Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation Under an Off-Balance Sheet Arrangement.
As previously reported in the Current Report on Form 8-K filed by DPW Holdings,
Inc. (the "Company"), on July 2, 2019, pursuant to an Exchange Agreement of even
date therewith, the Company issued to Bellridge Capital L.P. ("Bellridge"), a
Convertible Promissory Note in the principal amount of $783,031.14 (the
"Convertible Note") with a maturity date of December 31, 2019 (the "Maturity
Date").
The Company received a notice of default (the "Notice") from Bellridge on
January 21, 2020 informing it that the Convertible Note was in default because
the Company had not repaid the principal, interest, late charges, or other
amounts when and as due thereunder. In addition, the Notice states that the
Company failed to file a registration statement on Form S-3 for shares of common
stock underlying the Convertible Note and obtain authorization thereof by the
NYSE American by the agreed upon dates.
The Company notes that, as previously reported in the Current Report on Form 8-K
filed on September 26, 2019, the Company entered into a second exchange
agreement with Bellridge, pursuant to which, in exchange for the Convertible
Note, the Company sold to Bellridge a new convertible promissory note in the
principal amount of $815,218.02 with the same Maturity Date.
Prior to receipt of the Notice from Bellridge, the Company was attempting to
reach a negotiated settlement with Bellridge, and remains in discussions with
Bellridge to do so. Notwithstanding receipt of the Notice, the Company hopes to
continue to work with Bellridge to settle its obligations under the Convertible
Note. The Company intends to vigorously defend its position should a mutually
amicable resolution prove unattainable.
2
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