LSI INDUSTRIES INC. (NASDAQ:LYTS) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement.

Stock Purchase Agreement

On February 21, 2017, LSI Industries Inc., an Ohio corporation
(LSI or the Company), Atlas Lighting Products,
Inc., a North Carolina corporation (Atlas), James Hewes
Bennett and Rector Samuel Hunt III (Mr. Bennett and Mr. Hunt are
collectively referred to as Sellers), entered into a Stock
Purchase Agreement (the Purchase Agreement). to the
Purchase Agreement LSI acquired all of the outstanding shares of
capital stock of Atlas from Sellers and Atlas became a direct
wholly owned subsidiary of LSI. The Purchase Agreement provides
for an aggregate purchase price of approximately $97.5 million,
including $96,893,000 in cash andwarrants valued at approximately
$0.6 million asdescribed below. The purchase price nets certain
Seller expenses.In connection with the Purchase Agreement
theCompany secured a buyer-side representation and warranty
insurance policyand a portionof the purchase pricewas placed in
an escrow account for the purpose of securing the indemnification
obligations of Sellers under the Purchase Agreement. Also on
February 21, 2017, Atlas entered into a Lease Agreement with
Atlas Mebane Street Properties, LLC a North Carolina limited
liability company owned by Sellers which holds the property
located at 1406 South Mebane Street, Burlington, North Carolina.

The Purchase Agreement contains representations and warranties,
covenants, conditions and indemnification provisions. The
foregoing description of the Purchase Agreement and the
transactions contemplated thereby does not purport to be complete
and is subject to and qualified in its entirety by reference to
the Purchase Agreement, a copy of which is attached hereto as
Exhibit 2.1 and the terms of which are incorporated herein by
reference.

The Purchase Agreement has been included to provide investors and
security holders with information regarding its terms. It is not
intended to provide any other factual information about the
Company or Atlas. The representations, warranties and covenants
contained in the Purchase Agreement were made only for purposes
of that agreement and as of specific dates, were solely for the
benefit of the parties to the Purchase Agreement and may be
subject to limitations agreed upon by the contracting parties,
including qualification by confidential disclosures exchanged
between the parties in connection with the execution of the
Purchase Agreement. The representations and warranties may have
been made for the purposes of allocating contractual risk between
the parties to the Purchase Agreement instead of establishing
these matters as facts, and may be subject to contractual
standards of materiality and material adverse effect applicable
to the contracting parties that differ from those applicable to
investors or under applicable securities laws. Investors are not
third party beneficiaries under the Purchase Agreement and should
not rely on the representations, warranties and covenants, or any
descriptions thereof, as characterizations of the actual state of
facts or condition of the Company or any of its subsidiaries or
affiliates. Moreover, information concerning the subject matter
of the representations, warranties and covenants may change after
the date of the Purchase Agreement, which subsequent information
may or may not be fully reflected in the Companys public
disclosures.

A copy of the press release issued by the Company on February 21,
2017 related to the Purchase Agreement is filed herewith and
incorporated herein by reference.

Warrant Agreements

In connection with the transactions contemplated by the Purchase
Agreement, the Company issued to Sellers warrants to purchase an
aggregate of 200,000 shares of the Companys Common Stock at an
exercise price of $9.95 per share expiring February 2022. The
form of Warrant Agreement entered into by Sellers and the Company
is attached hereto and incorporated herein by reference as
Exhibit 4.1

Amended Loan Documents

On February 21, 2017, LSI entered into a Third Amendment to Loan
Documents with PNC Bank, National Association (the Bank).
The Third Amendment to Loan Documents amends LSIs Amended and
Restated Loan Agreement with the Bank to provide that the loans
under the facility provided by the Bank shall include a revolving
credit loan (Revolving Credit Loan) in the principal
amount of up to $100 million. Under the Third Amendment to Loan
Documents LSI also may request that the Bank issue trade or
standby letters of credit in the aggregate amount of $10 million
under the Revolving Credit Loan. LSI borrowedapproximately
$66million under the Revolving Credit Loan to finance the
acquisition of Atlas. The Revolving Credit Loan is secured by
certain of the assets of LSI.

The foregoing description of the Third Amendment to Loan
Documents does not purport to be complete and is subject to and
qualified in its entirety by reference to the Third Amendment to
Loan Documents, a copy of which is attached hereto as Exhibit 4.2
and the terms of which are incorporated herein by reference.

Item 2.01 Completion of Acquisition or Disposition of
Assets.

On February 21, 2017, LSI consummated the transactions
contemplated by the Purchase Agreement and acquired all of the
outstanding shares of capital stock of Atlas from Sellers. The
information in Item 1.01 under Stock Purchase Agreement is
incorporated by reference in this Item 2.01.

Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance SheetArrangement
of a Registrant.

On February 21, 2017, LSI entered into the Third Amendment to
Loan Documents with PNC Bank, National Association. The
information in Item 1.01 under Amended Loan Documents is
incorporated by reference in this Item 2.03.

Item 7.01 Regulation FD Disclosure.

On February 21, 2017 the Company issued a press release
announcing the acquisition of Atlas. The press release is
furnished as Exhibit 99.1 hereto and is incorporated herein by
reference.

“Safe Harbor” Statement under the Private Securities
Litigation Reform Act of 1995

This report contains certain forward-looking statements that are
subject to numerous assumptions, risks or uncertainties.The
Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking statements.Forward-looking statements
may be identified by words such as estimates, anticipates,
projects, plans, expects, intends, believes, seeks, may, will,
should or the negative versions of those words and similar
expressions, and by the context in which they are used.Such
statements, whether expressed or implied, are based upon current
expectations of the Company and speak only as of the date
made.Actual results could differ materially from those contained
in or implied by such forward-looking statements as a result of a
variety of risks and uncertainties over which the Company may
have no control.These risks and uncertainties include, but are
not limited to, the impact of competitive products and services,
product demand and market acceptance risks, potential costs
associated with litigation and regulatory compliance, reliance on
key customers, financial difficulties experienced by customers,
the cyclical and seasonal nature of our business, the adequacy of
reserves and allowances for doubtful accounts, fluctuations in
operating results or costs whether as a result of uncertainties
inherent in tax and accounting matters or otherwise, failure of
an acquisition or acquired company to achieve its plans or
objectives generally, unexpected difficulties in integrating
acquired businesses, the ability to retain key employees of
acquired businesses, unfavorable economic and market conditions,
the results of asset impairment assessments, the ability to
maintain an effective system of internal control over financial
reporting, the ability to remediate any materialweaknesses in
internal control over financial reporting,and any other risk
factors that may be identified herein.Readers are cautioned to
not place undue reliance on these forward-looking statements.In
addition to the factors described in this paragraph, the risk
factors identified in the Companys Form 10-K and other filings
the Company may make with the SEC constitute risks and
uncertainties that may affect the financial performance of the
Company and are incorporated herein by reference.The Company does
not undertake and hereby disclaims any duty to update any
forward-looking statements to reflect subsequent events or
circumstances.

Item9.01 Financial Statements and Exhibits.

About LSI INDUSTRIES INC. (NASDAQ:LYTS)

LSI Industries Inc. is a provider of corporate visual image solutions to the petroleum/convenience store industry. The Company designs and develops aspects of the solid-state light emitting diode (LED) lighting, from the electronic circuit board, to the software to drive and control the LEDs, to the structure of the LED product. It operates through three segments: Lighting, Graphics and Technology. The Lighting Segment manufactures and markets outdoor and indoor lighting and lighting controls for the commercial, industrial and multi-site retail markets, including the quick-service and automotive markets. The Graphics Segment manufactures and sells exterior and interior visual image elements related to signage and graphics, including integrated digital solutions. The Technology Segment designs, engineers, and manufactures electronic circuit boards, assemblies, lighting controls and large format solid state LED video displays. The Company provides a range of lighting control solutions.

LSI INDUSTRIES INC. (NASDAQ:LYTS) Recent Trading Information

LSI INDUSTRIES INC. (NASDAQ:LYTS) closed its last trading session up +0.30 at 10.25 with 58,019 shares trading hands.