DPW Holdings Enters Into Exchange Agreement for Debt Totaling Approximately $7.7 Million
February 10 2020 - 2:35PM
DPW Holdings, Inc. (NYSE American: DPW) a diversified holding
company (“
DPW,” or the “
Company”)
announced that it has entered into a Master Exchange Agreement
dated February 10, 2020 (the “
Agreement”) with a
family office to resolve debt previously in default in an aggregate
amount of up to $7.7 million. The family office has purchased $4.2
million of outstanding debt currently in default and has committed
to purchase up to an additional $3.5 million of outstanding
debt upon receipt of stockholder approval. In connection with the
entry into the Agreement, Dominion Capital, LLC has sold its
secured promissory note to the family office, as has another
creditor, of which the notes in the hands of the family office are
no longer in default, and all litigation between the parties is
resolved. The remaining note holders have entered into forbearance
agreements and, upon receipt of stockholder approval, the family
office has agreed to acquire the debt held by these parties.
DPW’s CEO and Chairman, Milton “Todd” Ault, III
said, “Today’s announcement represents a significant milestone for
DPW. As a significant stockholder, I am now much more confident in
the Company’s future as much uncertainty has been removed. Our
supportive partners worked diligently with us to structure these
transactions, and I am proud of our team’s persistence in getting
this transaction consummated. We are pleased to report that as a
result of the closing of the exchange agreement, litigation related
to our senior secured creditor has been dropped. The exchange
agreement has not only eliminated debt that was in default, but
will improve our financial results by reducing the Company’s
borrowing costs and will also enable management to focus on the
many opportunities we have to grow our business, which was
challenging in light of the constraints under our prior debt
agreements.”
The first exchange of debt for equity shall
occur on the date of the Agreement.
Some of the benefits of the Agreement
include:
- Elimination of the majority of all outstanding debt, subject to
stockholder and regulatory approval;
- The full repayment to Dominion of its senior secured note, and
the termination of its actions against DPW; and
- The other lenders having agreed to forbear taking further
actions as the Company seeks stockholder and regulatory approval to
issue additional shares as part of the Agreement to eliminate all
of the remaining debt in default.
According to the Agreement the family office may
exchange debt into a maximum of 19.9% of the outstanding shares of
common stock prior to stockholder approval. Please refer to the
Form 8-K to be filed later today with the Securities and Exchange
Commission for additional details.
For more information on DPW Holdings and its
subsidiaries, the Company recommends that stockholders, investors
and any other interested parties read the Company’s public filings
and press releases available under the Investor Relations section
at www.DPWHoldings.com or available at www.sec.gov.
About DPW Holdings, Inc.
DPW Holdings, Inc. is a diversified holding
company pursuing growth by acquiring undervalued businesses and
disruptive technologies with a global impact. Through its wholly
and majority-owned subsidiaries and strategic investments, the
Company provides mission-critical products that support a diverse
range of industries, including defense/aerospace, industrial,
telecommunications, medical, crypto-mining, and textiles. In
addition, the Company owns a select portfolio of commercial
hospitality properties and extends credit to select entrepreneurial
businesses through a licensed lending subsidiary. DPW’s
headquarters are located at 201 Shipyard Way, Suite E, Newport
Beach, CA 92663; www.DPWHoldings.com.
Forward-Looking Statements
This press release contains “forward looking
statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These
forward-looking statements generally include statements that are
predictive in nature and depend upon or refer to future events or
conditions, and include words such as “believes,” “plans,”
“anticipates,” “projects,” “estimates,” “expects,” “intends,”
“strategy,” “future,” “opportunity,” “may,” “will,” “should,”
“could,” “potential,” or similar expressions. Statements that are
not historical facts are forward-looking statements.
Forward-looking statements are based on current beliefs and
assumptions that are subject to risks and uncertainties.
Forward-looking statements speak only as of the date they are made,
and the Company undertakes no obligation to update any of them
publicly in light of new information or future events. Actual
results could differ materially from those contained in any
forward-looking statement as a result of various factors. More
information, including potential risk factors, that could affect
the Company’s business and financial results are included in the
Company’s filings with the U.S. Securities and Exchange Commission,
including, but not limited to, the Company’s Forms 10-K, 10-Q and
8-K. All filings are available at www.sec.gov and on the
Company’s website at www.DPWHoldings.com.
Contacts:IR@DPWHoldings.com or
1-888-753-2235
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