UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 12, 2020
REVOLUTION LIGHTING TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-23590 | 59-3046866 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 177 Broad Street, Stamford, Connecticut |
06901 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (203) 504-1111
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Stock, $0.001 par value | RVLT | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
| Item 1.01 | Entry into a Material Definitive Agreement. |
Sixth Amendment to Forbearance Agreement and Twenty-First Amendment to Credit Facility
Effective on February 12, 2020, Revolution Lighting Technologies, Inc. (the “Company”) and its direct and indirect subsidiaries (collectively, the “Obligors”) entered into a Sixth Amendment to Forbearance Agreement and Twenty-First Amendment (the “Twenty-First Amendment”) to its loan and security agreement (the “Loan Agreement”) with Bank of America N.A. (“Bank of America”). Under the terms of the Twenty-First Amendment, Bank of America has agreed to extend the maturity date of the revolving credit facility provided by the Loan Agreement to March 31, 2020 and to forbear, until March 31, 2020, from exercising its rights and remedies against the Obligors as a result of breaches of certain covenants under the Loan Agreement. If the Company is not able to obtain a further amendment of the Loan Agreement or extend the forbearance, all principal, interest and other amounts outstanding under the Loan Agreement will become due and payable upon the earlier of 5 p.m. on March 31, 2020 or any Termination Event (as defined in the Loan Agreement, as previously amended).
Under the terms of the Twenty-First Amendment, Bank of America has agreed to continue lending to the Company under the revolving credit facility provided by the Loan Agreement through March 31, 2020, subject to the Company continuing to comply with its obligations under the Twenty-First Amendment, including not allowing any additional Defaults or Events of Default (as defined in the Loan Agreement) to occur. Under the Twenty-First Amendment, Base Rate Revolver Loans (as defined in the Loan Agreement) shall have an interest rate equal to the Base Rate (as defined in the Loan Agreement) plus 4.00%, and LIBOR Revolver Loans (as defined in the Loan Agreement) shall have an interest rate equal to LIBOR plus 5.00%. Such interest rates may be reduced by 0.50% if the Company (i) provides Bank of America with satisfactory and acceptable documentation evidencing that the Obligors have achieved a trailing twelve-month Fixed Charge Coverage Ratio (as defined in the Loan Agreement) of at least 1.0 : 1.0 at the end of any fiscal month and (ii) is not subject to any Default or Events of Default other than the defaults subject to forbearance in the Twenty-First Amendment.
In exchange for the forbearance granted under the Twenty-First Amendment, the Company agreed, among other things, to (i) limit the cumulative monthly use of cash by the Company in accordance with a cash burn schedule, (ii) deliver to Bank of America updated projections of quarterly consolidated financial statements for fiscal year 2020 by March 1, 2020 (such statements to provide calculations to evidence, in good faith, that the Obligors shall be able to maintain a Fixed Charge Coverage Ratio of at least 1.0 : 1.0 by December 31, 2020), (iii) deliver to Bank of America an updated calculation of the Accounts on the first and fifteenth day of each month and (iv) pay Bank of America’s expenses, including attorney’s fees, in connection with the Twenty-First Amendment and prior open invoices.
As of February 18, 2020, the Company had total debt of approximately $76.9 million, including aggregate principal and interest outstanding under the Company’s line of credit with Bank of America of approximately $22.3 million, aggregate principal and interest outstanding under loans from Robert V. LaPenta, Sr. (“Mr. LaPenta”), the Company’s Chairman, CEO and President, and Aston Capital, LLC of approximately $53.5 million and approximately $1.1 million from other sources. As of February 18, 2020, the Company estimates that it had $2.2 million of available liquidity, reflecting its net cash position plus the remaining borrowing availability under the Loan Agreement.
The Company will likely need additional funding to continue its operations beyond the end of the first quarter of 2020. The extent of additional funds required will depend on the Company’s results of operations in the first quarter of 2020, the amount of time and expense necessary to complete the previously announced investigation by the Securities and Exchange Commission (the “SEC”) and the restatement of certain of the Company’s financial statements and other related costs. The Company plans to work with Bank of America to further amend the Loan Agreement to extend the current maturity date of March 31, 2020, and to provide for ongoing borrowing availability. However, there can be no assurance that the Company will obtain such an amendment. Any failure to obtain such an amendment under the Loan Agreement could result in the exercise of remedies by Bank of America and all amounts becoming due under the Loan Agreement, and cause the Company to become unable to operate as a going concern.
The foregoing description of the Twenty-First Amendment is not complete and is qualified in its entirety by reference to the full text of the Twenty-First Amendment, which is attached to this Form 8-K as Exhibit 99.1.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosure under Item 1.01 is incorporated by reference in its entirety in this Item 2.03.
Forward-looking statements
Except for statements of historical fact, the matters discussed herein are “forward-looking statements” within the meaning of the applicable securities laws and regulations. The words “will,” “may,” “estimates,” “expects,” “intends,” “plans,” “believes” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements, including statements regarding further amendments to the Loan Agreement, the Company’s future levels of indebtedness and funding needs and the availability of funding from Mr. LaPenta or Bank of America, involve risks and uncertainties that may cause actual results to differ materially from those stated here. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the Company’s results of operations, the Company’s ability to complete the restatement and the ongoing audit of its financial statements, the Company’s ability to obtain an extension of maturity under the Loan Agreement, the Company’s ability to continue to meet its liquidity needs, the Company’s ongoing litigation, and SEC investigation and potential future litigation and the other risks described more fully in the Company’s filings with the SEC. Forward-looking statements reflect the views of the Company’s management as of the date hereof. The Company does not undertake to revise these statements to reflect subsequent developments.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
SIGNATURE
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 hereunto duly authorized.
Date: February 19, 2020
| REVOLUTION LIGHTING TECHNOLOGIES, INC. | ||
| By: | /s/ Robert V. LaPenta | |
| Robert V. LaPenta, Sr. | ||
| Chief Executive Officer and President | ||