Item 3.02. Unregistered Sales of
On
Pursuant to the Dealer-Manager Agreement, the Company is obligated to pay
The Company conducted the Rights Offering and will conduct the offer and sale of
Series 1 Preferred Stock during the Placement Period under Regulation A
promulgated under the Securities Act of 1933, as amended, and its Offering
Statement on Form 1-A (File No. 024-11087), as amended, which was qualified by
the
Item 3.03. Material Modification to Rights of Security Holders.
In connection with the Rights Offering and the issuance of Series 1 Preferred
Stock, which is described in Item 3.02 above and incorporated by reference into
this Item 3.03, the Company filed with the
The terms of the Series 1 Preferred Stock are set forth in the Articles of Designation and summarized below. The rights of holders of the Company's Class A common stock have been materially limited and qualified by the issuance of the Series 1 Preferred Stock, as described below.
Dividends
Holders of the Series 1 Preferred Stock will be entitled to receive cumulative
cash dividends representing a 12% annual yield on the purchase price, payable on
the tenth business day after each dividend record date (
Liquidation Preference and Sale Transactions
The Series 1 Preferred Stock will have a liquidation preference of
Certain "sale transactions" (as defined in the Articles of Designation) will be treated as a liquidation, dissolution or winding up of the Company unless holders of a majority of the outstanding shares of Series 1 Preferred Stock shall have consented otherwise. Generally, a "sale transaction" includes (i) a merger involving the Company where the holders of its voting capital stock before such merger do not retain at least a majority of the voting power of the surviving entity, or (ii) a sale of all or substantially all of the Company's assets.
Voting Rights
Except as otherwise provided in the Articles of Designation or as required by law, the Series 1 Preferred Stock will vote together with the shares of Class A common stock (and not as a separate class) at any annual or special meeting of shareholders. Except as required by law, each holder of shares of Series 1 Preferred Stock will be entitled to 100 votes for each share of Series 1 Preferred Stock held as of the applicable record date as though each share of Series 1 Preferred Stock were 100 shares of Class A common stock. Holders of the Series 1 Preferred Stock will vote as a class on any modification or amendment of the Articles of Designation.
No Conversion
The Series 1 Preferred Stock will not be convertible into or exchangeable for shares of Class A common stock or any other security.
Rank
With respect to payment of dividends, redemption payments, and rights upon liquidation, dissolution or winding-up of the Company's affairs or a sale transaction, as applicable, the Series 1 Preferred Stock will rank:
• senior to the Company's Class A common stock, and any other securities the
Company issues in the future unless the terms of such securities provide that they rank senior to or on a parity with any or all of the Series 1 Preferred Stock;
• on a parity with any securities the Company issues in the future the terms of
which provide that they will rank on a parity with any or all of the Series 1
Preferred Stock;
• junior to any securities issued in the future the terms of which expressly
provide that such securities will rank senior to the Series 1 Preferred Stock;
and
• junior to all of the Company's existing and future indebtedness.
In addition, with respect to rights upon the Company's liquidation, dissolution or winding-up, the Series 1 Preferred Stock will be structurally subordinated to existing and future indebtedness of the Company and subsidiaries, as well as the capital stock of the Company's subsidiaries held by third parties.
Term
The Series 1 Preferred Stock is perpetual and does not have a term. However, the Company may redeem or otherwise repurchase the Series 1 Preferred Stock as described below.
Redemption
The Company may redeem any or all of the Series 1 Preferred Stock at any time
after
The redemption price for any shares of Series 1 Preferred Stock will be an
amount equal to 125% of the
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The Company filed Articles of Amendment with the Articles of Designation with
the
Item 8.01. Other Events.
As of
Risk Factors
The following updates the risk factors included in the Company's Annual Report
on Form 10-K for the year ended
The interests of the holders of Series 1 Preferred Stock and the holders of Class A common stock may be adverse.
Holders of the Series 1 Preferred Stock will generally vote together with
holders of Class A common stock as one class (and not as a separate class) at
any annual or special meeting of shareholders. Except as required by law, each
holder of shares of Series 1 Preferred Stock will be entitled to 100 votes for
each share of Series 1 Preferred Stock held on the record date as though each
share of Series 1 Preferred Stock were 100 shares of the Company's Class A
common stock. As of
A public market may not develop for the Series 1 Preferred Stock.
There is no established public trading market for the Series 1 Preferred Stock and one may not develop. The Series 1 Preferred Stock will not be listed on any national securities exchange. The Company expects the Series 1 Preferred Stock to trade in the over-the-counter market and to be quoted on the OTCQX marketplace operated by OTC Markets Group. Nevertheless, there can be no guarantee that a public trading market will develop for the Series 1 Preferred Stock. Without an active market, the liquidity of the Series 1 Preferred Stock will be very limited.
The subscription price for the Series 1 Preferred Stock will not be adjusted for certain dilutive events.
The subscription price for the Series 1 Preferred Stock of
The Company does not intend to issue any additional shares of the Series 1 Preferred Stock after the Rights Offering and the Placement Period.
The Company does not expect to issue any additional shares of Series 1 Preferred Stock after the Rights Offering and the Placement Period other than if the Company elects to pay dividends on the Series 1 Preferred Stock in the form of additional shares of Series 1 Preferred Stock. Consequently, the Company expects trading of the Series 1 Preferred Stock, if any, to be limited to what the Company issues in the Rights Offering and during the Placement Period.
Although there may be low or no correlations between the markets and trading prices of Series 1 Preferred Stock and the Class A common stock, changes in the markets or trading prices of one could impact the other.
The market for or trading price of the Series 1 Preferred Stock, if any, may have only a low correlation, and may have no correlation, with the market for or trading price of the Class A common stock. Nevertheless, fluctuations in the market for or trading prices of the Series 1 Preferred Stock or the Class A common stock could impact the market for or trading prices of the other, which could occur as the result of developments in the Company's business or from future sales of Class A common stock by the Company or by holders of Class A common stock or for other reasons. For example, in the future, the Company may sell shares of its Class A common stock to raise capital or to acquire interests in other companies. Any of these events may adversely affect the price of the Class A common stock and, in turn, of the Series 1 Preferred Stock. In addition, the Company has reserved shares of its Class A common stock for issuance upon the exercise of stock options and upon exercise of warrants. Any of these events, and any other event that results in sales of a substantial amount of the Class A common stock in the public market, or the perception that any such sales may occur, could reduce the market price of the Class A common stock and, in turn, the trading price of the Series 1 Preferred Stock. This could also impair the Company's ability to raise additional capital through the sale of the Company's securities. Further, greater investor demand for the Series 1 Preferred Stock and a more liquid market in the Series 1 Preferred Stock as a result could reduce the demand and decrease liquidity in the market for the Class A common stock. Changes in the market for or trading prices of the Series 1 Preferred Stock or Class A common stock could have a material adverse effect on the other.
The Series 1 Preferred Stock will rank senior to the Class A common stock but junior to all of the Company's existing and future liabilities in the event of a liquidation, winding up or dissolution of the Company's business.
In the event of the Company's liquidation, winding up or dissolution, its assets would be available to make payments to holders of the Series 1 Preferred Stock only after all of the Company's liabilities have been paid. In addition, the Series 1 Preferred Stock will rank structurally senior to the Class A common stock, but junior to all of the Company's existing and future liabilities and those of the Company's subsidiaries, as well as the capital stock of the Company's subsidiaries held by third parties and employees holding shares of any other direct or indirect subsidiary of the Company, whether now existing or created in the future, which issues shares or other equity interests to employees. In the event of the Company's bankruptcy, liquidation or winding up, there may not be sufficient assets remaining, after paying the Company's and its subsidiaries' liabilities, to pay any amounts to the holders of the Series 1 Preferred Stock then outstanding. Any liquidation, winding up or dissolution of the Company or of any of its wholly or partially owned subsidiaries would have a material adverse effect on holders of the Series 1 Preferred Stock.
The holders of Series 1 Preferred Stock or Class A common stock may be adversely affected by the issuance of any subsequent series of preferred stock.
The terms of the Series 1 Preferred Stock do not restrict the Company's ability to offer one or more additional new series of preferred stock, any or all of which may rank equally with or have preferences over the Series 1 Preferred Stock and the Class A common stock as to dividend payments, voting rights, rights upon liquidation or other types of rights. The Company would have no obligation to consider the specific interests of the holders of the Series 1 Preferred Stock or the Class A common stock in creating any such new series of preferred stock or engaging in any such offering or transaction. The Company's creation of any new series of preferred stock or the Company engaging in any such offering or transaction could have a material adverse effect on holders of the Series 1 Preferred Stock or the Class A common stock.
The holders of Series 1 Preferred Stock may not receive any cash payment of dividends.
Holders of the Series 1 Preferred Stock will be entitled to receive cash
dividends representing a 12% annual yield on the
Additionally, under
The rights as a holder of shares of Series 1 Preferred Stock are primarily those set forth in the terms of the Series 1 Preferred Stock, and the Company's board of directors may prefer the interests of the holders of the Company's Class A . . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 3.1 Articles of Designation of Preferences, Rights and Limitations of Series 1 Preferred Stock 4.1 Form ofReal Goods Solar, Inc. Class A Common Stock Certificate 4.2 Form ofReal Goods Solar, Inc. Series 1 Preferred Stock Certificate Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K includes forward-looking statements relating to
matters that are not historical facts. Forward-looking statements may be
identified by the use of words such as "expect," "intend," "may," "believe,"
"will," "should," "would" or comparable terminology or by discussions of
strategy. While the Company believes its assumptions and expectations underlying
forward-looking statements are reasonable, there can be no assurance that actual
results will not be materially different. Risks and uncertainties that could
cause materially different results include, among others, the Company's ability
to pay dividends on the Series 1 Preferred Stock in cash, whether the Series 1
Preferred Stock will be quoted on any market and other risks and uncertainties
included in the Company's filings with the
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