Trans-Lux Corp (TNLX)

[Enterprising Investor]

Let’s make a side deal (3/06/19)

Entry into Material Definitive Agreement

On March 4, 2019, Trans-Lux Corporation (the “Company”) and Unilumin North America, Inc. (“Unilumin”) entered into a side letter to the Securities Purchase Agreement dated as of November 2, 2018 (the “Side Letter”). The Side Letter provides, among other things, (i) the extension of the expiration date of the Company’s $2,500,000 rights offering from March 1, 2019 to April 5, 2019 (the “Rights Offering”); (ii) the exercise by Unilumin on March 4, 2019 of Warrants to purchase 2,061,856 shares of Common Stock which was conditioned upon the conversion of at least 91% of the Company’s outstanding Series B Convertible Preferred Stock into Common Stock; and (iii) the exercise by Unilumin of Warrants to purchase 3,608,247 shares of Common Stock simultaneously with the closing of the Rights Offering.

On March 1, 2019, and effective February 28, 2019, the Company and certain of its subsidiaries entered into a Forbearance Agreement to Credit and Security Agreement (the “Forbearance Agreement”) with CNH Finance Fund I, L.P. (formerly known as SCM Specialty Finance Opportunities Fund (“Lender”). The Forbearance Agreement provides that the Lender will forbear from declaring previous events of default provided, among other things, that (i) the Company makes payment in full by March 10, 2019 of all of its obligations under the Revolving Facility (approximately $910,000); (ii) the Company consummates an equity raise of at least $9.5 million, inclusive of $1,500,000 previously raised in November 2018 from Unilumin’s purchase of Common Stock and $2,000,000 the Company received from the Warrant exercise described above; and (iii) by April 15, 2019, the Company makes payment in full of the amounts owed under the Term Loan (approximately,$540,000).

The Company issued 2,061,856 shares of Common Stock pursuant to the exercise of the Warrant and 1,586,400 shares of Common Stock pursuant to the conversion of Series B Preferred Stock. The Series B Convertible Stock converted constituted 96.1% of the Company’s outstanding Series B Convertible Preferred Stock.

As a result of such issuances, Unilumin and GAMCO (and affiliated entities) currently own approximately 46.4% and 28.4%, respectively, of the Company’s outstanding Common Stock, exclusive of Common Stock underlying derivative securities.

The Common Stock issued in connection with the exercise of the Warrant and the conversion of the Series B Convertible Preferred Stock was issued in reliance of the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended.

On February 19, 2019, an aggregate of $35,000 principal amount of the Company’s outstanding 8¼% Limited Convertible Senior Subordinated Notes due 2012 were redeemed by the Company for $7,000.

https://www.sec.gov/Archives/edgar/data/99106/000151316219000057/form8k.htm