Banking & Finance  June 9, 2016

RGS Energy discloses plan for $10M public stock offering

LOUISVILLE – Solar-panel installer Real Goods Solar Inc., doing business as RGS Energy, saw its share price dip more than 15 percent Thursday following the announcement that the Louisville company is planning a new public offering of common stock and warrants in an attempt to raise up to $10 million.

RGS officials, in filings made with the U.S. Securities and Exchange Commission, said the proceeds of the sale would be used for general corporate purposes, including reducing accounts payable balances, paying down its revolving credit facility, and working capital to increase sales and operational capabilities.

The offering would be a sale of units that would include one share of RGS stock plus a warrant to purchase a yet-to-be-determined fractional share.

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The number of units and price of each has yet to be disclosed. RGS shares (Nasdaq: RGSE) closed at $5.71 apiece Wednesday but had slid to $4.83 by late in Thursday trading.

RGS last week conducted a 1-for-20 reverse stock split, a move the struggling company made to regain compliance with a Nasdaq rule requiring a minimum $1 share price.

Struggling RGS Energy’s strategy of late has been to optimize the infrastructure costs of operations and then obtain additional capital necessary for profitable growth. In April, the company completed a convertible note and warrant offering of $10 million and received gross cash proceeds of $750,000, with the remaining $9.25 million held in restricted cash.

In addition to the minimum share price rule, the company is also still trying to regain compliance with a Nasdaq rule requiring minimum stockholders equity of $2.5 million.

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