x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-3672603
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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12300 Grant Street, Thornton, CO
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80241
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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x
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Emerging growth company
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o
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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ASCENT SOLAR TECHNOLOGIES, INC.
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||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
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||||||||
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||||||||
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June 30,
2018 |
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December 31,
2017 |
||||
ASSETS
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(Unaudited)
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|
|
||||
Current Assets:
|
|
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||||
Cash and cash equivalents
|
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$
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25,901
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|
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$
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89,618
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Trade receivables, net of allowance for doubtful accounts of $39,333 and $48,201, respectively
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43,984
|
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6,658
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Inventories, net
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1,000,250
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|
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1,037,854
|
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||
Prepaid expenses and other current assets
|
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508,115
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494,425
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Total current assets
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1,578,250
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1,628,555
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||
Property, Plant and Equipment
|
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36,645,862
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36,645,862
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|
||
Less accumulated depreciation and amortization
|
|
(32,130,988
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)
|
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(32,013,686
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)
|
||
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4,514,874
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4,632,176
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Other Assets:
|
|
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|
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Patents, net of accumulated amortization of $479,685 and $430,071, respectively
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1,341,108
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1,470,796
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Other non-current assets
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35,937
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49,813
|
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1,377,045
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1,520,609
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Total Assets
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$
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7,470,169
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|
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$
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7,781,340
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LIABILITIES AND STOCKHOLDERS’ DEFICIT
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||||
Current Liabilities:
|
|
|
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|
||||
Accounts payable
|
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$
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2,181,208
|
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$
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1,600,455
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Related party payables
|
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201,561
|
|
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202,827
|
|
||
Accrued expenses
|
|
2,452,521
|
|
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1,623,748
|
|
||
Notes payable
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1,873,272
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|
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1,570,231
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|
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Current portion of long-term debt
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354,884
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|
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343,395
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Current portion of secured notes, net of discount of $2,488,113 and $1,934,304, respectively
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1,577,724
|
|
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253,590
|
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Promissory Notes, net of discount of $59,792 and $20,626, respectively
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|
1,322,145
|
|
|
948,811
|
|
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October 2016 convertible notes
|
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330,000
|
|
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330,000
|
|
||
St. George convertible note, net of discount and cash payment premium of $384,709 and $673,241, respectively
|
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929,525
|
|
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1,032,592
|
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BayBridge convertible note, net of discount of $50,400 and $565,000, respectively
|
|
1,600
|
|
|
—
|
|
||
Embedded derivative liabilities
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|
7,746,770
|
|
|
6,406,833
|
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Total current liabilities
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18,971,210
|
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14,312,482
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Long-term debt, net of current portion
|
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4,938,062
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|
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5,118,424
|
|
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Long-term secured notes, net of current portion, and net of discount of $1,224,922 and $1,684,267, respectively
|
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55,822
|
|
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685,066
|
|
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Accrued Warranty Liability
|
|
48,001
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57,703
|
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Commitments and Contingencies
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Mezzanine Equity:
|
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|
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Series K preferred stock: 20,000 shares authorized; zero and 2,810 issued and outstanding, respectively
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—
|
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2,810,000
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Stockholders’ Deficit:
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Series A preferred stock, $.0001 par value; 750,000 shares authorized; 60,756 shares issued and outstanding, respectively ($791,992 and $761,864 Liquidation Preference)
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6
|
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6
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Common stock, $0.0001 par value, 20,000,000,000 shares authorized; 18,994,481 and 9,606,598 shares issued and outstanding, respectively
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1,899,448
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960,660
|
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Additional paid in capital
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391,940,970
|
|
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386,332,475
|
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Accumulated deficit
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(410,383,350
|
)
|
|
(402,495,476
|
)
|
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Total stockholders’ deficit
|
|
(16,542,926
|
)
|
|
(15,202,335
|
)
|
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Total Liabilities, Mezzanine Equity and Stockholders’ Deficit
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|
$
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7,470,169
|
|
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$
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7,781,340
|
|
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For the Three Months Ended
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For the six months ended
|
|
||||||||||||
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June 30,
|
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June 30,
|
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||||||||||||
|
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2018
|
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2017
|
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2018
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2017
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||||||||
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||||||||
Revenues
|
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$
|
102,962
|
|
|
$
|
25,134
|
|
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$
|
480,472
|
|
|
$
|
305,737
|
|
|
|
|
|
|
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||||||||
Costs and Expenses:
|
|
|
|
|
|
|
|
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||||||||
Cost of revenues (exclusive of depreciation shown below)
|
|
230,581
|
|
|
295,026
|
|
|
503,609
|
|
|
1,787,867
|
|
|
||||
Research, development and manufacturing operations (exclusive of depreciation shown below)
|
|
700,045
|
|
|
1,241,108
|
|
|
1,873,081
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|
|
2,517,974
|
|
|
||||
Inventory impairment costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
363,758
|
|
|
||||
Selling, general and administrative (exclusive of depreciation shown below)
|
|
700,615
|
|
|
1,405,863
|
|
|
1,636,141
|
|
|
3,170,094
|
|
|
||||
Depreciation and amortization
|
|
97,446
|
|
|
330,324
|
|
|
198,220
|
|
|
701,976
|
|
|
||||
Total Costs and Expenses
|
|
1,728,687
|
|
|
3,272,321
|
|
|
4,211,051
|
|
|
8,541,669
|
|
|
||||
Loss from Operations
|
|
(1,625,725
|
)
|
|
(3,247,187
|
)
|
|
(3,730,579
|
)
|
|
(8,235,932
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Other Income/(Expense)
|
|
|
|
|
|
|
|
|
|
||||||||
Other Income/(Expense), net
|
|
—
|
|
|
(149,340
|
)
|
|
—
|
|
|
579,145
|
|
|
||||
Interest expense
|
|
(2,128,698
|
)
|
|
(2,247,707
|
)
|
|
(3,472,429
|
)
|
|
(4,239,059
|
)
|
|
||||
Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net
|
|
299,595
|
|
|
928,909
|
|
|
(684,866
|
)
|
|
1,601,987
|
|
|
||||
Total Other Income/(Expense)
|
|
(1,829,103
|
)
|
|
(1,468,138
|
)
|
|
(4,157,295
|
)
|
|
(2,057,927
|
)
|
|
||||
Net Loss
|
|
$
|
(3,454,828
|
)
|
|
$
|
(4,715,325
|
)
|
|
$
|
(7,887,874
|
)
|
|
$
|
(10,293,859
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net Loss Per Share (Basic and diluted)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.81
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(2.96
|
)
|
|
Weighted Average Common Shares Outstanding (Basic and diluted)
|
|
16,617,799
|
|
|
4,668,930
|
|
|
13,822,617
|
|
|
9,361,114
|
|
|
ASCENT SOLAR TECHNOLOGIES, INC.
|
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||||
(Unaudited)
|
|||||||||
|
|||||||||
|
|
six months ended
|
|
||||||
|
|
June 30,
|
|
||||||
|
|
2018
|
|
2017
|
|
||||
Operating Activities:
|
|
|
|
|
|
||||
Net loss
|
|
$
|
(7,887,874
|
)
|
|
$
|
(10,293,859
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
|
198,220
|
|
|
701,976
|
|
|
||
Share based compensation
|
|
21,346
|
|
|
95,911
|
|
|
||
Realized gain on sale of assets
|
|
—
|
|
|
(1,214,658
|
)
|
|
||
Amortization of financing costs to interest expense
|
|
10,833
|
|
|
70,556
|
|
|
||
Non-cash interest expense
|
|
801,610
|
|
|
727,732
|
|
|
||
Amortization of debt discount
|
|
2,450,664
|
|
|
3,190,185
|
|
|
||
Bad debt expense
|
|
(8,868
|
)
|
|
9,649
|
|
|
||
Accrued litigation settlement
|
|
—
|
|
|
(289,861
|
)
|
|
||
Write-down of inventory
|
|
—
|
|
|
363,758
|
|
|
||
Write down of patents
|
|
59,153
|
|
|
—
|
|
|
||
Warranty reserve
|
|
(9,702
|
)
|
|
(50,085
|
)
|
|
||
Change in fair value of derivatives and (gain)/loss on extinguishment of liabilities, net
|
|
684,866
|
|
|
(1,601,987
|
)
|
|
||
Inducement conversion costs
|
|
—
|
|
|
635,514
|
|
|
||
Changes in operating assets and liabilities:
|
|
||||||||
Accounts receivable
|
|
(28,458
|
)
|
|
396,467
|
|
|
||
Inventories
|
|
37,604
|
|
|
1,010,196
|
|
|
||
Prepaid expenses and other current assets
|
|
14,353
|
|
|
355,759
|
|
|
||
Accounts payable
|
|
945,703
|
|
|
(340,200
|
)
|
|
||
Related party payable
|
|
(1,266
|
)
|
|
(14,903
|
)
|
|
||
Accrued expenses
|
|
531,086
|
|
|
(26,867
|
)
|
|
||
Net cash used in operating activities
|
|
(2,180,730
|
)
|
|
(6,274,717
|
)
|
|
||
Investing Activities:
|
|
|
|
|
|
||||
Proceeds from the sale of assets
|
|
—
|
|
|
150,000
|
|
|
||
Patent activity costs
|
|
(9,705
|
)
|
|
(25,341
|
)
|
|
||
Net cash provided by/(used in) investing activities
|
|
(9,705
|
)
|
|
124,659
|
|
|
||
Financing Activities:
|
|
|
|
|
|
||||
Proceeds from issuance of debt
|
|
2,357,500
|
|
|
2,865,000
|
|
|
||
Proceeds from issuance of stock
|
|
—
|
|
|
4,250,000
|
|
|
||
Repayment of debt
|
|
(230,782
|
)
|
|
(862,993
|
)
|
|
||
Net cash provided by financing activities
|
|
2,126,718
|
|
|
6,252,007
|
|
|
||
Net change in cash and cash equivalents
|
|
(63,717
|
)
|
|
101,949
|
|
|
||
Cash and cash equivalents at beginning of period
|
|
89,618
|
|
|
130,946
|
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
25,901
|
|
|
$
|
232,895
|
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
211,166
|
|
|
$
|
206,080
|
|
|
Cash paid for income taxes
|
|
—
|
|
|
—
|
|
|
||
Non-Cash Transactions:
|
|
|
|
|
|
||||
Non-cash conversions of convertible notes and preferred stock
|
|
$
|
5,140,600
|
|
|
$
|
6,934,064
|
|
|
Interest converted to principal
|
|
$
|
140,355
|
|
|
$
|
—
|
|
|
Initial derivatives
|
|
$
|
2,013,601
|
|
|
$
|
—
|
|
|
Make-whole dividend
|
|
$
|
—
|
|
|
$
|
257,152
|
|
|
Accounts payable converted to notes payable
|
|
$
|
308,041
|
|
|
$
|
1,422,026
|
|
|
Non-cash finance costs
|
|
$
|
25,000
|
|
|
$
|
2,500
|
|
|
Accounts payable forgiven in relation to Sale of EnerPlex
|
|
$
|
—
|
|
|
$
|
1,031,726
|
|
|
|
|
As of June 30,
|
|
As of December 31,
|
||||
|
|
2018
|
|
2017
|
||||
Building
|
|
$
|
5,828,960
|
|
|
$
|
5,828,960
|
|
Furniture, fixtures, computer hardware and computer software
|
|
489,421
|
|
|
489,421
|
|
||
Manufacturing machinery and equipment
|
|
30,327,481
|
|
|
30,327,481
|
|
||
Property, plant and equipment
|
|
36,645,862
|
|
|
36,645,862
|
|
||
Less: Accumulated depreciation and amortization
|
|
(32,130,988
|
)
|
|
(32,013,686
|
)
|
||
Net property, plant and equipment
|
|
$
|
4,514,874
|
|
|
$
|
4,632,176
|
|
|
|
As of June 30,
|
|
As of December 31,
|
||||
|
|
2018
|
|
2017
|
||||
Raw materials
|
|
$
|
653,680
|
|
|
$
|
688,904
|
|
Work in process
|
|
25,040
|
|
|
11,878
|
|
||
Finished goods
|
|
321,530
|
|
|
337,072
|
|
||
Total
|
|
$
|
1,000,250
|
|
|
$
|
1,037,854
|
|
|
|
||
2018
|
$
|
174,523
|
|
2019
|
366,757
|
|
|
2020
|
391,709
|
|
|
2021
|
418,358
|
|
|
2022
|
446,821
|
|
|
Thereafter
|
3,494,778
|
|
|
|
$
|
5,292,946
|
|
Conversion Period
|
Principal Converted
|
Interest Converted
|
Common Shares Issued
|
|||||
Q1 2018
|
$
|
1,250,000
|
|
$
|
—
|
|
2,450,981
|
|
Q2 2018
|
$
|
176,000
|
|
$
|
—
|
|
1,035,295
|
|
|
$
|
1,426,000
|
|
$
|
—
|
|
3,486,276
|
|
Closing Date
|
Closing Amount
|
Maturity Date
|
||
11/30/2017
|
$
|
250,000
|
|
11/30/2018
|
12/28/2017
|
$
|
250,000
|
|
12/28/2018
|
1/11/2018
|
$
|
250,000
|
|
1/11/2019
|
1/25/2018
|
$
|
250,000
|
|
1/25/2019
|
2/8/2018
|
$
|
250,000
|
|
2/8/2019
|
2/21/2018
|
$
|
250,000
|
|
2/21/2019
|
3/7/2018
|
$
|
250,000
|
|
3/7/2019
|
3/21/2018
|
$
|
250,000
|
|
3/21/2019
|
1)
|
The first valuation was done on the November 30, 2017 Note with term of
three
years. The derivative value of this note was
$3,742,002
as of
December 31, 2017
.
|
1)
|
The second valuation was done on the group of Notes dated November 30, 2017, that had a term of
one
year. The derivative value of this group of notes was
$888,168
as of
December 31, 2017
.
|
2)
|
The third valuation was done on the Note dated December 28, 2017, which had a term of
one
year. The derivative value of this note was
$267,008
on
December 31, 2017
.
|
3)
|
For the Notes dated in the first quarter of
2018
, we did a fourth valuation. Although the notes were entered into at various dates, we used a weighted average issuance date of
February 15, 2018
for a combined valuation purpose. Management's analysis, using the following assumptions: annual volatility of
54%
present value discount rate of
12%
and a dividend yield of
0%
, resulted in a fair value of the embedded derivative associated with these Notes of
$1,151,162
as of
February 15, 2018
. The value of the embedded derivative associated with these Notes was recorded as a debt discount.
|
1)
|
For the November 30, 2017 3yr Note: Management conducted a fair value assessment with the following assumptions: annual volatility of
62%
present value discount rate of
12%
and a dividend yield of
0%
as of
June 30, 2018
. As a result of the fair value assessment, the Company recorded a net gain of
$424,530
as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of
$3,317,472
as of
June 30, 2018
.
|
2)
|
For the November 30, 2017 1yr Notes: Management conducted a fair value assessment with the following assumptions: annual volatility of
35%
present value discount rate of
12%
and a dividend yield of
0%
as of
June 30, 2018
. As a result of the fair value assessment, the Company recorded a net gain of
$204,697
as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of
$683,471
as of
June 30, 2018
.
|
3)
|
For the December 28, 2017 1yr Note: Management conducted a fair value assessment with the following assumptions: annual volatility of
35%
present value discount rate of
12%
and a dividend yield of
0%
as of
June 30, 2018
. As a result of the fair value assessment, the Company recorded a net gain of
$86,708
as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of
$180,300
as of
June 30, 2018
.
|
4)
|
For the first quarter
2018
1yr Notes: Management conducted a fair value assessment with the following assumptions: annual volatility of
52%
present value discount rate of
12%
and a dividend yield of
0%
as of
June 30, 2018
. As a result of the fair value assessment, the Company recorded a net gain of
$69,365
as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of
$1,081,797
as of
June 30, 2018
.
|
Conversion Period
|
Principal Converted
|
Common Shares Issued
|
||||
Q1 2018
|
$
|
75,000
|
|
187,500
|
|
|
Q2 2018
|
$
|
316,600
|
|
2,082,778
|
|
|
|
$
|
391,600
|
|
$
|
2,270,278
|
|
Conversion Period
|
Principal Converted
|
Interest Converted
|
Common Shares Issued
|
|||||
Q4 2017
|
$
|
275,000
|
|
$
|
—
|
|
404,412
|
|
Q1 2018
|
$
|
105,000
|
|
$
|
20,717
|
|
493,007
|
|
Q2 2018
|
$
|
408,000
|
|
$
|
6,090
|
|
2,435,823
|
|
|
$
|
788,000
|
|
$
|
26,807
|
|
3,333,242
|
|
Conversion Period
|
Preferred Series K Shares Converted
|
Value of Series K Preferred Shares
|
Common Shares Issued
|
||||
Q2 2017
|
3,200
|
|
$
|
3,200,000
|
|
800,000
|
|
Q3 2017
|
3,000
|
|
$
|
3,000,000
|
|
750,000
|
|
Q2 2018
|
2,810
|
|
$
|
2,810,000
|
|
702,500
|
|
|
9,010
|
|
9,010,000
|
|
2,252,500
|
|
Preferred Stock Series Designation
|
Shares Outstanding
|
|
Series A
|
60,756
|
|
Series K
|
—
|
|
|
Warrant
Shares |
Warrant
Weighted Average Exercise Price |
|||
Outstanding at December 31, 2016
|
—
|
|
$
|
—
|
|
Granted
|
700,000
|
|
$
|
3.01
|
|
Exercised
|
—
|
|
$
|
—
|
|
Canceled/Expired
|
—
|
|
$
|
—
|
|
Outstanding at December 31, 2017
|
700,000
|
|
$
|
3.01
|
|
Granted
|
—
|
|
$
|
—
|
|
Exercised
|
—
|
|
$
|
—
|
|
Canceled/Expired
|
(200,000
|
)
|
$
|
1.80
|
|
Outstanding at June 30, 2018
|
500,000
|
|
$
|
3.50
|
|
Exercisable at June 30, 2018
|
500,000
|
|
$
|
3.50
|
|
|
|
For the six months ended June 30,
|
|
||||||
|
|
2018
|
|
2017
|
|
||||
Share-based compensation cost included in:
|
|
|
|
|
|
||||
Research and development
|
|
$
|
642
|
|
|
$
|
16,898
|
|
|
Selling, general and administrative
|
|
20,704
|
|
|
79,013
|
|
|
||
Total share-based compensation cost
|
|
$
|
21,346
|
|
|
$
|
95,911
|
|
|
|
|
For the six months ended June 30,
|
|
||||||
|
|
2018
|
|
2017
|
|
||||
Type of Award:
|
|
|
|
|
|
||||
Stock Options
|
|
$
|
21,346
|
|
|
$
|
69,582
|
|
|
Restricted Stock Units and Awards
|
|
—
|
|
|
26,329
|
|
|
||
Total share-based compensation cost
|
|
$
|
21,346
|
|
|
$
|
95,911
|
|
|
•
|
Our ability to generate customer acceptance of and demand for our products;
|
•
|
Successful ramping up of commercial production on the equipment installed;
|
•
|
Our products are successfully and timely certified for use in our target markets;
|
•
|
Successful operating of production tools to achieve the efficiencies, throughput and yield necessary to reach our cost targets;
|
•
|
The products we design are saleable at a price sufficient to generate profits;
|
•
|
Our ability to raise sufficient capital to enable us to reach a level of sales sufficient to achieve profitability on terms favorable to us;
|
•
|
Effective management of the planned ramp up of our domestic and international operations;
|
•
|
Our ability to successfully develop and maintain strategic relationships with key partners, including OEMs, system integrators, distributors, retailers and e-commerce companies, who deal directly with end users in our target markets;
|
•
|
Our ability to maintain the listing of our common stock on the OTC Market;
|
•
|
Our ability to implement remediation measures to address material weaknesses in internal control;
|
•
|
Our ability to achieve projected operational performance and cost metrics;
|
•
|
Our ability to enter into commercially viable licensing, joint venture, or other commercial arrangements; and
|
•
|
Availability of raw materials.
|
1.
|
Personnel and facility related expenses decreased approximately
$512,000
, as compared to the
second
quarter of
2017
. The decrease in personnel and facility related costs was primarily due to a reduction in headcount and the use of contractors.
|
2.
|
Materials and equipment related expenses, decreased approximately
$29,000
, as compared to the
second
quarter of
2017
. The decrease was due to a decrease in production of research and development products.
|
1.
|
Personnel and facility related costs decreased approximately
$489,000
during the three months ended
June 30, 2018
, as compared to the three months ended
June 30, 2017
. The overall decrease in personnel related costs was primarily due a lower headcount for the three months ended
June 30, 2018
, as compared to the three months ended
June 30, 2017
as well as the decreased use of consultants and contractors during the same period.
|
2.
|
Marketing and related expenses decreased approximately
$16,000
during the three months ended
June 30, 2018
, as compared to the three months ended
June 30, 2017
. The decrease in Marketing and related expenses is due to reduced marketing, advertising, and promotional activities during the three months ended
June 30, 2018
, compared to the
second
quarter of
2017
, which is the direct result of reducing our marketing budget to focus more on the development of our PV.
|
3.
|
Legal expenses increased approximately
$52,000
during the three months ended
June 30, 2018
, as compared to the three months ended
June 30, 2017
. The primary reasons for the increase is due increased and general legal expenses related to financing efforts as compared to the quarter ended
June 30, 2017
, offset by decreases in legal expenses related to our patent activity as compared to the
second
quarter of
2017
.
|
4.
|
Public company expenses increased approximately
$19,000
during the three months ended
June 30, 2018
, as compared to the three months ended
June 30, 2017
. The increase is mostly due to a timing difference in our Annual Shareholder Meeting, which was held during the third quarter of 2017, and the fees related to the processing of our reverse stock split.
|
5.
|
During the three months ended
June 30, 2017
, we also incurred settlement fees of approximately
$167,485
, related to the settlements with customers who wished to return Enerplex products following the sale of our Enerplex brand. There were no such fees incurred during the three months ended
June 30, 2018
.
|
1.
|
Interest expense decreased approximately
$119,000
, as compared the
second
quarter of
2017
. The decrease is primarily due to an decrease of non-cash interest expense related to convertible debt, promissory notes, and Preferred Stock.
|
2.
|
During the three months ended
June 30, 2017
, we recorded conversion inducement transaction costs of
$149,000
, related to our Series J Preferred Stock. There were no such transactions during the three months ended
June 30, 2018
.
|
3.
|
Gains and losses on change in fair value of derivatives and on extinguishment of liabilities, net was a loss of approximately
$300,000
during the
second
quarter of
2018
, as compared to an approximate loss of
$929,000
for the
second
quarter of
2017
. The improvement of approximately
$629,000
in this non-cash item is attributable to a gain of approximately
$1,225,000
on the change in fair value of our embedded derivative instruments during the three months ended
June 30, 2018
, compared to an approximate gain
$1,932,000
in
2017
, offset by a reduction in the loss from extinguishment of
|
|
|
Decrease (Increase)
to Net Loss
For the Three
Months Ended
June 30, 2018 Compared to the Three Months Ended
June 30, 2017
|
||
Revenues
|
|
$
|
78,000
|
|
Cost of Revenue
|
|
64,000
|
|
|
Research, development and manufacturing operations
|
|
|
||
Materials and Equipment Related Expenses
|
|
29,000
|
|
|
Personnel and Facility Related Expenses
|
|
512,000
|
|
|
Selling, general and administrative expenses
|
|
|
||
Personnel, administrative, and facility Related Expenses
|
|
489,000
|
|
|
Marketing Related Expenses
|
|
16,000
|
|
|
Legal Expenses
|
|
52,000
|
|
|
Public Company Costs
|
|
(19,000
|
)
|
|
Bad debt and Settlement expense
|
|
167,000
|
|
|
Depreciation and Amortization Expense
|
|
233,000
|
|
|
Other Income / (Expense)
|
|
|
||
Other income
|
|
150,000
|
|
|
Interest Expense
|
|
119,000
|
|
|
Non-Cash Change in Fair Value of Derivatives and Gain/Loss on Extinguishment of Liabilities, net
|
|
(629,000
|
)
|
|
Decrease (Increase) to Net Loss
|
|
$
|
1,261,000
|
|
1.
|
Personnel and facility related expenses decreased approximately
$571,000
, as compared to the same time period of 2017. The decrease in personnel and facility related costs was primarily due to a reduction in headcount and the use of contractors.
|
2.
|
Materials and equipment related expenses, decreased approximately
$74,000
, as compared to the same time period of 2017. The decrease was due to a decrease in production of research and development products.
|
1.
|
Personnel and facility related costs decreased approximately
$1,144,000
during the
six
months ended
June 30, 2018
, as compared to the
six
months ended
June 30, 2017
. The overall decrease in personnel related costs was primarily due a lower headcount for the
six
months ended
June 30, 2018
, as compared to the
six
months ended
June 30, 2017
as well as the decreased use of consultants and contractors during the same period.
|
2.
|
Marketing and related expenses decreased approximately
$99,000
during the
six
months ended
June 30, 2018
, as compared to the
six
months ended
June 30, 2017
. The decrease in Marketing and related expenses is due to reduced marketing, advertising, and promotional activities during the
six
months ended
June 30, 2018
, compared to the same time period of 2017, which is the direct result of reducing our marketing budget to focus more on the development of our PV.
|
3.
|
Legal expenses increased approximately
$40,000
during the
six
months ended
June 30, 2018
, as compared to the
six
months ended
June 30, 2017
. The primary reasons for the increase is due increased and general legal expenses related to financing efforts as compared to the
six
months ended ended
June 30, 2017
, offset by decreases in legal expenses related to our patent activity as compared to the same period of 2017.
|
4.
|
Public company expenses decreased approximately
$119,000
during the
six
months ended
June 30, 2018
, as compared to the
six
months ended
June 30, 2017
. This decrease is primarily due to reduced filing fees related to financing agreements in 2018, as compared to the same period in the previous year.
|
5.
|
Bad debt and settlement expenses decreased approximately
$212,000
during the
six
months ended
June 30, 2018
, as compared to the
six
months ended
June 30, 2017
. During 2017 we recorded payments and settlements against existing reserves which were offset by additional reserves for customers whose accounts were greater than 120 days overdue. In 2018 we had fewer customers whose accounts were greater than 120 days overdue.
|
1.
|
Interest expense decreased approximately
$766,000
, as compared the
six
months ended
June 30, 2017
. The decrease is primarily due to an decrease of non-cash interest expense related to convertible debt, promissory notes, and Preferred Stock.
|
2.
|
During the six months ended
June 30, 2017
, the Company recorded net other income of
$579,000
. This income was comprised of a $1,215,000 increase in gain on sale of assets after the transfer of the EnerPlex IP, offset by induced conversion costs of $636,000 on several of the financial instruments. There were no other income or expense transactions during the
six
months ended
June 30, 2018
.
|
3.
|
Gains and losses on change in fair value of derivatives and on extinguishment of liabilities, net was a gain of approximately
$685,000
during the
six
months ended
June 30, 2018
, as compared to an approximate gain of
$1,602,000
for the
six
months ended
June 30, 2017
. The change of approximately
$2,287,000
in this non-cash item is attributable to a gain of approximately
$674,000
on the change in fair value of our embedded derivative instruments during the
six
months ended
June 30, 2018
, compared to an approximate gain
$5,187,000
in 2017, offset by a reduction in the loss from extinguishment
|
|
|
Decrease (Increase)
to Net Loss
For the Six
Months Ended
June 30, 2018 Compared to the Six Months Ended
June 30, 2017
|
||
Revenues
|
|
$
|
175,000
|
|
Cost of Revenue
|
|
1,284,000
|
|
|
Research, development and manufacturing operations
|
|
|
||
Materials and Equipment Related Expenses
|
|
74,000
|
|
|
Personnel and Facility Related Expenses
|
|
571,000
|
|
|
Inventory impairment costs
|
|
364,000
|
|
|
Selling, general and administrative expenses
|
|
|
||
Personnel, administrative, and facility Related Expenses
|
|
1,144,000
|
|
|
Marketing Related Expenses
|
|
99,000
|
|
|
Legal Expenses
|
|
(40,000
|
)
|
|
Public Company Costs
|
|
119,000
|
|
|
Bad debt and Settlement expense
|
|
212,000
|
|
|
Depreciation and Amortization Expense
|
|
504,000
|
|
|
Other Income / (Expense)
|
|
|
||
Other income
|
|
(579,000
|
)
|
|
Interest Expense
|
|
766,000
|
|
|
Non-Cash Change in Fair Value of Derivatives and Gain/Loss on Extinguishment of Liabilities, net
|
|
(2,287,000
|
)
|
|
Decrease (Increase) to Net Loss
|
|
$
|
2,406,000
|
|
|
ASCENT SOLAR TECHNOLOGIES, INC.
|
|
|
|
|
|
By:
|
/
S
/ VICTOR LEE
|
|
|
Lee Kong Hian (aka Victor Lee)
President and Chief Executive Officer
(Principal Executive Officer, Principal Financial Officer, Chief Accounting Officer, and Authorized Signatory)
|
Exhibit A
|
Note
|
Exhibit B
|
Subordination Agreement
|
Exhibit C
|
Consent
|
Exhibit D
|
Trust Deed
|
Exhibit E
|
Irrevocable Transfer Agent Instructions
|
Exhibit F
|
Officer’s Certificate
|
Exhibit G
|
Share Issuance Resolution
|
Exhibit H
|
Arbitration Provisions
|
A.
|
Redemption Date: ____________, 201_
|
B.
|
Redemption Amount: ____________
|
C.
|
Portion of Redemption Amount to be Paid in Cash: ____________
|
D.
|
Portion of Redemption Amount to be Converted into Common Stock: ____________ (B minus C)
|
E.
|
Conversion Price: _______________
|
F.
|
Conversion Shares: _______________ (D divided by E)
|
G.
|
Remaining Outstanding Balance of Note: ____________ *
|
H.
|
Remaining Balance of Investor Notes: ____________*
|
I.
|
Outstanding Balance of Note Net of Balance of Investor Notes: ____________ (G minus H)*
|
A.
|
Market Capitalization:________________
|
B.
|
_________ Borrower herby certifies that no Equity Conditions Failure exists as of the applicable Redemption Date.
|
C.
|
_________ Borrower hereby gives notice that an Equity Conditions Failure has occurred and requests a waiver from Lender with respect thereto. The Equity Conditions Failure is as follows:
|
A.
|
Redemption Date: ____________, 201_
|
B.
|
Redemption Amount: ____________
|
C.
|
Portion of Redemption Amount to be Paid in Cash: ____________
|
D.
|
Portion of Redemption Amount to be Converted into Common Stock: ____________ (B minus C)
|
E.
|
Par Value Adjustment Amount: ______________
|
F.
|
Conversion Price: _______________ (Par Value)
|
G.
|
Conversion Shares: _______________ (D divided by F)
|
H.
|
Remaining Outstanding Balance of Note: ____________ *
|
B.
|
Market Capitalization:________________
|
C.
|
_________ Borrower herby certifies that no Equity Conditions Failure exists as of the applicable Redemption Date.
|
D.
|
_________ Borrower hereby gives notice that an Equity Conditions Failure has occurred and requests a waiver from Lender with respect thereto. The Equity Conditions Failure is as follows:
|
|
|
|
August 20, 2018
|
|
|
|
|
/s/ VICTOR LEE
|
|
|
Victor Lee
President and Chief Executive Officer
(Principal Executive Officer, Principal Financial Officer, Chief Accounting Officer, and Authorized Signatory)
|
|
|
|
August 20, 2018
|
|
|
|
|
/s/ VICTOR LEE
|
|
|
Victor Lee
President and Chief Executive Officer
(Principal Executive Officer, Principal Financial Officer, Chief Accounting Officer, and Authorized Signatory)
|
1
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
August 20, 2018
|
|
|
|
|
/s/ VICTOR LEE
|
|
|
Victor Lee
President and Chief Executive Officer
(Principal Executive Officer, Principal Financial Officer, Chief Accounting Officer, and Authorized Signatory)
|
1
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
August 20, 2018
|
|
|
|
|
/s/ VICTOR LEE
|
|
|
Victor Lee
President and Chief Executive Officer
(Principal Executive Officer, Principal Financial Officer, Chief Accounting Officer, and Authorized Signatory)
|