Senior Secured Lender Takes Action to Preserve Enterprise Value After Review Identifies Material Issues
LOS ANGELES, CA, UNITED STATES, January 19, 2026 /EINPresswire.com/ — Applied Real Intelligence (the “Lender”), the senior secured lender to Lights Out Sports (the “Company”), announced today that the Company has paused operations following an extended period of financial distress, default, and forbearance, and after identifying material financial, operational, and contractual issues that became apparent during the Lender’s review of the Company.
The Lender initially provided senior secured debt financing to the Company in May 2024 based on a strong belief in the underlying brand, platform, and long-term potential of the business, and worked constructively with the Company over an extended period to support its operations and strategic objectives.
The Company had been in default and/or forbearance on its loan obligations for several months. Despite extensive accommodation, the Company was unable to cure the defaults or meet its ongoing financial obligations. As a result of the Company’s continued non-performance, the Lender exercised its contractual control rights and appointed a representative to assume leadership control of the Company in order to stabilize operations and preserve enterprise value.
Following the leadership and governance transition announced on January 8, 2026, the Lender conducted a review of the Company in furtherance of its fiduciary and governance responsibilities. This review included securing and analyzing the Company’s books and records, engaging directly with employees and senior leadership, and coordinating with vendors, sponsors, financial partners, and professional advisors.
Through this process, the Lender identified material financial, operational, and contractual issues that were not previously disclosed or fully apparent prior to the governance transition. The scope and severity of these issues only became clear after direct engagement with stakeholders and a comprehensive review of the Company’s records, obligations, and liquidity position.
In light of these findings, the Lender is focused on preventing further value erosion, conserving liquidity, and conducting an orderly evaluation of available strategic alternatives.
Investor Relations
Applied Real Intelligence
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