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): November 6, 2019

 

 

 

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.)

 

110 16th Street, Suite 300, Denver, CO 80202

(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 communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934: None

 

 

 

 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

On November 6, 2019, Real Goods Solar, Inc. (the “Company”) entered into a Subscription and Escrow Agent Agreement with Continental Stock Transfer & Trust Company (the “Subscription Agent”), as subscription and escrow agent, in connection with the Company’s planned distribution, at no charge, to each of (i) the holders of the Company’s Class A common stock, and (ii) the holders of warrants exercisable for the Company’s Class A common stock, (collectively the “Rights Holders”) non-transferable subscription rights (“Rights”) to purchase up to, subject to proration and other restrictions, an aggregate of 10 shares of Real Goods Solar, Inc.’s Series 1 Preferred Stock, par value $0.0001 per share, at a subscription price of $10 per share of Series 1 Preferred Stock (the “Rights Offering”). The Company intends to offer up to 2,000,000 shares of Series 1 Preferred Stock in the Rights Offering. The Company expects to conduct the Rights Offering pursuant to its Offering Statement on Form 1-A (File No. 024-11087), which has not yet been qualified by the Securities and Exchange Commission.

 

The Subscription Agent will process subscriptions, hold in escrow the funds the Company receives from subscribers and will arrange for the issuance of the shares of Series 1 Preferred Stock purchased pursuant to the Rights Offering after completion of the allocation process. Under the Subscription and Escrow Agent Agreement, the Company will pay the Subscription Agent a fee of $20,000 and will reimburse the Subscription Agent for reasonable out-of-pocket expenses.

 

The Subscription and Escrow Agent Agreement contains customary indemnification and limitation of liability provisions.

 

A copy of the Subscription and Escrow Agent Agreement is attached as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Item 2.02. Results of Operations and Financial Condition.

 

The disclosure regarding the unaudited preliminary results for the Company’s third quarter ended September 30, 2019 and other financial information set forth in Item 7.01 below is incorporated by reference in response to this Item 2.02.

 

The unaudited preliminary results and other financial information discussed in Item 2.02 and Item 7.01 consists of estimates derived from the Company’s internal books and records and has been prepared by, and are the responsibility of, the Company’s management. The preliminary financial data are subject to the completion of financial closing procedures, final adjustments and other developments that may arise between now and the time the financial results for the fourth quarter ended December 31, 2018 are finalized. Therefore, actual results may differ materially from these preliminary cash projections and financial data and all of these preliminary cash projections and financial data are subject to change.

 

The information in this Item 2.02 is being furnished by the Company pursuant to Item 2.02 “Results of Operations and Financial Condition.” In accordance with General Instruction B.2 of Form 8-K, the information contained in this Item 2.02 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. In addition, this information shall not be deemed incorporated by reference into any of the Company’s filings with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in any such filing.

 

Item 7.01. Regulation FD Disclosure.

 

The Company plans to present the attached presentation related to the Company’s business in connection with meetings with potential investors in the Rights Offering. A copy of the presentation is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The Company has posted a copy of the presentation in the investor relations section of its website.

 

The Offering Statement on Form 1-A/A-2 (File No. 024-11087) filed November 7, 2019 in connection with the Rights Offering contained the following disclosures:

 

 

 

Preliminary Third Quarter of 2019 Results and Business Update

 

The following unaudited preliminary results for the Company’s third quarter ended September 30, 2019 are subject to the completion of the Company’s quarterly closing and review procedures, and have not been audited or reviewed by the Company’s independent registered accounting firm, and therefore is subject to change.

 

 

(000's omitted and unaudited)

 

 

Preliminary

Sept. 30, 2019

  

Last Quarter

Reported

June 30, 2019

  

Year Ago
Quarter
Reported

Sept. 30, 2018

 
Selected Balance Sheet Items:               
Cash  $799   $1,696   $8,593 
Convertible Debt   -    -    218 
Shareholder's Equity   4,539    3,590    6,639 
Selected Income Statement Items:               
Revenue for Quarter  $2,225   $2,294   $3,885 
Operating Loss   (2,611)   (3,352)   (3,038)
Non-Operating Income (Expense)   800    (1,724)   (15,227)
Net Loss   (1,811)   (5,076)   (18,294)
Other Items:               
Working Capital  $410   $2,579   $5,181 
Backlog:               
POWERHOUSE™ Division   7,731    7,698    - 
Solar Division (excluding exited mainland residential business)
   14,480    10,965    6,477 
Debt-to-Equity Ratio   0%   0%   3%

 

Non-operating income (expense) is primarily non-cash expenses that include changes in the fair value of derivative liabilities, losses on the extinguishment of debt, and the amortization of debt discount and deferred loan costs associated with the conversion of debt to equity.

 

Backlog represents the dollar amount of revenue that may be recognized in the future from signed contracts without taking into account possible future cancellations. Backlog is not a measure defined by generally accepted accounting principles and is not a measure of contract profitability. The backlog amounts disclosed are net of cancellations received and include anticipated revenues associated with (i) the original contract amounts, and (ii) change orders for which written confirmations have been received. Backlog may not be indicative of future operating results. The backlog amounts for the Company’s Solar Division excludes backlog of the Company’s mainland residential business, which the Board of Directors determined to exit on March 29, 2019, as previously disclosed.

 

POWERHOUSE™ Revenue and Cash Outflows

 

For the quarter ended September 30, 2019, the Company had minimal revenue from POWERHOUSE™ of $0.2 million and accordingly the Company incurred cash outflows from operations of $8.5 million.

 

Consolidated Debt and Liabilities

 

As of November 6, 2019, the Company had consolidated debt of $0 and liabilities of approximately $6.6 million consisting of trade payables and accrued liabilities.

 

Supply Chain and Tariffs on Chinese Imports

 

The Company engages third-party manufacturers to manufacture components of the in-roof POWERHOUSE™ solar shingle. The major components of the POWERHOUSE™ solar shingle consist of the solar laminate, connectors, wire harnesses, base assembly and integrated flashing system. The solar laminate, connectors and wire harnesses are produced by a manufacturer located in China and shipped to the Company’s U.S. based manufacturer of the baseplate for assembly into a solar shingle. The solar shingle is then shipped to the Company’s third-party logistics provider to warehouse and distribute kitted systems to customers.

 

The tariffs on solar cells and photovoltaic modules from China imposed by the Office of the President of the United States have increased the Company’s cost of goods sold by 26%.

 

The information under this Item 7.01 and the presentation attached hereto as Exhibit 99.1 are being furnished by the Company pursuant to Item 7.01. In accordance with General Instruction B.2 of Form 8-K, the information contained under this Item 7.01 and the presentation attached hereto as Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. In addition, this information shall not be deemed incorporated by reference into any of the Company’s filings with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in any such filing.

 

 

 

 

Item 8.01. Other Events.

 

The Company has set the record date as November 27, 2019 for Rights Holders of record as of such date to receive Rights under the Rights Offering.

 

Item 9.01. Financial Statements and Exhibits.

 

(d)Exhibits

 

Exhibit
No.

 

Description

   
10.1   Subscription and Escrow Agent Agreement, dated November 6, 2019, by and between Real Goods Solar, Inc. and Continental Stock Transfer and Trust Company.
     
99.1   Corporate Presentation, dated November 2019.
       

 

 

 

 

 

 

 

 

 

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
    Chief Financial Officer, Chief Administrative Officer Principal Accounting Officer and Treasurer

 

 

Date: November 7, 2019

 

 

 

 

 

 

Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

 

SUBSCRIPTION AND ESCROW AGENT AGREEMENT

 

Between

 

Real Goods Solar, Inc.

 

And

 

Continental Stock Transfer & Trust Company

 

 

 

 

 

 

 

 

 

 

 

 

 

  

THIS SUBSCRIPTION AND ESCROW AGENT AGREEMENT (this “Agreement”) between Real Goods Solar, Inc. (the “Company”) and Continental Stock Transfer & Trust Company (the “Subscription Agent”), is dated as of November 6, 2019.

 

1.       Appointment.

 

(a)       The Company is distributing at no charge (the “Rights Offering”) to (i) the holders of record of its Class A Common Stock, par value $0.0001 per share (the “Common Stock”), as of 5:00 p.m., Eastern time, on November 27, 2019 (the “Record Date”) and (ii) the holders of record of its warrants exercisable for Common Stock (the “Warrants”) on the Record Date non-transferable subscription rights (the “Rights”) to purchase up to an aggregate of 2,000,000 shares of the Company’s Series 1 Preferred Stock, par value $0.0001 per share (the “Preferred Stock”). Each holder of Common Stock or Warrants will receive ten Rights for each every (x) one share of Common Stock owned on the Record Date, and (y) one share of Class A common stock that such holder could purchase on the Record Date by exercising Warrants (assuming full exercise, and without any beneficial ownership limitation). Each Right entitles the stockholder or warrantholder to purchase one share of Preferred Stock at a purchase price of $10 per share (the “Subscription Price”). The term “Subscribed” shall mean submitted for purchase from the Company by a stockholder or warrantholder in accordance with the terms of the Rights Offering, and the term “Subscription” shall mean any such submission.

 

(b)       The Rights Offering will expire on December 16, 2019 at 5:00 p.m. Eastern Time (the “Expiration Time”), unless the Company shall have extended the period of time for which the Rights Offering is open, in its sole discretion for up to 45 days, in which event the term “Expiration Time” shall mean the latest time and date at which the Rights Offering, as so extended by the Company from time to time, shall expire.

 

(c)       The Company filed an Offering Statement on Form 1-A (File No. 024-11087) relating to the Rights Offering with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended, on September 30, 2019 (the “Offering Statement”). The terms of the Rights Offering are more fully described in the Offering Circular (the “Circular”) forming part of the Offering Statement as such Offering Statement may be qualified by the SEC. A copy of the Circular is attached hereto as Exhibit 1. All terms used and not defined herein shall have the same meaning as in the Circular. Promptly after the Record Date, (i) the Company will instruct Computershare, in its capacity as transfer agent for the Common Stock, to generate a list of holders of Common Stock as of the Record Date (the “Record Stockholders List”) and (ii) the Company will generate a list of holders of Warrants (the “Record Warrant Holders List,” and together with the Record Stockholders List, the “Records Holders List”).

 

(d)       The Company hereby appoints the Subscription Agent to act as subscription agent (the “Subscription Agent”) for the Rights Offering in accordance with and subject to the following terms and conditions.

 

2.       Subscription of Rights.

 

(a)       The Rights are evidenced by subscription rights certificates (the “Certificates”), a copy of the form of which is attached hereto as Exhibit 2. The Certificates entitle the holders to subscribe, upon payment of the Subscription Price, for shares of Preferred Stock at the rate of one share per Right evidenced by a Certificate (the “Basic Subscription Right”). No fractional shares will be issued.

 

3.       Duties of Subscription Agent. As Subscription Agent, the Subscription Agent is authorized and directed to perform the following:

 

(a)       Issue the Certificates in accordance with this Agreement in the names of the holders of the Common Stock and Warrants of record on the Record Date, keep such records as are necessary for the purpose of recording such issuance, and furnish a copy of such records to the Company. The Certificates may be signed on behalf of the Subscription Agent by the manual or facsimile signature of a Vice President or Assistant Vice President of the Subscription Agent, or by the manual signature of any of its other authorized officers.

 

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(b)       Promptly after the Subscription Agent receives the Record Holders List, the Subscription Agent shall:

 

(i)       mail or cause to be mailed, by first class mail, or deliver (which delivery may be done electronically through the facilities of the Depository Trust Company (“DTC”) or otherwise) to each holder of Common Stock or Warrants of record on the Record Date whose address of record is within the United States and Canada, (i) a Certificate evidencing the Rights to which such Common Stock holder or Warrant holder is entitled under the Rights Offering, (ii) a copy of the Circular, and (iii) a return envelope addressed to the Subscription Agent; and

 

(ii)       mail or cause to be mailed, to each holder of Common Stock or Warrants of record on the Record Date whose address of record is outside the United States and Canada, or is an A.P.O. or F.P.O. address, a copy of the Circular (including all attachments and accompanying documents). The Subscription Agent shall refrain from mailing Certificates issuable to any holder of Common Stock or Warrants of record on the Record Date whose address of record is outside the United States and Canada, or is an A.P.O. or F.P.O. address, and hold such Certificates for the account of such holder subject to such holder making satisfactory arrangements with the Subscription Agent for the exercise of the Rights evidenced thereby, and follow the instructions of such Common Stock holder or Warrant holder for the exercise of such Rights if such instructions are received at or before 11:00 a.m., Eastern Time, at least three business days prior to the Expiration Time.

 

(c)       Mail or deliver (which delivery may be done electronically through the facilities of DTC or otherwise) a copy of the Circular with Certificate(s) with respect to Common Stock and Warrants when such Certificate(s) are issued to holders other than the registered holder of the Certificate.

 

(d)       Accept Subscriptions upon the due exercise (including payment of the Subscription Price) on or prior to the Expiration Time of Rights in accordance with the terms of the Certificates and the Circular.

 

(e)       Subject to the next sentence, accept Subscriptions from Common Stock holders and Warrant holders whose Certificates are alleged to have been lost, stolen, or destroyed upon receipt by the Subscription Agent of an affidavit of theft, loss, or destruction and a bond of indemnity in form and substance reasonably satisfactory to the Subscription Agent, accompanied by payment of the Subscription Price for the total number of Rights Subscribed. Upon receipt of such affidavit and bond of indemnity and compliance with any other applicable requirements, stop orders shall be placed on said Certificates, and the Subscription Agent shall withhold delivery of the Rights Subscribed for until after the Certificates have expired and it has been determined that the Rights evidenced by the Certificates have not otherwise been purported to have been exercised or otherwise surrendered.

 

(f)       Accept Subscriptions, without further authorization or direction from the Company, without procuring supporting legal papers or other proof of authority to sign (including without limitation proof of appointment of a fiduciary or other person acting in a representative capacity), and without signatures of co-fiduciaries, co-representatives, or any other person:

 

(i)       if the Certificate is registered in the name of a fiduciary and is executed by, and the Rights are to be issued in the name of, such fiduciary;

 

(ii)       if the Certificate is registered in the name of joint tenants and is executed by one of the joint tenants, provided the Certificate is issued in the names of, and is to be delivered to, such joint tenants;

 

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(iii)       if the Certificate is registered in the name of a corporation and is executed by a person in a manner which appears or purports to be done in the capacity of an officer, or agent thereof, provided the Rights are to be issued in the name of such corporation; or

 

(iv)       if the Certificate is registered in the name of an individual and is executed by a person purporting to act as such individual’s executor, administrator, or personal representative, provided, the Rights are to be registered in the name of the subscriber as executor or administrator of the estate of the deceased registered holder and there is no evidence indicating the subscriber is not the duly authorized representative that they purport to be.

 

(g)       Accept Subscriptions not accompanied by Certificates if submitted by a firm having membership in the New York Stock Exchange or another national securities exchange or by a commercial bank or trust company having an office in the United States and accompanied by proper payment for the total number of Rights Subscribed.

 

(h)       Refer to the Company, for specific instructions as to acceptance or rejection, Subscriptions received after the Expiration Time, Subscriptions not authorized to be accepted, and Subscriptions otherwise failing to comply with the requirements of the Circular and the terms and conditions of the Certificates.

 

4.       Acceptance of Subscriptions. Upon acceptance of a Subscription, the Subscription Agent shall from time to time during the Rights Offering:

 

(a)       Hold all funds received in a dedicated, non-interest bearing escrow account for the benefit of the Company. Promptly following the Expiration Time, the Subscription Agent shall, upon the receipt of the Distribution Letter in the form attached hereto as Exhibit 3 and executed by the Company, distribute to the Company or its designee(s) the funds from exercise of the Basic Subscription Rights and Over-Subscription Rights in such account. The Subscription Agent will not be obligated to calculate or pay interest to any holder or any other party claiming through a holder or otherwise. It is hereby agreed immediately following the effective date of the Subscription, immediately available funds, represented by certified check, money order, or wire transfer but not personal check, will be deposited with the Subscription Agent in accordance with Exhibit 7. In the event that the Rights Offering is not consummated because the Company has withdrawn, cancelled or terminated the Rights Offering, the Subscription Agent shall, upon the receipt of the Liquidation Letter in the form attached hereto as Exhibit 4 and executed by the Company, liquidate the segregated account in which the subscription funds were held as promptly as practicable and distribute the funds to each respective subscribing Common Stock holder or Warrant holder who elected to exercise its Rights.

 

(b)       Advise the Company daily by email transmission and confirm by letter to the attention of Tyler Clarke (the “Company Representative”) as to the total number of shares of Preferred Stock Subscribed for and the amount of funds received, with cumulative totals for each; and in addition advise the Company Representative, by telephone at 303-222-8437, confirmed by email transmission tyler.clarke@rgsenergy.com, of the amount of funds received identified in accordance with (a) above, deposited, available, or transferred in accordance with (a) above, with cumulative totals; and

 

(c)       As promptly as possible but in any event on or before 3:30 p.m., Eastern Time, on the first full business day following the Expiration Time, advise the Company Representative in accordance with (b) above of the number of shares of Subscribed and the number of shares of Preferred Stock unsubscribed.

 

5.       Completion of Rights Offering. Upon completion of the Rights Offering:

 

(a)       The Subscription Agent shall prepare and maintain a list of Common Stock holders and Warrant Holders who have exercised their Rights in whole or in part, together with the number of shares of Preferred Stock to be issued to each such holder (after taking into account exercise of the Over-Subscription Rights) (the “List”).

 

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(b)       For so long as this Agreement shall be in effect, the Company will reserve for issuance and keep available free from preemptive rights a sufficient number of shares of Preferred Stock to permit the exercise of Rights as contemplated by the Rights Offering.

 

(c)       The Company shall take any and all action, including without limitation obtaining the authorization, consent, lack of objection, registration, or approval of any governmental authority, or the taking of any other action under the laws of the United States of America or any political subdivision thereof, to insure that all shares of Preferred Stock issuable upon the exercise of the Certificates at the time of delivery of such shares (subject to payment of the Subscription Price) will be duly and validly issued and fully paid and non-assessable shares of Preferred Stock, free from all preemptive rights and taxes, liens, charges, and security interests created by or imposed upon the Company with respect thereto.

 

(e)       The Company shall from time to time take all action necessary or appropriate to obtain and keep effective all registrations, permits, consents, and approvals of the SEC and any other governmental agency or authority and make such filings under federal and state laws which may be necessary or appropriate in connection with the issuance and delivery of Certificates or the issuance, sale, transfer, and delivery of Preferred Stock issued upon exercise of Certificates.

 

6.       Procedure for Discrepancies. The Subscription Agent shall follow its regular procedures to attempt to reconcile any discrepancies between the number of shares of Preferred Stock that any Certificate may indicate are to be issued to a Common Stock holder or a Warrant holder and the number that the Record Holders List indicates may be issued to such holder. In any instance where the Subscription Agent cannot reconcile such discrepancies by following such procedures, the Subscription Agent will consult with the Company for instructions as to the number of shares of Preferred Stock, if any, should be set forth on the List.

 

7.       Procedure for Deficient Items. The Subscription Agent shall examine the Certificates received by it as Subscription Agent to ascertain whether they appear to have been properly completed and executed. In the event the Subscription Agent determines that any Certificate does not appear to have been properly completed or executed, or where a Certificate does not appear to be in proper form for Subscription, or any other irregularity in connection with the Subscription appears to exist, the Subscription Agent shall follow, where possible, its regular procedures to attempt to cause such irregularity to be corrected. The Subscription Agent is not authorized to waive any irregularity in connection with a Subscription, unless the Subscription Agent shall have received from the Company instructions, duly dated and signed by an authorized officer of the Company, indicating that any irregularity in such Certificate has been cured or waived and that such Certificate has been accepted by the Company. If any such irregularity is neither corrected nor waived, the Subscription Agent will return to the subscribing Common Stock holder or Warrant holder (at its option by either first class mail under a blanket surety bond or insurance protecting the Subscription Agent and the Company from losses or liabilities arising out of the non-receipt or nondelivery of a Certificate or by registered mail insured separately for the value of such Certificate) to such Common Stock holder’s or Warrant holder’s address as set forth in the Subscription any Certificate surrendered in connection therewith and any other documents received with such Certificate, and a letter of notice to be furnished by the Company explaining the reasons for the return of the Certificate and such documents.

 

8.       Date/Time Stamp. Each document received by the Subscription Agent relating to its duties hereunder shall be dated and time stamped when received.

 

9.       Tax Reporting. Should any issue arise regarding federal income tax reporting or withholding, the Subscription Agent shall take such action as the Company reasonably instructs in writing.

 

10.       Termination. The Company may terminate this Agreement at any time by so notifying the Subscription Agent in writing. The Subscription Agent may terminate this Agreement upon 60 days’ prior written notice to the Company. Upon any such termination, the Subscription Agent shall be relieved and discharged of any further responsibilities with respect to its duties hereunder and shall deliver to the Company or its designee promptly any funds and Certificate or other document relating to the Subscription Agent’s duties hereunder. Upon payment of all the Subscription Agent‘s outstanding fees and expenses, the Subscription Agent shall forward to the Company or its designee promptly any funds and Certificate or other document relating to the Subscription Agent’s duties hereunder that the Subscription Agent may receive after its appointment has so terminated. Sections 11, 12, 13, and 18 of this Agreement shall survive any termination of this Agreement.

 

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11.       Authorizations and Protections. As agent for the Company, the Subscription Agent:

 

(a)       shall have no duties or obligations other than those specifically set forth herein or as may subsequently be agreed to in writing by the Subscription Agent and the Company;

 

(b)       shall be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value, or genuineness of any Certificates surrendered to the Subscription Agent hereunder, and will not be required to or be responsible for and will make no representations as to, the validity, sufficiency, value or genuineness of the Rights Offering;

 

(d)       shall not be obligated to take any legal action hereunder; if, however, the Subscription Agent determines to take any legal action hereunder, and where the taking of such action might, in the Subscription Agent’s judgment, subject or expose it to any expense or liability, the Subscription Agent shall not be required to act unless it shall have been furnished with an indemnity reasonably satisfactory to it;

 

(e)       may rely on and shall be fully authorized and protected in acting or failing to act upon any certificate, instrument, opinion, notice, letter or other document or security delivered to the Subscription Agent and believed by it to be genuine and to have been signed by the proper party or parties;

 

(f)       shall not be liable or responsible for any recital or statement contained in the Circular or any other documents relating thereto;

 

(g)       shall not be liable or responsible for any failure on the part of the Company to comply with any of its covenants and obligations relating to the Rights Offering, including without limitation obligations under applicable securities laws;

 

(h)       may rely on and shall be fully authorized and protected in acting or failing to act upon the written, telephonic, or oral instructions of officers of the Company with respect to any matter relating to the Subscription Agent acting as Subscription Agent covered by this Agreement (or supplementing or qualifying any such actions);

 

(i)       may consult with counsel satisfactory to the Subscription Agent, including internal counsel, and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered, or omitted by the Subscription Agent hereunder in good faith and in reliance upon the advice of such counsel; and

 

(j)       is not authorized, and shall have no obligation, to pay any brokers, dealers, or soliciting fees to any person.

 

12.       Indemnification. The Company agrees to indemnify the Subscription Agent for, and hold it harmless from and against, any loss, liability, claim, or expense (“Loss”) arising out of or in connection with the Subscription Agent’s performance of its duties under this Agreement or this appointment, including the costs and expenses of defending itself against any Loss or enforcing this Agreement, except to the extent that such Loss shall have been determined by a court of competent jurisdiction to be a result of the Subscription Agent’s gross negligence or intentional misconduct.

 

13.       Limitation of Liability.

 

(a) In the absence of gross negligence or intentional misconduct on its part, the Subscription Agent shall not be liable for any action taken, suffered, or omitted by it or for any error of judgment made by it in the performance of its duties under this Agreement. Anything in this Agreement to the contrary notwithstanding, in no event shall the Subscription Agent be liable for special, indirect, incidental, or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Subscription Agent has been advised of the likelihood of such damages and regardless of the form of action. Any liability of the Subscription Agent will be limited to the amount of fees paid by the Company hereunder.

 

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(b)       In the event any question or dispute arises with respect to the proper interpretation of this Agreement or the Subscription Agent’s duties hereunder or the rights of the Company or of any holders surrendering Certificates pursuant to the Rights Offering, the Subscription Agent shall not be required to act and shall not be held liable or responsible for refusing to act until the question or dispute has been judicially settled (and the Subscription Agent may, if it deems it advisable, but shall not be obligated to, file a suit in interpleader or for a declaratory judgment for such purpose) by judgment rendered by a court of competent jurisdiction, binding on all parties interested in the matter, or settled by a written document in form and substance reasonably satisfactory to the Subscription Agent and executed by the Company and each Common Stock holder, Warrant holder or other party affected by the question or dispute.

 

14.       Representations, Warranties and Covenants. The Company represents, warrants, and covenants that (a) it is validly existing and in good standing under the laws of its jurisdiction of incorporation, (b) the making and consummation of the Rights Offering and the execution, delivery, and performance of all transactions contemplated thereby (including without limitation this Agreement) have been duly authorized by all necessary corporate action and will not result in a breach of or constitute a default under the articles of incorporation or bylaws of the Company or any indenture, agreement, or instrument to which the Company is a party or is bound, (c) this Agreement has been duly executed and delivered by the Company and constitutes a legal, valid, binding obligation of the Company, enforceable against the Company in accordance with its terms, (d) the Rights Offering will comply in all material respects with all material applicable requirements of law, and (e) to the best of its knowledge, there is no litigation pending as of the date hereof in connection with the Rights Offering.

 

15.       Notices. All notices, demands, and other communications given pursuant to the terms and provisions hereof shall be in writing, shall (except as provided for in Section 18 hereof) be deemed effective on the date of receipt, and may be sent by email, overnight delivery services, or by certified or registered mail, return receipt requested to (or such other address or email address specified in a notice given by a party hereto to the other party under this Section 15):

 

If to the Company:


Real Goods Solar, Inc.
110 16th Street, 3rd Floor Denver, CO 80202
Denver, CO 80202
Telephone: 303-222-8437

Email: tyler.clarke@rgsenergy.com

Attention: Tyler Clarke

 

with a copy to (which shall not constitute notice):

 

Brownstein Hyatt Farber Schreck, LLC

410 17th Street, 22nd Floor

Denver, CO 80220

Telephone: 303-223-1232

Email: rlundberg@bhfs.com

Attention: Rikard Lundberg

 

If to the Subscription Agent:

 

Continental Stock Transfer & Trust Company
1 State Street Plaza- 30th Floor
New York, NY 10004
Telephone:  (212) 845-3287
Email:
Attn:  Reorganization Department
 

 

 7 
 

 

16.       Specimen Signatures. Set forth in Exhibit 5 hereto is a list of the names and specimen signatures of the persons authorized to act for the Company under this Agreement. The Secretary of the Company shall, from time to time, certify to the Subscription Agent the names and signatures of any other persons authorized to act for the Company, as the case may be, under this Agreement.

 

17.       Instructions. Any instructions given to the Subscription Agent orally, as permitted by any provision of this Agreement, shall, upon the request of the Subscription Agent, be confirmed in writing by the Company (which for these purposes only may be undertaken by e-mail transmission) as soon as practicable. The Subscription Agent shall not be liable or responsible and shall be fully authorized and protected for acting, or failing to act, in accordance with any oral instructions which do not conform with the written confirmation received in accordance with this Section 17.

 

18.       Fees. Whether or not any Certificates are surrendered to the Subscription Agent, for its services as Subscription Agent hereunder, the Company shall pay to the Subscription Agent fees in accordance with Exhibit 6, together with reimbursement for reasonable out-of-pocket expenses. All amounts owed to the Subscription Agent hereunder are due upon receipt of the invoice.

 

19.       Force Majeure. the Subscription Agent shall not be liable for any failure or delay arising out of conditions beyond its reasonable control including, but not limited to, work stoppages, fires, civil disobedience, riots, rebellions, storms, electrical, mechanical, computer or communications facilities failures, acts of God or similar occurrences.

 

20.       Miscellaneous.

 

(a)       This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to conflict of laws, rules, or principles.

 

(b)       No provision of this Agreement may be amended, modified, or waived, except in writing signed by all of the parties hereto.

 

(c)       Except as expressly set forth elsewhere in this Agreement, all notices, instructions, and communications under this Agreement shall be in writing, shall be effective upon receipt and shall be addressed as provided in Section 15 or to such other address as a party hereto shall notify the other party in writing.

 

(d)       In the event that any claim of inconsistency between this Agreement and the terms of the Rights Offering arise, as they may from time to time be amended, the terms of the Rights Offering shall control, except with respect to the Subscription Agent’s duties, liabilities, and rights, including without limitation compensation and indemnification, which shall be controlled by the terms of this Agreement.

 

(e)       If any provision of this Agreement shall be held illegal, invalid, or unenforceable by any court, this Agreement shall be construed and enforced as if such provision had not been contained herein and shall be deemed an Agreement among the parties hereto to the full extent permitted by applicable law.

 

(f)       This Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the respective successors and assigns of the parties hereto.

 

(g)       This Agreement may not be assigned by any party without the prior written consent of all parties.

 

(h)       This Agreement may be executed in counterparts, each of which, when taken together, shall constitute one and the same agreement, and each of which may be delivered by the parties by facsimile or other electronic transmission, which shall not impair the validity of such counterparts.

 

 8 
 

 

(Signature page follows)

 

 

 

 

 

 9 
 

 

Signature Page
to
Subscription and Escrow Agent Agreement

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers as of the day and year above written.

 

 

REAL GOODS SOLAR, INC.

 

 

By: /s/ Dennis Lacey                                                

Name: Dennis Lacey

Title: CEO

   
 

CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Subscription Agent

 

 

By: /s/ Wilton Davila                                              

Name: Wilton Davila

Title: Vice President

 

Exhibit 1 Circular

Exhibit 2 Form of Subscription Rights Certificate

Exhibit 3 Distribution Letter

Exhibit 4 Liquidation Letter

Exhibit 5 List of Authorized Representatives

Exhibit 6 Subscription Agent Fee Schedule

Exhibit 7 Wire Instructions

 

 

 10 
 

 

Exhibit 1
to
Subscription and Escrow Agent Agreement

 

Circular

 

 

 

 

 

 

 

 

 

 

 

Exhibit 2
to
Subscription and Escrow Agent Agreement

 

Form of Subscription Rights Certificate

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 3
to
Subscription and Escrow Agent Agreement

 

Form of Distribution Letter

 

[Letterhead of Real Goods Solar, Inc.]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

1 State Street- 30th Fl.

New York, New York 10004

Attn: [                     ]

Re: Trust Account No. [    ] Termination Letter

 

Ladies and Gentlemen:

 

Pursuant to Section 4(a) of the Subscription and Escrow Agent Agreement between Real Goods Solar, Inc. and Continental Stock Transfer & Trust Company, dated as of __________, 2019 (the “Subscription Agent Agreement”), you are hereby directed and authorized to transfer the subscription funds held in the segregated account immediately in the manner set forth in the attached flow of funds memorandum and otherwise in accordance with the terms of the Subscription Agent Agreement.

 

 

 

Very truly yours,

 

REAL GOODS SOLAR, INC.

 

 

By:                                                                                  

Name:

Title:

   

 

 

 

 

 

Exhibit 4
to
Subscription and Escrow Agent Agreement

 

Form of Liquidation Letter

 

[Letterhead of Real Goods Solar, Inc.]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

1 State Street- 30th Fl.

New York, New York 10004

Attn: [    ]

Re: Trust Account No. [ ] Termination Letter

 

Ladies and Gentlemen:

 

Pursuant to Section 4(a) of the Subscription and Escrow Agent Agreement between Real Goods Solar, Inc. and Continental Stock Transfer & Trust Company, dated as of ______________, 2019 (the “Subscription Agent Agreement”), this is to advise you that we have withdrawn or otherwise terminated its Rights Offering (as defined in the Subscription Agent Agreement).

 

In accordance with the terms of the Subscription Agent Agreement, we hereby authorize you to commence liquidation of the segregated account in which the subscription funds were held as promptly as practicable to holders of Common Stock (as defined in the Subscription Agent Agreement) and Warrant (as defined in the Subscription Agent Agreement) holders who elected to exercise their Rights (as defined in the Subscription Agent Agreement). You shall commence distribution of such funds in accordance with the terms of the segregated account, and you shall oversee the distribution of such funds. Upon the payment of all the funds in the segregated account, your obligations under the Subscription Agent Agreement shall be terminated.

 

 

Very truly yours,

 

REAL GOODS SOLAR, INC.

 

 

By:                                                                                  

Name:

Title:

   

 

 

 

 

 

Exhibit 5
to
Subscription and Escrow Agent Agreement

 

List of Authorized Representatives

 

Authorized
Representative

 

Specimen Signature

     
Dennis Lacey   /s/ Dennis Lacey
   

 

Authorized
Representative

 

Specimen Signature

     
Alan Fine   /s/ Alan Fine
   

 

Authorized
Representative

 

Specimen Signature

     
Tyler Clarke   /s/ Tyler Clarke
   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 6
to
Subscription and Escrow Agent Agreement

 

Subscription Agent Fee Schedule

 

 

 

A.       FEES FOR SERVICES: $20,000.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 7

to

Subscription and Escrow Agent Agreement

 

 

Wire Instructions

 

 

 

ACCOUNT NAME

 

BANK

 

 

ACCOUNT#

 

 

ABA#

 

 

SWIFT CODE

 

 

Reference: __________

Attn: Ernest Wilson

 

 

PRIMARY CONTACT:

Kirsten Kulmaczewski

Administrator

Continental Stock Transfer & Trust Company Corporate Actions Services

1 State Street, 30th Floor

Phone: (212) 845-5282

E: kkulmaczewski@continentalstock.com

 

SECONDARY CONTACT:

Wilton Davila

Vice President

Continental Stock Transfer & Trust Company

Company Corporate Actions Services

1 State Street, 30th Floor

Phone: (212) 845-3226

E: wdavila@continentalstock.com

 

 

 

 

 

Exhibit 99.1

 

Corporate Presentation November 2019 OTCQX: RGSE Size: 9.625kW Littleton, CO April 24, 2019

 

 

OTCQX: RGSE Our Mission Size: 14.74 kW with battery backup Satellite Beach, FL August 15, 2019 2 2019 Best of International Builder Show Awards WINNER BEST ENERGY EFFICIENT PRODUCT FINALIST BEST GREEN BUILDING PRODUCT “Saving the Planet, One Roof at a Time” with our Award - Winning Next Generation POWERHOUSE™ 3.0 Product

 

 

OTCQX: RGSE Previously when homeowners wanted to “go solar” their only option was “Traditional Rack - n - Mount” 3

 

 

OTCQX: RGSE That was then, this is now… Size: 5.7 kW Colorado Springs, CO May 23, 2019 4

 

 

OTCQX: RGSE 5 Why POWERHOUSE™ Problem Solution • Solar systems arose from homeowners being tired of paying their utility company • Homeowners have more energy needs than ever: • electric cars • more air - conditioning • interest in battery storage • “I want to do good for the environment and save money, but I don’t like the way a solar system looks on my roof” • POWERHOUSE™ in - roof solar shingle developed and patented by The Dow Chemical Company, using CIGS technology and “designed by roofers, for roofers” • As America’s Original Solar Company, when the opportunity arose to license the product from The Dow Chemical Company, we knew this was a great opportunity

 

 

OTCQX: RGSE 6 The Opportunity for Us with POWERHOUSE™ Homeowners at some point need to replace their roof - why not make money while doing it? • Improve curb appeal – max home value • We believe a cheaper to operate home has a higher market value Americans are increasingly concerned about the environment There is limited competition for solar shingles and high barriers to entry More government mandates are being set requiring solar We believe we have the opportunity to ride the wave of growing sentiment for green and further pro - solar legislation International patents for future business expansion Size:5.7 kW Colorado Springs, CO Date: May 23, 2019

 

 

OTCQX: RGSE 7 We Reinvented Our Company Around POWERHOUSE™ We are the Exclusive worldwide manufacturer of POWERHOUSE™ • Redesigned the third generation of POWERHOUSE™ with traditional silicon solar cells (instead of CIGS) for higher panel efficiency and a lower price to homeowners • UL & IEC (International Electrotechnical Commission) certified • UL certified for asphalt roofs • Planning to obtain UL approval for tile roofs RGS Energy reinvented: • Competing with Tesla for ownership of solar shingle market • Competitive “moats” around the business – U.S. & International patents • Scalable business model • Contract manufacturing • Contract homeowner sales and installation • No company debt and recently shed unprofitable mainland traditional rack - n - mount business

 

 

OTCQX: RGSE 8 Attractive When Customers Need a New Roof Roofing Contractor’s State of the Industry and Survey 2019: Residential Sales 4 1) Q2 2019 US Bureau Estimated of total US housing units divided by 20 year average roof life, 2) ISO 2011 to 2015 Homeowner Los ses Ranked by Claim Frequency, 3) US Census Bureau – Monthly New Residential Construction, March 2019, 4) Roofing Contractor’s State of the Industry and Survey 2019, https://www.roofingcontractor.com/articles/93398 - roofing - contractors - state - of - the - industry - report - and - survey - 2019 ? Size: 6.9 kW Seattle, WA April 12, 2019 Size: 3.465 kW Denver, CO May 15, 2019 Large Market Opportunity (annually) Roof replacements due to age: 1 ~4.4M Roof replacements due to insurance claims: 2 ~1.4M New home construction: 3 ~1.1M Total addressable market: ~6.9M Two - Thirds of all roofing contractors expect sales growth this year and into next three years ~60% of residential roofing contractors expect sales to grow through 2022 & 50%+ anticipated growth this year ~71% Of residential contractors use steep - slope asphalt shingles

 

 

OTCQX: RGSE POWERHOUSE™ was Designed by Roofers for Roofers POWERHOUSE™ Warranty • 11 - year solar module parts • 20 - year shingle warranty • 24 - year power production POWERHOUSE™ Ratings • Class A fire rating • Class 2 hail rating (1½” ice ball) • UL 1703 impact rating (2” steel ball) • 200 mph wind rating Horseshoe Connector Asphalt Shingle Solar PV Insert Integrated Flashing Through Roof Connector 9

 

 

OTCQX: RGSE Solar Component • Top 10 Tier 1 solar cell & module manufacturer in China. • Current annual manufacturing capacity of over 8.6 gigawatts. China tariffs increase our COGS by 26% Plastic Resin • One of the fastest growing multi - national thermoplastic resin distributors serving custom injection molders in North America. Base Plate Molder & Shingle Assembly • One of the nation’s top injection molders. Nationwide Distribution Partner • Providing cutting - edge 3PL services for POWERHOUSE™. • Including network optimization, warehousing, final packaging and distribution to all 50 states. 10 Strong Supply Chain In Place

 

 

OTCQX: RGSE 11 We Recently Launched POWERHOUSE™ Nationwide Growing and training a nationwide network • Roofers • Solar Installers • Homebuilders • Equipment Distributors Currently, a network of 340 roofers, solar installers and homebuilders across 48 States We offer our network: • Free ongoing installation and sales training • Free marketing support • System design assistance Building Brand Awareness • To be featured on two upcoming National TV Shows • Member of Builder Partnerships Network with access to over 1,400 homebuilders nationwide • SEO and social media campaigns Size: 7.2 kW Skaneateles, NY June 25, 2019 11

 

 

OTCQX: RGSE 12 Every 30 Days We Issue a Report Card on our Launch to Investors First we grew a customer base Worked with our customers on specific sales opportunities and projects Opportunities result in signed Purchase Orders (“P/O”) After cash receipt, we ship and book revenue Business Update Network Size Sales Pipeline 1 Roofer/ Solar Installer P/O 1 Home Builder P/O 1 Backlog 1 Revenue 1 April 15 th 262 $2,225,296 $22,416 $0 $0 $20,624 May 15 th 288 6,576,507 215,112 0 172,630 42,482 June 15 th 310 7,173,558 24,074 4,941,734 5,069,144 69,496 July 15 th 318 5,541,919 99,803 2,704,037 7,766,816 1,932 August 15 th 329 15,553,146 182,022 0 7,751,123 60,097 September 15 th 335 17,131,493 118,201 0 7,802,769 40,129 October 15 th 340 $17,730,631 $140,773 0 7,760,886 $150,919 Current expectations for backlog conversion: Roofers/Solar Installers: Time their cash payment to RGS when job ready to install (permitting, interconnection, etc.) – Expectation is average of sixty days from date of purchase order Homebuilders: Time their cash payments to RGS over the construction period their communities are built – Expectation is communities are built ranging on average from six months to one year Our Expectation – We just started building pipeline and backlog, once fully up and running, higher revenue 1. See expanded definition in Glossary of Terms in Business Update filed under form 8 - K on September 16, 2019

 

 

OTCQX: RGSE 1 to 2 weeks 13 Timeline: Homeowners, Roofers and RGS 4 to 8 weeks 1 to 4 weeks 1 to 6 weeks Goes into RGS Sales Pipeline during this period Goes into RGS Backlog after roofer submits P/O RGS Revenue Recorded Activities: ط Site review ط Create initial design ط Present quote and benefits of POWERHOUSE™ ط Customer decision making process Activities: ط Sign contract with homeowner ط Finalize design & plans ط Create bill of material Activities: ط Submit purchase order (“P/O”) ط Permitting approval ط Utility approvals ط Incentive approvals Activities: ط Send payment ط Schedule material delivery ط Schedule installation

 

 

OTCQX: RGSE 14 Proceeds from Series 1 Preferred Stock to Commercialize POWERHOUSE™ Significant capital needed to “really make a go” of the POWERHOUSE™ opportunity Building brand awareness • Advertising: TV, radio, web, local presentations • Investing to improve the Homeowner experience • 3 rd party marketing consultants • Expanded SEO and digital presence • Grow sales team • International expansion • More attractive to customers with stronger balance sheet Improving the POWERHOUSE™ product • UL Certifications for roofing materials in additional to asphalt shingles • R&D (POWERHOUSE™ 4.0) Growing supply chain • Working capital to build inventory • US manufacturers Expected use of proceeds, actual amounts for any items dependent upon the ultimate size of the rights offering

 

 

OTCQX: RGSE 15 POWERHOUSE™ Unit Sales Opportunity Analysis Hypothetical Series 1 Preferred Stock Offering Amount $5,000,000 $10,000,000 $15,000,000 $20,000,000 Quarterly Series 1 Preferred Stock Cash Dividend $150,000 $300,000 $450,000 $600,000 Estimated Annual POWERHOUSE™ unit sales to break - even and pay dividend in cash 1 1,250 1,350 1,450 1,550 Comparison of Estimated Annual POWERHOUSE™ Units Sales to the following: Annual Addressable Market for POWERHOUSE™ (number of homes) 6,900,000 6,900,000 6,900,000 6,900,000 Percentage of Addressable Market 0.02% 0.02% 0.02% 0.02% Current number of Participants in POWERHOUSE™ Network 340 340 340 340 Number of units each participant must order during the year 3.7 4.0 4.3 4.6 2018 California residential and multifamily new home construction 2 116,400 116,400 116,400 116,400 Percentage of annual California Market 1.08% 1.16% 1.25% 1.34% 1) This cash basis break - even analysis does not reflect the initial investment in marketing, branding and sales organization activi ties and assumes no contribution from Solar Division towards recovery of overhead 2) http://journal.firsttuesday.us/the - rising - trend - in - california - construction - starts/17939/

 

 

OTCQX: RGSE NAHB Announces Finalists for Best of IBS Awards Winner Best Green Building Product – RGS Energy Finalist Best Energy Efficient Product – RGS Energy - nahb.org, Jan 28, 2019 RGS Energy Revives Dow’s Solar Roof, Claiming Better Efficiency & Lower Costs “RGS' sales strategy is notable for what the company chose not to do itself. It designs and assembles the tiles in the U.S., but sources the solar components from manufacturing partners.” “The arithmetic of savings for a new roof paired with solar tiles makes sense, in theory. RGS' job now is to prove it in the field. That's a tall order, based on the history of the market , but at least the field isn't very crowded .” - greentechmedia.com, Jan 25, 2019 Real Goods Solar Plows Ahead With Energy Plans “Real Goods Solar Inc. received a boost Wednesday on news the California Energy Commission approved the selling of its 3.0 solar shingle system in California, the nation's largest solar market” - thestreet.com, Jan 16, 2019 Powerhouse 3.0 Solar Shingles Head To The Roof “May the best shingle prevail.” - Cleantechnica.com, Dec 28, 2018 Tesla and RGS set for solar roof tile market share battle in US “Having two companies being public listed with two competing products in one country should make things more interesting and hopefully transparent. We could all soon be watching the birth of a new mainstream solar market or the trial and tribulations of a niche play .” - pvtech.org, Nov 9, 2018 16 Its not just us saying it

 

 

OTCQX: RGSE 17 Statutory Notice Disclaimer: Information on websites listed above is not incorporated by reference into this presentation. RGS Energy Headquarters 110 16 th Street, Suite 300 Denver, CO 80202 This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities. No money or other consideration is being solicited at this time, and if sent in response, will not be accepted. No offer to buy the Series 1 preferred stock or other securities can be accepted and no part of the purchase price can be received until the offering statement is qualified, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date of the offering statement. Any person’s indication of interest regarding the Series 1 preferred stock or this press release involves no obligation or commitment of any kind. A copy of the preliminary offering circular is available at [ ] and also may be obtained from Mackenzie Partners at 800.322.2885 (toll - free in North America) or at +1 212.929.5500, or by email at rightsoffer@mackenziepartners.com .

 

 

OTCQX: RGSE 18 Forward Looking Statements This presentation contains forward - looking that involve risks and uncertainties, including statements regarding RGS Energy’s res ults of operations and financial positions, and RGS Energy’s business and financial strategies. Forward - looking statements are neither historical facts nor assurances of futur e performance. Instead, they provide RGS Energy’s current beliefs, expectations, assumptions, forecasts, and hypothetical constructs about future events, and include sta tements regarding our future results of operations and financial position, business strategy, budgets, projected costs, plans and objectives of management for future op erations. The words “plan,” “believe,” “hypothetical,” “future,” “may,” “will,” “expect,” and similar expressions as they relate to us are intended to identify such fo rward - looking statements. Forward - looking statements should not be read as a guarantee of future performance or results and will not necessarily be accura te indications of the times at, or by, which such performance or results will be achieved, if at all. Forward looking statements are subject to risks and uncertainties th at could cause actual performance or results to differ materially from those expressed in or suggested by the forward - looking statements. Therefore, RGS Energy cautions you against r elying on any of these forward - looking statements. Key risks and uncertainties that may cause a change in any forward - looking statement or that could cause our actual results and financial condition to differ materially from those indicated in the forward - looking statements include: RGS Energy’s ability to manage supply chain in order to have producti on levels and pricing of the POWERHOUSE™ 3.0 shingles to be competitive; the ability of RGS Energy to realize profitable revenue growth from the sale and installation of POWERHOUSE™ 3.0, and to the extent, anticipated; RGS Energy’s ability to realize revenue from backlog and sales pipeline for POWERHOUSE™; RGS Energy’s ability to re alize revenue within expected timelines; RGS Energy’s ability to increase the rate of participation within its network; RGS Energy’s ability to obtain future purchase ord ers for POWERHOUSE™ deliveries; whether RGS Energy will realize increased market penetration from its brand and network supporting activities; competition in the built - in photovol taic solar system business; RGS Energy’s ability to successfully implement its revenue growth strategy, achieve its target level of sales, generate cash flow from operations, an d a chieve break - even and better results; the adequacy of, and access to, capital necessary to implement RGS Energy’s revenue growth strategy; the ability to obtain requis ite international product certification of POWERHOUSE™ 3.0; RGS Energy’s ability to satisfy the conditions and obligations under the POWERHOUSE™ license agreement; RGS Ene rgy’s ability to realize revenue from sales of POWERHOUSE™ arising from the California Energy Commissions’ mandate for solar systems with new home building commenc ing in 2020; RGS Energy’s ability to successfully and timely expand its POWERHOUSE™ 3.0 business outside of the United States; foreign exchange risks associated w ith the POWERHOUSE™ 3.0 business; intellectual property infringement claims and warranty claims related to the POWERHOUSE™ 3.0 business; cost and availability of raw materi als including the impact from changes in the price of oil and the foreign currency exchange rate for Chinese yuan; the continuation and level of government and utility in cen tives for solar energy; changes in general economic, business and political conditions, including tariffs on imported solar cells, and changes in the financial markets; ad verse effect on RGS Energy’s sales and business from changes in U.S. trade policy that result in increased “trade wars,” resulting in increased costs for solar components im por ted from China, which may reduce customer demand for RGS Energy’s product, or China limiting its trade with the United States; whether RGS Energy will receive any proc eed s from a rights offering; RGS Energy’s ability to pay dividends in cash on the Series 1 Preferred Stock; whether use of proceeds from rights offering will result in increased bra nd recognition and sales of POWERHOUSE™; the ability to obtain requisite product certification of POWERHOUSE™ 3.0 for roofs other than tile roofs; impact of installation of POWERHOUSE™ 3.0 on market value of buildings; and other risks and uncertainties included in RGS Energy’s filings with the Securities and Exchange Commission. You should read the section entitled “Risk Factors” in our 2018 Annual Report on Form 10 - K and in our Quarterly Report on Form 1 0 - Q for the quarter ended March 31, 2019 and June 30, 2019, each of which has been filed with the Securities and Exchange Commission, which identify certain of these and add itional risks and uncertainties. Any forward - looking statements made by us in this presentation speak only as of the date of this presentation. Factors or events that cou ld cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We do not undertake any obligation to publicly updat e o r revise any forward - looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. POWERHOUSE™ is a trademark of The Dow Chemical Company, used under license. RGS Energy is a registered trade name. RGS Energy files periodic and other reports with the Securities and Exchange Commissio n u nder its official name “Real Goods Solar, Inc.” This presentation does not constitute an offer to sell or solicitation to buy any securities of RGS Energy. © Copyright 2019 - 2018 Real Goods Solar, Inc. All Rights Reserved.