Property after a written invention disclosure is received by the University of Michigan Office of Technology Transfer. Sponsor will notify University in writing of any Joint Project Intellectual Property promptly after it receives a written disclosure thereof.

7.6 Joint Project Intellectual Property. If Sponsor does not exclusively license University’s interests in any Joint Project Intellectual Property, the parties shall upon the request of either party, negotiate in good faith to reach agreement on the joint management of such Joint Project Intellectual Property, including the patenting and commercialization thereof. In the absence of the parties entering into such an agreement, each party may exploit or license its own interest in the Joint Project Intellectual Property without accounting to the other and either may apply for patent protection, provided that all such applications must be joint and the filing party will bear all costs and will include the non-filing party on all communications with the patent office.

7.7 No Rights Granted in Pre-existing or Other Intellectual Property. Nothing contained in this Agreement shall be deemed by implication, estoppel or otherwise to grant Sponsor any rights in any Inventions, Copyrightable Material, improvements, discoveries, trade secrets, data or know-how conceived or made (a) prior to the effective date of this Agreement which are owned or controlled by University and may be used in the performance of the Project or (b) after the effective date of this Agreement and not made in the performance of the Project except as otherwise provided in the applicable Sponsored Research Agreements under the Amended License Agreement.

ARTICLE 8 - TERM AND TERMINATION

8.1 This Agreement shall become effective upon the date first written above and shall continue in effect for the full duration of the Contract Period. The parties hereto may, however, extend the term of this Agreement for additional periods as desired under mutually agreeable terms and conditions that the parties reduce to writing and sign. Either party may terminate this agreement upon thirty (30) days prior written notice to the other.

8.2 In the event that either party commits any material breach of or default in any of the terms or conditions of this Agreement, and fails to remedy such default or breach within ninety (90) days after receipt of written notice thereof from the other party, the party giving notice may, at its option and in addition to any other remedies which it may have at law or in equity, terminate this Agreement by sending notice of termination in writing to the other party. Such termination shall be effective as of the date of the receipt of such notice.

8.3 No termination of this Agreement, however effectuated, shall release the parties from their rights and obligations accrued prior to the effective date of termination.

ARTICLE 9 - INDEPENDENT CONTRACTOR

9.1 University shall be deemed to be and shall be an independent contractor and as such University shall not be entitled to any benefits applicable to employees of Sponsor.

9.2 Neither party is authorized or empowered to act as agent for the other for any purpose and shall not on behalf of the other enter into any contract, warranty or representation as to any matter. Neither shall be bound by the acts or conduct of the other.

ARTICLE 10 - INSURANCE AND INDEMNIFICATION

10.1 University warrants and represents that University has adequate liability insurance, such protection being applicable to officers, employees, and agents while acting within the scope of their employment by University. University has no liability insurance policy as such that can extend protection to any other person.

10.2 Each party hereby assumes any and all risks of bodily injury, including death and property damage attributable to the negligent acts or omissions of that party and the officers, employees, and agents thereof.

10.3 Sponsor understands that the University is an educational institution created under Article 8, Section 5 of the Michigan Constitution and operated pursuant to authority conferred by the State of Michigan. As a state institution the University is prohibited from lending the credit of the state pursuant to Article 9 of the Michigan Constitution. Sponsor acknowledges that this Agreement does not confer upon Sponsor any right of claim of indemnification by the University, either express or implied.

ARTICLE 11 - GOVERNING LAW

This Agreement shall be governed and construed in accordance with the laws of the State of Michigan without reference to such state’s conflicts of laws principles.

ARTICLE 12 - ASSIGNMENT

12.1 Except as provided in Section 12.2, this Agreement shall not be assigned by either party without the prior written consent of the other party, which will not be unreasonably withheld.

12.2 This Agreement is assignable to any division of Sponsor, any majority stockholder of Sponsor, or any subsidiary of Sponsor in which fifty-one percent of the outstanding stock is owned by Sponsor and to any purchaser of all or substantially all of Sponsor’s assets relating to the subject matter of this Agreement; provided, that, Sponsor provides written notice of such assignment or sale to University and the assignee or buyer agrees to assume the obligations of Sponsor hereunder.

ARTICLE 13 - AGREEMENT MODIFICATION

Any agreement to change the terms of this Agreement in any way shall be valid only if the change is made in writing and signed by the authorized representatives of the parties hereto.

ARTICLE 14 - CONFIDENTIALITY

14.1 University and Sponsor agree to use the confidential and proprietary information and data acquired from each other and identified as such at the time of disclosure (“Confidential Information”) only in the performance of the Project and as otherwise contemplated under this Agreement and not to disclose to any third party, during the period of this Agreement and for a period of five (5) years thereafter, any such Confidential Information of the other party. Confidential Information shall be disclosed in writing or, if disclosed orally, reduced to writing within ten (10) business days of disclosure.

14.2 The obligation to protect Confidential Information shall not apply to any information that: (i) is or becomes a part of the public domain through no act or omission of the receiving party; (ii) was in the receiving party’s lawful possession prior to the disclosure and had not been obtained by the receiving party either directly or indirectly from the disclosing party; (iii) is lawfully disclosed to the receiving party by a third party without restriction on disclosure; (iv) is independently developed by the receiving party without reference to the other party’s Confidential Information; (v) is released with written consent of the disclosing party; or (vi) is disclosed by operation of law, provided, however, that the non-disclosing party be given an opportunity to oppose such disclosure.

ARTICLE 15 - NOTICES

Notices hereunder shall be deemed made upon receipt if given by registered or certified mail, postage prepaid, or sent via nationally recognized overnight courier, and addressed to the party to receive such notice at the address given below, or such other address as may hereafter be designated by notice in writing:

If to Sponsor:	Nanoflex Power Corporation
	17207 N. Perimeter Drive, Suite 210
	Scottsdale, AZ 85255 ATTN: Mark Tobin

If to University:	University of Michigan
	Office of Research and Sponsored Projects
	3003 S. State St., 1- Floor
	Ann Arbor, MI 48109-1274

ARTICLE 16 — CONFLICT OF INTEREST

This research is subject to a conflict of interest management plan due to the involvement of University employees with the Sponsor. Sponsor agrees to cooperate with the University in complying with the management plan as requested.

AGREED TO:		AGREED TO:

NANOFLEX POWER CORPORATION		THE REGENTS OF THE
		UNIVERSITY OF MICHIGAN

By:	/s/ Mark Tobin	By:	/s/ Peter J. Gerard
Name (Printed):	Mark Tobin	Name (Printed):	Peter J. Gerard
Title:	Chief Financial Officer	Title:	Associate Director
			Grants and Contracts

Appendix A

16-PAFD6416

GaAs Research and Development

Principal Investigator:

Prof. Stephen Forrest, PhD

University of Michigan

2237 EECS, 1301 Beal Avenue

Ann Arbor, MI 48109

stevefor@umich.edu

Project Description:

University of Michigan (UM, Prof. Stephen Forrest), has created a transformation in the cost of thin-film single junction GaAs cells using a non-destructive epitaxial lift-off process (ND-ELO) that allows for the virtually unlimited reuse of the original GaAs substrate. Importantly, the UM team has demonstrated the ability of ND-ELO to eliminate the expensive and time consuming conventional ELO steps of an intermediate “handle” that is used to grasp the wafer during the liftoff process, and then transfer the active layers for gluing to its fmal host substrate. Furthermore, ND-ELO completely eliminates the highly problematic cost-intensive and destructive chemo-mechanical polishing of the parent wafer to prepare it for re-use. The ND-ELO process bonds the highly flexible active solar layers directly to the host Kapton substrate without brittle adhesives, resulting in a lighter and truly flexible device. Furthermore, our team has developed early stage GaAs prototypes utilizing the ND-ELO processing cost breakthrough in combination with integrated lightweight, very low profile (2 cm high) mini-parabolic concentrators, which do not require active solar tracking. Our technology and processes have shown strong promise and potentially lead to a transformational change in the cost of GaAs solar films. Specifically, these cost breakthroughs enable entry into terrestrial applications that are not well-served by Silicon-based photovoltaics.

During the proposed project, our ND-ELO process will be validated by fabricating solar cells after multiple cycles of ND-ELO, and ensuring that the cycle-to-cycle performance variation differs by no more than 10% throughout the process.

*** Furthermore, we will develop a scalable CPC technology for dramatically reducing potential costs of GaAs cells.

*** All device processing and characterization both with and without CPCs will be carried out at UM.

Statement of Work

●

Demonstrate multiple lift-offs of GaAs epitaxy ***

●

Develop CPC fabrication technology that will allow for continuous production of CPC arrays.

●

Fully characterize all fabrication technologies and resulting devices for performance.

●

Work with NanoFlex Power to attract external funds from industry and government sources.

NanoFlex Power Corporation – GaAs Research and Development

Budget

Year 1

Year 2

Year 3

Total

Expense Category

5/1/16 – 4/30/17

5/1/17 – 4/30/18

5/1/18 – 4/30/19

5/1/16 – 4/30/19

Salary

Prof. Stephen Forrest

***

***, Calendar Year

Postdoctoral Research Fellow

***

***, Calendar Year

Administrative Assistant

***

***, Calendar Year

Graduate Student Research Assistant

***

1 @ ***, Full Year

Subtotal Salaries and Wages

***

Staff Benefits @ 25%

***

SUBTOTAL SALARIES AND BENEFITS

***

Student Tuition

0.5 GSRA @ 2 terms/year based on non-candidate rate ($10,822/term)

***

Materials and Supplies

***

LNF Laboratory Usage

***

Equipment

***

Total Direct Costs UM

107,903

108,105

108,316

324,324

Total Modified Direct Costs (less tuition, equipment)

76,540

76,174

75,788

228,502

Total Indirect Costs @ 55.0%

42,097

41,895

41,684

125,676

Total Costs

150,000

450,000

Budget Justification

Salaries : Salary support is being requested for Professor Stephen Forrest (PI) at *** of his calendar year salary, (currently *** ) for the duration of the project. This level is commensurate with the effort needed to accomplish the proposed work. Prof. Forrest, as the Principal Investigator, will oversee and manage all aspects of this project.

Salary support is being requested for one postdoctoral researcher at *** of a calendar year salary (currently *** ) for the duration of the project. Support is also requested for one doctoral student (GSRA) at *** appointment level for the duration of the project. Current University of Michigan graduate student salary rates can be found at: http://orsp.umich.edu/proposals/students/gsra.html .

Support is also requested for administrative support at *** of a calendar year salary (currently at *** ) through the duration of the project to provide dedicated support required to facilitate planning and processing meetings, travel arrangements, executing patent paperwork, maintaining detailed financial information as well as compiling and providing information for requirements.

Salaries and wages are based upon University established rates that are comparable to others doing similar research both within and outside the University or Private Industry. An annual increment (3%) has been included each September in accordance with University of Michigan practice.

Fringe Benefits: Fringe benefits were estimated at 25%. These estimates are based on the experience of the Electrical Engineering and Computer Science Department and the University. Actual rates will be based on the selection of benefits by personnel assigned to the project. Rates can also be found at: http://orsp.umich.edu/staff-fringe-benefits.

Graduate Student Tuition: Partial graduate student tuition has been included for one Engineering student with non-candidacy status (current rate of $10,822 per term) Tuition is typically incurred for two semesters per year per GSRA (Sep — Dec & Jan — Apr). Current rates can be found at: http://orsp.umich.edu/proposals/students/gsra.html. Annual increments of 5% have been included each September in accordance with University of Michigan practice.

Materials and Supplies: The supplies category includes funds for items such as specific lab supplies, telephone tolls, freight, and communication charges necessary to the project and dissemination of results, such as copy charges for preparation of technical presentations, posters, reports and photographic images. These expenses would relate directly to the research subject and would be used solely to benefit the project. Lab supplies include host and dopant material sets described in detail in the technical volume. Processing and testing supplies include solvents, liquid nitrogen, tweezers, wafer carriers, sample boxes, etc. used for processing, as well as electrical components, breadboards, PCBs, cables, connectors, etc. used for testing.

Laboratory - Access and usage charges for the University of Michigan’s Lurie Nanofabrication Facility (LNF) are estimated at an average of *** /month based on our past experience. Within each year, it is expected that actual costs will be significantly higher in certain periods and lower in others. Information and rate schedules are provided at the following website: http://www.lnf.umich.edu/.

Equipment: The equipment category includes partial funding for growth and processing equipment as developed during the life of this program as well as metrology equipment required.

Indirect Cost: The indirect cost rate (Facilities and Administrative Cost Rate) is 55.0% as negotiated with the Department of Health and Human Services (DHHS) effective July 1, 2015. The base used to calculate the indirect cost includes modified total direct costs consisting of all direct costs less tuition and equipment. The current indirect cost rate can be found at the following web site: http://orsp.umich.edu/proposals/budgets/indirect_costs.html.

Exhibit 10.32

AMENDMENT NO. 1

DATED: JULY 21, 2016

TO ROUNDTABLE RESEARCH AGREEMENT

EFFECTIVE June 16, 2016

BETWEEN

NANOFLEX POWER CORPORATION (hereinafter “Sponsor”)

AND

THE REGENTS OF THE UNIVERSITY OF MICHIGAN (hereinafter “University”)

Reference: University of Michigan PG No. NOZ1732

WHEREAS Sponsor and University entered into the above referenced Agreement.

WHEREAS the Sponsor and University wish to change the terms of the Agreement to authorize the performance of Years 2 and 3 of the Project.

AND WHEREAS Article 13 of the Agreement provides that “[a]ny agreement to change the terms of this Agreement in any way shall be valid only if the change is made in writing signed by the authorized representatives of the parties hereto.”

NOW, THEREFORE, IT IS AGREED that Articles 1.2 and 4.1 shall be deleted in their entirety and replaced with the following language:

1.2 “Contract Period” is from May 1, 2016, through April 30, 2019 unless earlier terminated pursuant to this Agreement.

4,1 It is agreed that the total costs to Sponsor hereunder shall not exceed Four Hundred Fifty Thousand ($450,000.00) as described in Appendix A. University may rebudget within this total as reasonable and necessary.

All other terms and conditions shall remain unchanged.

AGREED TO:		AGREED TO:

NANOFLEX POWER CORPORATION		THE REGENTS OF THE
		UNIVERSITY OF MICHIGAN

By:	/s/ Mark Tobin	By:	/s/ Peter J. Gerard
Name (Printed):	Mark Tobin	Name (Printed):	Peter J. Gerard
Title:	Chief Financial Officer	Title:	Associate Director
			Grants and Contracts

Date:	7/21/2016	Date:	7/25/16

Exhibit 10.33

ROUNDTABLE RESEARCH AGREEMENT

NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, the parties hereto agree to the following:

ARTICLE 1- DEFINITIONS

As used herein, the following terms shall have the following meanings:

1.1 “Project” shall mean the research project described in ORSP 16-PAF00781 and ORSP 16-PAF03598, both under the direction of Stephen Forrest as Project Director and both entitled “Low-Cost and High-Efficiency Thin-Film GaAs Solar Cells for Building Integrated and Building Applied Photovoltaics” attached hereto as Appendix A.

1.2 “Contract Period” is from August 1, 2015, through July 31, 2016, unless earlier terminated pursuant to this Agreement. The parties may agree to extend the Project into years 2 and 3 pursuant to Appendix A by entering into a modification pursuant to Article 13 hereof.

1.3 “Copyrightable Material” shall mean any material or other property that is or may be copyrightable or otherwise protectable under Title 17 of the United States Code.

1.4 “Invention” shall mean any discovery that is or may be patentable or otherwise protectable under Title 35 of the United States Code.

1.5 “Project Intellectual Property” shall mean all Copyrightable Material, Inventions, trade secrets, data, computer software, and know-how conceived or made in the performance of the Project.

1.6 “University Project Intellectual Property” shall mean all Project Intellectual Property made by University personnel.

1.7 “Sponsor Project Intellectual Property” shall mean all Project Intellectual Property made by Sponsor personnel without the use of University facilities, resources, equipment or funds.

ARTICLE 2 - RESEARCH WORK

2.1 University and Sponsor shall use reasonable efforts to perform and complete the Project in accordance with the terms and conditions of this Agreement.

2.2 University shall not knowingly incorporate or utilize in the performance of the Project any third party intellectual property that would affect any rights granted to Sponsor hereunder.

ARTICLE 3 - REPORTS AND CONFERENCES

ARTICLE 4 - COSTS, BILLINGS, AND OTHER SUPPORT

4.1 It is agreed that total costs to Sponsor hereunder shall not exceed One Hundred Thousand Dollars ($100,000.00) as described in Appendix A. University may rebudget within this total as reasonable and necessary.

4.2 University acknowledges that Sponsor has already paid Sixty-Seven Thousand Five Hundred Seventy-One and 49/100 Dollars ($67,571.49) of this total cost, and Sponsor acknowledges that University has already incurred actual charges and invoiced Sponsor in the amount of Sixty-Seven Thousand Five Hundred Seventy-One and 4 ⁹ / ₁ 00 Dollars ($67,571.49). For year 1 only, Sponsor shall make payment of Twenty-Five Thousand and 00/100 ($25,000.00) within thirty (30) days of the execution of this Agreement (“Advance Payment”). For year 1 only, University shall provide Sponsor with an itemized invoice for actual charges for the entire year within sixty (60) days of the end of year one of the Contract Period. Sponsor shall promptly pay the year one invoice amount. Thereafter, this Agreement is anticipated to be extended for two (2) years by amendment (“Anticipated Amendment”). For years two and three, Sponsor shall pay in advance promptly upon full execution of the Anticipated Amendment, one quarter of the annual agreed to cost (“Advance Payment”). On or as near the first day of each calendar quarter thereafter, University shall provide Sponsor with an itemized invoice for the prior calendar quarter for actual charges incurred by the University. University shall deduct that amount of the invoice from the Advance Payment. Upon receipt of invoice, Sponsor shall pay invoiced amount so as to bring the Advance Payment held by University back to the level of one quarter of the annual agreed to cost. Any portion of the Advance Payment that has not been used for actual charges incurred by the University during the Contract Period shall be returned to Sponsor within sixty (60) days.

ARTICLE 5 - PUBLICITY

ARTICLE 6 - PUBLICATIONS

ARTICLE 7 - INTELLECTUAL PROPERTY

Intellectual Property shall belong jointly to University and Sponsor. Determination of inventorship of Project Intellectual Property shall be made in accordance with the rules of inventorship under United States patent law.

ARTICLE 8 - TERM AND TERMINATION

8.3 No termination of this Agreement, however effectuated, shall release the parties from their rights and obligations accrued prior to the effective date of termination.

ARTICLE 9 - INDEPENDENT CONTRACTOR

9.1 University shall be deemed to be and shall be an independent contractor and as such University shall not be entitled to any benefits applicable to employees of Sponsor.

ARTICLE 10 - INSURANCE AND INDEMNIFICATION

ARTICLE 11- GOVERNING LAW

This Agreement shall be governed and construed in accordance with the laws of the State of Michigan without reference to such state’s conflicts of laws principles.

ARTICLE 12 - ASSIGNMENT

12.1 Except as provided in Section 12.2, this Agreement shall not be assigned by either party without the prior written consent of the other party, which will not be unreasonably withheld.

ARTICLE 13 - AGREEMENT MODIFICATION

Any agreement to change the terms of this Agreement in any way shall be valid only if the change is made in writing and signed by the authorized representatives of the parties hereto.

ARTICLE 14 - CONFIDENTIALITY

ARTICLE 15 - NOTICES

If to Sponsor:	Nanoflex Power Corporation
	17207 N. Perimeter Drive, Suite 210
	Scottsdale, AZ 85255
	ATTN: Mark Tobin

If to University:	University of Michigan
	Office of Research and Sponsored Projects
	3003 S. State St., 1st Floor Ann Arbor, MI 48109-1274

ARTICLE 16 - CONFLICT OF INTEREST

AGREED TO:		AGREED TO:

NANOFLEX POWER CORPORATION		THE REGENTS OF THE
		UNIVERSITY OF MICHIGAN

By:	/s/ Mark Tobin	By:	/s/ Peter J. Gerard
Name (Printed):	Mark Tobin	Name (Printed):	Peter J. Gerard
Title:	Chief Financial Officer	Title:	Associate Director
			Grants and Contracts

Appendix A

16-PAFOO781

Low-cost and high-efficiency thin-film GaAs solar cells for building integrated and building applied photovoltaics

Principal Investigator:
Prof. Stephen Forrest, PhD
University of Michigan
2237 EECS, 1301 Beal Avenue
Ann Arbor, MI 48109
stevefor@umich.edu

Project Description:

NanoFlex Power Corporation, in cooperation with its partner at the University of Michigan (UM, Prof. Stephen Forrest), has created a transformation in the cost of thin-film single junction GaAs cells using a non-destructive epitaxial lift-off process (ND-ELO) that allows for the virtually unlimited reuse of the original GaAs substrate. Importantly, the UM team has demonstrated the ability of ND-ELO to eliminate the expensive and time consuming conventional ELO steps of an intermediate “handle” that is used to grasp the wafer during the lift-off process, and then transfer the active layers for gluing to its final host substrate. Furthermore, ND-ELO completely eliminates the highly problematic cost-intensive and destructive chemo-mechanical polishing of the parent wafer to prepare it for re-use. The ND-ELO process bonds the highly flexible active solar layers directly to the host Kapton substrate without brittle adhesives, resulting in a lighter and truly flexible device. Furthermore, our team has developed early stage GaAs prototypes utilizing the ND-ELO processing cost breakthrough in combination with integrated lightweight, very low profile (-2 cm high) mini-parabolic concentrators, which do not require active solar tracking. Our technology and processes have shown strong promise and potentially lead to a transformational change in the cost of GaAs solar films. Specifically, these cost breakthroughs enable entry into terrestrial applications that are not well-served by Silicon-based photovoltaics.

During the proposed project, our ND-ELO process will be validated by visiting scholars from NanoFlex Power Corporation, supervised by Prof. Stephen Forrest, Validation will be achieved by fabricating solar cells after multiple cycles of ND-ELO, and ensuring that the cycle-to-cycle performance variation differs by no more than 10% throughout the process.

Low-Cost and High Efficiency Thin-Film GaAs Solar Cells for Building Integrated and Building Applied Photovoltaics

Prof. S. Forrest

	Total
Expense Category	8/1/2015 - 7/31/2016

Materials and Supplies		10,580
LNF Laboratory Expense		12,000

Total Direct Costs		22,580
Total Modified Direct Costs		22,580
Total Indirect Costs @ 55.0% effective 7/1/15		12,419
Total Costs		34,999

FIRM FIXED PRICE QUOTE

Appendix A

16-PAFO3598

GaAs Project Support

Principal Investigator:
Prof. Stephen Forrest, PhD
University of Michigan
2237 EECS, 1301 Beal Avenue
Ann Arbor, MI 48109
stevefor@umich.edu

Project Description:

During the proposed project, our ND-ELO process will be validated by UM personnel alongside visiting scholars from NanoFlex Power Corporation, supervised by Prof. Stephen Forrest, Validation will be achieved by fabricating solar cells after multiple cycles of ND-ELO, and ensuring that the cycle-to-cycle performance variation differs by no more than 10% throughout the process.

NanoFlex Power Corporation – GaAs Research and Development

Budget

Year 1

Year 2

Year 3

Total

Expense Category

8/1/15 – 7/31/16

8/1/16 – 7/31/17

8/1/17 – 7/31/18

8/1/15 – 7/31/16

Salary

Postdoctoral Research Fellow

***

***, Calendar Year

Administrative Assistant

***

***, Calendar Year

Graduate Student Research Assistant

***

1 @ ***, Full Year

Subtotal Salaries and Wages

***

Staff Benefits @ 25%

***

SUBTOTAL SALARIES AND BENEFITS

***

Materials and Supplies

***

LNF Laboratory Usage

***

Total Direct Costs UM

41,936

64,516

710,968

Total Modified Direct Costs

41,936

64,516

710,968

Total Indirect Costs @ 55.0%

23,065

35,484

94,033

Total Costs

65,001

100,000

265,001

Budget Justification

Salaries : Salary support is being requested for one postdoctoral researcher at *** of his calendar year salary, (currently *** ) for year 1. Support is also requested for one doctoral student (GSRA) at the standard 50% appointment level (currently *** per month) for yer 1. Current University of Michigan graduate student salary rates can be found at: http://orsp.umich.edu/proposals/students/gsra.html . Salaries and wages are based upon University established rates that are comparable to others doing similar research both within and outside the University or Private Industry. An annual increment (3%) has been included each September in accordance with University of Michigan practice.

Support is also requested for administrative support at *** of a calendar year salary (currently at *** ) to provide dedicated support required to coordinate this collaboration. Support will be provided to facilitate planning and processing meetings, travel arrangements, executing patent paperwork, maintaining detailed financial information as well as compiling and providing information for requirements.

Fringe Benefits: Fringe benefits were estimated at 25%. These estimates are based on the experience of the Solid-State Electronics Laboratory and the University. Actual rates will be based on the selection of benefits by personnel assigned to the project. Rates can also be found at: http://orsp.umich.edu/staff-fringe-benefits .

Laboratory - Access and usage charges for the University of Michigan’s Lurie Nanofabrication Facility (LNF) are estimated at an average of *** for year 1, ***for year 2 and *** for year 3, based on our past experience. Within each year, it is expected that actual costs will be significantly higher in certain periods and lower in others. Information and rate schedules are provided at the following website: http ://www. lnfumi ch. edu/.

Indirect Cost: The indirect cost rate (Facilities and Administrative Cost Rate) is 55.0% as negotiated with the Department of Health and Human Services (DHHS) effective July 1, 2015. The current indirect cost rate can be found at the following web site: http://orsp .umich . edu/propo sal s/budgets/ind irect co sts. html

Exhibit 10.34

AMENDMENT NO. 1

DATED: JULY 21, 2016

TO ROUNDTABLE RESEARCH AGREEMENT

EFFECTIVE June 16, 2016

BETWEEN

NANOFLEX POWER CORPORATION (hereinafter “Sponsor”)

AND

THE REGENTS OF THE UNIVERSITY OF MICHIGAN (hereinafter “University”)

Reference: University of Michigan PG No. NO20568

WHEREAS Sponsor and University entered into the above referenced Agreement.

WHEREAS the Sponsor and University wish to change the terms of the Agreement to authorize the performance of Years 2 and 3 of the Project.

NOW, THEREFORE, IT IS AGREED that Articles 1.2 and 4.1 shall be deleted in their entirety and replaced with the following language:

1.2 “Contract Period” is from August 1, 2015, through July 31, 2018 unless earlier terminated pursuant to this Agreement.

4,1 It is agreed that the total costs to Sponsor hereunder shall not exceed Three Hundred Thousand ($300,000.00) as described in Appendix A. University may rebudget within this total as reasonable and necessary.

All other terms and conditions shall remain unchanged.

AGREED TO:		AGREED TO:

NANOFLEX POWER CORPORATION		THE REGENTS OF THE
		UNIVERSITY OF MICHIGAN

By:	/s/ Mark Tobin	By:	/s/ Peter J. Gerard
Name (Printed):	Mark Tobin	Name (Printed):	Peter J. Gerard
Title:	CFO	Title:	Associate Director
			Grants and Contracts

Date:	7/21/2016	Date:	7/26/16

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the inclusion in this Registration Statement on Form S-1 of our report dated March 18, 2016, except for Note 1, 2, 4 and 6, as to which the date is November 28, 2016 with respect to the audited consolidated financial statements of NanoFlex Power Corporation for the years ended December 31, 2015 and 2014. Our report contains an explanatory paragraph regarding the Company’s ability to continue as a going concern.

We also consent to the references to us under the heading “Experts” in such Registration Statement.

/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

November 28, 2016