RGS Energy reaps $3.5M in net proceeds from public offering

LOUISVILLE – Real Goods Solar Inc. (Nasdaq: RGSE), which does business as RGS Energy, announced Friday that it has closed its public offering of 7 million units of Class A common stock and Series A, B, C, D and E warrants.

The units sold for 50 cents apiece, and RGS will pull in about $2.75 million in net proceeds after expenses and fees associated with the sale are deducted. Participants in the funding round also exercised a portion of the Series B warrants that will provide an additional $800,000 in net proceeds for RGS.

WestPark Capital Inc. acted as exclusive placement agent in the offering.

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The new funds come as RGS struggles to recover from a 2014 and early 2015 that’s seen the company’s share price decimated. The company closed its commercial solar segment to concentrate on the residential market. But the acquisition of Hawaiian-based Sunetric hasn’t gone as well as planned as regulation changes in that state have made rooftop solar a less attractive option.

Cash-strapped RGS has a $55 million backlog of projects that it is struggling to fund, and is the subject of a pair of lawsuits related to a $7 million private placement offering last summer.

RGS shares closed at 41 cents apiece Friday, down 4 cents from Thursday’s close.

“This financing immediately strengthens our financial position by $3.5 million and provides the right, subject to certain conditions, to execute our ‘put option’ on the Series B warrants in the future for additional capital of over $7 million,” CEO Dennis Lacey said in a prepared statement. “As recently reported, we made progress with our cash management last quarter and this financing allows us to work with our vendors and other installation partners to convert our $55 million backlog into revenue and cash.”