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Matters

Company Which Acquired Retail Supplier In "Default" Under Sale Agreement

May 22, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Premier Holding Corporation, which last fall purchased a majority stake in retail supplier Lexington Power & Light (LPL), reported in a 10Q that it had, "defaulted on its purchase obligations for the LPL in April 2015, which required installment payments every 90 days but no payment had been made in 2015."

"Per the acquisition agreement, any failure to make timely payments as set forth under the purchase price notes, the original member in Lexington shall have the right to promptly (i) terminate the acquisition agreement and any further obligation hereunder; and (ii) the sale and transfer of Purchased Interests to the Purchaser shall be deemed terminated (the 'Termination Rights'); provided, that the Purchaser shall be entitled to retain an amount of Membership Interests equal to (x) the amount of issued and outstanding Membership Interests issued and outstanding multiplied by (y) the quotient of (i) the amount of cash actually paid by the Purchaser pursuant to the Purchase Price Note and (ii) $6,000,000. Both parties are still in the process to finalize the settlement," Premier Holding Corporation said.

Premier Holding Corporation in the 10-Q also noted that its financials, "raise substantial doubt," about the company's ability to continue as a going concern. Premier Holding Corporation has made similar statements in prior 10Ks/10Qs.

Specifically, Premier Holding Corporation noted that, "The Company has sustained [cumulative] operating losses of $22,133,549. The Company’s continuation as a going concern is dependent on management’s ability to develop profitable operations, and / or obtain additional financing from its stockholders and / or other third parties. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. If management projections are not met, the Company may have to reduce its operating expenses and to seek additional funding through debt and/or equity offerings."

For the three months ended March 31, 2015, Premier had a net loss of $850,026 as compared to a net loss of $1,017,378 for the three months ended March 31, 2014.

The loss from operations at Premier's Lexington Power & Light was $271,000 for the current quarter. Lexington Power & Light revenues for the quarter were $2.3 million, and gross profit was $143,000. A comparison to the year-ago was not provided as Lexington Power & Light was not acquired until late 2014.

The loss from operations at Premier's broker, The Power Company USA, was $12,000 for the current quarter. The Power Company USA revenues for the quarter were $1.1 million, and gross profit was $1.1 million.

Total Premier Holding Corporation revenue for the three months ended March 31, 2015 was $3,416,410 compared to $653,257 for the three months ended March 31, 2014. The increase was due to the acquisition of Lexington Power & Light in 2014 and increasing sales from Premier's broker The Power Company USA, LLC.

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