Item
8.01 Other Events.
As
previously disclosed, RedHawk Holdings Corp. (the “Company”) and Beechwood Properties, LLC (“Beechwood”)
on March 22, 2019, entered into a Settlement Agreement and General Release (the “Settlement Agreement”) to resolve
litigation, as previously disclosed, brought by the Company and Beechwood against Daniel J. Schreiber and the Daniel J. Schreiber
Living Trust – Dtd 2/08/95 (collectively, the “Defendants”) in the United States District Court for the Eastern
District of Louisiana (the “Louisiana Court”). Pursuant to the Settlement Agreement, the Company agreed to, among
other things, issue two Promissory Notes to the Defendants, each in the principal amount of $200,000.00. The first Promissory
Note was originally due and payable on or before September 6, 2020 (“Note 1”). The second Promissory Note was originally
due and payable on or before September 5, 2021 (“Note 2”).
The
Defendants filed on October 11, 2019, a Motion to Enforce Settlement Agreement (the “Motion”) with the Louisiana Court
alleging that the Company failed to comply with certain obligations under the Settlement Agreement. The Motion sought to, among
other things, accelerate the payment of amounts owed to the Defendants under the Settlement Agreement and assert a claim for interest
and attorneys’ fees.
On
July 16, 2020, the Louisiana Court granted the Defendant’s Motion ordering the Company to pay to the Defendants $519,495.78
(“Judgment”) representing (i) the principal amount due on Note 1 ($200,000.00); (ii) the principal amount due on Note
2 ($200,000.00); (iii) 18% simple interest on certain outstanding debt charged back to the date of the Settlement Agreement; (iv)
$40,000.00 of attorneys’ fees (10% of the amounts due, which to date remains greater than the amount of actual reasonable
fees); and (v) interest from the date of the Louisiana Court’s judgment and costs. The Company has appealed the Louisiana
Court’s ruling to the United States 5th Circuit Court of Appeals (the “Court of Appeals”) and intends to vigorously
defend against the ruling.
Payment
of the principal amount of Note 1 was tendered by the Company to the Defendants on August 13, 2020. Notwithstanding the appeal
to the Court of Appeals, the Company tendered the early repayment of the principal amount of Note 2 to the Defendants on August
24, 2020. To date, $119,495.78 of the Judgment remains outstanding (“Remaining Unsatisfied Judgment”).
On
September 4, 2020, the Company filed a Consent Motion to Approve Supersedeas Bond and Stay of Execution of Judgment Pending Appeal
(“Motion to Approve”). On September 8, 2020 the Louisiana Court granted the Company’s Motion to Approve and
the posting of a supersedeas bond by the Company in the whole amount of $143,491.26 representing (i) the Remaining Unsatisfied
Judgment; plus (ii) Federal Post-Judgment Interest of $80.27; plus, (iii) 20% of the combined amount ($23,915.21).
Cautionary
Statement Regarding Forward-Looking Statements
This
Current Report on Form 8-K contains forward-looking statements. Forward-looking statements are all statements other than statements
of historical fact. Statements contained in this Current Report on Form 8-K that are not historical facts may be deemed to be
forward-looking statements. The words “anticipate,” “may,” “can,” “plans,” “believes,”
“estimates,” “expects,” “projects,” “targets,” “intends,” “likely,”
“will,” “should,” “to be,” “potential” and any similar expressions are intended
to identify those assertions as forward-looking statements.
Investors
are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from
that projected or suggested herein due to certain risks and uncertainties. In evaluating forward-looking statements, you should
consider the various factors which may cause actual results to differ materially from any forward-looking statements including
those listed in the “Risk Factors” section of our latest Annual Report on Form 10-K. Further, the Company may make
changes to its business plans that could or will affect its results. Investors are cautioned that the Company will undertake no
obligation to update any forward-looking statements.