/C O R R E C T I O N -- Lighting Science Group Corporation/
SATELLITE BEACH, Fla., Oct 06, 2010 /PRNewswire via COMTEX/ -- In the news
release, Lighting Science Group Corporation Announces Recapitalization, Including
$25 Million Private Placement, and Commercial Agreement With Simon Property
Group, Inc., issued 06-Oct-2010 by Lighting Science Group Corporation over PR
Newswire, we are advised by the company that the seventh paragraph, second
sentence, should read "80.0%" rather than "73.2%" as originally issued
inadvertently. The complete, corrected release follows:
Lighting Science Group Corporation Announces Recapitalization, Including $25
Million Private Placement, and Commercial Agreement With Simon Property Group,
Inc.
Lighting Science Group Corporation (LSCG) ("LSG") is pleased to announce that it
has simplified its capital structure and obtained $25 million of additional
operating capital from a newly-formed entity controlled by Pegasus Partners IV,
L.P. and certain of its affiliates ("Pegasus"). Pegasus provided LSG $21 million
and $4 million was obtained from investors not associated with Pegasus, including
Simon Property Group, Inc. ("Simon"). In connection with such investment, Simon
also entered into a commercial agreement whereby LSG would be a preferred
supplier to properties owned by Simon and Simon would utilize LSG's products when
the economic and performance attributes of the LSG product are compelling. Simon
also agreed to engage in certain other promotional activities related to LSG
products.
LSG entered into a recapitalization agreement with Pegasus, the holder of a
majority of LSG's stock, pursuant to which:
A Pegasus-controlled entity purchased $20 million of common stock from LSG and
received an option until the earlier of the closing of a revolving credit
facility or December 31, 2010, to purchase up to an additional $5 million of
common stock at a price of $1.60 per share (which option was exercised in full to
effect the sale of $1 million of common stock to Pegasus and the remaining $4
million of common stock to Simon and other investors not affiliated with
Pegasus);
LSG exchanged common stock for all of its outstanding Series B Preferred Stock,
Series C Preferred Stock, Series E Non-Convertible Preferred Stock and warrants
issued in conjunction with the Series E Non-Convertible Preferred Stock;
Holders of all of the warrants issued in conjunction with the Series C Preferred
Stock exercised such warrants on a cashless basis for common stock;
Pegasus approved an amendment to the Certificate of Designation concerning LSG's
Series D Non-Convertible Preferred Stock ("Series D Preferred Stock") which will
convert all shares of Series D Preferred Stock into common stock;
Pegasus waived certain anti-dilution rights on behalf of all holders of the
warrants issued in conjunction with the Series D Preferred Stock ("Series D
Warrants"); and
LSG agreed to amend all of the Series D Warrants to provide that, upon the
earlier of a change of control or eighth anniversary of their original issuance,
their effective exercise price would be reduced to approximately $1.02 to $1.05
per share of common stock (after application of accelerated or term dividend
accruals), depending upon the date of issuance of the related shares of Series D
Preferred Stock (except in the case of the Series D Warrants of Koninklijke
Philips Electronics N.V., whose exercise price would decrease to approximately
$7.05 per share of common stock).
The agreement was negotiated on LSG's behalf by a committee of independent and
disinterested directors that, based in part upon the assessment of the
committee's financial advisor, McColl Partners, LLC, determined that the
transaction was advisable and in the best interests of LSG and its stockholders.
"I am pleased that our independent directors sought this recapitalization as a
means to help investors more easily understand an investment in our company, with
the ultimate goal of increasing the value of our common stock," said Zach Gibler,
Chairman and Chief Executive Officer of LSG. "They spent many hours negotiating
the recapitalization, and we believe the $25 million investment should provide us
with the capital we need to expand our production to meet increasing demand."
Automatic conversion of all outstanding shares of Series D Preferred Stock into
common stock will require LSG to amend its charter. LSG has received the
requisite consent from its stockholders and board of directors for such amendment
and expects to amend its Certificate of Incorporation to effectuate the amendment
approximately 20 days after it mails an information statement concerning the
recapitalization to stockholders, which LSG expects to occur during the fourth
quarter of 2010. After the amendment is effective, holders of Series D Preferred
Stock will be entitled to receive, based upon their Series D Preferred Stock's
date of issuance, approximately 0.64 to 0.66 shares of common stock for each
share of Series D Preferred Stock they hold. Information about how holders of
Series D Preferred Stock may receive common stock certificates for Series D
Preferred Stock certificates will be provided in a notice mailed to each holder
of Series D Preferred Stock.
Assuming no further changes to LSG's equity, following the recapitalization, LSG
expects to have 125,485,985 shares of common stock outstanding and no shares of
preferred stock outstanding.
Prior to the recapitalization, Pegasus held approximately 73.2% of the shares of
LSG's common stock on a fully diluted basis and preferred stock of LSG with an
aggregate liquidation preference of approximately $122 million. Following the
recapitalization, including the sale of $25 million of common stock and the
resulting anti-dilution adjustments to the exercise price of certain outstanding
warrants (and assuming no other changes to LSG's equity), Pegasus will hold
approximately 80.0% of the shares of LSG's common stock on a fully diluted basis
and no shares of LSG's preferred stock and, therefore, all prior preferences of
such preferred stockholders will be eliminated.
About Simon Property Group
Simon Property Group, Inc. is an S&P 500 company and the largest real estate
company in the United States. The company currently owns or has an interest in
393 retail real estate properties comprising 263 million square feet of gross
leasable area in North America, Europe and Asia. Simon Property Group is
headquartered in Indianapolis, Indiana and employs more than 5,000 people
worldwide. The company's common stock is publicly traded on the NYSE under the
symbol "SPG." For further information about Simon Property Group, visit the
company's website at simon.com.
About Lighting Science
Lighting Science Group Corporation designs, develops, manufactures and markets
LED lighting solutions that are environmentally friendlier and more energy
efficient than traditional lighting products. Lighting Science Group offers
retrofit LED lamps in form factors that match the form factor of traditional
lamps or bulbs and LED luminaires for a range of applications including public
and private infrastructure for both indoor and outdoor applications. Lighting
Science Group Design Works business unit designs, develops and manufactures
custom LED lighting solutions for architectural and artistic projects. Lighting
Science Group is headquartered in Satellite Beach, Florida; Lighting Science
Group Design Works business unit is based in Rancho Cordova, California; the
company's European operations are based in Goes, The Netherlands; and, the
company has a sales office in Sydney, Australia. Lighting Science Group has over
200 workers in its Satellite Beach, Florida manufacturing facility that build
lighting products from domestic and imported parts. Lighting Science Group is a
Pegasus Capital Advisors portfolio company. More information about Lighting
Science Group is available at lsgc.com.
Forward-Looking Statements
Certain statements in this press release may constitute "forward-looking
statements" made under the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. The statements include, but are not limited to,
statements regarding LSG's ability to effect the conversion of the Series D
Preferred Stock into common stock, file an information statement with the
Securities and Exchange Commission concerning such transaction and increase
production using terminology such as "expects," "should," "would," "could,"
"intend," "plan," "anticipate," "believe," and "potential." Such statements
reflect the current view of LSG with respect to future events and are subject to
certain risks, uncertainties and assumptions. Known and unknown risks,
uncertainties and other factors could cause actual results to differ materially
from those contemplated by the statements. In evaluating these statements, you
should specifically consider various factors that may cause our actual results to
differ materially from any forward-looking statements. Readers should carefully
review the risk factors detailed under "Risk Factors" in our most recent Form
10-K and subsequent Form 10-Qs.
SOURCE Lighting Science Group Corporation |
