Item 1.01. Entry into a Material Definitive
Agreement.
Registered Offering
On April 2, 2019, Real Goods Solar, Inc. (the “Company”)
entered into a Securities Purchase Agreement (the “Purchase Agreement”) with three institutional and accredited investors
(the “Investors”). Pursuant to the terms of the Purchase Agreement, the Company will sell to the Investors (a) “Primary
Units,” each consisting of one share of the Company’s Class A common stock, par value $0.0001 (“Common Stock”),
and a Series R Warrant to purchase one share of Common Stock (the “Series R Warrant), and (b) “Alternative Units,”
each consisting of a Prepaid Series S Warrant to purchase one share of Common Stock (the “Series S Warrants,” and together
with the Series R Warrants, collectively, the “Warrants”), and a Series R Warrant to purchase one share of Common Stock.
The purchase price for a Primary Unit is $0.19 and the purchase price for an Alternative Unit is $0.18. The Primary Units and the
Alternative Units are referred to in this Current Report on Form 8-K collectively as the “Units.” Pursuant to the terms
of the Purchase Agreement, the Company will sell to the Investors an aggregate of approximately $3,028,273 of the Primary Units
and approximately $257,425 of the Alternative Units. The aggregate gross proceeds from the offering are approximately $3.3 million.
The closing of the offering is expected to occur on or about April 2, 2019, subject to the satisfaction of certain customary closing
conditions set forth in the Purchase Agreement. The Company expects to receive net proceeds of approximately $2.9 million at the
closing, after deducting commissions to the Placement Agent (as defined below) and estimated offering expenses associated with
the offering payable by the Company. The Investors have participated in the Company’s past securities offerings.
The Company offered and sold the Units, the shares of Commons Stock
and the Series R Warrants issued as part of the Primary Units, and the Series S Warrant and the Series R Warrants issued as a party
of the Alternative Units pursuant to an effective registration statement on Form S-3 (File No. 333-215985). In addition, the shares
of Common Stock issuable upon exercise of the Warrants are also registered on the same registration statement. 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 Units will not be issued or certificated. The Series R Warrants
and the Series S Warrants, as applicable, will be issued in physical form 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 R Warrants
Each Primary Unit and Alternative Unit contains a Series R Warrant
to purchase one share of Common Stock. The Series R 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 R Warrants is $0.20 per share. The exercise
price is subject to adjustments for stock splits or similar events, and if the Company in the future issue shares of Common Stock
or securities exercisable for or convertible into shares of Common Stock at an effective price per share less than the exercise
price then in effect, then the exercise price will be reduces to such lower effective price per share. In addition, the Company
may, with the consent of the “required holders” (as defined in the Series R 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 R 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 R Warrants and the Company
will not receive the exercise price. Further, on or after the 60th day following issuance, if the volume weighted price of the
Common Stock for five consecutive trading days is less than the exercise price, the holder may thereafter, in its sole discretion
and regardless of whether the shares of Common Stock issuable upon exercise of a Series R Warrant is not covered by a registration
statement under the Securities Act of 1933, as amended (the “Securities Act”), elect to exercise a Series R Warrant
without payment of any exercise price and receive a number of shares of Common Stock equal to the product of (x) the aggregate
number of shares that would be issuable upon exercise of a Series R Warrant if such exercise were by means of a cash exercise rather
than a cashless exercise and (y) 0.50.
A holder may not exercise a Series R Warrant and the Company may
not issue shares of Common Stock under a Series R 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 a percentage not in excess of 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 us.
The holders of the Series R 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 Series R 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 R Warrants, on an “as if exercised for Common Stock” basis.
The Series R Warrants prohibit the Company from entering into transactions
constituting a “fundamental transaction” (as defined in the Series R Warrants) unless the successor entity assumes
all of the Company’s obligations under the Series R Warrants and the other transaction documents in a written agreement approved
by the “required holders” of the Series R Warrants. Further, after a fundamental transaction, upon the request of a
holder, the Company is required to purchase such holder’s Series R Warrants for an amount equal to the “Black Scholes
value” (as defined in the Series R Warrants) of the remaining unexercised portion of such Series R 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 S Warrants
The exercise price for a Series S Warrant will be paid at the closing
except for the further payment of the $0.01 exercise price per share, which a holder will pay upon exercise. The Series S Warrants
will have substantially the same terms as the Series R Warrants, other than (i) the foregoing, (ii) the exercise price is not subject
to adjustment upon subsequent issuances of shares of Common Stock or securities exercisable for or convertible into shares of Common
Stock, and (iii) holders may not require the Company to purchase the Series R Warrants for the “Black Scholes value.”
Additional Terms of the Purchase Agreement
The terms of the Purchase Agreement limit the Company’s ability
to issue securities in the future:
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From the date of the Purchase Agreement until 90 “trading days” (as defined in the Purchase Agreement) 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.
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From the date of the Purchase Agreement until 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 a “variable rate transaction” (as defined in the Purchase Agreement). The
term “variable rate transaction” generally means a transaction in which the Company (a) 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 (i) 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 (ii) 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, or (b) enters into, or effects a transaction under,
any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined
price.
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The Purchase Agreement also provides that, until the one year anniversary
of the closing of the offering, the Investor has the right to participate in any future “subsequent financing” (as
defined in the Purchase Agreement) for cash consideration in an amount equal to up to 35% of such subsequent financing, on the
same terms, conditions and price provided for in such subsequent financing.
However, the limitations on securities issuances and participation
right described above do not apply to “exempt issuances” (as defined in the Purchase Agreement) (with respect to the
limitation on securities issuances, so long as such exempt issuance is not a “variable rate transaction”). The term
“exempt issuance” generally means 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 the Placement Agent in connection
with this offering; (c) securities upon the exercise, exchange or conversion of the securities sold in this offering, the warrant
the Company expects to issue to the Placement Agent 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 of the Purchase Agreement, subject to certain
limitations; (d) up to 250,000 shares of Common Stock issued pursuant to an exemption from registration to the lender, or any successor
thereto, who is a party to any revolving or other credit facility that is outstanding prior to the date of the Purchase Agreement
or to which the Company becomes a party thereafter; (e) securities issued pursuant to acquisitions or strategic transactions approved
by a majority of the Company’s disinterested directors, subject to certain limitations; (f) securities issued in a transaction
in which the Company is not issuing securities primarily for the purpose of raising capital from retail investors or one or more
entities whose primary business is investing in securities, subject to certain limitations; or (g) securities issued in connection
with the settlement of any dispute or disagreement with, or litigation claim against, the Company outstanding as of the date of
the Purchase Agreement, subject to certain limitations.
For 75 days after the closing of the offering, the Company may not undertake or announce a reverse
or forward stock split or reclassification of the Common Stock.
The Purchase Agreement also contains customary representations,
warranties, covenants, including indemnifications, and closing conditions.
Leak-Out Agreements
On April 2, 2019, the Company entered into separate and substantially
similar leak-out agreements directly with each of the Investors. Under the leak-out agreements, during the period commencing on
the date of the Purchase Agreement and ending May 1, 2019, each Investor (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 of Common Stock (including the
shares of Common Stock purchased in the offering and issuable upon exercise of the Series R Warrants and the Series S Warrants
and other shares of Common Stock held or acquired in the future), 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 is 30% 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. This restriction does not apply to any actual “long” (as defined in
Regulation SHO promulgated under the Securities Exchange Act of 1934, as amended) sales by an Investor (together with certain of
its affiliate) at a price greater than $0.24. Further, this restriction does not apply to sales or transfers of any such shares
of Common Stock in transactions which do not need to be reported on the OTCQX consolidated tape (or equivalent thereof) so long
as the purchaser or transferee executes and delivers a leak-out agreement. After such sale or transfer, future sales of the securities
covered by the leak-out agreement by the original owner (together with certain of its affiliate) and the purchaser or transferee
will be aggregated to determine compliance with the terms of the leak-out agreement.
Placement Agent
Dawson James Securities, Inc. acted as the exclusive placement agent
for the offering (the “Placement Agent”) pursuant to the terms an engagement letter, dated March 19, 2019 (the “Placement
Agency Agreement”). In connection with the closing of the offering, the Company expects to pay the Placement Agent a cash
fee equal to approximately $231,000, an amount equal to 7% of the gross proceeds received by the Company from the offering. The
Company has agreed to reimburse the Placement Agent’s reasonable and documented out-of-pocket expenses up to a maximum of
$5,000 and reasonable and documented out-of-pocket legal expenses up to a maximum of $100,000.
In addition to the cash fees set forth above, Dawson James, as placement
agent, has a right to purchase for the sum of $100 a warrant to purchase up to an aggregate of 8% of the aggregate number of shares
of Common Stock sold in the offering and issuable upon exercise of the Series S Warrants (exclusive of any shares of Common Stock
issuable upon exercise of the Series R Warrants). The placement agent warrant will have similar terms as the Series R Warrants,
other than (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 but only based on the net number of shares; (iii) the exercise price will be
125% of the public offering price per Primary Unit; (iv) certain covenants appearing in the Series R Warrants will be removed in
the placement agent warrant; (v) the initial beneficial ownership limitation will be set at 4.99%; (vi) the placement agent warrant
will have certain demand and piggyback registration rights with respect to the shares issuable upon exercise of the placement agent
warrant; and (vii) 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:
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by operation of law or by reason of reorganization of the Company;
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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;
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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;
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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
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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.
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Additionally, the Company has agreed to indemnify the Placement
Agent against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the Placement Agent
may be required to make because of those liabilities.
The Placement Agency Agreement also contains customary representations,
warranties and covenants.
The descriptions of each of the Purchase Agreement, the Series R
Warrant, the Series S Warrant, the leak-out agreements 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 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
and beneficiaries thereof. In addition, such representations and warranties (a) have been made only for purposes of such documents,
(b) 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, (c) are subject to materiality qualifications
contained therein which may differ from what may be viewed as material by investors, (d) 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 (e) 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,” “project” 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.