Current Report Filing (8-k)
August 16 2018 - 5:11PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
____________________________________________________________
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
___________________________________________________________________
Date of Report (Date of earliest
event reported): August 16, 2018
DPW
HOLDINGS, INC.
(Exact name of registrant as specified
in its charter)
Delaware
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001-12711
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94-1721931
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(State or other jurisdiction of
incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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201 Shipyard Way, Newport Beach,
CA 92663
(Address of principal executive
offices) (Zip Code)
(510) 657-2635
(Registrant's telephone number, including
area code)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
☐ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the
registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or
Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
Financing
On August
16, 2018 (the “
Closing Date
”), DPW Holdings, Inc., a Delaware corporation (the “
Company
”)
entered into a Securities Purchase Agreement (the “
SPA
”) with certain institutional investors (the “
Investors
”)
providing for the issuance of (i) Secured Promissory Notes (the “
Notes
”) in the aggregate principal face amount
of $1,212,000 due February 15, 2019, at an interest rate of eight percent (8%) per annum for which it received an aggregate of
$1,010,000, and (ii) an aggregate of 400,000 shares of common stock to be issued by the Company, subject to approval of the NYSE
American (the “
Commitment Shares
”), and be registered under the Securities Act of 1933, as amended, within fourteen
(14) days after the date that the Securities and Exchange Commission shall have declared the Company’s presently filed registration
statement on Form S-3 (File No. 333-226301) effective.
In connection
with the SPA, the Company and Super Crypto Mining, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“
SCM
”)
and the Investors entered into a security and pledge agreement (the “
Security Agreement
”), pursuant to which
the Investors were granted a springing security interest in SCM to secure the prompt payment, performance and discharge in full
of all of the obligations under the Notes due to the Investors.
Description Secured Promissory
Note
The Notes
have an aggregate principal face amount of $1,212,000 and bear interest at 8% per annum. The Notes contain standard and customary
events of default including, but not limited to, failure to make payments when due under the Notes, failure to comply with certain
covenants contained in the Notes, or bankruptcy or insolvency of the Company. So long as no Event of Default (as defined in the
Notes) exists, upon 10 days written notice to the Investors, the Company may prepay the full outstanding principal and accrued
and unpaid interest at any time without penalty.
After the
occurrence of any Event of Default that results in the eventual acceleration of the Notes, the interest rate on the Notes shall
accrue at an additional interest rate equal to the lesser of one and one-half percent (1.5%) per month (eighteen percent (18.0%)
per annum) or the maximum rate permitted under applicable law. All overdue accrued and unpaid interest to be paid hereunder shall
entail a late fee at an interest rate equal to the lesser of eighteen percent (18%) per annum or the maximum rate permitted by
applicable law.
The foregoing
are only brief descriptions of the material terms of the SPA, the Notes, and the Security Agreement, the forms of which are attached
hereto as exhibits to this Current Report on Form 8-K, and are incorporated herein by reference. The foregoing does not purport
to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their
entirety by reference to such exhibits.
Real
Estate Transaction
On May 25, 2018 the Company announced
its intention to participate in the construction of a hotel in New York City (the “
Transaction
”). On June 8,
2018, the Company entered into a limited partnership agreement, in which it agreed to become a limited partner in the partnership
(the “
NY Partnership
”). The NY Partnership is a limited partner in the partnership that is responsible for
the construction and related activities of the hotel. In connection with this transaction, DPW has agreed to finance a portion
of the capital required by the NY Partnership. While the Company has already made an initial investment in the NY Partnership,
given its intention to use the net proceeds from the financing discussed above as an additional capital contribution thereto,
its commitment to participate in the Transaction has become material to it. The Company has made approximately $1,800,000 in capital
contributions to the NY Partnership as of the date this Current Report. Subject to the occurrence of certain events and other
conditions over which the Company has no control, it is required to make monthly capital contributions of $500,000 every thirty
days until DPW’s commitment is funded in full, which is expected to occur in January 2020. If the Company fails to make
a monthly contribution when due, then the other entities affiliated with the NY Partnership could potentially have the right to
acquire fifty percent (50%) of the capital contributions that the Company will have made to the NY Partnership at that time.
Item
3.02
Unregistered Sales of Equity Securities
The information
contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference to this Item 3.02. The Commitment
Shares described in this Current Report on Form 8-K were offered and sold to the Investors in reliance upon exemption from the
registration requirements under Section 4(a)(2) under the Securities Act of 1933 and, as applicable, Rule 506 of Regulation D promulgated
thereunder.
Item 9.01 Exhibits and Financial
Statements.
(d) Exhibits:
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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DPW HOLDINGS, INC.
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Dated: August 16, 2018
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/s/ Milton C. Ault, III
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Milton C. Ault, III
Chief Executive Officer
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