UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 3130, 2019

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________

Commission File Number 333-187308

NANOFLEX POWER CORPORATION

(Exact name of registrant as specified in its charter)

Florida		46-1904002
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

17207 N Perimeter Dr., Suite 210
Scottsdale, AZ		85255
(Address of principal executive offices)		(Zip Code)

480-585-4200

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value per share		OPVS		OTCQB Marketplace

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~165~~176,~~315~~397,~~733~~ 889 shares of common stock are issued and outstanding as of ~~May~~August 149, 2019.

TABLE OF CONTENTS

		Page

PART I.	FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	1

ITEM 2.	MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	17

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	21

ITEM 4.	CONTROLS AND PROCEDURES	21

PART II.	OTHER INFORMATION

ITEM 1	LEGAL PROCEEDINGS	22

ITEM 1A.	RISK FACTORS	22

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	22

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	24

ITEM 4.	MINE SAFETY DISCLOSURES	24

ITEM 5.	OTHER INFORMATION	24

ITEM 6.	EXHIBITS	24

SIGNATURES		25

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONTENTS

FINANCIAL STATEMENTS		Page
CONSOLIDATED BALANCE SHEETS (Unaudited)		2
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)		3
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT (Unaudited)		4
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)		56
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)		67

NANOFLEX POWER CORPORATION

CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	June 30,			December 31,
	2019			2018
		(unaudited)
ASSETS	(unaudited)
ASSETS
Current assets:
Cash	$	~~138~~101,~~624~~045		$	27,213
Accounts receivable		~~69,749~~-			150,348
Unbilled accounts receivable		—-			54,176
Prepaid expenses and other current assets		2324,~~771~~274			32,224
Total current assets		~~232~~125,~~144~~319			263,961
Right of use asset - operating lease		4341,~~348~~815			—-
Property and equipment, net		~~281~~275,~~598~~352			253,324
Total assets	$	~~557~~442,~~090~~486		$	517,285
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	2,~~902~~885,~~345~~500		$	2,780,839
Accounts payable- related party		126,~~081~~700			11,875
Accrued expenses		1,~~383~~323,~~467~~126			1,304,258
Share issuance obligation		~~327~~1,~~300~~374,209			1,379,067
Short-term debt, net of unamortized discounts		1480,~~745,018~~000			1,687,518
Short-term debt- related party		350,000			3,972,759
Short-term convertible debt- related party, net of unamortized discounts		1,190,250			3,972,759
Convertible debt, net of unamortized discounts and deferred financing costs		23,~~678~~579,~~474~~075			1,012,038
Advances - related party		217,464			107,464
Advances		100,000			-
Operating lease liability		43,348			—
Advances - related party		170,142			107,464
Total current liabilities		9,659,497			12,255,818
Operating lease liability		41,815			-
Total liabilities		9,659,497			12,255,818
Total current liabilities		11,150,817			12,255,818
Series A Redeemable Participating Convertible Preferred Stock, 10,000 authorized, $0.0001 par value, 4,546 and 0 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively		4,538,415			—
Total liabilities		11,150,817			12,255,818
		4,538,415
Series A Redeemable Participating Convertible Preferred Stock, 10,000 authorized, $0.0001 par value, 4,830 and 0 issued and outstanding as of		4,816,003			-
June 30, 2019 and December 31, 2018, respectively		4,816,003			-
Stockholders’ deficit:
Common stock, 500,000,000 authorized, $0.0001 par value, 160,376,983 and 131,170,840 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively		16,037			13,117
Common stock, 500,000,000 authorized, $0.0001 par value, 169,584,483 and 131,170,840 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively		16,958			13,117
Additional paid-in capital		~~223~~224,~~961~~674,~~623~~389			222,370,241
Accumulated deficit		(~~237~~240,~~618~~215,~~482~~681	)		(234,121,891	)
Total stockholders’ deficit		(1315,~~640~~524,~~822~~334	)		(11,738,533	)
Total liabilities and stockholders’ deficit	$	~~557~~442,~~090~~486		$	517,285

See accompanying notes to unaudited consolidated financial statements.

NANOFLEX POWER CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,
	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Revenue	$	~~93,280~~-		$	~~149~~221,~~991~~917		$	93,280		$	371,908
Cost of services		~~(93,280~~-	)		(~~149~~221,~~991~~917	)		(93,280	)		(371,908	)
Gross loss		-			-			-			-
Operating expenses:
Research and development	$	~~321~~348,~~840~~932		$	~~145~~245,~~781~~741			670,772			391,522
Patent application and prosecution fees		~~287~~113,~~188~~828			~~327~~526,~~157~~459			401,016			853,616
Selling, general and administrative expenses		78362,~~801~~172			~~474~~503,~~944~~508			440,973			978,452
Total operating expenses		~~687~~824,~~829~~932			~~947~~1,~~882~~275,708			1,512,761			2,223,590
Loss from operations		(~~687~~824,~~829~~932	)		(~~947~~1,~~882~~275,708	)		(1,512,761	)		(2,223,590	)
Other income (expense):
Loss on extinguishment of debt		(~~233~~670,~~287~~773	)		(1,~~820~~365,~~764~~972	)		(904,060	)		(3,186,736	)
Gain on settlement of accrued interest		~~20,784~~-			~~32,800~~-			20,784			32,800
Loss on induced conversion of debt		~~(24,948~~-	)		-(598,425	)		(24,948	)		(598,425	)
Loss on change in fair value of share issuance obligation		(72308,~~016~~525	)		-			(380,541	)		-
Interest expense		(2792,~~499,295~~969	)		(~~641~~627,~~669~~382	)		(3,292,264	)		(1,269,051	)
Total other income (expense)		(21,~~808~~772,~~762~~267	)		(2,~~429~~591,~~633~~779	)		(4,581,029	)		(5,021,412	)
Net loss	$	(32,~~496~~597,~~591~~199	)	$	(3,~~377~~867,~~515~~487	)	$	(6,093,790	)	$	(7,245,002	)
Net loss per common share:
Loss on reduction in price of warrants		-			(5,755,133	)		-			(5,755,133	)
Basic and diluted	$	(0.03	)	$	(0.05	)
Net loss attributable to shareholders	$	(2,597,199	)	$	(9,622,620	)	$	(6,093,790	)	$	(13,000,135	)
Weighted average common shares outstanding:
Net loss per common share:
Basic and diluted	$	~~136,316,150~~(0.02	)	$	~~68,158,463~~(0.13	)	$	(0.04	)	$	(0.18	)
Weighted average common shares outstanding:
Basic and diluted		165,277,971			73,579,555			150,877,065			70,883,984

See accompanying notes to unaudited consolidated financial statements.

NANOFLEX POWER CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

					Additional						Common
	Common Stock				Paid in			Accumulated			Stock
	Shares		Amount		Capital			Deficit			Payable		Total
Balance at December 31, 2018		131,170,840	$	13,117	$	222,370,241		$	(234,121,891	)	$	-	$	(11,738,533	)
Common stock issued for accrued interest		480,000		48		27,168			-			-		27,216
Common stock and warrants issued for extinguishment of debt		1,000,500		100		67,900			-			-		68,000
Loss on induced conversion of debt		-		-		24,948			-			-		24,948
Conversion of debt and interest to common stock		540,000		54		53,946			-			-		54,000
Common stock issued to settle share issuance obligation		23,573,800		2,357		1,487,195			-			-		1,489,552
Warrants exercised cashlessly		2,200,000		220		(220	)		-			-		-
Warrants exercised in exchange for debt		1,411,843		141		141,043			-			-		141,184
Warrants issued for services - non-employees		-		-		16,187			-			-		16,187
Warrants issued for services - employees		-		-		(237,209	)		-			-		(237,209	)
Options issued for services		-		-		10,424			-			-		10,424
Net loss		-		-		-			(3,496,591	)		-		(3,496,591	)
Balance at March 31, 2019 (unaudited)		160,376,983	$	16,037	$	223,961,623		$	(237,618,482	)	$	-	$	(13,640,822	)

FOR THE THREE MONTHS ENDED JUNE 30, 2019 AND 2018

							Additional						Common
	Common Stock						Paid in			Accumulated			Stock
	Shares			Amount			Capital			Deficit			Payable			Total
Balance at December 31, 2017		67,289,475			6,729			205,928,610			(216,545,120	)		681,625			(9,928,156	)
Balance at March 31, 2019 (unaudited)		160,376,983		$	16,037		$	223,961,623		$	(237,618,482	)	$	-		$	(13,640,822	)
Common stock issued for accrued interest		112,000			11			23,189			-			-			23,200
Common stock and warrants issued for extinguishment of debt		3,000,000			300			220,700			-			-			221,000
Common stock issued for extinguishment of debt		100,000			10			1,772,402			-			-			1,772,412
Common stock issued to settle share issuance obligation		5,772,500			577			404,777			-			-			405,354
Common stock issued for services		30,303			3			9,997			-			-			10,000
Warrants exercised in exchange for debt		435,000			44			43,455			-			-			43,499
Warrants issued for services - non-employees		-			-			~~(13~~16,~~222~~508	)		-			-			~~(13~~16,~~222~~508	)
Warrants issued for services - employees		-			-			8516,~~183~~915			-			-			8516,~~183~~915
BCF and common stock and warrants issued with debt		140,000			14			494,683			-			-			494,697
Options issued for services		-			-			10,411			-			-			10,411
Options issued for services		-			-			9,811			-			-			9,811
Net loss		-			-			-			(2,597,199	)		-			(2,597,199	)
Common stock issued for legal settlement agreement		1,750,000			175			681,450			-			(681,625	)		-
Balance at June 30, 2019 (unaudited)		169,584,483		$	16,958		$	224,674,389		$	(240,215,681	)	$	-		$	(15,524,334	)
Net loss		-			-						(3,377,515	)		-			(3,377,515	)
								Additional						Common
		Common Stock						Paid in			Accumulated			Stock
		Shares			Amount			Capital			Deficit			Payable			Total
Balance at March 31, 2018 (unaudited)		69,421,778			6,942			208,992,103			(219,922,635	)		-			(10,923,590	)
Common stock issued for cash		5,187,810			519			518,262			-			-			518,781
Common stock and warrants issued for extinguishment of debt		4,250,000			425			1,340,206			-			-			1,340,631
Loss on induced conversion of debt		-			-			598,425			-			-			598,425
Warrants exercised for cash		1,802,260			180			180,046			-			-			180,226
Warrants exercised cashlessly		10,481,080			1,048			(1,048	)		-			-			0
Common stock returned for debt modification		(140,000	)		(14	)		14			-			-			-
Warrants issued for services - non-employees		-			-			83,782			-			-			83,782
Warrants issued for services - employees		-			-			69,695			-			-			69,695
BCF and common stock and warrants issued with debt		-			-			102,927			-			-			102,927
Options issued for services		-			-			10,777			-			-			10,777
Net loss		-			-			-			(3,867,487	)		-			(3,867,487	)
Balance at June 30, 2018 (unaudited)		91,002,928		$	9,100		$	211,895,189		$	(223,790,122	)	$	-		$	(11,885,833	)

See accompanying notes to unaudited consolidated financial statements.

NANOFLEX POWER CORPORATION

CONSOLIDATED STATEMENTS OF ~~CASH~~CHANGES ~~FLOWS~~IN STOCKHOLDERS’ DEFICIT

~~(Unaudited)~~FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND 2018

	Three Months Ended March 31,
							Additional						Common
	2019			2018
	Common Stock						Paid in			Accumulated			Stock
CASH FLOWS FROM OPERATING ACTIVITIES
	Shares			Amount			Capital			Deficit			Payable			Total
Net loss		(3,496,591	)	$	(3,377,515	)
Balance at December 31, 2018		131,170,840		$	13,117		$	222,370,241		$	(234,121,891	)	$	-		$	(11,738,533	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for accrued interest		480,000			48			27,168			-			-			27,216
Non-cash lease expense		6,894			-
Common stock and warrants issued for extinguishment of debt		4,000,500			400			288,600			-			-			289,000
Depreciation expense		2,506			1,369
Loss on induced conversion of debt		-			-			24,948			-			-			24,948
Warrants and options issued as compensation		(210,598	)		81,772
Conversion of debt and interest to common stock		540,000			54			53,946			-			-			54,000
Amortization of debt discounts		2,305,845			337,333
Common stock issued to settle share issuance obligation		29,346,300			2,934			1,891,972			-			-			1,894,906
Loss on extinguishment of debt		173,000			1,802,412
Warrants exercised cashlessly		2,200,000			220			(220	)		-			-			-
Loss on induced conversion of debt		24,948			-
Warrants exercised in exchange for debt		1,846,843			185			184,498			-			-			184,683
Gain on settlement of accrued interest with stock		(20,784	)		(32,800	)
Warrants issued for services - non-employees		-			-			32,695			-			-			32,695
Loss on change in fair value of share issuance obligation		72,016			-
Warrants issued for services - employees		-			-			(220,294	)		-			-			(220,294	)
Common shares issued for services		-			10,000
Options issued for services		-			-			20,835			-			-			20,835
Changes in operating assets and liabilities:
Net loss		-			-			-			(6,093,790	)		-			(6,093,790	)
Prepaid expenses and other current assets		8,453			1,320
Balance at June 30, 2019 (unaudited)		169,584,483		$	16,958		$	224,674,389		$	(240,215,681	)	$	-		$	(15,524,334	)
Accounts receivable		134,775			(81,698	)
								Additional						Common
Accounts payable		121,506			(328,186	)
		Common Stock						Paid in			Accumulated			Stock
Accounts payable - related party		206			2,878
		Shares			Amount			Capital			Deficit			Payable			Total
Accrued expenses		131,209			680,698
Balance at December 31, 2017		67,289,475			6,729			205,928,610			(216,545,120	)		681,625			(9,928,156	)
Operating lease liability		(6,894	)		-
Common stock issued for cash		5,187,810			519			518,262			-			-			518,781
Net cash used in operating activities		(753,509	)		(902,417	)
Common stock issued for accrued interest		112,000			11			23,189			-			-			23,200
CASH FLOWS FROM INVESTING ACTIVITIES
Common stock and warrants issued for extinguishment of debt		4,350,000			435			3,112,608			-			-			3,113,043
Purchases of property and equipment		(30,780	)		-
Loss on induced conversion of debt		-			-			598,425			-			-			598,425
Net cash used in investing activities		(30,780	)		-
Common stock issued for services		30,303			3			9,997			-			-			10,000
CASH FLOWS FROM FINANCING ACTIVITIES
Warrants exercised for cash		1,802,260			180			180,046			-			-			180,226
Borrowings on related party debt		350,000			300,000
Warrants exercised cashlessly		10,481,080			1,048			(1,048	)		-			-			-
Borrowings on promissory note debt		45,000			75,000
Warrants issued for services - non-employees		-			-			70,560			-			-			70,560
Repayments on promissory note debt		(45,000	)		-
Warrants issued for services - employees		-			-			154,878			-			-			154,878
Borrowings on short term convertible debt		588,700			595,100
BCF and common stock and warrants issued with debt		-			-			597,624			-			-			597,624
Repayments on convertible debt		(153,000	)		(43,000	)
Options issued for services		-			-			20,588			-			-			20,588
Advances received from related party		150,000			8,000
Common stock issued for legal settlement agreement		1,750,000			175			681,450			-			(681,625	)		-
Advances repaid to related party		(40,000	)		(81,645	)
Net loss		-			-			-			(7,245,002	)		-			(7,245,002	)
Net cash provided by financing activities		895,700			853,455
Balance at June 30, 2018 (unaudited)		91,002,928		$	9,100		$	211,895,189		$	(223,790,122	)	$	-		$	(11,885,833	)
NET INCREASE (DECREASE) IN CASH		111,411			(48,962	)
Cash, beginning of the period		27,213			61,459
Cash, end of the period	$	138,624		$	12,497
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest	$	6,805		$	-
Cash paid for income taxes	$	-		$	-
NON-CASH ACTIVITIES
Principal and interest converted into common stock		54,000			-
Principal and interest converted to preferred stock		4,449,943			-
Common shares issued for legal settlement		-			681,625
Common stock and warrants issued for accrued interest		-			23,200
Common stock issued to settle share issuance obligation		1,489,552			-
Debt discount on beneficial conversion feature and warrants issued with debt		-			494,697
Accrued interest roll over to principal per modification		-			40,000
Cashless warrant exercises		220			-
Debt discount on share issuance obligation issued with debt		365,769			-
Warrants exercised in exchange for debt		141,184			-
ROU assets and operating lease obligations recognized		50,242			-

See accompanying notes to unaudited consolidated financial statements.

NANOFLEX POWER CORPORATION

~~NOTES~~CONSOLIDATED TOSTATEMENTS ~~UNAUDITED~~OF ~~CONSOLIDATED~~CASH ~~FINANCIAL STATEMENTS~~FLOWS

~~1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCCOUNTING POLICIES~~(Unaudited)

Background

	Six Months Ended June 30,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		(6,093,790	)	$	(7,245,002	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash lease expense		14,232			-
Depreciation expense		12,027			3,195
Warrants and options issued as compensation		(166,764	)		246,026
Amortization of debt discounts		3,138,666			716,930
Loss on extinguishment of debt		394,000			2,862,042
Loss on induced conversion of debt		24,948			598,425
Gain on settlement of accrued interest with stock		(20,784	)		(32,800	)
Loss on change in fair value of share issuance obligation		380,541			-
Common shares issued for services		-			10,000
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		7,950			866
Accounts receivable		204,524			(76,127	)
Accounts payable		104,661			329,995
Accounts payable - related party		(5,175	)		(10,816	)
Accrued expenses		95,375			942,186
Operating lease liability		(14,232	)		-
Net cash used in operating activities		(1,923,821	)		(1,655,080	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(34,055	)		(55,237	)
Net cash used in investing activities		(34,055	)		(55,237	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common shares and warrants		-			518,781
Proceeds from exercise of warrants		-			180,226
Borrowings on related party debt		1,284,000			300,000
Borrowings on promissory note debt		45,000			275,000
Repayments on promissory note debt		(95,000	)		(125,000	)
Borrowings on short term convertible debt		1,842,030			1,438,720
Repayments on convertible debt		(1,207,000	)		(664,278	)
Advances received		100,000			-
Advances received from related party		110,000			8,000
Advances repaid to related party		(47,322	)		(111,645	)
Net cash provided by financing activities		2,031,708			1,819,804

NET INCREASE (DECREASE) IN CASH		73,832			109,487
Cash, beginning of the period		27,213			61,459
Cash, end of the period	$	101,045		$	170,946

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest	$	6,805		$	12,310
Cash paid for income taxes	$	-		$	-

NON-CASH ACTIVITIES

Promissory notes modified to convertible debt		1,215,000			-
Principal and interest converted into common stock		54,000			-
Principal and interest converted to preferred stock		4,693,575			-
Common shares issued for legal settlement		-			681,625
Common stock and warrants issued for accrued interest		-			23,200
Common stock issued to settle share issuance obligation		1,894,906			-
Debt discount on beneficial conversion feature and warrants issued with debt		-			597,624
Accrued interest roll over to principal per modification		24,525			40,000
Notes modified to common shares issued for cash		-			400,000
Cashless warrant exercises		220			1,048
Debt discount on share issuance obligation issued with debt		1,509,507			-
Warrants exercised in exchange for debt		184,683			-
ROU assets and operating lease obligations recognized		56,047			-
CIP reclassed as fixed assets		258,975			-

~~NanoFlex~~See ~~Power~~accompanying ~~Corporation~~notes (‘we” “our”, the “Company”), 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 aunaudited ~~Share Exchange Agreement (the “Share Exchange Transaction”).~~consolidated ~~Immediately~~financial ~~following the closing of the Share Exchange Transaction, the Company owned 100% of the equity interests of GPEC and GPEC became a wholly-owned subsidiary of the Company~~statements. 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 photovoltaic technologies that enable thin film solar products with what we believe to be industry-leading efficiencies, light weight, flexibility, and low total system cost.6

~~These~~NANOFLEX ~~technologies~~POWER are targeted at certain broad applications, including: (a) portable and off-grid 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, (f) ultra-thin solar films for automobiles or other consumer applications and (g) solar powered sensors.CORPORATION

WeNOTES ~~believe~~TO ~~these~~UNAUDITED ~~technologies~~CONSOLIDATED ~~have been~~FINANCIAL 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.STATEMENTS

~~Basis~~1. ofNATURE ~~Presentation~~OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCCOUNTING POLICIES

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 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, 2018 included in our Annual Report on Form 10-K. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of results to be expected for the full fiscal year or any other periods.Background

~~The~~NanoFlex ~~preparation~~Power ofCorporation (‘we” “our”, the ~~consolidated~~“Company”), ~~financial statements~~formerly known as Universal Technology Systems, Corp., was incorporated in ~~conformity~~the State ~~with~~of UFlorida on January 28, 2013.S. ~~generally~~On ~~accepted~~September ~~accounting~~24, ~~principles~~2013, ~~requires~~the ~~management~~Company tocompleted ~~make~~the acquisition of Global Photonic Energy Corporation, a ~~number~~Pennsylvania ofcorporation ~~estimates~~(“GPEC”), pursuant to a Share Exchange Agreement (the “Share Exchange Transaction”). ~~and~~Immediately ~~judgments~~following ~~that~~the ~~affect~~closing of the ~~reported~~Share ~~amounts~~Exchange Transaction, the Company owned 100% of ~~assets~~the equity interests of GPEC and GPEC became a wholly owned subsidiary of the Company. On November 25, ~~liabilities~~2013, ~~expenses~~the Company changed its name from “Universal Technology Systems, Corp.” to “NanoFlex Power Corporation” and ~~related~~its ~~disclosures.~~trading ~~Actual~~symbol ~~results~~was ~~may~~changed ~~differ~~to “OPVS” ~~from~~on ~~these~~December ~~estimates~~26, 2013.

6GPEC was incorporated in Pennsylvania on February 7, 1994. The Company is organized to fund, develop, commercialize and license advanced photovoltaic technologies that enable thin film solar products with what we believe to be industry-leading efficiencies, light weight, flexibility, and low total system cost.

~~Going~~These ~~Concern~~technologies are targeted at certain broad applications, including: (a) portable and off-grid 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, (f) ultra-thin solar films for automobiles or other consumer applications and (g) solar powered sensors.

~~The~~We ~~Company~~believe ~~has~~these ~~generated~~technologies ~~limited~~have ~~revenue~~been demonstrated toin ~~date. The Company has~~ a ~~working~~laboratory ~~capital~~environment ~~deficit~~with ofour ~~$9,427,353~~research ~~and an accumulated deficit of $237,618,482 as of March 31, 2019~~partners. The ~~ability of the~~ Company ~~to continue as a going concern~~ is ~~dependent~~currently ontaking ~~raising~~steps ~~capital~~ to ~~fund~~pursue ~~ongoing~~product ~~operations~~development and ~~carry~~ ~~out~~commercialization ~~its~~on ~~business~~some ~~plan~~of ~~and ultimately to attain profitable operations. Accordingly,~~ these ~~factors~~technologies 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~~collaboration ~~event~~with ~~the~~industry ~~Company~~partners 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~~potential ~~from related parties~~customers.

~~Basic~~Basis ~~and~~of ~~Diluted Earnings per share~~Presentation

~~Net~~The ~~loss~~accompanying ~~per~~unaudited ~~share~~interim isconsolidated financial ~~provided~~statements of the Company have been prepared in accordance with ~~FASB~~accounting ~~ASC~~principles ~~260-10~~generally accepted in the United States of America, ~~“Earnings~~pursuant ~~per~~to ~~Share”.~~the ~~Basic~~rules ~~loss~~and ~~per~~regulations ~~share~~of isthe ~~computed~~Securities byand ~~dividing~~Exchange ~~losses~~Commission. ~~available~~Certain toinformation ~~common~~and footnote ~~stockholders~~disclosures byhave ~~the~~been ~~weighted~~omitted ~~average~~pursuant ~~number~~to ofsuch ~~common~~rules ~~shares~~and ~~outstanding~~regulations. ~~during~~In the ~~period.~~opinion ~~Diluted~~of ~~loss~~management, ~~per~~the ~~share~~accompanying ~~gives effect~~consolidated tofinancial ~~all~~statements ~~dilutive~~include ~~potential~~normal ~~common~~recurring ~~shares~~adjustments ~~outstanding~~that ~~during~~are necessary for a fair presentation of the ~~period~~results for the interim periods presented. ~~Dilutive~~These ~~loss~~consolidated ~~per~~financial ~~share~~statements ~~excludes~~should ~~all~~be ~~potential~~read ~~common~~in ~~shares~~conjunction with our audited consolidated financial ifstatements ~~their~~and ~~effect~~notes isthereto ~~anti~~for the fiscal year ended December 31, 2018 included in our Annual Report on Form 10-~~dilutive~~K. asThe ~~shown~~results of ~~below:~~operations for the three and six months ended June 30, 2019 are not necessarily indicative of results to be expected for the full fiscal year or any other periods.

	Three Months Ended
	March 31,
	2019		2018
Stock options		300,000		215,000
Warrants		79,084,985		87,138,700
Shares issuable under convertible notes		12,163,500		12,858,902
Convertible preferred stock		45,384,150		-

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.

~~Leases~~Going Concern

The Company ~~determines~~has ifgenerated anlimited ~~arrangement~~revenue isto date. The Company has a ~~lease~~working atcapital ~~inception.~~deficit ~~Operating~~of ~~leases~~$11,025,498 ~~are~~and ~~included~~an inaccumulated ~~operating~~deficit ~~lease~~of ~~right-~~$240,215,681 as of~~-use~~ ~~(“ROU”)~~June ~~assets~~30, 2019. The ability of the Company to continue as a going concern is dependent on raising capital to fund ongoing operations and ~~operating~~carry ~~lease~~out ~~liabilities~~its inbusiness ~~our~~plan ~~consolidated~~and ~~balance~~ultimately ~~sheets~~to attain profitable operations. ~~Finance~~Accordingly, ~~leases~~these ~~are~~factors ~~included~~raise insubstantial ~~property~~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 ~~equipment,~~classification ~~other~~of ~~current~~recorded ~~liabilities~~assets, or the amounts of and ~~other~~classification ~~long-term~~of liabilities that might be necessary in ~~our~~the ~~consolidated~~event ~~balance~~the ~~sheets~~Company cannot continue in existence. AsTo ofdate, ~~adoption~~the ofCompany ~~ASC~~has ~~842~~funded ~~and~~its asinitial operations primarily by way of ~~January~~the 1sale of equity securities, ~~2019~~convertible note financing, ~~the~~short ~~Company was~~term ~~not~~financing ~~party~~from toprivate ~~finance~~parties, ~~lease~~and ~~arrangements~~advances from related parties.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.7

~~Under~~Basic ~~the available practical expedient, we account for the lease~~ and ~~non-lease~~Diluted ~~components~~Earnings asper ~~a single lease component.~~share

7Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic loss per share is computed by dividing losses available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive as shown below:

Recent Accounting Pronouncements

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Stock options		300,000		176,000		300,000		176,000
Warrants		77,884,985		111,302,445		77,884,985		111,302,445
Shares issuable under convertible notes		19,157,626		15,110,568		19,157,626		15,110,568
Convertible preferred stock		48,160,030		-		48,160,030		-

~~In February 2016, the FASB issued ASU 2016-02,~~ Leases (“ASU 2016-02”). This new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. In July 2018, the FASB issued ASU No. 2018-11 which provides an alternative transition method that allows entities to apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has adopted the requirements of ASU 2016-02 on January 1, 2019, the first day of fiscal year 2019, and using the modified retrospective method. The Company also elected the practical expedient under ASU 2018-11 “Leases: Targeted Improvements” which allows the Company to apply the transition provision for Topic 842 at the Company’s adoption date instead of at the earliest comparative period presented in the financial statements. Therefore, the Company recognized and measured leases existing at January 1, 2019 but without retrospective application. Therefore, there was no impact recorded to beginning retained earnings or the statement of operations. The Company took advantage of the practical expedient options, which allows an entity not to reassess whether any existing or expired contracts contain leases. There was an increase in assets and liabilities of $50,242 due to the recognition of the required right-of-use asset and corresponding liability for all lease obligations that are currently classified as operating leases. See Note 5 for details.

The Company ~~reviewed~~determines ~~other~~if ~~newly~~an ~~issued~~arrangement is ~~accounting~~a ~~pronouncements~~lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and ~~concluded~~operating ~~that~~lease liabilities ~~they~~in ~~either~~our ~~are~~consolidated ~~not~~balance ~~applicable~~sheets. toFinance ~~the~~leases ~~Company’s~~are ~~operations~~included orin ~~that~~property noand ~~material~~equipment, other current liabilities, ~~effect~~and isother ~~expected~~long-term onliabilities in our consolidated balance sheets. As of adoption of ASC 842 and as of January 1, 2019, the Company’s was ~~financial~~not ~~statements~~party ~~upon~~to ~~future~~finance ~~adoption~~lease arrangements.

2:ROU ~~RELATED~~assets ~~PARTY~~represent ~~TRANSACTIONS~~the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

~~Short~~Under ~~Term~~the ~~Convertible~~available ~~Debt~~practical –expedient, we ~~Related~~account ~~Party~~for the lease and non-lease components as a single lease component.

~~During~~Recent ~~the~~Accounting three months ended March 31, 2019, the Company entered into various note and share purchase agreements with a major shareholder to which the shareholder purchased convertible notes in the aggregate of $350,000 along with additional shares of the Company’s common stock. The notes expire on the 90-day anniversary of the issuance date and accrue interest at a rate of 10% per annum. The maturity dates range from May to June 2019. On the maturity date, whether or not the notes are converted, the investors shall receive shares of the Company’s common stock with a value worth 50% of the note’s principal amounts. In addition, the shareholder shall have the right to convert all or any portion of the outstanding and unpaid principal and interest of the note into securities being sold by the Company on or after the maturity date. The Company may not prepay the notes prior to the maturity dates. The number of shares in aggregate was determined to be 1,750,000 based on a 20-day lookback from the inception date subject to a minimum of $0.10 per share. Total debt discount and share issuance obligation of $110,875 was recorded at inception. The debt discount was amortized straight line over the 90-day period. This obligation was determined to be a liability under ASC 480. Total amortization for the period from inception through March 31, 2019 was $24,686. As of March 31, 2019, the fair value of the shares was determined to be $99,225 and a gain on change in value of share obligation of $11,650 was recorded.Pronouncements

~~During~~In February 2016, the ~~three~~FASB issued ASU 2016-02, Leases (“ASU 2016-02”). This new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. ~~ended~~Leases ~~March~~will ~~31,~~be classified ~~2019~~as either finance or operating, anwith ~~aggregate~~classification affecting the pattern of $3expense recognition in the income statement. ASU 2016-02 is effective for fiscal years beginning after December 15,~~972~~ 2018,~~759~~ ofincluding ~~convertible~~interim ~~notes~~periods ~~matured~~within those fiscal years. Early adoption is permitted. In July 2018, the FASB issued ASU No. 2018-11 which provides an alternative transition method that allows entities to apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company ~~issued~~has 19adopted the requirements of ASU 2016-02 on January 1,~~863~~ 2019,~~800~~ ~~shares~~the first day of ~~its~~fiscal ~~common~~year ~~stock~~2019, ~~to various~~and ~~noteholders~~using the modified retrospective method. The Company ~~recalculated~~also elected the ~~fair~~practical ~~value~~expedient under ofASU 2018-11 “Leases: Targeted Improvements” which allows the ~~share~~Company ~~issuance~~to ~~obligation~~apply the transition provision for Topic 842 at the ~~maturity~~Company’s adoption date toinstead beof $at the earliest comparative period presented in the financial statements. Therefore, the Company recognized and measured leases existing at January 1,~~255~~ 2019 but without retrospective application. Therefore,~~130~~ ~~and~~there was no impact recorded ato ~~loss~~beginning onretained ~~change~~earnings inor ~~fair~~the ~~value~~statement of ~~$93,098~~operations. The Company ~~wrote~~took ~~off~~advantage of the practical ~~share~~expedient ~~issuance~~options, ~~obligation~~which allows an entity not to ~~common~~reassess ~~stock~~whether ~~and APIC~~any ~~upon~~existing ~~issuance~~or ofexpired ~~the~~contracts ~~shares~~contain leases. There ~~This~~was ~~note~~an increase in assets and ~~$99,319~~liabilities of ~~accrued~~$56,047 ~~interest~~due ~~were~~to ~~converted~~the ~~into~~recognition ~~4,073~~of ~~shares~~the required right-of-use ~~Series~~asset Aand ~~Redeemable~~corresponding ~~Participating~~liability ~~Convertible~~for ~~Preferred~~all ~~Stock~~lease ~~(“Preferred~~obligations ~~Stock”)~~that are currently classified as operating leases. See Note 5 for details.

AsThe ofCompany ~~March~~reviewed ~~31,~~other ~~2019,~~newly issued accounting pronouncements and ~~December~~concluded ~~31, 2018,~~that they either are not applicable to the Company’s ~~had~~operations ~~outstanding~~or ~~short-term~~that ~~related~~no ~~party~~material ~~convertible~~effect is ~~notes~~expected ~~payable~~on ofthe ~~$350,000~~Company’s ~~and~~financial ~~$3,972,759,~~statements ~~respectively~~upon future adoption.

~~Advances~~2: –RELATED ~~Related~~PARTY ~~Party~~TRANSACTIONS

~~During~~Short ~~the~~Term ~~three~~Convertible ~~months~~Debt ~~ended March 31,~~– ~~2019,~~Related the Company received advances from its Chief Executive Officer totaling $150,000, and repaid advances totaling $40,000. During the three months ended March 31, 2018, the Company received advances from its Chief Executive Officer totaling $8,000, and repaid advances totaling $81,645. Such advances accrue interest at 6% per year and are payable upon demand. The Company paid interest of $6,805 and $0 during the three months ended March 31, 2019 and 2018, respectively.Party

AsDuring ofthe ~~March~~six 31months ended June 30, 2019, the Company entered into various note and ~~December~~share 31purchase agreements with related parties pursuant to which the related parties purchased convertible notes in the aggregate amount of $1,290,250, along with additional shares of the Company’s common ~~2018~~stock to be issued upon maturity. Total cash of $1,284,000 was received and $6,250 was accrued interest rolled into principal. The notes expire on the ~~aggregate~~90-day anniversary of the issuance date and accrue interest at a rate of 10% per annum. The maturity dates on the outstanding ~~balance~~notes range from July to September 2019. On the maturity date, whether or not the notes are converted, the investors shall receive shares of ~~advances~~the Company’s common stock with a value worth 50% of the note’s principal amounts. In addition, the shareholder shall have the right to ~~related~~convert ~~parties~~all or any portion of the outstanding and unpaid principal and interest of the note into securities being sold by the Company on or after the maturity date. The Company may not prepay the notes prior to the maturity dates. The number of shares to be issued upon maturity calculated on inception was ~~$217~~determined to be 7,~~464~~701,250 based on a 20-day lookback from the inception date, subject to a minimum of $0.10 per share. Total debt discount and share issuance obligation of $~~107~~508,~~464~~187 was recorded at inception. The debt discount was amortized straight line over the 90-day period. This obligation was determined to be a liability under ASC 480. Total amortization for the period from inception through June 30, ~~respectively~~2019 was $223,038. As of June 30, 2019, the fair value of the shares was determined to be $476,100 and a year-to-date loss on change in value of share obligation of $67,138 was recorded.

3During the six months ended June 30, 2019, an aggregate of $4,322,760 of convertible notes matured and the Company issued 21,613,800 shares of its common stock to various noteholders. ~~DEBT~~The Company recalculated the fair value of the share issuance obligation at the maturity date to be $1,369,382 and recorded a loss on change in fair value of $108,125. The Company wrote off the share issuance obligation to common stock and APIC upon issuance of the shares. Convertible notes totaling $4,072,759 and $101,819 of accrued interest were converted into 4,176 shares of Series A Redeemable Participating Convertible Preferred Stock (“Preferred Stock”). Additionally, a $250,000 note that matured in the current period, plus accrued interest totaling $6,250, were rolled into a new note with the same terms.

~~Short~~As ~~Term~~of ~~Convertible~~June ~~Debt~~30, 2019, and December 31, 2018, the Company had outstanding short-term related party convertible notes payable of $1,190,250 and $3,972,759, respectively.

AsAdvances of– ~~March~~Related 31, 2019, and December 31, 2018, the Company had outstanding short-term convertible notes payable of $2,678,474 and $1,012,038, respectively, net of unamortized discounts of $350,258 and $2,158,944, respectively.Party

~~New~~During ~~Debt~~the six months ended June 30, 2019, the Company received advances from related parties totaling $110,000, and repaid advances totaling $47,322. Such advances accrue interest at 6% per year and are payable upon demand. The Company paid interest of $6,805 during the six months ended June 30, 2019. The Company paid $12,310 during the six months ended June 30, 2018.

~~During~~As ~~the~~of ~~three~~June ~~months ended March 31~~30, 2019, ~~the Company borrowed an aggregate of $120,200, net of original issue discounts~~ and ~~fees~~December ~~of $12~~31,~~800~~ ~~under short-term convertible~~2018, ~~notes~~the ~~payable.~~aggregate ~~The~~ outstanding ~~convertible~~balance ~~notes~~ of ~~the~~advances ~~Company~~to ~~are~~related ~~unsecured,~~parties ~~bear~~was ~~interest~~$170,142 ~~between 0%~~ and ~~12% per annum and mature between April 2019 and February 2020. Certain of these notes are convertible at fixed rates ranging from~~ $~~0.25 - $0.50 per share for the first 180 days. After 180 days or upon default~~107,464, ~~the conversion rates become variable with prices ranging from 60% - 61% of the lowest sale price of the common stock during the 15 to 20 consecutive trading days prior to the date of conversion~~respectively.

During the three months ended March 31, 2019, the Company entered into various note and share purchase agreements with accredited investors pursuant to which the investors purchased convertible notes in the aggregate of $468,500, along with additional shares of the Company’s common stock3. ~~In addition,~~ existing promissory notes and related party notes totaling $182,250 were modified into these note and share purchase agreements. The notes expire on the 90-day anniversary of the issuance date and accrue interest at a rate of 10% per annum. The maturity dates range from April 2019 to June 2019. On the maturity date, whether or not the notes are converted, the investors shall receive shares of the Company’s common stock with a value worth 50% of the note’s principal amounts. In addition, the investors shall have the right to convert all or any portion of the outstanding and unpaid principal and interest of the note into securities being sold by the Company on or after the maturity date. The Company may not prepay the notes prior to the maturity dates. The number of shares in aggregate was determined to be 4,022,500 based on a 20-day lookback from the inception date subject to a minimum of $0.10 per share. Total debt discount and share issuance obligation of $254,894 was recorded at inception. The debt discount was amortized straight line over the 90-day period. This obligation was determined to be a liability under ASC 480. Total amortization for the period from inception through March 31, 2019 was $145,307. As of March 31, 2019, the fair value of the shares was determined to be $228,075 based on the stock price on March 31, 2019 and a gain on change in value of share obligation of $26,819 was recorded.DEBT

~~Modifications~~Short Term Convertible Debt

~~During~~As ~~the~~of ~~three~~June ~~months~~30, ~~ended~~2019, ~~March~~and December 31, ~~2019,~~ 2018, the Company ~~entered~~had ~~into~~outstanding ~~various~~short-term ~~letter agreements with~~ convertible ~~noteholders,~~notes ~~pursuant~~payable ~~to which a prepayment penalty~~ of $473,~~500~~579,075 ~~was added to principal~~ and ~~an aggregate of~~ $1,~~480~~012,~~000~~038, ~~shares~~respectively, ofnet ~~the Company’s common stock were issued in exchange for extending the maturity dates~~ of ~~these notes. One investor pursuant to one of these letter agreements was issued an additional~~unamortized ~~one~~discounts ~~million shares~~ of ~~the Company’s common stock on April 1~~$818,750 ~~2019~~ and ~~an additional one million shares on May 1~~$2,158,944, ~~2019 as the note was not paid in full~~respectively. ~~The modification of these convertible notes resulted in loss on extinguishment of debt.~~

~~Payoffs and Conversions~~9

~~During~~New ~~the three months ended March 31, 2019, and 2018, the Company paid off short-term convertible debt of $153,000 and $43,000, respectively.~~Debt

9During the six months ended June 30, 2019, the Company borrowed an aggregate of $949,030, net of original issue discounts and fees of $135,495 under short-term convertible notes payable. The outstanding convertible notes of the Company are unsecured, bear interest between 8% and 12% per annum and mature between August 2019 and June 2020. Certain of these notes are convertible at fixed rates ranging from $0.25 - $0.50 per share for the first 180 days. After 180 days or upon default, the conversion rates become variable with prices ranging from 55% - 61% of the lowest sale price of the common stock during the 15 to 25 consecutive trading days prior to the date of conversion.

During the ~~three~~six months ended ~~March~~June 3130, 2019, the Company ~~signed~~entered aninto ~~agreement~~various note and share purchase agreements with anaccredited ~~investor~~investors pursuant to ~~modify~~which the ~~conversion~~investors purchased ~~price~~convertible ofnotes anin ~~existing~~the ~~note~~aggregate ~~from~~of $~~0.50~~893,000, along with additional shares of the Company’s common stock to be $0issued upon maturity.10 In addition, existing promissory and convertible notes totaling $1,397,250 were modified into these note and toshare ~~convert~~purchase ~~the~~agreements. Also, $50759,~~000~~525 of convertible notes that matured including $18,275 accrued interest were rolled into another bridge note rather than converted. ~~This~~The ~~increased~~notes expire on the ~~number~~90-day anniversary of ~~shares~~the ~~received~~issuance ~~upon~~date ~~conversion~~and accrue interest at a rate of 10% per annum. The maturity dates on the outstanding notes range from ~~100,000~~July to ~~500,000~~September 2019. On the maturity ~~These~~date, ~~transactions~~whether ~~met~~or not the ~~requirements~~notes ofare converted, ~~and~~the ~~are~~investors ~~being~~shall ~~recorded~~receive ~~as,~~shares anof ~~inducement~~the Company’s common stock with a value worth 50% of the ~~conversion~~note’s ofprincipal ~~debt~~amounts. ~~The~~In ~~difference~~addition, the investors shall have the right to convert all or any portion inof the ~~fair~~outstanding ~~value~~and unpaid principal and interest of the note into securities ~~were~~being ~~measured~~sold by the Company on or after the ~~dates~~maturity date. The Company may not prepay the ~~signed~~notes ~~agreements~~prior ~~were~~to ~~received~~the ~~and~~maturity ~~were~~dates. The ~~recorded~~number asof ashares ~~loss~~in aggregate was determined to be 15,248,876 based on ~~induced~~a ~~conversion~~20-day lookback from the inception date subject to a minimum of $0.10 per share. Total debt ~~totaling~~discount and share issuance obligation of $241,~~948~~001,320 was recorded at inception. The ~~full~~debt ~~principal~~discount ~~balance~~was ofamortized straight line over the 90-day period. This obligation was determined to be a liability under ASC 480. Total amortization for the period from inception through June 30, 2019 was $50417,~~000~~294. ~~with~~As ~~accrued~~of ~~interest~~June 30, 2019, the fair value of the shares was determined to be $4898,~~000~~109 ~~was~~based ~~converted~~on the ~~into~~stock ~~540~~price on June 30,~~000~~ ~~shares~~2019 and a year-to-date loss on change in value of ~~common~~share ~~stock~~obligation of $124,865 was recorded.

During the three months ended March 31, 2019, an aggregate of $742,000 of convertible notes matured and the Company issued 3,710,000 shares of its common stock to various noteholders. The Company recalculated the fair value of the share issuance obligation at the maturity date to be $234,422 and recorded a loss on change in fair value of $17,388. The Company wrote off the share issuance obligation into common stock and APIC upon issuance of the shares. Convertible notes totaling $414,000 and accrued interest of $10,470 were converted into 430 shares of Series A Redeemable Participating Convertible Preferred Stock (“Preferred Stock”). Convertible notes totaling $178,000 and accrued interest of $5,050 were forgiven in exchange for the exercise of warrants totaling $141,184 and the issuance of 43 preferred shares for the remainder. Additionally, a $150,000 note that was entered into in the prior year, plus accrued interest of $3,750, was rolled into another note with the same terms.Modifications

~~Short~~During ~~Term~~the ~~Non-Convertible~~six ~~Debt~~months ended June 30, 2019, the Company entered into various letter agreements with convertible noteholders, pursuant to which a prepayment penalty of $47,500 was added to principal and an aggregate of 3,480,000 shares of the Company’s common stock were issued in exchange for extending the maturity dates of these notes. One investor pursuant to one of these letter agreements was issued an additional one million shares of the Company’s common stock on July 1, 2019 and an additional one million shares on August 1, 2019 as the note was not paid in full. The Company fair valued all of the common stock on the modification date and concluded that it qualified as debt extinguishment. Therefore, the Company recorded a total loss on extinguishment of debt of $336,500 on these convertible note transactions.

AsPayoffs ~~of March31,2019~~ and ~~December 31, 2018, the Company had outstanding notes payable of $1,745,018 and $1,687,518, respectively, net of unamortized discounts of $0.~~Conversions

~~New~~During ~~Debt~~the six months ended June 30, 2019, and 2018, the Company paid off short-term convertible debt of $1,207,000 and $664,278, respectively.

~~During the three months ended March 31, 2019, the Company borrowed $45,000 under non-convertible notes payable from an investor. This note had 0% interest and no maturity date.~~10

~~Modifications~~During the six months ended June 30, 2019, the Company signed an agreement with an investor to modify the conversion price of an existing note from $0.50 to $0.10 and to convert the $50,000 convertible note. This increased the number of shares received upon conversion from 100,000 to 500,000. These transactions met the requirements of, and are being recorded as, an inducement of the conversion of debt. The difference in the fair value of the securities were measured on the dates the signed agreements were received and were recorded as a loss on induced conversion of debt totaling $24,948. The full principal balance of $50,000 with accrued interest of $4,000 was converted into 540,000 shares of common stock.

During the ~~three~~six months ended ~~March~~June 3130, 2019, an aggregate of $1,546,500 of convertible notes matured and the Company ~~entered~~issued ~~into~~7,732,500 ~~various~~shares ~~letter~~of ~~agreements~~its ~~with~~common ~~non-convertible~~stock to various noteholders,. ~~pursuant~~The toCompany ~~which~~recalculated anthe ~~aggregate~~fair value of the share issuance obligation at the maturity date to be $57525,~~500~~524 and ~~was~~recorded ~~added~~a toloss ~~principal~~on change in ~~exchange~~fair ~~for~~value ~~extending~~of $80,413. The Company wrote off the ~~maturity~~share ~~dates~~issuance obligation into common stock and APIC upon issuance of ~~these~~the shares. Convertible notes totaling $620,816 and accrued interest of $14,470 were converted into 597 shares of Series A Redeemable Participating Convertible Preferred Stock (“Preferred Stock”). ~~The~~Convertible ~~Company~~notes ~~recorded~~totaling $231,500 ~~this~~and asaccrued ~~loss~~interest onof ~~extinguishment~~$6,138 were forgiven in exchange for the exercise of warrants totaling $184,683 and the issuance of ~~debt~~57 preferred shares for the remainder. Additionally, an aggregate of $741,000 of notes that matured plus accrued interest totaling $18,275, were rolled into new notes with the same terms.

~~Payoffs~~Short Term Non-Convertible Debt

~~During~~As ~~the~~of ~~three~~June ~~months~~30, ~~ended~~2019, ~~March~~and December 31, ~~2019~~ ~~and~~ 2018, the Company ~~paid~~had ~~off~~outstanding ~~short-term~~notes ~~non-convertible~~payable ~~debt~~ of $45480,000 and $01,687,518, respectively, net of unamortized discounts of $0.

~~Debt~~New ~~Summary~~Debt

InDuring ~~summary, total debt discount due to beneficial conversion feature and common stock and warrants issued with debt was $365,769 and $494,697 for~~ the ~~three~~six months ended ~~March~~ 31June 30, 2019 ~~and 2018~~, ~~respectively. All debt discounts are being amortized over the term of the notes. Total amortization of~~ the ~~debt~~Company ~~discounts~~borrowed ~~on all debt was~~ $245,~~305,845~~000 ~~and~~under ~~$337,333 for the three months ended March 31, 2019 and 2018, respectively. During the three months ending March 31, 2019 and 2018, total loss on extinguishment of debt from promissory,~~ non-convertible ~~and related party~~ notes ~~was~~payable ~~$173,000~~from ~~and~~an ~~$1,802,412,~~investor. ~~respectively,~~This ~~which~~note ~~excludes~~had ~~loss~~0% ~~due~~interest ~~to cash payoff prepayment penalties of $60,287~~ and ~~$18,352~~no ~~respectively~~maturity date.

10Modifications

4During the six months ended June 30, 2019, the Company entered into various letter agreements with non-convertible noteholders, pursuant to which an aggregate of $57,500 was added to principal and $20,000 in cash was paid in exchange for extending the maturity dates of these notes. The Company recorded ~~EQUITY~~this as loss on extinguishment of debt.

~~Preferred~~During the six months ended June 30, 2019, ~~Stock~~existing non-convertible promissory notes totaling $1,215,000 were modified into convertible note and share purchase agreements. See convertible debt section above for details.

On February 15, 2019, the Company established a series of redeemable participating convertible preferred stock, par value $0.0001 per share, pursuant to a Certificate of Designation of Series A Redeemable Participating Convertible Preferred Stock dated February 15, 2019.Payoffs

~~Pursuant to~~During the ~~Certificate~~six ofmonths ~~Designation,~~ended ~~the~~June ~~Company authorized 10~~30,~~000~~ ~~shares of the Series A Preferred Stock (“preferred stock”)~~2019, ~~which shall be convertible into shares of common stock of~~ the Company atpaid ~~the~~off ~~option~~short-term ofnon-convertible ~~the~~debt ~~holders thereof at any time after the issuance~~ of ~~the preferred stock, at a conversion price equal to~~ $095,000.~~10 subject to certain anti-dilution adjustments.~~

So long as 50% of the preferred stock that has been issued remains outstanding, the holders thereof will have the right to participate ratably in any offering of common stock of the Company or any other securities of the Company that would entitle the holder thereof to acquire common stock of the Company.Advances

~~The holders~~During ~~of preferred stock shall be entitled to receive dividends when and as declared by~~ the ~~Board~~six ofmonths ~~Directors.~~ended NoJune ~~dividends (other than those payable solely in common stock) shall be paid on the common stock or any class or series of capital stock ranking junior~~30, ~~as to dividends~~2019, to the ~~preferred stock during any fiscal year of the~~ Company ~~until~~received ~~there~~an ~~shall~~unsecured, ~~have~~due ~~been~~on ~~paid~~demand, ornon-interest ~~declared and~~bearing, ~~set~~advance ~~apart~~from ~~during that fiscal year for the holders of the preferred stock a dividend in~~ an ~~amount~~investor ~~per share equal to (i) the number~~ of shares of common stock issuable upon conversion of the preferred stock times (ii) the amount per share of the dividend to be paid on the common stock. No dividends were declared for the three months ended March 31$100, ~~2019~~000.

~~Upon~~Debt the occurrence of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary (a “Liquidating Event”), each holder of preferred stock then outstanding shall be entitled to receive, out of the assets of the Company available for distribution to its stockholders, before any payment shall be made in respect of the common stock, an amount per share of preferred stock equal to three (3) times the price such holder paid to purchase such preferred stock plus, accrued and unpaid dividends (the “Preferred Liquidation Preference”). Such Preferred Liquidation Preference shall be secured by a first priority security interest on all of the Company’s assets. The following events shall be deemed a Liquidating Event: (i) a sale, lease, exchange, exclusive license which has the same effect as a sale of all or substantially all of the Company’s assets or other disposition of all or substantially all of the Company’s assets in one transaction or a series of related transactions and (ii) a merger, tender offer, reorganization, business combination or other transaction as a result of which (a) holders of the Company’s issued and outstanding voting securities immediately before such transaction own or control less than a majority of the voting securities of the continuing or surviving entity immediately after such transaction or (b) any of the preferred stock is converted into any other property or security. It was determined the preferred stock has a deemed liquidation redemption feature that triggers temporary equity classification under ASC 480.Summary

~~The holders~~In ofsummary, ~~shares~~total ofdebt ~~preferred~~discount ~~stock~~on ~~shall~~share issuance ~~vote~~obligation ~~together~~issued with ~~the~~debt ~~holders~~was of$1,509,507 ~~common~~for ~~stock~~the assix amonths ~~single~~ended ~~class.~~June ~~The~~30, ~~holder~~2019. ofAll ~~each share~~debt ofdiscounts ~~preferred~~are ~~stock~~being amortized ~~(i)~~over ~~shall be entitled to~~ the ~~number~~term of ~~votes with respect to such share equal to~~ the ~~number~~notes. ofTotal ~~shares of~~amortization ~~common Stock into which such share~~ of ~~preferred~~the ~~stock~~debt ~~could~~discounts ~~be converted~~ on ~~the~~all ~~record~~debt ~~date~~was ~~for~~$3,138,666, ~~the~~which ~~subject~~included ~~vote or written~~the ~~consent ( or~~$122,428 ifinterest ~~there~~expense isrecorded ~~no such record date, then~~ on ~~the~~preferred ~~date~~stock ~~that~~issued ~~such~~upon ~~vote~~bridge isnote ~~taken~~conversion, orfor ~~consent~~the issix ~~effective)~~months ~~and~~ended ~~(ii)~~June ~~shall~~30, be2019. ~~entitled~~During ~~to notice of any stockholders’ meeting in accordance with~~ the ~~Bylaws~~six ofmonths ~~the~~ending ~~Company.~~June ~~Fractional~~30, ~~votes shall not be permitted~~2019, ~~and~~total ~~any~~loss ~~fractional~~on ~~voting~~extinguishment ~~rights~~of ~~resulting~~debt from ~~the~~promissory, ~~above~~convertible ~~formula~~and related ~~(after~~party ~~aggregating~~notes ~~all~~was ~~shares~~$394,000, ~~of common stock into~~ which ~~shares~~excludes ofloss ~~preferred~~due ~~stock~~to ~~held~~cash bypayoff ~~each~~prepayment ~~holder~~penalties ~~could~~of ~~be converted) shall be reduced to the nearest whole number~~$510,060.

During the three months ended March 31, 2019, the Company issued an aggregate of 4,546 shares of its preferred stock related to the conversion of $4,449,943 of debt and $88,742 of interest expense. See convertible debt discussion in Note 3 for more details.11

~~Common Stock~~4. EQUITY

~~During the~~Preferred three months ended March 31, 2019, the Company issued 23,573,800 shares of the Company’s common stock pursuant to certain debt modification agreements, related to the maturity of various convertible notes totaling $4,714,760. See the convertible debt section in Note 3 for more details.Stock

InOn ~~March~~February 15, 2019, the Company ~~issued 480,000~~established ~~shares~~a series of ~~the~~redeemable ~~Company’s~~participating ~~common~~convertible preferred stock, topar ~~certain~~value ~~note~~$0.0001 ~~holders~~per inshare, ~~exchange~~pursuant ~~for~~to ~~accrued~~a ~~interest~~Certificate of ~~$48,000. The fair value~~Designation of ~~the~~Series ~~common~~A ~~stock~~Redeemable ~~was~~Participating ~~determined~~Convertible toPreferred beStock ~~$27,216~~dated ~~and~~February ~~resulted in a gain on settlement of accrued interest of $20~~15,~~784~~ 2019.

11Pursuant to the Certificate of Designation, the Company authorized 10,000 shares of the Series A Preferred Stock (“preferred stock”), which shall be convertible into shares of common stock of the Company at the option of the holders thereof at any time after the issuance of the preferred stock, at a conversion price equal to $0.10 subject to certain anti-dilution adjustments.

~~On March~~So 1,long ~~2019,~~as ~~the~~50% ~~Company~~of ~~entered~~the ~~into~~preferred astock ~~letter~~that has ~~agreement~~been ~~with~~issued anremains ~~investor~~outstanding, ~~pursuant to which~~ the ~~investor~~holders ~~agreed~~thereof towill ~~extend~~have the ~~maturity~~ ~~date~~right ofto aparticipate ~~convertible~~ratably ~~note~~ in ~~exchange~~any ~~for~~offering ~~1,000,500~~of ~~shares~~common stock of the Company’s ~~common~~or ~~stock.~~any ~~The~~other ~~fair~~securities ~~value~~ of the ~~common~~ ~~stock~~Company ~~was~~that ~~determined~~would toentitle ~~be $68,000 based on~~ the ~~stock~~holder ~~price~~thereof ~~on March 1, 2019 which was recorded as loss on extinguishment of debt. Pursuant~~ to ~~this~~acquire ~~agreement, an additional 1,000,000 shares of the Company’s~~ common stock ~~were~~of ~~issued on April 1,~~the ~~2019 and May 1, 2019~~Company.

~~During~~The holders of preferred stock shall be entitled to receive dividends when and as declared by the ~~three~~Board ~~months~~of ~~ended~~Directors. ~~March~~No 31dividends (other than those payable solely in common stock) shall be paid on the common stock or any class or series of capital stock ranking junior, ~~2019~~as to dividends, to the ~~Company~~preferred ~~issued~~stock during anany ~~aggregate~~fiscal year of ~~540,000~~the ~~shares~~Company until there shall have been paid or declared and set apart during that fiscal year for the holders of ~~its~~the ~~common~~preferred stock ~~related~~a dividend in an amount per share equal to (i) the ~~conversion~~ number of ~~$50,000~~shares of ~~principal~~common ~~and~~stock ~~$4,000~~issuable ~~accrued~~upon conversion ~~interest~~of ~~expense~~the preferred stock times (ii) the amount per share of the dividend to be paid on ~~convertible~~the ~~notes~~common stock. No dividends were declared for the six months ended June 30, 2019.

~~During~~Upon the occurrence of any liquidation, dissolution or winding up of the ~~three~~Company, ~~months~~either ~~ended~~voluntary ~~March~~or 31involuntary (a “Liquidating Event”), ~~2019~~each holder of preferred stock then outstanding shall be entitled to receive, out of the assets of the Company available for distribution to its stockholders, before any payment shall be made in respect of the common stock, an ~~aggregate~~amount per share of preferred stock equal to three (3) times the price such holder paid to purchase such preferred stock plus,~~300~~ accrued and unpaid dividends (the “Preferred Liquidation Preference”). Such Preferred Liquidation Preference shall be secured by a first priority security interest on all of the Company’s assets. The following events shall be deemed a Liquidating Event: (i) a sale,~~000~~ ~~warrants~~lease, ~~were~~exchange, ~~exercised~~exclusive ~~cashlessly~~license which ~~resulting~~has inthe same effect as a sale of all or substantially all of the ~~issuance~~Company’s assets or other disposition of all or substantially all of 2the Company’s assets in one transaction or a series of related transactions and (ii) a merger,~~200~~ tender offer,~~000~~ ~~common~~reorganization, business ~~shares~~combination or other transaction as a result of which (a) holders of the Company’s issued and outstanding voting securities immediately before such transaction own or control less than a majority of the voting securities of the continuing or surviving entity immediately after such transaction or (b) any of the preferred stock is converted into any other property or security. It was determined the preferred stock has a deemed liquidation redemption feature that triggers temporary equity classification under ASC 480.

~~During~~The holders of shares of preferred stock shall vote together with the ~~three~~holders ~~months~~of ~~ended~~common ~~March~~stock ~~31,~~as ~~2019,~~a ansingle ~~aggregate~~class. The holder of ~~1,411,843~~each ~~warrants~~share ~~were~~of ~~modified~~preferred tostock ~~reduce~~(i) shall be entitled to the ~~exercise~~number ~~price~~of votes with respect to ~~$0.10 per~~such share ~~pursuant~~equal to athe ~~debt~~number ~~modification~~of ~~and~~shares ~~exercised~~of ~~resulting~~common inStock ainto ~~total~~which ~~issuance~~such share of ~~1,411,843~~preferred stock ~~common~~could ~~shares.~~be ~~Rather~~converted ~~than receiving~~on ~~cash~~the ~~proceeds~~record ofdate ~~$141~~for the subject vote or written consent ( or,~~184~~ if there is no such record date, then on the ~~Company~~date ~~netted~~that ~~this~~such ~~amount~~vote ~~against~~is ~~convertible~~taken ~~note~~or ~~payoffs~~consent ~~totaling~~is ~~$178,000.~~effective) ~~The~~and ~~remaining $36,816~~(ii) ~~owed~~shall be entitled to ~~one~~notice ~~noteholder~~of ~~was~~any ~~paid~~stockholders’ bymeeting in accordance with the ~~issuance~~Bylaws of 37the Company. Fractional votes shall not be permitted, and any fractional voting rights resulting from the above formula (after aggregating all shares of ~~Preferred~~common ~~Stock~~stock into which shares of preferred stock held by each holder could be converted) shall be reduced to the nearest whole number.

~~Stock~~During the six months ended June 30, 2019, ~~Options~~the Company issued an aggregate of 4,830 shares of its preferred stock related to the conversion of $4,693,575 of debt and $122,428 of interest expense. See convertible debt discussion in Note 3 for more details.

~~A summary of stock option activity during the three months ended March 31, 2019 is as follows:~~12

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)
Outstanding at December 31, 2018		300,000	$	0.52		9.0
Granted		-
Exercised		-
Forfeited		-
Outstanding at March 31, 2019		300,000	$	0.52		8.7
Exercisable at March 31, 2019		97,000	$	0.53		7.8

Common Stock

~~Stock option awards are expensed on a straight-line basis over the requisite service period.~~ During the ~~three~~six months ended ~~March~~June 3130, ~~2019~~ ~~and 2018~~2019, the Company ~~recognized~~issued ~~expense of $10~~29,~~424~~346,300 ~~and~~shares ~~$9,811,~~of ~~respectively,~~the ~~associated~~Company’s ~~with~~common stock ~~option~~pursuant ~~awards.~~to Atcertain ~~March 31,~~debt ~~2019~~agreements, ~~future~~related ~~stock~~to ~~compensation~~the ~~expense (net~~ maturity of ~~estimated~~various ~~forfeitures)~~convertible ~~not~~notes ~~yet~~totaling ~~recognized was~~ $755,~~767~~869,260. ~~and~~See ~~will~~the beconvertible ~~recognized over~~debt asection ~~weighted~~in ~~average~~Note ~~remaining~~3 ~~vesting~~for ~~period~~more ~~of 2~~details.~~4 years.~~

~~The~~During the six months ended June 30, 2019, ~~intrinsic~~the ~~value~~Company issued 480,000 shares of the Company’s common stock ~~options~~to ~~outstanding~~certain ~~was~~note holders in exchange for accrued interest of $048,000. atThe ~~March~~fair 31value of the common stock was determined to be $27,216 ~~2019~~and resulted in a gain on settlement of accrued interest of $20,784.

~~Warrants~~During the six months ended June 30, 2019, the Company entered into a two letter agreements with an investor pursuant to which the investor agreed to extend the maturity date of a convertible note in exchange for the issuance of 1,000,500 shares of the Company’s common stock on March 1, 2019, and the issuance of 1,000,000 shares of the Company’s common stock on the first day of each month through August 1, 2019. The aggregate fair value of the 4,000,500 shares issued during the six months ended June 30, 2019, was determined to be $289,000 based on the stock price on March 1, April 1, May 1, and June 1, 2019 which was recorded as loss on extinguishment of debt. Pursuant to these agreements, an additional 1,000,000 shares of the Company’s common stock were issued on July 1, 2019 and August 1, 2019.

~~Employee~~During the six months ended June 30, 2019, ~~Warrants~~the Company issued an aggregate of 540,000 shares of its common stock related to the conversion of $50,000 of principal and $4,000 accrued interest expense on convertible notes.

~~On May~~During ~~18, 2017,~~ the ~~Company~~six ~~entered~~months ~~into~~ended anJune ~~Employment Agreement (the “Employment Agreement”) with Ron DaVella in his capacity as the Company’s Chief Financial Officer. Pursuant to the Employment Agreement~~30, ~~on May 18~~2019, ~~2017 the Company issued~~ ~~Mr.~~an ~~DaVella~~aggregate ~~warrants~~of ~~to purchase 1~~3,~~800~~300,000 ~~shares of the Company’s common stock at $0.50 per share (the “Warrant Shares”). The fair value of the~~ warrants ~~was~~were ~~determined~~exercised tocashlessly beresulting ~~$743,416~~in ~~using~~ the ~~Black-Scholes~~issuance option pricing model. 450,000 Warrant Shares vested on May 18, 2017 and 450,000 additional warrant shares vested on May 18, 2018. An additional 450,000 warrant shares will vest on the second anniversary date of ~~the Employment Agreement~~2, ~~and~~200, ~~an additional 450,~~000 ~~warrant~~common shares ~~will vest on the third anniversary date of the Employment Agreement~~. On November 28, 2018, the exercise price was reduced to $0.10 pursuant to the Board of Director’s consent. This resulted in a difference in fair value of $117,440 of which $58,720 was expensed on November 28, 2018 for the vested warrants and the remaining $58,720 will be expensed equally over the remaining term. On March 31, 2019, Mr. DaVella terminated his employment with the Company. The remaining two tranches totaling 900,000 warrants were forfeited upon termination of the Employment Agreement on March 31, 2019. Warrant expense of $248,486 was recaptured during the three months ended March 31, 2019. Warrant expense of $85,183 was recognized during the three months ended March 31, 2018.

12During the six months ended June 30, 2019, an aggregate of 1,846,843 warrants were modified to reduce the exercise price to $0.10 per share pursuant to a debt modification and exercised resulting in a total issuance of 1,846,843 common shares. Rather than receiving cash proceeds of $184,683, the Company netted this amount against convertible note payoffs totaling $231,500. The remaining $46,817 owed to two noteholders was paid by the issuance of 47 shares of Preferred Stock.

~~On February 5, 2019, the Company issued warrants to purchase an aggregate of 2,500,000 shares of its Common~~ Stock to three of its employees as a bonus in exchange for services to be provided to the Company. The warrants have a 10-year term, a $0.10 exercise price and will vest 25% annually for 4 years beginning on the first anniversary date. The aggregate fair value of the warrants was determined to be $129,906 using the Black-Scholes option pricing model. Warrant expense of $11,277 was recognized during the three months ended March 31, 2019.Options

~~Total warrant~~A ~~expense~~summary ~~for employee warrants~~ of ~~non-forfeited~~stock ~~tranches~~option ~~was~~activity ~~$11,277 and $85,183 for~~ during the three months ended ~~March~~June 3130, 2019 ~~and~~ ~~2018,~~is ~~respectively.~~ as follows:

Non-Employee Service Warrants

					Weighted
			Weighted		Average
			Average		Remaining
	Number of Shares		Exercise Price		Contractual Life (years)
Outstanding at December 31, 2018		300,000	$	0.52		9.0
Granted		-
Exercised		-
Forfeited		-
Outstanding at June 30, 2019		300,000	$	0.52		8.5
Exercisable at June 30, 2019		115,000	$	0.53		7.6

~~On October~~Stock ~~23,~~option ~~2018,~~awards ~~the~~are ~~Company~~expensed ~~issued~~on ~~warrants~~a tostraight-line basis ~~purchase~~over ~~2,000,000 shares of~~ the ~~Company’s~~requisite ~~common~~service ~~stock~~period. ~~pursuant~~During tothe athree ~~letter agreement~~and insix ~~exchange~~months ~~for~~ended ~~services.~~June ~~The~~30, ~~warrants~~2019, ~~have~~the anCompany ~~exercise~~recognized ~~price~~expense of $~~0.50 and a 10-year term.~~ 20%,835, ofassociated ~~the~~with ~~warrants~~stock ~~vested immediately~~option ~~and~~awards. anAt ~~additional~~June ~~20%~~30, ~~will~~2019, ~~vest~~future ~~each~~stock ~~anniversary~~compensation ~~for~~expense ~~four~~(net ~~years.~~of ~~The~~estimated ~~fair~~forfeitures) not ~~value~~yet ofrecognized ~~the warrants~~ was ~~determined to be~~ $~~155~~65,~~397~~355 ~~using~~and ~~the~~will ~~Black-Scholes~~be ~~option~~recognized ~~pricing~~over ~~model.~~a ~~Warrant~~weighted ~~expense~~average ofremaining ~~$16,187~~vesting ~~was~~period ~~expensed~~of ~~during~~2.2 ~~the three months ended March 31, 2019~~years.

The ~~Company~~ ~~expensed~~intrinsic avalue ~~total~~ of ~~$16,187~~the ~~and~~Company’s stock ~~recaptured~~options aoutstanding ~~total~~was of $~~13,222 for~~0 ~~warrants~~at ~~issued~~June ~~to non-employees for services provided during the three months ended March 31~~30, 2019 ~~and 2018, respectively~~.

~~Warrant Exercises and Reduction of Exercise Prices~~13

During the three months ended March 31, 2019, an aggregate of 631,843 warrants were modified to reduce the exercise price to $0.10 per share pursuant to a debt modification and exercised the warrants resulting in the issuance of 631,843 common shares. Rather than receiving cash proceeds of $63,184, the Company netted this amount against a convertible note payoff of $100,000. The remaining $36,816 owed to the noteholder was paid by the issuance of 37 shares of Preferred Stock.Warrants

~~During the~~Employee three months ended March 31, 2019, an aggregate of 780,000 warrants were modified to reduce the exercise price to $0.10 per share pursuant to a debt modification and exercised resulting in the issuance of 780,000 common shares. The change in fair value of these warrants from the modification is immaterial. Rather than receiving cash proceeds of $78,000, the Company netted this amount against convertible notes payable of $78,000.Warrants

~~During February~~On ~~and~~May ~~March~~18, ~~2019~~2017, the Company entered into an ~~aggregate~~Employment ofAgreement ~~814,848~~(the ~~warrants~~“Employment ~~were~~Agreement”) ~~modified~~with Ron DaVella in his capacity as the Company’s Chief Financial Officer. Pursuant to ~~reduce~~the Employment Agreement, on May 18, 2017 the ~~exercise~~Company ~~price~~issued Mr. DaVella warrants to purchase 1,800,000 shares of the Company’s common stock at $0.1050 per share ~~pursuant~~(the “Warrant Shares”). The fair value of the warrants was determined to abe ~~debt~~$743,416 ~~modification~~using ~~but~~the ~~not~~Black-Scholes ~~exercised~~option pricing model. ~~The~~450,000 ~~change~~Warrant Shares vested on May 18, 2017 and 450,000 additional warrant shares vested on May 18, 2018. An additional 450,000 warrant shares will vest on the second anniversary date of the Employment Agreement, and, an additional 450,000 warrant shares will vest on the third anniversary date of the Employment Agreement. On November 28, 2018, the exercise price was reduced to $0.10 pursuant to the Board of Director’s consent. This resulted in a difference in fair value of ~~these~~$117,440 of which $58,720 was expensed on November 28, 2018 for the vested warrants and ~~from~~the remaining $58,720 will be expensed equally over the ~~modification~~remaining isterm. ~~immaterial~~On March 31, 2019, Mr. DaVella terminated his employment with the Company. The remaining two tranches totaling 900,000 warrants were forfeited upon termination of the Employment Agreement on March 31, 2019. Warrant expense of $248,486 was recaptured during the six months ended June 30, 2019.

~~Between January~~On ~~and~~February ~~March~~5, 2019, the Company issued warrants to purchase an aggregate of 32,~~300~~500,000 ~~warrants~~shares ~~were~~of ~~exercised~~its ~~cashlessly~~Common ~~resulting~~Stock to three of its employees as a bonus in exchange for services to be provided to the ~~issuance~~Company. The warrants have a 10-year term, a $0.10 exercise price and will vest 25% annually for 4 years beginning on the first anniversary date. The aggregate fair value of 2the warrants was determined to be $129,~~200,000~~906 ~~common~~using the ~~shares~~Black-Scholes option pricing model. Warrant expense of $28,192 was recognized during the six months ended June 30, 2019.

13Total expense recaptured for employee warrants for the six months ended June 30, 2019 was $220,294.

~~The following~~Non-Employee ~~summarizes~~Service ~~the warrant activity for the three months ended March 31, 2019:~~Warrants

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding as of December 31, 2018		90,258,828		$	0.41		5.2	$	-
Granted		2,500,000			0.10
Expired		(8,962,000	)		0.14
Exercised		(4,711,843	)		0.10
Outstanding as of March 31, 2019		79,084,985		$	0.44		5.8	$	-
Exercisable as of March 31, 2019		73,179,628		$	0.45		5.8	$	-

On October 23, 2018, the Company issued warrants to purchase 2,000,000 shares of the Company’s common stock pursuant to a letter agreement in exchange for services. The warrants have an exercise price of $0.50 and a 10-year term. 20% of the warrants vested immediately and an additional 20% will vest each anniversary for four years. The fair value of the warrants was determined to be $155,397 using the Black-Scholes option pricing model. Warrant expense of $32,374 was expensed during the six months ended June 30, 2019, respectively.

~~These~~ On June 1, 2019, the Company issued warrants to ~~were~~purchase ~~valued~~25,000 ~~based~~shares onof the ~~grant~~Company’s ~~date~~common ~~fair~~stock pursuant to a letter agreement in exchange for services. The warrants have an exercise price of $0.50 and a 5-year term. The warrants vest equally over six months beginning June 1, 2019. The fair value of the ~~instruments~~warrants was determined to be $1,924 using athe Black-Scholes option pricing model. ~~with~~Warrant ~~the~~expense of $321 was expensed ~~following~~during ~~assumptions:~~the six months ended June 30, 2019.

	Three Months Ended March 31,
	2019	2018
Volatility	217.10%	138.93% - 185.90%
Risk-free interest rate	2.72%	2.12% - 2.87%
Expected term	10 years	3-10 years

Total expense for non-employee warrants for the six months ended June 30, 2019 was $32,695.

~~5. COMMITMENTS~~Warrant ~~AND~~Exercises ~~CONTINGENCIES~~and Reduction of Exercise Prices

~~Sponsored~~During the six months ended June 30, 2019, ~~Research~~an aggregate of 1,846,843 warrants were modified to reduce the exercise price to $0.10 per share pursuant to a debt modification and ~~License~~exercised ~~Agreements~~resulting in a total issuance of 1,846,843 common shares. Rather than receiving cash proceeds of $184,683, the Company netted this amount against convertible note payoffs totaling $231,500. The remaining $46,817 owed to two noteholders was paid by the issuance of 47 shares of Preferred Stock.

~~Research~~During the six months ended June 30, 2019, ~~and~~an ~~development~~aggregate of 814,848 warrants were modified to reduce the ~~Company’s~~exercise ~~high~~price ~~efficiency~~to ~~solar~~$0.10 ~~thin~~per ~~films~~share ~~and~~pursuant ~~OPV~~to ~~technologies~~a ~~are~~debt ~~conducted~~modification but not exercised. The change in ~~collaboration~~fair ~~with University~~value ~~partners~~of ~~through~~these ~~sponsored~~warrants ~~research~~from ~~agreements~~the modification is immaterial.

~~The Company~~During ~~established~~the ~~direct~~six ~~research~~months ~~and~~ended ~~development agreements with Michigan on~~ June 1630, ~~2016~~2019, an ~~which~~aggregate ~~were~~of ~~amended on July 21~~3, ~~2016~~300,000 towarrants ~~provide~~were ~~engineering~~exercised ~~support~~cashlessly ~~and~~resulting ~~facility~~in ~~access~~the ~~associated~~issuance ~~with technology transfer and commercialization~~ of ~~its high efficiency thin film solar technologies. Such research agreements were terminated on August 31~~2,200,000 ~~2017~~common ~~and replaced with a time and materials contract for access to Michigan’s Labs by the Company’s technicians~~shares.

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. The 2013 Research Agreement expires on January 31, 2021.14

~~On August~~The 8,following ~~2016,~~summarizes the ~~Company~~warrant ~~amended the 2013 Research Agreement with USC, suspending the agreement effective as of August 15,~~activity ~~2016.~~for ~~The Company requested this amendment to suspend its OPV-related sponsored research activities to reduce near-term expenditures to allow~~ the ~~Company~~six tomonths ~~bring~~ended ~~its~~June ~~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 repaid expenses to USC in quarterly installments of $206,000 from November 2016 through February 2018.~~2019:

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. Minimum royalties are $100,000 per year for the remainder of the contract.

						Weighted
						Average
				Weighted		Remaining
				Average		Contractual		Aggregate
	Number of Shares			Exercise Price		Term (in years)		Intrinsic Value


Outstanding as of December 31, 2018		90,258,828		$	0.41		5.2	$	-

Granted		2,525,000			0.10
Expired		(9,752,000	)		0.14
Exercised		(5,146,843	)		0.10

Outstanding as of June 30, 2019		77,884,985		$	0.44		5.6	$	-
Exercisable as of June 30, 2019		71,958,795		$	0.45		5.6	$	-

14These warrants were valued based on the grant date fair value of the instruments using a Black-Scholes option pricing model with the following assumptions:

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

	Six Months Ended June 30,
	2019	2018

Volatility	213.95% - 217.10%	138.93% - 186.70%
Risk-free interest rate	1.93% - 2.72%	2.12% - 2.88%
Expected term	5-10 years	3-10 years

~~Leases~~5. COMMITMENTS AND CONTINGENCIES

~~The Company~~Sponsored ~~has~~Research ~~two operating leases, one for office space in Scottsdale, Arizona~~ and ~~one~~License for laboratory and office space in Ann Arbor, Michigan. The office lease in Scottsdale, Arizona is renewed on a monthly basis and was therefore scoped out of ASC 842 while the laboratory and office space lease in Ann Arbor, Michigan has a remaining term of 1.6 years. When this lease expires, it becomes renewable on a monthly basis. Lease expense was $7,500 and $0 for the three months ended March 31, 2019 and 2018, respectively.Agreements

~~Supplemental~~Research and development of the Company’s ~~cash~~high ~~flow~~efficiency ~~information~~solar ~~related~~thin tofilms ~~leases~~and ~~for~~OPV ~~the~~technologies ~~three~~are ~~months~~conducted ~~ending~~in ~~March~~collaboration ~~31,~~with ~~2019~~University ~~was~~partners asthrough ~~follows:~~sponsored research agreements.

Right-of-use assets obtained in exchange for lease obligations		$	50,242
Cash payments for operating leases		$	7,500

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. Such research agreements were terminated on August 31, 2017 and replaced with a time and materials contract for access to Michigan’s Labs by the Company’s technicians.

~~Supplemental~~A separate research agreement dated December ~~balance~~20, ~~sheet~~2013, ~~information~~among ~~related~~the toCompany ~~leases~~and asUSC of(the ~~March~~“2013 31Research Agreement”), ~~2019~~governs ~~was~~research asconducted ~~follows:~~by USC and Michigan on high efficiency thin film and OPV technologies. Michigan is a subcontractor to USC on this research agreement. The 2013 Research Agreement expires on January 31, 2021.

Operating lease right-of-use asset		$	43,348
Operating lease liabilities		$	43,348

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 suspend its OPV-related sponsored research activities to reduce near-term expenditures 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 repaid expenses to USC in quarterly installments of $206,000 from November 2016 through February 2018.

AsUnder ofthe ~~March~~Company’s 31currently effective License Agreement, ~~2019~~as amended on August 22, ~~our~~2016, ~~operating~~among ~~lease~~the ~~has~~Company aand ~~remaining~~USC, ~~lease~~Michigan, and Princeton (the “Fourth Amendment ~~term~~to ofLicense ~~1.6~~Agreement”), ~~years~~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 ~~utilized~~have anagreed ~~incremental~~to ~~borrowing~~pay ~~rate~~for all reasonable and necessary out of 5pocket expenses incurred in the preparation, filing, maintenance, renewal and continuation of patent applications designated by the Company.33 In addition, the Company is required to pay to USC 3%. ~~Future~~of ~~lease~~net ~~payments~~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 ~~operating~~the ~~lease~~agreement. ~~liabilities~~A previous amendment to the License Agreement (the Third Amendment asto License Agreement dated December 20, 2013) amended the minimum royalty section to eliminate the accrual of ~~March~~any 31such royalties until 2014. Furthermore, ~~2019~~the amounts of the non-refundable minimum royalties, which would be applicable starting in 2014, were adjusted asto ~~follows:~~be lower than the amounts in the previous License Agreement. Minimum royalties are $100,000 per year for the remainder of the contract.

Remainder of 2019	$	22,500
2020		22,500
Total future lease payments		45,000
Less imputed interest		(1,652	)
Total lease liability balance	$	43,348

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

~~Concentrations~~15

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

15The Company has two operating leases, one for office space in Scottsdale, Arizona and one for laboratory and office space in Ann Arbor, Michigan. The office lease in Scottsdale, Arizona is renewed on a monthly basis and was therefore scoped out of ASC 842 while the laboratory and office space lease in Ann Arbor, Michigan has a remaining term of 1.3 years. When this lease expires, it becomes renewable on a monthly basis. In June 2019, an addendum was added to this lease increasing the monthly payments to $2,875 in exchange for more office space. Lease expense was $14,232 for the six months ended June 30, 2019.

6.Supplemental cash flow information related ~~SUBSEQUENT~~to ~~EVENTS~~leases for the six months ending June 30, 2019 was as follows:

Between April and May 2019, the Company entered into various note and share purchase agreements with accredited investors, four of which are related parties, to which the investors purchased convertible notes in the aggregate of $1,491,681, along with additional shares of the Company’s common stock. The notes expire on the 90-day anniversary of the issuance date and accrue interest at a rate of 10% per annum. The maturity dates range from July to August of 2019. On the maturity date, whether or not the note is converted, the investor shall receive a number of additional shares of the Company’s common stock equal in value to 50% of the note balance based on the average closing price for the 20-trading day prior to the maturity date subject to a floor of $0.10 per share. In addition, the investor shall have the right to convert all or any portion of the outstanding and unpaid principal and interest of the note into securities being sold by the Company on or after the maturity date. The Company may not prepay the note prior to the maturity date. In April and May of 2019, an aggregate of $520,750 of notes matured and the Company issued 2,603,750 shares of its common stock to various noteholders. These noteholders also elected to convert the notes and accrued interest into Series A Redeemable Participating Convertible Preferred Stock (“Preferred Stock”). An aggregate of 55 shares of Preferred Stock were issued upon conversion as of the date of this report.

Right-of-use assets obtained in exchange for lease obligations		$	56,047
Cash payments for operating leases		$	15,375

~~During April~~Supplemental ~~2019,~~balance ansheet ~~aggregate~~information ~~of 335,000 warrants were modified~~ related to ~~reduce~~leases ~~the~~as ~~exercise price to $0.10 per share pursuant to a debt modification and exercised resulting in the issuance~~ of ~~335,000~~June ~~common shares. Rather than receiving cash proceeds of $33~~30,~~500, the~~ ~~Company~~2019 ~~netted~~was ~~this~~as ~~amount against convertible notes payables totaling $43,500. The remaining balance of the notes were paid with the issuance of 13 shares of preferred stock.~~follows:

In May of 2019, the Company paid back advances to its Chief Executive Officer totaling $5,000.

Operating lease right-of-use asset		$	41,815
Operating lease liabilities		$	41,815

~~In April~~Future ~~2019,~~minimum ~~the~~annual ~~Company~~lease ~~entered~~payments ~~into a letter agreement with a non-convertible noteholder, pursuant to which an aggregate~~ of ~~$20,000~~ ofoperating ~~accrued~~leases ~~interest~~as ~~was added to principal in exchange for extending the maturity date~~ of ~~this~~June ~~note. This $50~~30,~~000~~ ~~note and $6,000 of interest was paid off on May 8,~~ 2019.:

On April 1, 2019 and May 1, 2019, pursuant to a letter agreement, the Company issued 1,000,000 shares of the Company’s common stock to a convertible noteholder in exchange for extending the maturity date of this note.

Remainder of 2019	$	17,250
2020		25,875
Total future lease payments		43,125
Less imputed interest		(1,310	)
Total lease liability balance	$	41,815

In May 2019, the Company borrowed an aggregate of $511,000 under short-term convertible notes payable. The notes are unsecured, bear interest at a rate of 12% per annum and mature between February and May of 2020. The notes are convertible at a range of $0.25 to $.050 per share for the first 180 days. After 180 days or upon default, the conversion rate becomes variable with a price range of 60% to 55% of the lowest sale price of the common stock during the 20 to 25 consecutive trading days prior to the date of conversion.Concentrations

~~In May~~All ~~2019,~~of the Company’s ~~paid~~revenue ~~off~~and accounts ~~short-term~~receivable ~~convertible~~were ~~debt~~earned offrom ~~$676,500~~one customer.

166. SUBSEQUENT EVENTS

~~ITEM~~During July and August 2019, the Company 2entered into various note and share purchase agreements with related parties pursuant to which the parties purchased convertible notes in the aggregate amount of $108,000, along with additional shares of the Company’s common stock to be issued on the maturity date. Also, ~~MANAGEMENT~~$256,250 ~~DISCUSSION~~of ~~AND~~convertible ~~ANALYSIS~~notes OFthat ~~FINANCIAL~~matured ~~CONDITION~~including ~~AND~~$6,250 ~~RESULTS~~accrued OFinterest ~~OPERATIONS~~were rolled into another bridge note rather than converted. The notes expire on the 90-day anniversary of the issuance date and accrue interest at a rate of 10% per annum. The maturity dates range from September to October 2019. On the maturity date, whether or not the notes are converted, the investors shall receive shares of the Company’s common stock with a value 50% of the note’s principal amounts. In addition, the investors shall have the right to convert all or any portion of the outstanding and unpaid principal and interest of the note into securities being sold by the Company on or after the maturity date. The Company may not prepay the notes prior to the maturity dates.

~~The following~~During ~~discussion~~July and ~~analysis~~August of2019, ~~our~~the ~~financial~~Company entered ~~condition~~into various note and ~~results~~share ofpurchase ~~operations~~agreements ~~should~~with beaccredited ~~read~~investors pursuant to which the investors purchased convertible notes in ~~conjunction~~the aggregate amount of $615,000, along with ~~our unaudited~~additional ~~consolidated~~shares ~~financial~~of ~~statements~~the ~~and~~Company’s ~~related~~common stock to be issued on the maturity date. Also, $689,498 of convertible notes ~~included~~that inmatured ~~this~~including ~~Quarterly~~$16,817 ~~Report~~accrued interest were rolled into another bridge note rather than converted. The notes expire on ~~Form~~the 1090-Qday ~~and~~anniversary of the ~~audited~~issuance ~~consolidated financial~~date ~~statements~~ and ~~notes~~accrue ~~thereto~~interest asat a rate of ~~and~~10% ~~for~~per annum. The maturity dates range from September to October 2019. On the ~~year~~maturity ~~ended~~date, ~~December~~whether 31or not the notes are converted, ~~2018~~the ~~and~~investors shall receive shares of the ~~related~~Company’s ~~Management~~common stock with a value 50% of the note’s ~~Discussion~~principal ~~and~~amounts. ~~Analysis~~In ofaddition, ~~Financial~~the ~~Condition~~investors ~~and~~shall ~~Results~~have the right to convert all or any portion of ~~Operations,~~the ~~both~~outstanding and unpaid principal and interest of ~~which~~the ~~are~~note ~~contained~~into insecurities ~~our~~being ~~Annual~~sold ~~Report~~by the Company on ~~Form~~or ~~10-K~~after ~~for~~ the ~~fiscal~~maturity ~~year~~date. The ~~ended~~Company ~~December~~may ~~31,~~not ~~2018,~~prepay the ~~filed~~notes onprior ~~April~~to ~~16,~~the ~~2019~~maturity dates.

~~SPECIAL~~In July and August 2019, an aggregate of ~~NOTE~~$942,681 OFof ~~CAUTION~~notes ~~REGARDING~~matured ~~FORWARD-LOOKING~~and ~~STATEMENTS~~the Company issued 4,713,406 shares of its common stock to various noteholders. Certain noteholders also elected to convert the notes and accrued interest into Series A Redeemable Participating Convertible Preferred Stock (“Preferred Stock”). An aggregate of 22 shares of Preferred Stock were issued upon conversion as of the date of this report.

~~Certain statements~~In inJuly ~~this~~2019, ~~Report~~the ~~constitute~~Company ~~forward-looking~~borrowed ~~statements.~~an ~~These forward-looking statements include statements, which involve~~aggregate ~~risks~~of ~~and uncertainties~~$153,000 ~~regarding,~~under ~~among~~short-term ~~other~~convertible ~~things,~~notes ~~(a)~~payable. ~~our~~These ~~projected~~notes ~~revenue,~~are ~~profitability~~unsecured, ~~and~~bear ~~cash~~interest ~~flows,~~at ~~(b)~~a ~~our~~rate ~~growth strategy,~~of ~~(c)~~12% ~~anticipated~~per ~~trends~~annum ~~in our industry, (d) our future financing plans,~~ and mature ~~(e)~~in ~~our~~July ~~anticipated needs for,~~ and ~~use~~August of~~, working~~ ~~capital~~2020. ~~They~~These notes are ~~generally~~convertible ~~identifiable~~at by$0.25 ~~use~~for of the ~~words~~first ~~“may,”~~180 ~~“will,”~~days ~~“should,” “anticipate,”~~or ~~“estimate,”~~after ~~“plan,”~~180 ~~“potential,”~~days ~~“project,”~~or ~~“continuing,” “ongoing,”~~upon ~~“expects~~default,~~” “management believes,” “we believe,” “we intend,”~~ orat ~~the~~prices ~~negative~~ranging of ~~these~~60% ~~words~~to or61% ~~other~~of ~~variations~~the onlowest ~~these~~sale ~~words~~price ~~or comparable terminology. In light~~ of ~~these~~the ~~risks~~common ~~and~~stock ~~uncertainties, there~~during ~~can be no assurance that~~ the ~~forward-looking~~15 ~~statements~~to ~~contained~~20 inconsecutive ~~this~~trading ~~filing~~days ~~will in fact occur. You should not place~~prior ~~undue~~to ~~reliance on these forward-looking statements contained in this report on Form 10-Q and~~ the ~~Company’s~~date ~~Form 10-K filed on April 16, 2019. No statements contained in the following discussion should be construed as a guarantee or assurance~~ of ~~future performance or future results~~conversion.

The ~~forward-looking~~ ~~statements~~Company ~~speak~~issued ~~only~~one asmillion shares of the Company’s ~~date~~common stock on ~~which~~July ~~they are made~~1, 2019 and, ~~except~~an toadditional ~~the~~one ~~extent~~million ~~required~~shares byon ~~federal~~August ~~securities laws~~1, we2019 ~~undertake~~pursuant ~~no obligation~~ to ~~update~~a ~~any~~letter ~~forward-looking~~agreement with ~~statements~~an toinvestor ~~reflect~~in ~~events~~exchange orfor ~~circumstances~~extending ~~after~~ the maturity date ~~on which~~of the ~~statements are made or to reflect the occurrence of unanticipated events~~note.

~~The “Company”,~~In ~~“we~~July 2019,” ~~“us~~the Company repaid an advance to an investor of $100,”000 and ~~“our~~issued 100,”000 ~~refer~~shares toof ~~(i)~~the ~~NanoFlex~~Company’s ~~Power~~common ~~Corporation~~stock and ~~(ii)~~ ~~Global~~repaid ~~Photonic~~short-term ~~Energy~~convertible ~~Corporation~~debt of $70,000.

17In July and August, the Company received advances from a related party of $25,000 and repaid advances of $70,964.

~~Background~~16

~~NanoFlex~~ITEM Power Corporation is engaged in the research, development, and commercialization of advanced photovoltaic technologies that enable thin film solar products with what the Company believes can be industry-leading efficiencies, light weight, flexibility, and low total system cost2. ~~The~~MANAGEMENT ~~Company’s~~DISCUSSION ~~sponsored~~AND ~~research~~ANALYSIS ~~programs~~OF atFINANCIAL ~~the~~CONDITION ~~University~~AND ofRESULTS ~~Southern~~OF 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 the Company’s license agreement with our university research partners, they have obtained the exclusive worldwide license and right to sublicense any and all intellectual property which resulted from sponsored research programs with the universities. 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.OPERATIONS

~~These~~The ~~patented~~following discussion and ~~patent-pending~~analysis ~~technologies~~of ~~fall~~our ~~into~~financial ~~two~~condition ~~general categories – (1) cost reducing~~ and ~~performance-enhancing fabrication~~results ~~processes~~of ~~and~~operations ~~device~~should ~~architectures~~be ~~for~~read ~~ultra-high~~in ~~efficiency~~conjunction ~~Gallium~~with ~~Arsenide (“GaAs”)-based solar thin~~our ~~films~~unaudited ~~and~~consolidated ~~(2)~~financial ~~organic~~statements ~~photovoltaic (“OPV”) materials, architectures,~~ and ~~fabrication~~related ~~processes~~notes ~~for~~included ~~low~~in ~~cost,~~this ~~ultra-thin solar~~Quarterly ~~films~~Report ~~offering~~on ~~high~~Form ~~quality aesthetics, such as semi~~10-~~transparency~~Q and ~~tinting,~~the ~~and~~audited ~~highly flexible form factors. The technologies~~consolidated ~~are~~financial ~~targeted~~statements ~~at certain broad applications that require high power conversion efficiency, flexibility,~~ and ~~light~~notes ~~weight.~~thereto ~~These applications~~as ~~include:~~of ~~(a) mobile~~ and ~~off-grid~~for ~~solar~~the ~~power~~year ~~generation,~~ended ~~(b)~~December ~~BAPV~~31, ~~(c)~~2018 ~~BIPV,~~and ~~(d)~~the ~~space~~related ~~vehicles~~Management’s Discussion and ~~UAVs,~~Analysis ~~(e)~~of ~~semi-transparent solar~~Financial ~~power~~Condition ~~generating~~and ~~glazing~~Results orof ~~windows~~Operations, ~~(f)~~both ~~ultra-thin~~of ~~solar~~which ~~films~~are ~~for~~contained ~~automobiles~~in orour ~~other~~Annual ~~consumer~~Report ~~applications~~on ~~and~~Form ~~sensors and~~10-K ~~other devices~~ for the ~~Internet~~fiscal ofyear ~~Things~~ended ~~(“IoT”).~~December ~~The~~31, ~~Company~~2018, ~~believes~~filed ~~these~~on ~~technologies~~April ~~have~~16, ~~been demonstrated in a laboratory environment with our research partners~~2019.

~~The~~SPECIAL ~~Company~~NOTE ~~currently~~OF ~~holds~~CAUTION ~~exclusive~~REGARDING ~~rights to an extensive portfolio of issued and pending U.S. patents, plus their foreign counterparts, which cover architecture, processes and materials for flexible, thin~~FORWARD-~~film~~LOOKING organic photovoltaic (“OPV”) and Gallium Arsenide (“GaAs”)-based solar technologies. In addition, we have an extensive collection of patents in process. Some of our technology holdings include foundational concepts in the following areas.STATEMENTS

●Certain statements ~~Tandem~~in ~~organic~~this ~~solar~~Report ~~cell~~constitute ●forward-looking ~~Fullerene~~statements. ~~acceptors~~These ●forward-looking ~~Blocking~~statements ~~layers~~include ●statements, ~~New~~which ~~materials~~involve risks ~~for~~and ~~visible~~uncertainties, regarding, among other things, (a) our projected revenue, profitability, and ~~infrared~~cash ~~sensitivity~~flows, ●(b) ~~Scalable~~our growth strategy, ~~technologies~~(c) ●anticipated ~~Inverted~~trends ~~solar~~in ~~cells~~our ●industry, ~~Materials~~(d) ~~for~~our ~~enhanced~~future ~~light~~financing ~~collection~~plans, ~~via~~and ~~multi-exciton~~(e) ~~generation~~our ●anticipated ~~Mixed~~needs ~~layer~~for, and ~~nanocrystalline~~use ~~cells~~of, working ●capital. ~~Solar~~They ~~films~~are generally identifiable by use of the words “may,” ~~coatings~~“will,” or“should,” “anticipate,” ~~paints~~“estimate,” ●“plan,” ~~Semi-transparent~~“potential,” ~~cells~~“project,” ●“continuing,” “ongoing,” ~~Ultra-low~~“expects,” ~~cost~~“management believes,” ~~ultra-high~~“we ~~efficiency~~believe,” ~~flexible~~“we ~~thin~~intend,” or ~~film~~the ~~GaAs~~negative ~~cells~~of ●these ~~Accelerated~~words ~~and~~or ~~recyclable~~other ~~liftoff~~variations ~~process~~on ●these ~~Cold-weld~~words ~~bonding~~or ofcomparable ~~GaAs~~terminology. ~~solar~~In ~~cells~~light toof ~~plastic~~these ~~substrates~~risks and ~~metal~~uncertainties, there ~~foils~~can ●be ~~Micro~~no assurance that the forward-~~inverters~~looking ~~monolithically~~statements ~~integrated~~contained ~~into~~in ~~GaAs~~this ~~solar~~filing ~~cells~~will ●in ~~Low~~fact ~~cost,~~occur. ~~thermo~~You should not place undue reliance on these forward-~~formed~~looking ~~plastic~~statements ~~mini~~contained in this report on Form 10-~~compound~~Q ~~parabolic~~and ~~concentrator~~the ~~arrays~~Company’s Form 10-K filed on April 16, 2019. No statements contained in the following discussion should be construed as a guarantee or assurance of future performance or future results.

18The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.

~~Plan~~The of“Company”, ~~Operation~~“we,” “us,” and ~~Liquidity~~“our,” refer to (i) NanoFlex Power Corporation and (ii) ~~Capital~~Global ~~Resources~~Photonic Energy Corporation.

~~Overall Operating Plan~~Background

~~Our~~NanoFlex ~~business~~Power ~~model~~Corporation is ~~now~~engaged ~~shifting~~in tothe ~~focus~~research, ondevelopment, ~~NanoFlex~~and commercialization of advanced photovoltaic technologies that enable thin film solar products ~~which~~with ~~have~~what ~~competitive~~the ~~advantage~~Company ~~due~~believes tocan ~~our~~be ~~intellectual~~industry-leading ~~property~~efficiencies, light weight, flexibility, and low total system cost. The Company’s sponsored research programs at the University of Southern California (“USC”), Wethe ~~expect~~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 ~~work~~the Company’s license agreement with ~~well-positioned~~our ~~commercial~~university research partners, ~~who~~they ~~can~~have ~~provide~~obtained ~~manufacturing~~the ~~and~~exclusive ~~marketing~~worldwide ~~capabilities~~license and right to ~~enable~~sublicense ~~rapid~~any ~~commercial~~and ~~growth.~~all ~~These~~intellectual ~~manufacturing~~property ~~partners~~which ~~can~~resulted ~~also~~from ~~serve~~sponsored asresearch aprograms ~~source~~with the universities. While each patent is issued in the name of ~~solar~~the ~~cell~~respective ~~supply~~university ~~for~~that ~~NanoFlex~~developed tothe ~~provide~~subject technology, the Company has exclusive commercial license ~~products~~rights to ~~customers~~all onof ~~its~~the ~~own~~patents asand ~~well~~their asattendant ~~through~~technologies, aand ~~“fab-less”~~the ~~manufacturing~~patents ~~model~~are referred to herein as being the Company’s patents.

ToThese ~~support~~patented ~~this~~and ~~work,~~patent-pending ~~our~~technologies ~~III~~fall into two general categories – (1) cost reducing and performance-Venhancing fabrication ~~solar~~processes ~~engineering~~and ~~team~~device ~~operates~~architectures ~~out~~for ofultra-high ~~our~~efficiency ~~development~~Gallium Arsenide (“GaAs”)-based solar thin films and ~~prototyping~~(2) ~~center~~organic inphotovoltaic ~~Ann~~(“OPV”) ~~Arbor~~materials, ~~Michigan~~architectures, ~~which~~ weand ~~believe~~fabrication isprocesses afor low cost, ultra-~~effective~~thin solar ~~approach~~films tooffering ~~move~~high ~~the~~quality ~~technologies~~aesthetics, ~~toward~~such ~~commercialization~~as semi-transparency and tinting, and highly flexible form factors. WeThe ~~believe~~technologies are targeted at certain broad applications that ~~this~~require ~~allows~~high ~~our~~power conversion efficiency, flexibility, and light weight. These ~~engineering~~applications ~~team~~include: to(a) ~~develop~~mobile ~~our~~and ~~flexible~~off-grid solar ~~panel~~power ~~products~~generation, as(b) ~~well~~BAPV, as(c) ~~without~~BIPV, ~~the~~(d) ~~need~~space ~~for~~vehicles ~~large-scale~~and ~~capital~~UAVs, ~~investment~~(e) insemi-transparent ~~clean~~solar ~~room~~power ~~facilities~~generating ~~and~~glazing or windows, (f) ultra-thin solar ~~cell~~films ~~fabrication~~for ~~equipment~~automobiles or other consumer applications and sensors and other devices for the Internet of Things (“IoT”). The Company believes these technologies have been demonstrated in a laboratory environment with our research partners.

WeThe ~~are~~Company ~~also~~currently ~~pursuing~~holds ~~sponsored~~exclusive ~~development~~rights ~~funding~~ to ~~generate~~an ~~revenue~~extensive inportfolio the near-term as well as subsidize our product development with non-dilutive financing. In connection with our focus on potential government-sponsored research projects, on June 19, 2017, the Company announced that that it is part of aissued ~~consortium that was awarded a $6.3 million contract from the Army Research Laboratory’s Army Research Office to develop high power, flexible,~~ and ~~lightweight~~pending ~~solar panels for portable power applications~~U.S. ~~The consortium consists of NanoFlex~~patents, ~~SolAero,~~plus ~~the~~their ~~University~~foreign ~~of Michigan~~counterparts, ~~and the University of Wisconsin. Pursuant to the foregoing and as part~~ of the consortium, SolAero was awarded a 4-year contract amounting to $6.3 million with the Army Research Lab (ARL) to develop solar power mats. SolAero has engaged the Company as a subcontractor for $3.3 million over 4 years of which ~~$1.6~~cover ~~million will be provided to the University of Michigan as a subcontractor to the Company. The Company’s contract with SolAero provides for direct reimbursement of the Company’s costs~~architecture, ~~including~~processes ~~indirect~~and ~~overhead.~~materials ~~On February 1, 2019 we were informed by SolAero that Mantech had terminated the contract as provided~~ for in the agreement. The Company will be fully reimbursed for all costs incurred through that date. Having an established technical team enables us to more effectively pursue and execute sponsored research projects from the Department of Defense (“DoD”)flexible, ~~the~~thin-film ~~Department~~organic ofphotovoltaic ~~Energy~~ (“~~DOE~~OPV”), and ~~the National Aeronautics~~Gallium ~~and~~Arsenide ~~Space Administration~~ (“~~NASA~~GaAs”)~~, each of which has interests in businesses that can deliver ultra~~-~~lightweight,~~based ~~high-efficiency~~ solar technologies ~~for demanding applications~~. ~~However~~In addition, ~~there~~we ~~can~~have bean noextensive ~~assurance~~collection ~~that~~of ~~the~~patents ~~Company~~in ~~can~~process. ~~effectively pursue such~~Some ~~research~~of ~~projects,~~our ~~nor~~technology ifholdings itinclude ~~can,~~foundational ~~that~~concepts ~~such~~in ~~pursuit~~the ~~will~~following ~~be successful~~areas.

~~As reported~~● inTandem ~~the~~organic ~~Company’s~~solar ~~Form~~cell ~~8-K~~● ~~filed~~Fullerene ~~with~~acceptors ~~the~~● ~~SEC~~Blocking onlayers ~~February~~● 7,New ~~2017,~~materials onfor ~~February~~visible 2,and ~~2017,~~infrared ~~the~~sensitivity ~~Company~~● ~~entered~~Scalable ~~into a~~growth ~~License~~technologies ~~Agreement~~● ~~with~~Inverted ~~SolAero~~solar ~~Technologies~~cells ~~Corp.~~● ~~(“SolAero”),~~Materials ~~pursuant to which the Company agreed to grant SolAero a non-exclusive worldwide license to use, sell, offer~~ for ~~sale,~~enhanced ~~import~~light orcollection ~~otherwise~~via ~~dispose of certain products (the “Licensed Products”) using the Company’s patented proprietary manufacturing processes relating to Gallium Arsenide~~multi-~~based~~exciton ~~photovoltaic cells~~generation ~~(the~~● ~~“Licensed~~Mixed ~~Patents”)~~layer ~~within the space~~ and ~~near-space~~nanocrystalline fields of use (the “License Field”). SolAero is to pay the Company a royalty based on sales of the Licensed Products within the Licensed Field. The agreement does not provide SolAero with the right to sublicense the Licensed Patents. The term of the agreement runs from February 2, 2017 through the expiration date of the last expiring patent included in the Licensed Technology. However, each party may terminate the agreement upon a material breach by the other party.cells

~~There can be no assurance that our overall term operating plan will be successful or that the capital needed to fulfill it can be raised.~~ 17

~~Results~~ ● Solar films, coatings, or paints ● Semi-transparent cells ● Ultra-low cost, ultra-high efficiency, flexible thin film GaAs cells ● Accelerated and recyclable liftoff process ● Cold-weld bonding of ~~Operations~~GaAs solar cells to plastic substrates and metal foils ● Micro-inverters monolithically integrated into GaAs solar cells ● Low cost, thermo-formed plastic mini-compound parabolic concentrator arrays

~~For~~Plan ~~the~~of ~~three~~Operation ~~months~~and ~~ended~~Liquidity ~~March 31, 2019~~ and ~~2018~~Capital Resources

~~Revenue~~Overall ~~was~~Operating $93,280 and $149,991 for the three months ended March 31, 2019 and 2018, respectively. Revenue relates to engineering services provided under the ARL contract. On February 1, 2019 we were informed by SolAero that Mantech had terminated the contract as provided for in the agreement. We will be fully reimbursed for all costs incurred through that date. We are attempting to ascertain the reason for the cancellation.Plan

WeOur dobusiness ~~not~~model ~~believe~~is ~~that~~now ~~inflation~~shifting orto ~~changing~~focus ~~prices~~on ~~have~~NanoFlex ~~had~~products which have a ~~material~~competitive ~~effect~~advantage ondue to our ~~business,~~intellectual ~~financial~~property. We ~~condition,~~expect orto ~~results~~work with well-positioned commercial partners who can provide manufacturing and marketing capabilities to enable rapid commercial growth. These manufacturing partners can also serve as a source of solar cell supply for NanoFlex to provide ~~operations~~products to customers on its own as well as through a “fab-less” manufacturing model.

19To support this work, our III-V solar engineering team operates out of our development and prototyping center in Ann Arbor, Michigan, which we believe is a cost-effective approach to move the technologies toward commercialization. We believe that this allows our engineering team to develop our flexible solar panel products as well as without the need for large-scale capital investment in clean room facilities and solar cell fabrication equipment.

~~Cost~~We are also pursuing sponsored development funding to generate revenue in the near-term as well as subsidize our product development with non-dilutive financing. In connection with our focus on potential government-sponsored research projects, on June 19, 2017, the Company announced that that it is part of ~~Services~~a consortium that was awarded a $6.3 million contract from the Army Research Laboratory’s Army Research Office to develop high power, flexible, and lightweight solar panels for portable power applications. The consortium consists of NanoFlex, SolAero, the University of Michigan, and the University of Wisconsin. Pursuant to the foregoing and as part of the consortium, SolAero was awarded a 4-year contract amounting to $6.3 million with the Army Research Lab (ARL) to develop solar power mats. SolAero has engaged the Company as a subcontractor for $3.3 million over 4 years of which $1.6 million will be provided to the University of Michigan as a subcontractor to the Company. The Company’s contract with SolAero provides for direct reimbursement of the Company’s costs, including indirect overhead. On February 1, 2019 we were informed by SolAero that Mantech had terminated the contract as provided for in the agreement. The Company was reimbursed for all costs incurred through that date. 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. However, there can be no assurance that the Company can effectively pursue such research projects, nor if it can, that such pursuit will be successful.

~~Cost~~As ofreported ~~services~~in ~~was~~the ~~$93~~Company’s Form 8-K filed with the SEC on February 7,~~280~~ ~~and~~2017, ~~$149~~on February 2,~~991~~ ~~for~~2017, the ~~three~~Company ~~months~~entered ~~ended~~into a ~~March~~License 31Agreement with SolAero Technologies Corp. (“SolAero”), ~~2019~~pursuant ~~and~~to ~~2018~~which the Company agreed to grant SolAero a non-exclusive worldwide license to use, ~~respectively.~~sell, ~~The~~offer ~~decrease~~for ~~was~~sale, ~~due~~import or otherwise dispose of certain products (the “Licensed Products”) using the Company’s patented proprietary manufacturing processes relating to Gallium Arsenide-based photovoltaic ~~less~~cells ~~spending~~(the “Licensed Patents”) within the space and near-space fields of use (the “License Field”). SolAero is to pay the Company a royalty based on sales of the ~~ARL~~Licensed ~~contract~~Products ~~during~~within the ~~2019~~Licensed ~~period~~Field. ~~due~~The agreement does not provide SolAero with the right to sublicense the ~~termination~~Licensed Patents. The term of the ~~contract~~agreement runs from February 2, 2017 through the expiration date of the last expiring patent included in the Licensed Technology. However, each party may terminate the agreement upon a material breach by the other party.

~~Research~~There ~~and~~can ~~Development~~be ~~Expenses~~no assurance that our overall term operating plan will be successful or that the capital needed to fulfill it can be raised.

Research and development expenses were $321,840 for the three months ended March 31, 2019, a 121% increase from $145,781 for the three months ended March 31, 2018. The increase is attributable to increased costs in building prototypes and developing applications for our commercialization efforts. The increase was also due to an increase in non-cash expenses consisting of warrants issued for services. For the three months ended March 31, 2019, non-cash expenses were $9,818. For the three months ended March 31, 2018, non-cash expenses recaptured were $4,238.18

~~Patent~~Results ~~Application~~of ~~and Prosecution Fees~~Operations

~~Patent~~For ~~application and prosecution fees consist of~~ the ~~fees~~three ~~due for prosecuting~~ and ~~maintaining~~six ~~the patents resulting from the research program sponsored by the Company and were $287,188 for the three~~ months ended ~~March~~June 3130, 2019, ~~a 12% decrease from $327,157 for the three months ended March 31, 2018. The decrease is attributable to the timing of application~~ and ~~prosecution of patents and the result of decreased patent activity by our engineering team in commercializing and developing our technologies.~~2018

~~Selling,~~Revenue ~~General~~was $0 and ~~Administrative~~$93,280 ~~Expenses~~for the three and six months ended June 30, 2019, respectively. Revenue was $221,917 and $371,908 for the three and six months ended June 30, 2018, respectively. Revenue relates to engineering services provided under the ARL contract. On February 1, 2019 we were informed by SolAero that Mantech had terminated the contract as provided for in the agreement. We have been fully reimbursed for all costs incurred through that date.

~~Selling,~~We ~~general~~do ~~and~~not ~~administrative~~believe ~~expenses~~that ~~were~~inflation ~~$78,801~~or ~~for~~changing ~~the~~prices ~~three~~have ~~months~~had ~~ended~~a ~~March~~material ~~31,~~effect ~~2019,~~on anour ~~83% decrease from $474~~business,~~944~~ ~~for the~~financial ~~three months ended March 31~~condition, ~~2018.~~or ~~The~~results ~~decrease is primarily attributable to a reduction in non-cash expenses associated with~~of ~~warrants issued to employees during the year~~operations. ~~For the three months ended March 31, 2019, non-cash expenses recaptured due to forfeited employee warrants were $231,693. For the three months ended March 31, 2018, non-cash expenses were $91,772.~~

~~Other~~Cost ~~Income~~of ~~(Expense)~~Services

~~Other~~Cost ~~income~~of ~~(expense)~~services was $0 and $93,280 for the three and six months ended ~~March~~June 3130, 2019, ~~was~~respectively. ~~($2,808,762)~~Cost asof ~~compared~~services towas ($2221,~~429~~917 and $371,~~633)~~908 for the three and six months ended ~~March~~June 3130, 2018, respectively. ~~These~~The ~~changes~~decrease ~~are~~was ~~primarily~~ due to anless ~~increase~~spending inon ~~interest~~the ~~expense~~ARL ofcontract during ~~$1,857,626,~~the ~~offset~~2019 byperiod adue ~~decrease~~to ~~of loss~~the ontermination ~~extinguishment~~ of ~~debt~~the ~~of $1,587,477~~contract.

~~Net~~Research ~~Loss~~and Development Expenses

~~The~~Research ~~net~~and ~~loss~~development expenses were $348,932 for the three months ended ~~March~~June 3130, 2019, ~~was~~a ~~$3,496,591,~~42% ~~compared~~increase tofrom $3245,~~377,515~~741 for the three months ended ~~March~~June 3130, 2018. ~~The~~Research ~~increase~~and indevelopment ~~net~~expenses ~~loss~~were is$670,772 ~~primarily~~for ~~related~~the tosix ~~non-cash~~months ~~expenses,~~ended ~~including~~June ~~interest~~30, ~~expense~~2019, ~~and~~a ~~loss~~71% onincrease ~~extinguishment~~from ~~of debt~~$391,522 ~~changes~~for inthe ~~research~~six ~~and~~months ~~development~~ended June 30, ~~patent~~2018. ~~application~~The ~~and~~increase ~~prosecution~~is ~~fees,~~attributable ~~and~~to ~~selling,~~increased ~~general~~costs ~~and~~in ~~administrative expenses,~~building ~~each~~prototypes ofand ~~which~~developing applications isfor ~~described~~our ~~above~~commercialization efforts.

~~Liquidity~~Patent Application and ~~Capital~~Prosecution ~~Resources~~Fees

~~Sources~~Patent application and prosecution fees consist of ~~Liquidity~~the fees due for prosecuting and maintaining the patents resulting from the research program sponsored by the Company and were $113,828 for the three months ended June 30, 2019, a 78% decrease from $526,459 for the three months ended June 30, 2018. Patent application and prosecution fees were $401,016 for the six months ended June 30, 2019, a 53% decrease from $853,616 for the six months ended June 30, 2018. The decrease is attributable to the timing of application and prosecution of patents and the result of decreased patent activity by our engineering team in commercializing and developing our technologies.

~~As of March 31~~Selling, ~~2019, we had cash and cash equivalents of $138,624 and a working capital deficit of $9,427,353, as compared to cash~~ ~~and~~General ~~cash equivalents of $27,213~~ and aAdministrative working capital deficit of $11,991,857 as of December 31, 2018. The increase in working capital deficit is attributable to an increase in accrued liabilities and debt during the three months ended March 31, 2018. Expenses

~~The~~Selling, ~~Company~~general ~~needs~~and toadministrative ~~raise~~expenses ~~additional~~were ~~capital~~$362,172 ~~and~~for ~~is in~~ the ~~process~~three ofmonths ~~raising~~ended ~~additional~~June ~~funds~~30, in2019, ~~order~~a to28% ~~continue~~decrease tofrom ~~finance our research and development~~$503,508 ~~service~~for ~~existing~~the three ~~liabilities~~months ~~and~~ended ~~commercialize~~June ~~photonic~~30, ~~energy~~2018. ~~conversion~~Selling, ~~technologies~~general ~~utilizing organic~~ and ~~GaAs~~administrative ~~semiconductor-based~~expenses ~~solar~~were ~~cells.~~$440,973 Infor the ~~next~~six 12 months weended ~~need~~June to30, 2019, ~~raise~~a ~~approximately~~55% ~~$13~~decrease ~~million~~from in$978,452 ~~additional~~for ~~capital in~~the ~~order~~six tomonths ~~continue~~ended ~~our~~June ~~operations as described above~~30, ~~support~~2018. ~~our~~The ~~corporate~~decrease ~~functions~~is ~~and~~primarily ~~repay~~attributable ~~some~~to ofa ~~our liabilities. We~~reduction ~~anticipate~~in ~~that~~non-cash ~~the~~expenses ~~additional~~associated ~~funding~~with ~~can~~warrants ~~result~~issued ~~from~~to ~~private~~employees ~~sales~~during ofthe ~~our equity securities~~year. ~~However,~~For ~~there~~the ~~can~~three bemonths noended ~~assurance that~~June ~~the~~30, ~~additional~~2019 ~~funds~~and 2018, ~~will~~non-cash beexpenses ~~available~~were to$16,671 usand ~~when needed~~$158,640, orrespectively. ifFor ~~available,~~the onsix ~~terms~~months ~~that~~ended ~~will~~June be30, ~~acceptable~~2019, tonon-cash usexpenses ~~or our~~recaptured ~~shareholders~~were $215,022. IfFor wethe ~~are~~six ~~unable~~months toended ~~raise~~June ~~sufficient~~30, ~~funds~~2018, ~~the~~non-cash ~~Company~~expenses ~~may~~were ~~have to cease its operations~~$254,650.

20Other Income (Expense)

~~Analysis~~Other income (expense) for the three months ended June 30, 2019, was ($1,772,267) as compared to ($2,591,779) for the three months ended June 30, 2018. Other income (expense) for the six months ended June 30, 2019, was ($4,581,029) as compared to ($5,021,412) for the six months ended June 30, 2018. These changes are primarily due to a decrease of ~~Cash~~loss ~~Flows~~on extinguishment of debt, offset by an increase in interest expense.

Net cash used in operating activities decreased by $148,908 to $753,509 for the three months ended March 31, 2019, compared to $902,417 for the three months ended March 31, 2018. The cash used in operating activities was primarily attributable to the change in net loss, the loss on extinguishment of debt and the amortization of debt discount.Loss

~~Net~~The ~~cash~~net ~~used~~loss infor ~~investing~~the ~~activities~~three months ended June 30, 2019 was $302,~~780~~597,199, ~~and~~compared to $03,867,487 ~~during~~for the three months ended ~~March~~June 3130, 2018. The net loss for the six months ended June 30, 2019 ~~and~~was ~~2018~~$6,093,790, ~~respectively.~~compared ~~This~~to $7,245,002 for the six months ended June 30, 2018. ~~consisted~~The decrease in net loss is primarily related to non-cash expenses, including interest expense and loss on extinguishment of ~~purchases~~debt, and changes in research and development, each of ~~fixed~~which ~~assets~~is described above.

Net cash provided by financing activities was $895,700 and $853,455 during the three months ended March 31, 2019 and 2018, respectively. For the three months ended March 31, 2019, this includes borrowings on related party debt of $350,000, borrowings on promissory note debt of $45,000, borrowings on short term convertible debt of $588,700, advances received from related party of $150,000 offset by repayments of promissory note debt of $45,000, repayments on convertible debt of $153,000 and advances repaid to related party of $40,000. For the three months ended March 31, 2018, this includes borrowings on related party debt of $300,000, borrowings on promissory note debt of $75,000, borrowing on convertible debt of $595,100, advances received from related party of $8,000, partially offset by repayments on convertible debt of $43,000 and advances repaid to related party of $81,465. 19

~~Going~~Liquidity ~~Concern~~and Capital Resources

~~The~~Sources ~~Company has only generated limited revenues to date. The Company has a working capital deficit~~ of $9,427,353 and an accumulated deficit of $237,618,482 as of March 31, 2019. 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. Liquidity

~~Off-Balance~~As ~~Sheet~~of ~~Arrangements~~June 30, 2019, we had cash and cash equivalents of $101,045 and a working capital deficit of $11,025,498, as compared to cash and cash equivalents of $27,213 and a working capital deficit of $11,991,857 as of December 31, 2018. The decrease in working capital deficit is attributable to a decrease in debt during the six months ended June 30, 2019.

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 and GaAs semiconductor-based solar cells. In the next 12 months we need to raise approximately $13 million in additional capital in order to continue our operations as described above, support our corporate functions and repay some of our liabilities. We doanticipate ~~not~~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 we are unable to raise sufficient funds, the Company may have ~~any~~to ~~off-balance~~cease ~~sheet~~its ~~arrangements~~operations.

~~Critical~~Analysis ~~Accounting~~of ~~Policies~~Cash Flows

~~There~~Net ~~were~~cash noused ~~changes~~ in ~~our~~operating ~~critical~~activities ~~accounting~~increased ~~policies~~by ~~during~~$268,741 to $1,923,821 for the ~~three~~six months ended ~~March~~June 3130, 2019, ~~from~~compared ~~those~~to ~~set~~$1,655,080 for ~~forth~~the insix ~~“Critical Accounting~~months ~~Policies”~~ended inJune ~~our~~30, ~~Annual~~2018. ~~Report~~The oncash ~~Form~~used ~~10-K~~in ~~for~~operating ~~the~~activities ~~year~~was ~~ended~~primarily ~~December~~attributable ~~31,~~to ~~2018~~the ~~filed~~change ~~with~~in net loss, the ~~SEC~~loss on ~~April 16,~~extinguishment ~~2019~~of debt and the amortization of debt discount.

~~ITEM~~Net 3.cash ~~QUANTITATIVE~~used ~~AND~~in ~~QUALITATIVE~~investing ~~DISCLOSURES~~activities ~~ABOUT~~was ~~MARKET~~$34,055 ~~RISK~~and $55,237 during the six months ended June 30, 2019 and 2018, respectively. This consisted of purchases of fixed assets.

WeNet ~~are~~cash aprovided ~~smaller~~by ~~reporting~~financing ~~company~~activities aswas ~~defined~~$2,031,708 and $1,819,804 during the six months ended June 30, 2019 and 2018, respectively. For the six months ended June 30, 2019, this includes borrowings on related party debt of $1,284,000, borrowings on promissory note debt of $45,000, borrowings on short term convertible debt of $1,842,030, advances received of $100,000, advances received from related party of $110,000, offset by ~~Rule~~repayments ~~12b-2~~of promissory note debt of $95,000, repayments on convertible debt of $1,207,000 and advances repaid to related party of $47,322. For the ~~Securities~~six ~~Exchange~~months ~~Act~~ended June 30, 2018, this includes proceeds from sale of ~~1934~~common shares and ~~are~~warrants ~~not~~of ~~required~~$518,781, toproceeds ~~provide~~from exercise of warrants of $180,226, borrowings on related party debt of ~~the~~$300,000, ~~information~~borrowings ~~under~~on ~~this~~promissory ~~item~~note debt of $275,000, borrowing on convertible debt of $1,438,720, advances received from related party of $8,000, offset by repayments on promissory note debt of $125,000, repayments on convertible debt of $664,278 and advances repaid to related party of $111,645.

~~ITEM~~Going ~~4. CONTROLS AND PROCEDURES~~Concern

~~Disclosure~~The ~~Controls~~Company has only generated limited revenues to date. The Company has a working capital deficit of $11,025,498 and ~~Procedures~~an accumulated deficit of $240,215,681 as of June 30, 2019. 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.

~~Pursuant to Rule 13a~~Off-~~15(b) under the Exchange Act, the Company carried out an evaluation, with the participation of the Company’s~~Balance ~~management,~~Sheet including the Company’s Chief Executive Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Report. Based upon that evaluation, the Company’s management concluded that the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management to allow timely decisions regarding required disclosure.Arrangements

~~Changes~~We indo ~~internal~~not ~~controls~~have ~~over~~any ~~financial~~off-balance ~~reporting~~sheet arrangements.

~~Ron~~Critical ~~DaVella,~~Accounting the Company’s CFO resigned on March 31, 2019. The Company is currently seeking a replacement. Until a replacement is found, his resignation may impact segregation of duties. Dean Ledger, the Company’s CEO will be signing all certifications as both the Principal Executive and Financial Officer.Policies

There ~~have~~were ~~been~~ no ~~other significant~~ changes in our ~~internal~~critical ~~controls~~accounting orpolicies induring ~~other~~the ~~factors~~six ~~that~~months ~~could~~ended ~~significantly~~June ~~affect~~30, 2019 from those ~~controls~~set forth in “Critical ~~subsequent~~Accounting toPolicies” in our Annual Report on Form 10-K for the ~~period~~year ~~covered~~ended byDecember ~~this~~31, ~~report~~2018 filed with the SEC on April 16, 2019.

2120

~~PART~~ITEM II3. -QUANTITATIVE ~~OTHER~~AND ~~INFORMATION~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~ITEM~~We 1.are ~~LEGAL~~a ~~PROCEEDINGS~~smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

~~From~~ITEM ~~time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business~~4. ~~Litigation~~ isCONTROLS ~~subject~~AND ~~to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.~~PROCEDURES

~~ITEM~~Disclosure ~~1A.~~Controls ~~RISK~~and ~~FACTORS~~Procedures

WePursuant ~~are~~to aRule ~~smaller~~13a-15(b) ~~reporting~~under ~~company~~the Exchange Act, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined byunder Rule ~~12b~~13a-215(e) ofunder the ~~Securities~~ Exchange Act) as of ~~1934~~the end of the period covered by this Report. Based upon that evaluation, the Company’s management concluded that the Company’s disclosure controls and ~~are~~procedures were not effective to ensure that information required to ~~provide~~be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information ~~under~~is ~~this~~accumulated ~~item~~and communicated to the Company’s management to allow timely decisions regarding required disclosure.

~~ITEM~~Changes 2.in ~~UNREGISTERED~~internal ~~SALES~~controls OFover ~~EQUITY~~financial ~~SECURITIES AND USE OF PROCEEDS~~reporting

~~Private~~Ron ~~Placement~~DaVella, the Company’s CFO resigned on March 31, 2019. An interim CFO was hired until a replacement is been found. Until a replacement is found, his resignation may impact segregation of duties. Dean Ledger, the Company’s ~~Notes~~CEO will be signing all certifications as both the Principal Executive and Financial Officer.

~~During~~There ~~the~~have ~~three~~been ~~months~~no ~~ended~~other ~~March~~significant ~~31,~~changes ~~2019, the Company entered into various note and share purchase agreements with a major shareholder to which the shareholder purchased convertible notes~~ in ~~the~~our ~~aggregate~~internal ofcontrols $350,000 along with additional shares of the Company’s common stock. The notes expire on the 90-day anniversary of the issuance date and accrue interest at a rate of 10% per annum. The maturity dates range from May to June 2019. On the maturity date, whether or not the notes are converted, the investors shall receive shares of the Company’s common stock with a value worth 50% of the note’s principal amounts. In addition, the shareholder shall have the right to convert all or any portion of the outstanding and unpaid principal and interest of the note into securities being sold by the Company on or after the maturity date. The Company may not prepay the notes prior to the maturity dates. The number of shares in ~~aggregate~~other ~~was~~factors ~~determined~~that tocould besignificantly ~~1,750,000~~affect ~~based~~those ~~on a 20-day lookback from~~controls ~~the~~subsequent ~~inception date subject~~ to ~~a minimum of $0.10 per share. Total debt discount and share issuance obligation of $110,875 was recorded at inception. The debt discount was amortized straight line over~~ the ~~90-day~~ period. ~~This~~covered ~~obligation~~by ~~was~~this ~~determined to be a liability under ASC 480~~report. Total amortization for the period from inception through March 31, 2019 was $24,686. As of March 31, 2019, the fair value of the shares was determined to be $99,225 and a gain on change in value of share obligation of $11,650 was recorded.

During the three months ended March 31, 2019, the Company borrowed an aggregate of $120,200, net of original issue discounts and fees of $12,800 under short-term convertible notes payable. The outstanding convertible notes of the Company are unsecured, bear interest between 0% and 12% per annum and mature between April 2019 and February 2020. Certain of these notes are convertible at fixed rates ranging from $0.25 - $0.50 per share for the first 180 days. After 180 days or upon default, the conversion rates become variable with prices ranging from 60% - 61% of the lowest sale price of the common stock during the 15 to 20 consecutive trading days prior to the date of conversion.21

22PART II - OTHER INFORMATION

~~During~~ITEM the three months ended March 31, 2019, the Company entered into various note and share purchase agreements with accredited investors pursuant to which the investors purchased convertible notes in the aggregate of $468,500, along with additional shares of the Company’s common stock1. In ~~addition,~~LEGAL existing promissory notes and related party notes totaling $182,250 were modified into these note and share purchase agreements. The notes expire on the 90-day anniversary of the issuance date and accrue interest at a rate of 10% per annum. The maturity dates range from April 2019 to June 2019. On the maturity date, whether or not the notes are converted, the investors shall receive shares of the Company’s common stock with a value worth 50% of the note’s principal amounts. In addition, the investors shall have the right to convert all or any portion of the outstanding and unpaid principal and interest of the note into securities being sold by the Company on or after the maturity date. The Company may not prepay the notes prior to the maturity dates. The number of shares in aggregate was determined to be 4,022,500 based on a 20-day lookback from the inception date subject to a minimum of $0.10 per share. Total debt discount and share issuance obligation of $254,894 was recorded at inception. The debt discount was amortized straight line over the 90-day period. This obligation was determined to be a liability under ASC 480. Total amortization for the period from inception through March 31, 2019 was $145,307. As of March 31, 2019, the fair value of the shares was determined to be $228,075 based on the stock price on March 31, 2019 and a gain on change in value of share obligation of $26,819 was recorded.PROCEEDINGS

~~The~~From ~~above~~time ~~issuances~~to oftime, ~~the~~we ~~Company’s~~may ~~securities~~become ~~were~~involved ~~not~~in ~~registered~~various ~~under~~lawsuits ~~the~~and ~~1933~~legal ~~Act,~~proceedings ~~and~~which ~~the~~arise ~~Company~~in ~~relied~~the onordinary ancourse ~~exemption~~of business. ~~from~~Litigation ~~registration~~is ~~pursuant~~subject to ~~Section~~inherent ~~4(2)~~uncertainties, ofand ~~the~~an ~~Securities~~adverse ~~Act~~result ofin ~~1933,~~these asor ~~amended~~other ~~(the~~matters ~~“1933~~may ~~Act”),~~arise ~~for~~from ~~such~~time ~~issuances~~to time that may harm our business.

~~Issuance~~ITEM of1A. ~~Promissory~~RISK ~~Notes~~ FACTORS

~~During~~We ~~the~~are ~~three~~a ~~months~~smaller ~~ended~~reporting ~~March~~company ~~31,~~as ~~2019,~~defined ~~the~~by ~~Company~~Rule ~~borrowed~~12b-2 ~~$45,000~~of ~~under~~the ~~non-convertible~~Securities ~~notes~~Exchange ~~payable~~Act ~~from~~of an1934 ~~investor.~~and ~~This note~~are ~~had~~not 0%required ~~interest~~to ~~and~~provide the noinformation ~~maturity~~under ~~date~~this item.

~~The~~ITEM ~~above issuances of the Company’s securities were not registered under the 1933 Act, and the Company relied on an exemption from registration pursuant to Section 4(~~2). ofUNREGISTERED ~~the~~SALES ~~Securities~~OF ~~Act~~EQUITY ofSECURITIES ~~1933,~~AND asUSE ~~amended~~OF ~~(the “1933 Act”), for such issuances.~~PROCEEDS

~~Issuance~~Private Placement of ~~Common~~the ~~Stock~~Company’s ~~and Warrants~~Notes

OnDuring ~~February~~the 5six months ended June 30, 2019, the Company ~~issued~~entered ~~warrants~~into tovarious note and share purchase anagreements with related parties pursuant to which the related parties purchased convertible notes in the aggregate amount of 2$1,~~500~~290,~~000~~250, along with additional shares of the ~~its~~Company’s ~~Common~~common ~~Stock~~stock to ~~three~~be issued upon maturity. Total cash of ~~its~~$1,284,000 was received and $6,250 was accrued ~~employees~~interest asrolled ainto ~~bonus~~principal. inThe ~~exchange~~notes ~~for~~expire ~~services~~on tothe be90-day ~~provided~~anniversary toof the ~~Company.~~issuance ~~The~~date ~~warrants~~and ~~have~~accrue interest at a rate of 10~~-year~~% ~~term,~~per aannum. The $0maturity dates on the outstanding notes range from July to September 2019.10 ~~exercise~~On the maturity date, whether ~~price~~or ~~and~~not ~~will~~the ~~vest~~notes ~~25%~~are ~~annually~~converted, ~~for~~the 4investors ~~years~~shall ~~beginning~~receive onshares of the ~~first~~Company’s ~~anniversary~~common ~~date. The~~stock ~~aggregate~~with ~~fair~~a value worth 50% of the ~~warrants was~~note’s ~~determined~~principal toamounts. beIn ~~$129~~addition,~~906~~ ~~using~~the shareholder shall have the ~~Black-Scholes~~right ~~option~~to ~~pricing~~convert ~~model.~~all ~~Warrant~~or ~~expense~~any portion of ~~$11,277~~the outstanding ~~was~~and ~~recognized~~unpaid ~~during~~principal and interest of the note into securities being sold by the Company on or after the maturity date. ~~three~~The ~~months~~Company ~~ended~~may ~~March~~not ~~31,~~prepay ~~2019~~the notes prior to the maturity dates.

During the ~~three~~six months ended ~~March~~June 3130, 2019, the Company ~~issued~~borrowed 23an aggregate of $949,~~573~~030,~~800~~ ~~shares~~net of ~~the~~original ~~Company’s~~issue ~~common~~discounts ~~stock~~and ~~related~~fees toof $135,495 under short-term convertible notes payable. The outstanding convertible notes of the Company are unsecured, bear interest ~~maturity~~between 8% and 12% per annum and mature between August 2019 and June 2020. Certain of ~~various~~these notes are convertible ~~notes~~at ~~totaling~~fixed rates ranging from $~~4,714,760~~0.25 ~~See~~- $0.50 per share for the ~~convertible~~first ~~debt~~180 ~~section~~days. inAfter ~~Note~~180 3days ~~for~~or ~~more~~upon ~~details~~default, the conversion rates become variable with prices ranging from 55% - 61% of the lowest sale price of the common stock during the 15 to 25 consecutive trading days prior to the date of conversion.

InDuring ~~March~~the six months ended June 30, 2019, the Company ~~issued~~entered ~~480~~into various note and share purchase agreements with accredited investors pursuant to which the investors purchased convertible notes in the aggregate of $893,000, along with additional shares of the Company’s common stock to ~~certain~~be ~~note~~issued ~~holders~~upon inmaturity. In ~~exchange~~addition, ~~for~~existing ~~accrued~~promissory and convertible notes totaling ~~interest~~$1,397,250 were modified into these note and share purchase agreements. Also, $759,525 of convertible notes that matured including $4818,~~000~~275 accrued interest were rolled into another bridge note rather than converted. The ~~fair~~notes ~~value~~expire on the 90-day anniversary of the ~~common~~issuance ~~stock~~date ~~was~~and ~~determined~~accrue interest at a rate of 10% per annum. The maturity dates on the outstanding notes range from July to beSeptember ~~$27~~2019. On the maturity date,~~216~~ ~~and~~whether ~~resulted~~or innot the notes are converted, the investors shall receive shares of the Company’s common stock with a ~~gain~~value onworth ~~settlement~~50% of ~~accrued~~the note’s principal amounts. In addition, the investors shall have the right to convert all or any portion of the outstanding and unpaid principal and interest of ~~$20,784~~the note into securities being sold by the Company on or after the maturity date. The Company may not prepay the notes prior to the maturity dates.

OnThe ~~March~~above 1,issuances ~~2019, the Company entered into a letter agreement with an investor pursuant to which, the investor agreed to extend the maturity date~~ of ~~a convertible note in exchange for 1,000,500 shares of~~ the Company’s ~~common~~securities ~~stock.~~were ~~The~~not ~~fair~~registered ~~value~~under of the ~~common~~ ~~stock~~1933 ~~was determined to be $68~~Act,~~000~~ ~~based~~and on the ~~stock~~Company ~~price~~relied on ~~March~~an ~~1, 2019 which was recorded as loss on extinguishment~~exemption offrom ~~debt.~~registration ~~Pursuant~~pursuant to ~~this~~Section ~~agreement,~~4(2) ~~an additional 1,000,000 shares~~ of the ~~Company’s~~Securities ~~common~~Act ~~stock~~of ~~were~~1933, ~~issued~~as onamended ~~both~~(the ~~April 1~~“1933 Act”), ~~2019~~for ~~and~~such ~~May 1, 2019~~issuances.

~~During~~Issuance ~~the three months ended March 31, 2019, the Company issued an aggregate~~ of ~~540,000~~Promissory ~~shares~~Notes ~~of its common stock related to the conversion of $50,000 of principal and $4,000 accrued interest expense on convertible notes.~~

During the ~~three~~six months ended ~~March~~June 3130, 2019, anthe ~~aggregate~~Company ofborrowed 3$45,~~300,~~000 ~~warrants~~under ~~were~~non-convertible ~~exercised~~notes ~~cashlessly~~payable ~~resulting~~from inan ~~the~~investor. ~~issuance~~This note ofhad ~~2,200,000~~0% ~~common~~interest ~~shares~~and no maturity date.

23The above issuances of the Company’s securities were not registered under the 1933 Act, and the Company relied on an exemption from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), for such issuances.

During the three months ended March 31, 2019, an aggregate of 1,411,843 warrants were modified to reduce the exercise price to $0.10 per share pursuant to a debt modification and exercised resulting in a total issuance of 1,411,843 common shares. Rather than receiving cash proceeds of $141,184, the Company netted this amount against convertible note payoffs totaling $178,000. The remaining $36,816 owed to one noteholder was paid by the issuance of 37 shares of Preferred Stock.22

~~The~~Issuance ~~above issuances~~ of ~~the~~Common ~~Company’s~~Stock ~~securities were not registered under 1933 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.~~Warrants

~~Issuance~~During the six months ended June 30, 2019, the Company issued 29,346,300 shares of ~~Preferred~~the ~~Stock~~Company’s common stock pursuant to certain debt agreements, related to the maturity of various convertible notes totaling $5,869,260.

During the ~~three~~six months ended ~~March~~June 3130, 2019, the Company issued ~~an aggregate of 4~~480,~~546~~000 shares of ~~its~~the ~~preferred~~Company’s common stock ~~related~~ to ~~the~~certain ~~conversion~~note holders in exchange for accrued interest of $448,~~449,943~~000. The fair value of ~~debt~~the ~~and~~common stock was determined to be $8827,~~742~~216 and resulted in a gain on settlement of accrued interest ~~expense~~of $20,784.

~~The~~During ~~above~~the ~~issuances~~six months ended June 30, 2019, the Company entered into a two letter agreements with an investor pursuant to which the investor agreed to extend the maturity date of a convertible note in exchange for the issuance of 1,000,500 shares of the Company’s common ~~securities~~stock ~~were~~on ~~not~~March ~~registered~~1, ~~under~~2019, and the ~~1933~~issuance ~~Act~~of 1,000,000 ~~and~~shares of the Company’s ~~relied~~common stock on anthe ~~exemption~~first day of each ~~from~~month ~~registration~~through ~~pursuant~~August to1, ~~Section~~2019. The aggregate fair value of the 4~~(2)~~,000,500 shares issued during the six months ended June 30, 2019, was determined to be $289,000 based on the stock price on March 1, April 1, May 1, and June 1, 2019 which was recorded as loss on extinguishment of debt. Pursuant to these agreements, an additional 1,000,000 shares of the ~~1933~~Company’s ~~Act~~common ~~for~~stock ~~such~~were issued ~~issuances~~on July 1, 2019 and August 1, 2019.

~~Except~~During asthe ~~disclosed~~six ~~above,~~months ~~all~~ended ~~unregistered~~June ~~sales~~30, of2019, the Company’s ~~securities~~issued ~~have~~an ~~been~~aggregate ~~disclosed~~of on540,000 ~~the~~shares ~~Company’s~~of ~~current~~its common stock related to the conversion ~~reports~~of on$50,000 ~~Form~~of ~~8-K~~principal and ~~the~~$4,000 ~~Company’s~~accrued ~~quarterly~~interest ~~reports~~expense on ~~Form~~convertible ~~10-Q~~notes.

~~ITEM~~During the six months ended June 30, 2019, an aggregate of 3.,300,000 ~~DEFAULTS~~warrants ~~UPON~~were ~~SENIOR~~exercised ~~SECURITIES~~cashlessly resulting in the issuance of 2,200,000 common shares.

~~Not~~During ~~applicable~~the six months ended June 30, 2019, an aggregate of 1,846,843 warrants were modified to reduce the exercise price to $0.10 per share pursuant to a debt modification and exercised resulting in a total issuance of 1,846,843 common shares. Rather than receiving cash proceeds of $184,683, the Company netted this amount against convertible note payoffs totaling $231,500. The remaining $46,817 owed to two noteholders was paid by the issuance of 47 shares of Preferred Stock.

~~ITEM~~On February 5, 2019, the Company issued warrants to purchase an aggregate of 2,500,000 shares of its Common Stock to three of its employees as a bonus in exchange for services to be provided to the Company. The warrants have a 10-year term, a $0.10 exercise price and will vest 25% annually for 4 years beginning on the first anniversary date. The ~~MINE~~aggregate ~~SAFETY~~fair ~~DISCLOSURES~~value of the warrants was determined to be $129,906 using the Black-Scholes option pricing model. Warrant expense of $28,191 was recognized during the six months ended June 30, 2019.

~~Not~~On ~~applicable~~June 1, 2019, the Company issued warrants to purchase 25,000 shares of the Company’s common stock pursuant to a letter agreement in exchange for services. The warrants have an exercise price of $0.50 and a 5-year term. The warrants vest equally over six months beginning June 1, 2019. The fair value of the warrants was determined to be $1,924 using the Black-Scholes option pricing model. Warrant expense of $321 was expensed during the six months ended June 30, 2019.

~~ITEM~~The 5.above ~~OTHER~~issuances ~~INFORMATION~~ of the Company’s securities were not registered under 1933 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.

~~ITEM 6. EXHIBITS~~23

Exhibit No.	Description	Incorporation by Reference
		Form	Exhibit	Filing Date
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Principal Executive and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

Issuance of Preferred Stock

*During ~~filed~~the ~~herewith~~six months ended June 30, 2019, the Company issued an aggregate of 4,830 shares of its preferred stock related to the conversion of $4,693,575 of debt and $122,428 of interest expense.

24The above issuances of the Company’s securities were not registered under the 1933 Act, and the Company relied on an exemption from registration pursuant to Section 4(2) of the 1933 Act for such issuances.

~~SIGNATURES~~Except as disclosed above, all unregistered sales of the Company’s securities have been disclosed on the Company’s current reports on Form 8-K and the Company’s quarterly reports on Form 10-Q.

~~Pursuant~~ITEM to3. ~~the~~DEFAULTS ~~requirements~~UPON ofSENIOR ~~the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.~~SECURITIES

	NANOFLEX POWER CORPORATION
Date: May 14, 2019	By:	/s/ Dean L. Ledger
		Dean L. Ledger
		Chief Executive Officer
		(Principal Executive and Financial Officer)

Not applicable.

25ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS

Exhibit No.	Description	Incorporation by Reference
		Form	Exhibit	Filing Date

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1	Certification of Principal Executive and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

* filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NANOFLEX POWER CORPORATION

Date: August 9, 2019	By:	/s/ Dean L. Ledger
		Dean L. Ledger
		Chief Executive Officer
		(Principal Executive and Financial Officer)

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