Revolution Lighting Technologies, Inc.

Revolution Lighting Technologies, Inc. (“Revolution”) designs, manufactures, markets, and sells light-emitting diode lighting solutions for various usages to industrial, commercial, and government markets. The shareholder derivative actions brought on behalf of Revolution allege that from 2014 through 2018, Revolution improperly recorded its revenue using the bill-and-hold method of revenue accounting. In August 2018, Revolution disclosed that it had identified certain deficiencies in its revenue recognition patterns. Specifically, Revolution concluded that the timing of its revenue recognition was incorrect, such that its annual reported revenue should have been less in 2014 to 2016 by, respectively, about $5 million, $7 million, and $5 million, and its revenue should have been more in 2017 and the first half of 218 by about, respectively, $11 million and $3 million. By October 2018, the SEC was investigating Revolution’s revenue recognition practices for its financial statements covering 2014 through the second quarter of 2018, and due to the alleged deficiencies related to its internal controls, Revolution was unable to timely file its periodic reports with the SEC. Hynes & Hernandez, LLC was part of the litigation team that negotiated a settlement conferring substantial benefits on Revolution.

The settlement reforms included:

• Internal Accounting Practices. Revolution will undertake changes to processes by which inventory bill and hold revenue is tracked and accounted for. In addition to other changes, the Company’s accounting department shall now provide monthly reports disclosing where inventory is physically maintained and whether is it subject to bill and hold accounting. Further, any business divisions that are known to use bill and hold accounting shall be directly solicited when preparing such monthly reports. Additionally, the changes provide for the timing of such reports (within three days following the close of the month) and the reporting chain for such information (provided to the Chief Executive Operating Officer, Chief Operating Officer, and the Chief Operations Officer.

• Establishment of a Corporate Compliance Committee and a Corporate Compliance Officer. As part of this Settlement, Revolution Lighting will establish both a Corporate Compliance Committee and a Corporate Compliance Officer position. The Compliance Committee will be principally charged with oversight of Revolution’s compliance with regulatory risk. This will include oversight of Revolution’s Codes of Conduct and ethical responsibilities of directors, officers and employees of the Company. The Compliance Committee shall be responsible for review and evaluation of all compliance complaints and have the power to conduct independent investigations into such complaints. The Compliance Committee shall have a direct line of reporting to the Board. Similarly, the Corporate Compliance Officer (who shall chair the Compliance Committee) shall be primarily responsible for overseeing Revolution’s ethics and compliance programs. This will include implementing procedures for measuring and evaluating compliance and informing senior management of the same.

• Enhanced Board Independence and Director Education. The reforms bolster the Board’s independence and competence by: (i) adding an additional independent director to the Board; (ii) strengthening the definition of director independence requiring and obligations for appointment of independent board members; and (iii) revising Revolution’s guidelines to limit directors to serving on, at most, two other public companies’ boards of directors.

• Additional Audit Committee Responsibilities. Revolution’s Audit Committee, in addition to oversight of the new accounting policies, will be responsible for review of the accounting treatment for significant new transactions and greater supervision of the application of the Company’s codes of conduct and ethics as it pertains to financial transactions and in particular, bill and hold transactions. The Audit Committee shall also affirmatively determine if related-party transactions are in the best interest of the Company and its shareholders. Revolution shall retain an independent consultant to conduct an annual materiality /risk analysis for the Company.

• Additional Governance Changes. In addition, Revolution will adopt changes to its Nominating and Compensation Committee for the purpose of obtaining qualified new directors and provide a more informed basis for determining compensation of Revolution’s officers and directors. Additionally, the Company has adopted a mandatory training program for all employees concerning the Company’s codes of conduct and ethics.