Item 1.01 Entry into a Material Definitive Agreement.
Consent and Twenty-Second Amendment to Credit Facility
Effective on March 27, 2020, Revolution Lighting Technologies, Inc. (the
"Company") and its direct and indirect subsidiaries (collectively, the
"Obligors") entered into a Consent and Twenty-Second Amendment (the
"Twenty-Second 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-Second Amendment, Bank of America agreed to consent to the sale of
substantially all of the assets of All Around Lighting, L.L.C., a Texas limited
liability company ("All Around"), to AAL, LLC, a Texas limited liability company
("AAL"), pursuant to an Asset Purchase Agreement dated March 20, 2020 (the
"Purchase Agreement"), as well as amend the Loan Agreement to permit adjustment
payments to AAL under the Purchase Agreement in an amount not to exceed
$100,000.
In exchange for the consent granted under the Twenty-Second Amendment, the
Company agreed, among other things to (i) pay the closing consideration under
the Purchase Agreement directly to Bank of America, (ii) deliver to Bank of
America within 45 days of the effectiveness of the Twenty-Second Amendment
evidence of the dissolution of All Around and the transfer of any remaining
assets of All Around to another Obligor or Obligors, and (iii) pay Bank of
America's expenses, including attorney's fees, in connection with the
Twenty-Second Amendment and prior open invoices. Upon Bank of America's receipt
of satisfactory confirmation of payment of the closing consideration received
under the Purchase Agreement, Bank of America will deliver to the Obligors a
UCC-3 Termination Statement to be filed against All Around, and All Around will
be released as a borrower under the Loan Agreement and other related loan
agreements, except to the extent any obligations or liabilities would otherwise
survive pursuant to the terms and conditions of the Loan Agreement and other
related loan agreements.
As of March 31, 2020, the Company had total debt of approximately $78.6 million,
including aggregate principal and interest outstanding under the Company's line
of credit with Bank of America of approximately $23.4 million, aggregate
principal and interest outstanding under loans from Robert V. LaPenta, Sr., the
Company's Chairman, CEO and President, and Aston Capital, LLC of approximately
$54.1 million and approximately $1.1 million from other sources. As of March 31,
2020, the Company estimates that it had 1.3 million of available liquidity,
reflecting its net cash position plus the remaining borrowing availability under
the Loan Agreement.
As previously disclosed in the Current Report on Form 8-K filed by the Company
on February 19, 2020, the Company previously entered into a Sixth Amendment to
Forbearance Agreement and Twenty-First Amendment to Loan and Security Agreement
(the "Twenty-First Amendment") to the Loan Agreement. Under the terms of the
Twenty-First Amendment, Bank of America agreed to forebear, until March 31,
2020, from exercising its rights and remedies as a result of breaches of certain
covenants under the Loan Agreement. On April 2, 2020, Bank of America approved
an extension of the forbearance period until April 3, 2020. All of the other
terms and conditions of the Loan Agreement and the Twenty-First Amendment remain
in full force and effect.
The Company will likely need additional funding to continue its operations. The
extent of additional funds required will depend on, among other things, the
Company's results of operations and the amount of time and expense necessary to
complete the previously announced investigation by the Securities and Exchange
Commission (the "SEC"). Mr. LaPenta has informed the Company's audit committee
that at this time he does not intend to provide the Company with additional
financing. The Company is working with Bank of America to further amend the Loan
Agreement to extend the current maturity date of April 3, 2020, and to provide
for ongoing borrowing availability. The Company expects to execute a 45-day
extension next week and to work with Bank of America to complete a one-year
extension during that period. 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-Second Amendment is not complete and is
qualified in its entirety by reference to the full text of the Twenty-Second
Amendment, which is attached to this Form 8-K as Exhibit 99.1.
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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.
Item 8.01 Other Events
As previously disclosed, the Company received a letter, dated October 31, 2019,
from the SEC staff (the "Staff") notifying the Company that it may be subject,
without further notice, to an administrative proceeding to revoke the Company's
registration under the Securities Exchange Act of 1934 (the "Exchange Act") if
the Company has not filed all required Exchange Act reports within fifteen days
from the date of the letter. The administrative proceeding would be brought by
the SEC's Division of Enforcement pursuant to Section 12(j) of the Exchange Act,
and also may suspend trading in the Company's common stock pursuant to
Section 12(k) of the Exchange Act. The Company's board of directors has
determined to not formally respond to the Staff's deregistration letter and has
directed the Company's representatives to contact the Staff to facilitate an
orderly deregistration due to the Company's unavailability of resources to
complete an audit of its historical financial statements.
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 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 a restatement and 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
Exhibit
No. Description
99.1 Consent and Twenty-Second Amendment to Loan and Security Agreement,
dated March 27, 2020, among Revolution Lighting Technologies, Inc.,
Lighting Integration Technologies, LLC, Tri-State LED DE, LLC, Value
Lighting, LLC, All Around Lighting, L.L.C., Energy Source, LLC,
Revolution Lighting - E-Lighting, Inc., Seesmart, LLC, TNT Energy,
LLC, the Guarantors party thereto and Bank of America, N.A.
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REVOLUTION LIGHTING TECHNOLOGIES, INC. 
