Ascent Solar Technologies Inc (ASTI)

[overlordpeter]

Derivatives and Hedging, the conversion options in the Series D-1 Preferred Stock were
deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option
as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At closing, a derivative liability and a corresponding debt
discount in the amount of $3.4 million were recorded. The debt discount of $3.4 million was charged to interest expense. As of March 31, 2015 , the value of the
derivative liability associated with the Series D-1 Preferred Stock was $0 as the Series D-1 Preferred Stock was fully converted as of March 31, 2015 . A net gain of $2.7 million was recorded to "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated
Statements of Operations for the quarter ended March 31, 2015 upon extinguishment of the D-1 Preferred Stock liability and the related embedded derivative.
The derivative associated with the Series D-1 Preferred Stock approximated management’s estimate of the fair value of the embedded derivative liability at
the closing date based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions: annual volatility of 45% , present value discount rate of 12% , dividend yield of 0% , and a life of 0.2 years .