| 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 aUCC-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 onForm 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 Form8-K as Exhibit 99.1.
