Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Preferred Stock Subscription and Support Agreement
As previously disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “
SEC
”) on September 17, 2015, Lighting Science Group Corporation (the “
Company
”) entered into a Preferred Stock Subscription and Support Agreement (the “
Subscription Agreement
”) with LSGC Holdings III LLC (“
Holdings III
”) and Pegasus Partners IV, L.P. (“
Pegasus Fund IV
”) on September 11, 2015, pursuant to which, among other things, the Company issued 10,000 units of its securities (the “
Series J Securities
”) to Holdings III for $1,000 per Series J Security, or aggregate consideration of $10,000,000 (the “
September 2015 Offering
”). Each Series J Security consists of (a) one share of Series J Convertible Preferred Stock of the Company, par value $0.001 per share (the “
Series J Preferred Stock
”), and (b) a warrant to purchase 2,650 shares of common stock of the Company, par value $0.001 per share (the “
Common Stock
”), at an exercise price of $0.001 per share (the “
Series J Warrant
”). The Subscription Agreement also permitted the Company to issue up to an additional 5,000 Series J Securities to approved purchasers between September 9, 2015 and March 31, 2016. As previously reported, in accordance with the terms of the Subscription Agreement, the Company issued and sold an aggregate of 13,000 Series J Securities between September 9, 2015 and March 31, 2016 (including the Series J Securities sold in the September 2015 Offering).
On July 19, 2016, the Company entered into Amendment No. 1 to Preferred Stock Subscription and Support Agreement (the “
Subscription Agreement Amendment
”) to amend the definition of “Series J Securities Offering” in the Subscription Agreement. Pursuant to the Subscription Agreement (as amended by the Subscription Agreement Amendment, the “
Amended Subscription Agreement
”), the Company is now authorized to sell an additional 10,000 Series J Securities (25,000 Series J Securities in the aggregate) on or before the earlier of (A) the sale of 25,000 Series J Securities to purchasers designated by the Chief Executive Officer, Chief Financial Officer or Secretary of the Company or (B) March 27, 2017.
The foregoing description of the Subscription Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Subscription Agreement Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Sale of Series J Securities
On July 19, 2016, pursuant to the Amended Subscription Agreement, the Company issued and sold 5,000 Series J Securities to Holdings III for aggregate proceeds of $5,000,000.
Sixth
Letter
Amendment to
ACF
Loan and Security Agreement
On July 19, 2016, the Company entered into a Sixth Letter Amendment to Loan and Security Agreement (the “
Sixth ACF Amendment
”) by and among the Company, BioLogical Illumination, LLC (“
BioLogical
”) and Environmental Light Technologies Corp. (“
ELT
” and, collectively with the Company and BioLogical, the “
Borrowers
”), the financial institutions from time to time party thereto as lenders (the “
ACF Lenders
”) and ACF FinCo I LP, as assignee of FCC, LLC, d/b/a First Capital, in its capacity as agent for the ACF Lenders (“
Ares
”), which amends that certain Loan and Security Agreement dated April 25, 2014 by and among Borrowers, the ACF Lenders and Ares (as amended from time to time and as the same may be further amended, modified or supplemented from time to time, the “
ACF Loan Agreement
”).
Among other things, the Sixth ACF Amendment (1) replaces the Fixed Charge Covenant (as defined in the ACF Loan Agreement) with EBITDA covenant levels that the Company must meet with respect to each of the twelve-month periods ending June 30, 2016, September 30, 2016, December 31, 2016 and March 31, 2017 (collectively, the “
Specified Covenant Periods
”) and (2) amends the definition of EBITDA to include, for purposes of determining compliance with the EBITDA covenant levels for the relevant Specified Covenant Periods, up to $2,500,000 of cash proceeds from the issuance of equity to
Pegasus Capital Advisors, L.P. or its affiliates (collectively, “Pegasus”) between July 19, 2016 and March 30, 2017. The Company paid Ares a $60,000 amendment fee in connection with the Sixth ACF Amendment.
The foregoing description of the Sixth ACF Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Sixth ACF Amendment, which is filed as Exhibit 10.2 to this Current Report and is incorporated herein by reference.
Fourth
Amendment to Medley Term Loan Agreement
On July 19, 2016, the Company also entered into a Fourth Amendment to Term Loan Agreement (the “
Fourth Medley Amendment
”) by and among the Company, Medley Capital Corporation (“
Medley
”) and the lenders from time to time party thereto (the “
Medley Lenders
”), which amends that certain Term Loan Agreement dated February 19, 2014 by and among the Company, Medley and the Medley Lenders (as amended from time to time and as the same may be further amended, modified or supplemented from time to time, the “
Medley Term Loan Agreement
”). Among other things, the Fourth Medley Amendment (1) amends the minimum EBITDA covenant levels with respect to the Specified Covenant Periods and each fiscal quarter thereafter during the term of the Medley Term Loan Agreement, (2) amends the definition of EBITDA to include, for purposes of determining compliance with the EBITDA and Fixed Charge Coverage Ratio (as defined in the Medley Term Loan Agreement) covenant levels for the relevant Specified Covenant Periods, up to $2,500,000 of cash proceeds from the issuance of equity to Pegasus between July 19, 2016 and March 30, 2017 and (3) amends the minimum Fixed Charge Coverage Ratio that the Company must maintain for each of the twelve-month periods ending September 30, 2016 and December 31, 2016.
The foregoing description of the Fourth Medley Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Fourth Medley Amendment, which is filed as Exhibit 10.3 to this Current Report and is incorporated herein by reference.