DENVER — After being delisted from the Nasdaq, RGS Energy has tried to regroup by changing its business model and raising $3.3 million in capital through a stock and warrant offering.

As Seeking Alpha reported, it was not the start to the year the company was hoping for after announcing it had started taking orders for the Powerhouse solar shingle system and that the California Energy Commission added the system to its list of “eligible photovoltaic modules.”

RGS (Real Goods Solar) Energy manufacturers the Powerhouse Solar Shingle System after it struck an exclusive deal in 2017 with Dow Chemical to produce and sell shingles featuring the Powerhouse technology developed by Dow. 

According to a Nov. 2018 article in PV Tech, RGS was expected to battle for market share with Tesla in the solar shingle market.

However, in mid-February the Denver-based company announced it was not in compliance with Nasdaq’s $1 per share minimum bid price requirement for maintaining its listing on the Nasdaq Capital Market. As a result, it was listed on the OTCQX Best Market, where shares were trading at about 16 cents each on Wednesday, April 10. 

Not long after the delisting, the company announced that leadership “has commenced a process to explore strategic alternatives focusing on maximizing shareholder value.” The company said the “strategic alternatives” may include a sale of the company, a merger, or a “strategic investment financing which would allow the company to continue its current business plan of commercializing Powerhouse solar shingles.”

At the end of March, the company announced another decision: to exit its mainland residential solar business and focus on the Powerhouse in-roof shingle market. RGS said it lost about $5.5. million through its mainland residential solar business in 2018.

The company said it would retain both the small commercial business and its Hawaii-based subsidiary, Sunetric since the segments “do not require material use of our cash.”

“By exiting the unprofitable mainland residential solar business, the company will reduce its overall cash outflow with the goal of maximizing future shareholder value,” the company said in a release.

RGS specifically pointed to California’s new solar mandate as a “substantial opportunity” for the company.

About a week ago, the company announced it had completed a $3.3 million registered offering of common stock and warrants.

“You may recall that we mentioned during the third quarter conference call that because we started our Powerhouse business from scratch, the first few quarters would be bumpy until we could achieve an equilibrium between our demand and supply,” said Dennis Lacey, RGS Energy’s CEO, in a release. “Our commercial launch coincided with the historically slow season for solar system sales in the first quarter, so it has been challenging. However, we have over 250 local roofers in our system, recently won ‘Best Energy Efficient Product’ award for Powerhouse at NAHB IBS, and expect to do better as we enter the historically busy season for solar system sales. Our less than expected start to 2019 made it necessary for us to raise additional capital. We appreciate the support of our shareholders.”

However, Seeking Alpha said the capital raised “buys another couple of months at the expense of existing equityholders to finally get some traction with its ongoing Powerhouse System commercialization or come up with a more sustainable solution for its capital needs.”

“Given the company's long-standing history of over-promise and under-deliver, I do not expect a positive outcome,” wrote Seeking Alpha’s Henrik Alex.