SAN DIEGO, CALIFORNIA--(Marketwired - Jan. 20, 2017) - OneRoof Energy, Inc. ("OneRoof" or the "Company"), a residential solar services provider and wholly-owned subsidiary of OneRoof Energy Group, Inc. ("OneRoof Energy") (TSX VENTURE:ON) today announced that it is currently in default under its head office lease for failure to pay rent. This default also creates a default under the Company's secured loan facilities, giving the secured lenders the right to accelerate and demand immediate payment of all outstanding balances, including principal and accrued interest, under such loans, totaling approximately US$100 million in the aggregate. The Company is in discussions with its landlord regarding the head office lease default; however there can be no assurance that any compromise will be reached, and the Company could be forced to vacate its office space, in addition to its liability for unpaid rent (which is currently in excess of US$160,000). The Company has not received any notice of default or acceleration from its secured lenders; however there can be no assurance that the lenders will not cause such indebtedness to be accelerated and immediately due and payable in full. The Company's liabilities under the secured loan facilities greatly exceeds the value of its assets, and an acceleration of the secured loans could result in the foreclosure of all or substantially all of the Company's assets.
In connection with the wind down of its operations, the Company amended the employment agreements of David Field, president and chief executive officer, and Dalton Sprinkle, senior vice president and general counsel. Mr. Field's employment agreement was amended to eliminate all bonus potential and reduce the severance obligations payable to Mr. Field in the event his employment is terminated without Cause or he resigns for Good Reason (as such terms are defined in the employment agreement). Previously, the severance obligations in Mr. Field's employment agreement provided for the payment in cash of 12 months of salary, plus a portion of his bonus compensation, plus reimbursement of COBRA health costs for 12 months (totaling over US$425,000 in the aggregate). As revised, Mr. Field will be entitled to a severance payment of US$266,000 if substantially all of the Company's solar project assets are subject to definitive sale or refinancing agreements on or prior to February 28, 2017, or if he is terminated prior to February 28, 2017 without Cause or resigns for Good Reason (the "Conditions"). If the Conditions are not satisfied, Mr. Field would be entitled to severance in the amount of US$133,000. Mr. Sprinkle's employment agreement was amended to eliminate all bonus potential and severance obligations in the event he is terminated without Cause or resigns for Good Reason (as such terms are defined in the employment agreement), and to change his salary from $280,000 per year to a daily rate of US$2,800 per day, which equates to US$350 per hour. Previously, the severance obligations in Mr. Sprinkle's employment agreement provided for the payment in cash of 12 months of salary, a portion of his bonus compensation, and reimbursement of COBRA health costs for 12 months (totaling over US$300,000 in the aggregate).
Caution Regarding Forward-Looking Information
Certain statements contained in this document, including those that express management's expectations or estimates regarding the Company's future performance, its ability to meet its obligations and the future compensation of certain executive officers are "forward-looking information" within the meaning of applicable securities laws. Forward-looking information is necessarily based on a certain number of estimates and assumptions, which, while considered plausible by the management when they are made, are inherently subject to significant commercial, economic and competitive risks and uncertainties. We advise investors not to rely unduly on forward-looking information. The Company further declines any intention or obligation to publicly update this forward-looking information, whether due to new information, or future or other events, unless required by applicable law.
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