Item 1.01 Entry into a Material Definitive Agreement.
TVT Capital, LLC Agreement for the Purchase and Sale of Future Receipts
On January 25, 2018, DPW Holdings, Inc., formerly known as Digital Power Corporation, a Delaware corporation (the “Company”) entered into two Agreements for the Purchase and Sale of Future Receipts (together, the “Agreements”) with TVT Capital LLC (“TVT”), pursuant to which Agreements the Company sold up to (i) $562,125 in Future Receipts of the Company to TVT for a purchase price of $375,000 (“Agreement No. 1”) and (ii) $337,275 in Future Receipts of the Company for a purchase price of $225,000 (“Agreement No. 2”). The term “Future Receipts” means cash, check, ACH, credit card, debit card, bank card, charged card or other form of monetary payment. The Agreements have been personally guaranteed by Milton Ault, III, the Company’s Chief Executive Officer and Chairman of the Board of Directors.
Under the terms of Agreement No. 1, the Company will be obligated to pay $22,310 on a weekly basis until the purchase amount of $562,125 has been paid in full. In connection with entering into Agreement No.1, the Company paid an origination fee in the amount of $11,250.
If DPW pays TVT within 9 weeks, the purchased amount will be discounted to $431,250. If DPW has not paid the $431,250, DPW agrees to pay the aggregate of $562,125. Agreement No. 1 also includes a warrant to purchase 56,250 shares of the Company’s common stock at an exercise price of $2.25 per share and a warrant to purchase 35,000 shares of the Company’s common stock at an exercise price of $2.50 per share.
Under the terms of Agreement No. 2, the Company will be obligated to pay $13,385 on a weekly basis until the purchase amount of $337,275 has been paid in full. In connection with entering into Agreement No.2, the Company paid an origination fee in the amount of $6,750.
If DPW pays TVT within 9 weeks, the purchased amount will be discounted to $258,750. If DPW has not paid the $258,750, DPW agrees to pay the aggregate of $337,275. Agreement No. 2 also includes warrants to purchase 56,250 shares of the Company’s common stock at an exercise price of $2.25 per share.
Libertas Funding, LLC Future Receivables Sale Agreement
On January 25, 2018, the Company and Philou Ventures, LLC, as guarantor (“Philou”), entered into a Future Receivables Sale Agreement (the “Libertas Agreement”) with Libertas Funding LLC (“Libertas”), pursuant to which Libertas Agreement the Company sold up to $148,500 in Future Receivables of the Company to Libertas for a purchase price of $100,000. The term “Future Receivables” means payments made by cash, check, electronic transfer or other form of monetary payment for the payment of the sale of goods or services, including payments made through the use of any payment device to purchase products and/or services that are processed by a card processor. Under the terms of the Libertas Agreement,
if DPW pays Libertas within 9 weeks, the purchased amount will be discounted to $118,000. Until that date, no specific payment schedules are required. IF DPW has not paid the $118,000,
the Company will be obligated to pay $8,839.30 on a weekly basis until the purchase amount of $148,500 has been paid in full. In connection with entering into the Libertas Agreement, Libertas received an additional discount for due diligence in the amount of $3,000. The Libertas
Agreement also includes warrants to purchase 125,000 shares of the Company’s common stock at an exercise price of $2.50 per share.
In connection with the Libertas Agreement, the Company, Philou and Libertas entered into a Security Agreement and Guaranty, pursuant to which the Company and Philou granted to Libertas a security interest in all accounts, chattel paper, documents, equipment, general intangibles, instruments and inventory, and all proceeds, as those terms are defined in Article 9 of the Uniform Commercial Code.