Explanatory Note
This Amendment No. 1 on Form 8-K/A is an amendment to the Current Report on Form 8-K of Revolution Lighting Technologies, Inc., filed on November 13, 2018 (the “Original Form 8-K”). Following the filing of the Original Form 8-K the Company discovered an error in the first sentence of the penultimate paragraph of Item 1.01. The Company is amending the Original Form 8-K solely to correct such error; no other changes were made to the Original Form 8-K.
| Item 1.01 | Entry into a Material Definitive Agreement |
As previously disclosed in the press release of Revolution Lighting Technologies, Inc. (“Revolution” or the “Company”), issued on October 19, 2018, Robert V. LaPenta, Sr., Revolution’s Chairman and CEO, has funded and has informed the Company that he intends to continue to fund the Company through continued periodic loans to the extent consistent with what he believes to be the best interests of the Company and its stockholders. In October 2018, Mr. LaPenta provided a total of $9.5 million in funding (the “October Funding”), consisting of the $2.0 million in funding disclosed in the Company’s press release issued on October 19, 2018 and further advances of $2.5 million and $5.0 million made on October 25, 2018 and October 31, 2018, respectively.
On November 10, 2018, the Audit Committee of Revolution’s Board of Directors ratified and approved the terms on which the October Funding was provided. The funding and the approved terms have been memorialized in a promissory note, entered into by Revolution and Mr. LaPenta, dated as of November 12, 2018 (the “Note”).
Subject to specified exceptions, amounts outstanding under the Note bear interest from the date of advance at a rate per annum equal toone-month LIBOR plus 3.75%, calculated on the basis of a360-day year and the actual number of days elapsed. The principal and interest are payable upon maturity. The Note matures on July 20, 2020. If Mr. LaPenta makes additional short-term advances to the Company that are not repaid within 90 days, the Note may be amended in Revolution’s discretion to include the amount of any such advances.
The Note contains customary events of default, including nonpayment of principal or interest when due; assignment without consent of the lender; or the occurrence of certain bankruptcy, insolvency or liquidation-related events. Upon the occurrence of an event of default, any outstanding amounts under the Note may be accelerated; provided, however, that upon the occurrence of certain bankruptcy, insolvency or liquidation-related events of default, all amounts payable under the Note will automatically become immediately due and payable. The Note does not contain financial or restrictive covenants.
Revolution is working with its existing bank lender to restructure its debt, which as of November 12, 2018 consisted of $65.0 million of aggregate principal and interest outstanding under notes from Mr. LaPenta, and Mr. LaPenta’s affiliates, RVL 1 LLC and Aston Capital, LLC, and under Revolution’s bank line of credit and other debt, and to obtain covenant waivers or a forbearance agreement under the bank line of credit. Although the Company believes that an advantageous restructuring can be completed in the near term, there can be no assurance that all parties will be able to agree on all terms necessary to close the contemplated restructuring.
Revolution believes that the $9.5 million Mr. LaPenta recently loaned to the Company, together with an expected $2.5 million of additional loans that Mr. LaPenta intends to provide and up to an additional $4.5 million of loans from Mr. LaPenta or other sources, are likely to be sufficient for the Company’s liquidity needs to fund operations in the ordinary course, including the anticipated costs necessary to fund the previously announced investigation of the Company by the Securities and Exchange Commission (the “SEC”) and
