RGS plans 3rd reverse stock split to boost share price

LOUISVILLE — Troubled solar installer Real Goods Solar Inc. (Nasdaq: RGSE) is contemplating its third reverse stock split in almost two years, with the solar company striving to maintain its listing on the Nasdaq stock exchange.

The company, which does business as RGS Energy, filed paperwork Dec. 20 with the U.S. Securities and Exchange Commission announcing a special meeting of shareholders to approve a potential reverse split. Shareholders will meet on Jan. 23 at RGS’ headquarters at 833 W. South Boulder Road in Louisville.

An RGS spokesman did not immediately return a call seeking comment.

The reverse stock split would apply to all outstanding shares of Class A stock, at a ratio within a range of one-for-five to one-for-35, according to the filing.

Shareholders also will vote whether to authorize the board of directors to determine the specific ratio and timing of the reverse stock split, which could occur at any time prior to Jan. 23, 2018.

RGS has effected two splits prior to this one, including one-for-20 splits on May 18, 2015, and June 2, 2016.

RGS’ stock price has struggled in recent years and as of Nov. 4, 2016, fell below Nasdaq’s minimum $1 per share requirement for continued inclusion on the exchange. The stock closed at 22 cents per share Dec. 20.

“Our board of directors has concluded that, absent a significant market-driven increase in our stock price, the best way for us to increase the closing bid price of our Class A common stock to the level satisfactory for meeting the continued listing requirements of NASDAQ is to affect the Reverse Stock Split,” the company said in its SEC filing. “We believe that retaining listing of our Class A common stock on Nasdaq improves the marketability and liquidity of our Class A common stock by making it available to a broader range of potential investors.”

The company previously received a letter from Nasdaq on April 14, 2016, notifying it that it no longer was in compliance with Nasdaq’s listing requirements. At the time, RGS failed to maintain a minimum of $2.5 million in shareholders’ equity or other standards. On July 7, the company was granted a 180-day extension to re-establish compliance, to Oct. 11, 2016. The company received a further notice of non-compliance with terms of the extension on Oct. 17.

RGS in December completed a $4.1 million public offering of common stock and warrants.

The company recorded a loss of $14.85 million through the first nine months of 2016, compared with a net loss of $6.57 million for the same period in 2015. Its third-quarter loss in 2016 totaled $7.74 million, compared with a loss of $4.28 million in third quarter 2015.

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