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EX-10.3 - EXHIBIT 10.3 - Real Goods Solar, Inc.t1600791_ex10-3.htm
EX-10.2 - EXHIBIT 10.2 - Real Goods Solar, Inc.t1600791_ex10-2.htm
EX-10.1 - EXHIBIT 10.1 - Real Goods Solar, Inc.t1600791_ex10-1.htm
EX-5.1 - EXHIBIT 5.1 - Real Goods Solar, Inc.t1600791_ex5-1.htm
EX-4.2 - EXHIBIT 4.2 - Real Goods Solar, Inc.t1600791_ex4-2.htm
EX-4.1 - EXHIBIT 4.1 - Real Goods Solar, Inc.t1600791_ex4-1.htm
EX-1.1 - EXHIBIT 1.1 - Real Goods Solar, Inc.t1600791_ex1-1.htm

 

 

 

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): December 8, 2016

 

 

REAL GOODS SOLAR, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Colorado 001-34044 26-1851813

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

833 West South Boulder Road, Louisville, CO 80027-2452

(Address of Principal Executive Offices, Including Zip Code)

Registrant’s telephone number, including area code: (303) 222-8300

Not Applicable

(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))

 

 

 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

Public Offering

 

On December 8, 2016, Real Goods Solar, Inc. (the “Company”) priced a public offering of units (each, a “Unit”) of (i) one share of the Company’s Class A common stock, par value $0.0001 (“Common Stock”) (issued as part of the Unit or underlying a prepaid Series J Warrant, as described below), (ii) a Series I Warrant to purchase up to one share of Common Stock (the “Series I Warrant”), and (iii) at each investor’s election, in lieu of a share of Common Stock, a prepaid Series J Warrant to purchase one share of Common Stock (the “Series J Warrant” and together with the Series I Warrant, the “Warrants”). Investors purchasing a minimum of $100,000 of Units in the offering entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the Company whereas investors purchasing less than $100,000 of Units will purchase securities solely under a prospectus supplement and the accompanying prospectus. The purchase price for a Unit is $0.22.

 

In connection with pricing the offering, on December 8, 2016, the Company entered into the Purchase Agreement with twelve institutional and accredited investors (the “Institutional Investors”). Pursuant to the terms of the Purchase Agreement, the Company will sell to the Institutional Investors an aggregate of approximately $3,750,000 of the Units. On the same day, the Company agreed to sell approximately $320,000 of Units to other investors (the “Other Investors”).

 

Subsequent to announcing the pricing of the offering and entering into the Purchase Agreement, the Company agreed with NASDAQ not to issue any Series J Warrants in this offering.  Nevertheless, because the Purchase Agreement and the offering as entered into contemplated the Company’s offering and selling Series J Warrants, the Company has elected to include in this Current Report on Form 8-K a description of the terms of the Series J Warrant.

 

The closing of the offering is expected to occur on December 13, 2016, subject to the satisfaction of certain customary closing conditions.

 

The Company offered and sold the Units, the shares of Commons Stock and the Warrants issued as part of the Units, and will sell the shares of Common Stock issuable upon exercise of the Warrants issued as part of the Units, pursuant to an effective registration statement on Form S-3 (File No. 333-193718). In the Purchase Agreement, the Company has agreed to maintain an effective registration statement covering the issuance of the Common Stock issuable upon exercise of the Warrants.

 

The Company expects to receive net proceeds of approximately $3.6 million at the closing, after deducting commissions to the Placement Agents (as defined below) and estimated offering expenses payable by the Company associated with the offering.

 

The Units will not be issued or certificated. The Warrants will be issued in physical form separately from the Common Stock included in the Units and may be transferred separately immediately thereafter. The Warrants will not be listed on any national securities exchange or other trading market, and no trading market for the Warrants is expected to develop.

 

Terms of the Series I Warrants

 

Each Unit contains a Series I Warrant to purchase one share of Common Stock. The Series I Warrants will be exercisable upon issuance and will remain exercisable until the fifth anniversary of the date of issuance. The initial exercise price of the Series I Warrants is $0.35 per share, subject to adjustments for stock splits and similar events and a reset. If the exercise price in effect on April 1, 2017 is higher than the lowest daily volume weighted average price (as defined in the Series I Warrants) of the Common Stock on any trading day during the month of March 2017, the exercise price is reset to such lower price, but in no event lower than $0.10. In addition, the Company may, with the consent of the “required holders” (as defined in the Series I Warrants), reduce the then current exercise price to any amount and for any period of time deemed appropriate by the Company’s board of directors. Under certain circumstances, the holders of the Series I Warrants may elect to exercise them through a cashless exercise, in which case the holders will receive upon such exercise the “net number” of shares of Common Stock determined according to the formula set forth in the Series I Warrants and the Company will not receive the exercise price.

 

 

 

A holder may not exercise a Series I Warrant and the Company may not issue shares of Common Stock under a Series I Warrant if, after giving effect to the exercise or issuance, the holder together with its affiliates would beneficially own in excess of a set percentage of the outstanding shares of the Common Stock. The cap will be set on the date of issuance at either 4.99% or 9.99%, at each holder’s election. If no election is made, the initial cap will be set at 4.99%. At each holder’s option, the cap may be increased or decreased to any other percentage not in excess of 9.99%, except that any increase will not be effective until the 61st day after notice to the Company.

 

The holders of the Series I Warrants are entitled to acquire options, convertible securities or rights to purchase the Company’s securities or property granted, issued or sold pro rata to the holders of its Common Stock on an “as if exercised for Common Stock” basis. The holders of the Warrants are entitled to receive any dividend or other distribution of the Company’s assets (or rights to acquire its assets), at any time after the issuance of the Series I Warrants, on an “as if exercised for Common Stock” basis. The Series I Warrants prohibit the Company from entering into transactions constituting a “fundamental transaction” (as defined in the Series I Warrants) unless the successor entity assumes all of the Company’s obligations under the Series I Warrants and the other transaction documents in a written agreement approved by the “required holders” of the Series I Warrants. The definition of “fundamental transactions” includes, but is not limited to, mergers, a sale of all or substantially all of the Company’s assets, certain tender offers and other transactions that result in a change of control.

 

Terms of the Series J Warrants

 

At the time of the execution of the Purchase Agreement, an investor could elect to receive a Series J Warrant to purchase one share of Common Stock in lieu of receiving a share of Common Stock as part of one or more Units. Subsequent to the date of execution, the Company agreed with NASDAQ not to issue Series J Warrants. The Series J Warrants would have been exercisable upon issuance and would remain exercisable until the fifth anniversary of the date of issuance. The exercise price for a Series J Warrant would have been paid at the closing except for the further payment of the $0.01 exercise price per share, which a holder would have paid upon exercise. The Series J Warrants would have had substantially the same terms as the Series I Warrants except that the exercise price of the Series J Warrants would not have been subject to a reset.

 

Additional Terms of the Purchase Agreement

 

The terms of the Purchase Agreement limit the Company’s ability to issue securities in the future:

 

·Until 30 days after the closing of the offering, the Company may not issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock, or any security which would entitle the holder to acquire at any time shares of Common Stock. From the 31st day after the closing of the offering and ending on February 15, 2017, the Company may not issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock, or other securities which would entitle the holder to acquire at any time shares of Common Stock, at an effective price per share less than 110% of the per-Unit purchase price.

 

·Until January 27, 2017, the Company may not effect or enter into an agreement to effect any issuance of shares of Common Stock or any security which would entitle the holder to acquire at any time shares of Common Stock involving a Variable Rate Transaction (as defined in the Purchase Agreement). The term “Variable Rate Transaction” generally means a transaction in which the Company issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (a) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (b) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the Company’s business or the market for the Common Stock.

 

·For one year after the closing of the offering, the Company may not effect or enter into an agreement to effect any issuance of shares of Common Stock, or any security which would entitle the holder to acquire at any time shares of Common Stock, involving an equity line of credit, an at-the-market offering (as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (“Securities Act”), or similarly structured transactions whereby we may issue securities at a future determined price.

 

 

 

However, the limitations on securities issuances described above do not apply to the issuance of: (a) shares of Common Stock or options to the Company’s employees, officers or directors pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Company’s board of directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company; (b) the warrant the Company expects to issue to Roth Capital Partners, LLC in connection with this offering; (c) securities upon the exercise, exchange or conversion of the securities sold in this offering, the Series I Warrants, the Series J Warrants, the warrant the Company expects to issue to Roth Capital Partners, LLC in connection with this offering, and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date the Company enters into the Purchase Agreement, subject to certain limitations; (d) up to 250,000 shares of Common Stock issued to the lender, or any successor thereto, who is a party to any revolving credit facility outstanding prior to the date of the Purchase Agreement; and (e) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the Company’s disinterested directors, subject to certain limitations, provided that none of the issuances listed above are Variable Rate Transactions (other than with respect to the transactions described in clause (c) of this paragraph).

 

The Purchase Agreement also contains customary representations, warranties, covenants, including indemnifications, and closing conditions.

 

On December 12, 2016, the Company and investors sufficient to amend the Purchase Agreement, entered into an Amendment to Purchase Agreement (the “Amendment”) pursuant to which the form of Series I Warrant attached to the Purchase Agreement was replaced with a new form that imposed a $0.10 floor on the reset calculation as described above.

 

Leak-Out Agreement

 

Each investor who purchases more than $10,000 of Units in the offering entered into separate and substantially similar leak-out agreement with the Company on December 8, 2016. Under the leak-out agreements, from December 8, 2016 and for a period of 15 trading days after the closing of the offering, each investor who is party to a leak-out agreement (together with certain of its affiliate) may not sell, dispose or otherwise transfer, directly or indirectly (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions), on any trading day, shares purchased in this offering (but not the shares of Common Stock issuable upon exercise of the Series I Warrants or the Series J Warrants) in an amount more than a specified percentage of the trading volume of the Common Stock on the principal trading market, subject to certain exceptions. The aggregate trading volume for all investors who executed leak-out agreements is 35% of the trading volume of the Common Stock on the principal trading market during each trading day during the above referenced leak-out period, subject to certain exceptions.

 

Placement Agents

 

Roth Capital Partners, LLC and WestPark Capital, Inc. acted as exclusive co-placement agents for the offering (collectively, the “Placement Agents”) pursuant to the terms of a Placement Agency Agreement, dated December 8, 2016 (the “Placement Agency Agreement”). The Company’s engagement of the Placement Agents expire 15 days from the date of the Placement Agency Agreement. In connection with the closing of the offering, the Company expects to pay the Placement Agents an aggregate cash fee equal to $284,900, an amount equal to 7% of the gross proceeds received by the Company from the sale of the Units. The Company has agreed to reimburse Roth Capital Partners, LLC’s expenses up to a maximum of $75,000.

 

At the closing of the offering, the Company has agreed to issue to Roth Capital Partners a warrant (the “Placement Agent Warrant”) to purchase up to a number of shares of Common Stock equal to 5.0% of the aggregate number of shares of Common Stock issued at the closing and issuable upon exercise of the Series J Warrants (exclusive of any shares of Common Stock issuable upon exercise of the Series I Warrants). The Placement Agent Warrant will have substantially the same terms as the Series I Warrants other than that (i) it will expire five years after the effective date of the offering; (ii) it will be exercisable through a cashless exercise regardless of whether the shares of Common Stock issuable upon exercise of the Placement Agent Warrant are covered by a registration statement under the Securities Act; (iii) the exercise price will be 125% of the public offering price per Unit; (iv) certain covenants appearing in the Series I Warrants will be removed in the Placement Agent Warrant; (v) it will not have an exercise price reset; and (vi) pursuant to FINRA Rule 5110(g), the Placement Agent Warrant, and the underlying securities, will not be transferable for 6 months from the date of issuance, except the transfer of any security: (a) by operation of law or by reason of reorganization of the Company; (b) to any FINRA member firm participating in the offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction set forth above for the remainder of the time period; (c) if the aggregate amount of securities of the Company held by the holder of the Placement Agent Warrant or related persons do not exceed 1% of the securities being offered; (d) that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the fund; or (e) the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction set forth above for the remainder of the time period.

 

Additionally, the Company has agreed to indemnify the Placement Agents against certain liabilities, including liabilities under the Securities Act or to contribute to payments the Placement Agents may be required to make because of those liabilities.

 

 

 

The Placement Agency Agreement also contains customary representations, warranties, covenants and closing conditions.

 

The descriptions of each of the Purchase Agreement, the Series I Warrant, the Series J Warrant, the Leak-Out Agreement, the Amendment and the Placement Agency Agreement are qualified in their entirety by reference to the forms attached hereto as Exhibits 10.1, 4.1, 4.2, 10.2, 10.3 and 1.1, respectively.

 

Disclaimers of Representations and Warranties

 

The representations and warranties of the Company and its subsidiaries contained in the Purchase Agreement and the Placement Agency Agreement have been made solely for the benefit of the parties thereto. In addition, such representations and warranties (i) have been made only for purposes of such documents, (ii) in some cases, have been qualified by documents filed with, or furnished to, the Securities and Exchange Commission by the Company before the date of the Purchase Agreement and the Placement Agency Agreement, (iii) are subject to materiality qualifications contained therein which may differ from what may be viewed as material by investors, (iv) were made only as of the date of the Purchase Agreement and the Placement Agency Agreement, or such other date as is specified in such documents, and (v) have been included in the Purchase Agreement and the Placement Agency Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters as facts.

 

Accordingly, the Purchase Agreement and the Placement Agency Agreement are included with this filing only to provide investors with information regarding the terms of such documents, and not to provide investors with any other factual information regarding the Company or its subsidiaries or their respective business. You should not rely on the representations and warranties or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement and the Placement Agency Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. The Purchase Agreement and Placement Agency Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the Company and its subsidiaries that has been, is or will be contained in, or incorporated by reference into, the Forms 10-K, Forms 10-Q, Forms 8-K, proxy statements, registration statements and other documents that the Company files with the Securities and Exchange Commission.

 

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,” “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 close the offering described herein and whether holders of the Warrants will exercise them for cash and other risks and uncertainties included in the Company’s filings with the Securities and Exchange Commission. The Company assumes no duty to update any forward-looking statements.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit
No.

 

Description

1.1   Placement Agency Agreement, dated December 8, 2016, among Real Goods Solar, Inc., Roth Capital Partners, LLC and WestPark Capital, Inc.
4.1   Form of Series I Warrant
4.2   Form of Series J Warrant
5.1   Opinion of Brownstein Hyatt Farber Schreck, LLP
10.1   Form of Securities Purchase Agreement, dated December 8, 2016, among Real Goods Solar, Inc. and the purchasers party thereto
10.2   Form of Leak-Out Agreement
10.3   Form of Amendment to Securities Purchase Agreement, dated December 12, 2016, among Real Goods Solar, Inc. and the purchasers party thereto
23.1   Consent of Bronstein Hyatt Farber Schreck, LLP (contained in Exhibit 5.1 above)

 

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.

 

  REAL GOODS SOLAR, INC.
   
  By:  /s/ Alan Fine
    Alan Fine
Principal Financial Officer

 

Date: December 13, 2016 

 

EXHIBIT INDEX

 

Exhibit
No.

 

Description

1.1   Placement Agency Agreement, dated December 8, 2016, among Real Goods Solar, Inc., Roth Capital Partners, LLC and WestPark Capital, Inc.
4.1   Form of Series I Warrant
4.2   Form of Series J Warrant
5.1   Opinion of Brownstein Hyatt Farber Schreck, LLP
10.1   Form of Securities Purchase Agreement, dated December 8, 2016, among Real Goods Solar, Inc. and the purchasers party thereto
10.2   Form of Leak-Out Agreement
10.3   Form of Amendment to Securities Purchase Agreement, dated December 12, 2016, among Real Goods Solar, Inc. and the purchasers party thereto
23.1   Consent of Bronstein Hyatt Farber Schreck, LLP (contained in Exhibit 5.1 above)