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ITEM 1.01
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ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
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On August 6, 2019, DPW Holdings Inc. (the
“
Company
”) entered into an At-The-Market Issuance Sales Agreement (the “
Sales Agreement
”)
with Ascendiant Capital Markets, LLC, as sales agent (the “
Agent
”) to sell shares of its common stock, par value
$0.001 (the “
Common Stock
”), having an aggregate offering price of up to $5,500,000 (the “
Shares
”)
from time to time, through an “at the market offering” program (the “
ATM Offering
”).
The offer and sale of the Shares will be
made pursuant to the Company’s effective “shelf” registration statement on Form S-3 and an accompanying
base prospectus contained therein (Registration Statement No. 333-222132) filed with the Securities and Exchange Commission
(the “
SEC
”) on December 18, 2017, amended on January 8, 2018, and declared effective by the SEC on January 11,
2018, and a prospectus supplement related to the ATM Offering, dated August 6, 2019.
This Current Report on Form 8-K shall not
constitute an offer to sell or the solicitation of any offer to buy the Shares, nor shall there be any offer, solicitation or sale
of the Shares in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under
the securities laws of such state.
Subject to the terms and conditions of
the Sales Agreement, the Agent will use its commercially reasonable efforts to sell the Shares, based upon the Company’s
instructions, consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations
and rules of the NYSE American. The Company will set the parameters for sales of the Shares, including the number of Shares to
be sold, the time period during which sales are requested to be made, any limitation on the number of Shares that may be sold in
one trading day, and any minimum price below which sales may not be made. Under the Sales Agreement, the Agent may sell the Shares
by any method permitted by law deemed to be an “at the market offering,” as defined in Rule 415 of the Securities Act
of 1933, as amended (the “
Securities Act
”). The Company or the Agent may, upon written notice to the other party
in accordance with the terms of the Sales Agreement, suspend offers and sales of the Shares. The Company and the Agent each have
the right, in its sole discretion, to terminate the Sales Agreement at any time upon prior written notice pursuant to the terms
and subject to the conditions set forth in the Sales Agreement.
The Company will pay the Agent a commission
in an amount equal to 4.0% of the gross proceeds from each sale of the Shares sold through it as sales agent under the Sales Agreement.
In addition, the Company has agreed to reimburse the Agent for certain expenses it incurs in the performance of its obligations
under the Sales Agreement including $30,000 as initial payment to the Agent’s legal counsel and the retainers, reasonable
fees and expenses thereof incurred in connection with quarterly and annual bring-downs required under the Sales Agreement. The
Company has also agreed pursuant to the Sales Agreement to indemnify and provide contribution to the Agent against certain liabilities,
including liabilities under the Securities Act.
The foregoing description of the terms
of the Sales Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Sales
Agreement, which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.
The legal opinion of Sichenzia Ross Ference
LLP, counsel to the Company, relating to the legality of the issuance and sale of the Shares is filed as Exhibit 5.1 hereto.