Nexxus Lighting has completed the sale of certain assets of its legacy Commercial and Pool businesses for Approximately $2.3 Million to Next Step Products, LLC.
 
The divested businesses contains the manufacture, marketing and sale of fiber optic lighting and LED products used for applications in commercial, architectural, pool and spa markets, but apart from Company's Array business or the business of the Company's wholly-owned subsidiary, Lumificient Corporation.

The divested assets consist primarily of trade receivables, inventory, equipment and intangible assets related to the legacy businesses.

According to the terms of the transaction, Next Step paid Nexxus $1.0 million at closing, and will pay approximately $1.3 million over the following 7 months under the terms of the purchase agreement and a related promissory note. The $1.0 million cash payment at closing includes the $750,000 of non-refundable deposits previously made by Next Step.

The promissory note is secured by all of the assets of Next Step and all of Next Step's obligations under the transaction documents are guaranteed by affiliates of Next Step. Next Step also assumed certain trade payables and all warranty obligations, whether arising before or after closing.

Mark Masterman, Nexxus' former division president for the businesses, organized Next Step and will continue to manage the businesses.

In the meantime, Next Step will operate from Nexxus' Orlando facility under a sublease agreement for a period of between 6 and 9 months. Nexxus has transferred warehouse and distribution operations for the Array product line to a 3rd party distribution company and there will be no disruption of Array shipments due to this transaction.

The Company will report a nonrecurring charge of approximately $0.6 million to $0.8 million in the 3rd quarter related to the transaction. This charge includes approximately $0.6 million for the write-down of inventory.