Item 1.01 Entry into a Material Definitive Agreement.
Eighth Amendment to Forbearance Agreement and Twenty-Fourth Amendment to Credit
Facility
Effective on May 29, 2020, Revolution Lighting Technologies, Inc. (the
"Company") and its direct and indirect subsidiaries (collectively, the
"Obligors") entered into an Eighth Amendment to Forbearance Agreement and
Twenty-Fourth Amendment (the "Twenty-Fourth 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-Fourth Amendment, Bank of America agreed to
forbear, until September 30, 2020, the maturity date of the Loan Agreement, from
exercising its rights and remedies against the Obligors as a result of breaches
of certain covenants under the Loan Agreement. If the Company is not able to
obtain a further amendment of the Loan Agreement and extend the forbearance, all
principal, interest and other amounts outstanding under the Loan Agreement will
become due and payable upon the earlier of 5:00 p.m. on September 30, 2020, or
any Termination Event (as defined in the Loan Agreement, as previously amended).
Pursuant to the Twenty-Fourth Amendment, Bank of America may continue lending to
the Company under the revolving credit facility provided by the Loan Agreement
through September 30, 2020, subject to the Company continuing to comply with its
obligations under the Twenty-Fourth Amendment, including not allowing any
additional Defaults or Events of Default (as defined in the Loan Agreement) to
occur. Bank of America may also, in its sole discretion, permit overadvances in
an aggregate amount not to exceed $1,000,000 at any time through and including
July 31, 2020, and in an aggregate amount not to exceed $500,000 at any time
through and including August 30, 2020. Any such overadvances must be repaid by
5:00 p.m. on September 30, 2020.
Furthermore, pursuant to the Twenty-Fourth Amendment, Bank of America thereby
acknowledges and permits the incurrence of indebtedness of any Obligor under the
Paycheck Protection Program (the "Paycheck Protection Program") established
under the Coronavirus Aid, Relief, and Economic Security Act. Any Obligor that
incurs indebtedness under the Paycheck Protection Program agrees to use
commercially reasonable efforts to maximize the amount of forgiveness of such
loan.
Additionally, pursuant to the Twenty-Fourth Amendment, Bank of America agreed,
in connection with the dissolution of Break One Nine, Inc., a Texas corporation
("Break One Nine"), to release Break One Nine as a guarantor under the Loan
Agreement. Further, the Twenty-Fourth Amendment extends the delivery requirement
for audited financial statements for fiscal year 2019 (the "Financial
Statements") to June 30, 2020.
In exchange for the forbearance granted under the Twenty-Fourth Amendment, the
Company agreed, among other things, (i) to limit the cumulative monthly use of
cash by the Company in accordance with a cash burn schedule, (ii) to maintain a
positive cash flow in accordance with a positive cash flow schedule and (iii) to
pay Bank of America a $7,500 forbearance fee, as well as Bank of America's
expenses, including attorney's fees, in connection with the Twenty-Fourth
Amendment and prior open invoices. Additionally, each Obligor agreed, on behalf
of itself and its successors, assigns and other legal representatives, to
absolutely, unconditionally and irrevocably release Bank of America, its
successors and assigns, and its present and former affiliates and
representatives from any and all claims known or unknown held by any Obligor at
any time prior to the date of the Twenty-Fourth Amendment in any way related to
or in connection with the Loan Agreement or any related documents or
transactions.
As of June 1, 2020, the Company had total debt of approximately $76.6 million,
including aggregate principal and interest outstanding under the Company's line
of credit with Bank of America of approximately $21.4 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
$54.2 million and approximately $1.0 million from other sources. As of June 1,
2020, the Company estimates that it had $1.6 million of available liquidity,
reflecting its net cash position plus the remaining borrowing availability under
the Loan Agreement.
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 in the second and third quarters of 2020 and the
amount of time and expense necessary to finalize the previously announced
investigation by the Securities and Exchange Commission (the "SEC"). The Company
plans to work with Bank of America to further amend the Loan Agreement to
provide for a longer-term extension of the current maturity date of
September 30, 2020, and to provide for ongoing borrowing availability. The
Company believes it will be successful. 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.
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The foregoing description of the Twenty-Fourth Amendment is not complete and is
qualified in its entirety by reference to the full text of the Twenty-Fourth
Amendment, which is attached to this Form 8-K as Exhibit 99.1.
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.
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 Eighth Amendment to Forbearance Agreement and Twenty-Fourth Amendment
to Loan and Security Agreement, dated May 29, 2020, among Revolution
Lighting Technologies, Inc., Lighting Integration Technologies, LLC,
Tri-State LED DE, LLC, Value Lighting, LLC, 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. 
