8-K

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):  April 1, 2020 (March 31, 2020)

_________________________________________

Cool Holdings, Inc.(Exact name of registrant as specified in its charter)
Commission File Number: 001-32217

Maryland	33-0599368
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

2001 NW 84^th Avenue

Miami, FL 33122
(Address of principal executive offices, including zip code)

(858) 373-1675
(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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	AWSM	OTC Markets Group Inc.

Indicate by check mark whether the registrant is an emerging growth company as defined in 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 1.01Entry into a Material Definitive Agreement.

Conversion Agreement

On March 31, 2020, Cool Holdings, Inc. (the “Company”) entered into conversion agreements (the “Conversion Agreements”) with certain debt holders (the “Holders”) to convert the outstanding aggregate principal amount of the convertible notes held by the Holders, including interest accrued thereon, into shares of common stock (the “Equity Securities”) of the Company at a conversion price of $0.17 per Equity Security (the “Conversion Price”).  The Conversion Agreements also resulted in the cancellation of warrants, issued by the Company to certain Holders in connection with their acquisition of convertible notes (“Warrants”), to purchase 210,002 common shares of the Company at a price of $4.25 per share, as well as cancellation of Warrants to purchase an indeterminate number of common shares which were exercisable by dividing the principal amount of the convertible notes by a price that is 30% below the twenty-day volume weighted average price of the Company’s common shares immediately prior to the date the Company was to obtain shareholder and regulatory approval to permit the conversion of the convertible notes.

The Holders entering into Conversion Agreements with the Company consist of holders of: (i) a principal amount of $91,666 pursuant to a 0% senior convertible note issued on January 19, 2018; (ii) a principal amount of $1,700,000 pursuant to 12.0% unsecured convertible notes (the “Convertible Notes”) issued on October 24, 2018; (iii) a principal amount of $400,000 pursuant to a Convertible Note issued on November 29, 2018; (iv) a principal amount of $1,500,000 pursuant to Convertible Notes issued on May 16, 2019; (v) a principal amount of $175,000 pursuant to Convertible Notes issued on July 9, 2019; (vi) a principal amount of $175,000 pursuant to Convertible Notes issued on August 8, 2019; (vii) a principal amount of $3,450,500 pursuant to Convertible Notes issued on September, 11, 13, 20, 23 and 24, 2019. Altogether, such Conversion Agreements have resulted in the conversion of an aggregate $8,183,180 of indebtedness, including $691,014 of accrued interest, into 48,136,344 Equity Securities of the Company, and the cancellation of an indeterminate amount of Warrants.

Settlement Agreement

On March 31, 2020, the Company entered into a settlement agreement and release of claims (the “Settlement Agreement”) settling claims (the “Claims”) relating to (i) outstanding transaction fees related to a previous debenture financing, (ii) settlement of a disputed claim for royalties relating to a previous debenture financing, and (iii) settlement of offsetting charges related to a promotion and supply agreement.  Pursuant to the Settlement Agreement, the Company issued an aggregate of 10,683,677 Equity Securities in full settlement of the Claims.

The foregoing are summaries of certain material terms and conditions of the Conversion Agreements and Settlement Agreement, and are not complete descriptions thereof. Accordingly, the foregoing is qualified in its entirety by reference to the full text of the form of Conversion Agreements and Settlement Agreement attached to this Current Report on Form 8-K as Exhibits 4.1 to 4.3, and incorporated herein by reference.

Item 1.02Termination of a Material Definitive Agreement.

On March 31, 2020, the Company terminated the Sponsorship Agreement between and among the Company, Simply Mac, Inc. (“Simply Mac”), a subsidiary of the Company, Torque Esports Corp. and Ideas & Cars Ltd.  The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.02.   

Item 3.02Unregistered Sales of Equity Securities.

The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.  The issuance of Equity Securities pursuant to the Conversion Agreements was made in reliance on the exemption from registration provided by Section 3(a)(9) the Securities Act of 1933, as amended (the “Securities Act”).  Equity Securities issued pursuant to the Settlement Agreement were issued in reliance on the exemption from registration provided by either Rule 903 of Regulation S or Section 4(a)(2) the Securities Act.

Item 7.01 Regulation FD Disclosure.

A copy of the press release announcing entry into the Conversion Agreements and the issuance of Equity Securities is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 7.01 disclosure.

The information in this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be incorporated by reference into any filing under the Securities Act or the Exchange Act, irrespective of any incorporation by reference language in any such filing.

Item 9.01. Financial Statements and Exhibits.

(d)Exhibits.

Exhibit No.	Description
4.1	Form of Conversion Agreement to 0% Senior Convertible Note
4.2	Form of Conversion Agreement to 12.0% Unsecured Convertible Note
4.3	Form of Settlement Agreement and Release of Claims
99.1	Press Release dated April 1, 2020

Signature

Pursuant to the requirements of the Securities Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		Cool Holdings, Inc.
Date:	April 1, 2020	By:	/s/ Vernon A. LoForti
			Vernon A. LoForti
			Chief Financial Officer

EX-4.1

Exhibit 4.1

FORM OF CONVERSION AGREEMENT

0% Convertible Note

This Note Conversion Agreement (this “Agreement”) is made and entered into as of March __, 2020 (the “Effective Date”), by and between __________________ (the “Noteholder”), and Cool Holdings, Inc., a Maryland corporation (“Company”).

W I T N E S S E T H:

WHEREAS, on the Effective Date, the Noteholder holds a 0% convertible note (“Convertible Note”) issued by the Company on January 19, 2018 in the principal amount of $91,666;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by all parties, the parties agree as follows:

1. Notwithstanding anything to the contrary in the Convertible Note, on or around March 31, 2020 (the “Closing”), the entire outstanding principal amount on the Noteholder’s Convertible Note as of the Effective Date shall be converted into and exchanged for 539,211 common shares (“Common Shares”) of the Company, which shall be issuable to RoyalCan Investment LP for the benefit of the Noteholder.

2. The Noteholder hereby agrees to promptly mark its Convertible Note as “canceled” and return it to the Company.

3. This Agreement and the covenants, obligations, undertakings, rights and benefits hereof shall be binding upon, and shall inure to the benefit of, the respective parties hereto and their respective successors and assigns.

4. This Agreement is intended only to effect the conversion into and exchange of the Noteholder’s Convertible Note for Common Shares.

5. This Agreement may be executed by one or both of the parties in several counterparts and all such counterparts so executed shall together be deemed to constitute one final agreement as if signed by both parties, and each such counterpart shall be deemed to be an original.

6. Each party hereto agrees to execute any and all documents and to perform such other acts as may be necessary or expedient to further the purposes of this Agreement and the transactions contemplated hereby.

7. The recitals set forth in this Agreement are hereby incorporated into and made a part of this Agreement for all purposes.

8. This Agreement shall be governed by, and construed and interpreted in accordance with, the substantive laws of the State of Maryland, without giving effect to any conflict‑of‑laws rule or principle that might result in the application of the laws of another jurisdiction.

EXECUTED and DELIVERED to be effective as of the date set forth above.

COMPANY:

Cool Holdings, Inc.

By:

Name: Vernon A. LoForti

Title:    SVP & CFO

NOTEHOLDER:

______________________

By:

Name:

Title:  

EX-4.2

Exhibit 4.2

FORM OF NOTE CONVERSION AGREEMENT

12% Convertible Notes

This Note Conversion Agreement (this “Agreement”) is made and entered into as of March __, 2020 (the “Effective Date”), by and between _________________ (the “Noteholder”), and Cool Holdings, Inc., a Maryland corporation (“Company”).

W I T N E S S E T H:

WHEREAS, on the Effective Date, the Noteholder holds a 12% convertible note (“Convertible Note”) issued by the Company on __________________ in the principal amount of $______________ with accrued and unpaid interest amounting to $____________;

WHEREAS, in connection with acquisition of the Convertible Note, Noteholder received common share purchase warrants (the “Warrants”) to purchase a number of Common Shares equal to the principal amount of the Notes divided by the Conversion Price that is 30% below the twenty-day volume weighted average price immediately prior to the date the Company obtains any shareholder or other required regulatory approval to permit the conversion of the Notes at an exercise price equal to that Conversion Price;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by all parties, the parties agree as follows:

1. Notwithstanding anything to the contrary in the Convertible Note, on or around March 31, 2020 (the “Closing”), the sum of the outstanding principal amount plus accrued and unpaid interest on the Noteholder’s Convertible Note as of the Effective Date totaling $__________________ shall be converted into and exchanged for _____________ common shares (“Common Shares”) of the Company, which shall be issuable to RoyalCan Investment LP for the benefit of the Noteholder.

2. The Noteholder hereby agrees to promptly mark its Convertible Note as “canceled” and return it to the Company.

3. The Noteholder hereby agrees that all outstanding Warrants will be cancelled as of the Effective Date and will be of no further force and effect.

4. This Agreement and the covenants, obligations, undertakings, rights and benefits hereof shall be binding upon, and shall inure to the benefit of, the respective parties hereto and their respective successors and assigns.

5. This Agreement is intended only to effect (i) the conversion into and exchange of the Noteholder’s Convertible Note for Common Shares, and (ii) the cancellation of the Warrants.

6. This Agreement may be executed by one or both of the parties in several counterparts and all such counterparts so executed shall together be deemed to constitute one final agreement as if signed by both parties, and each such counterpart shall be deemed to be an original.

7. Each party hereto agrees to execute any and all documents and to perform such other acts as may be necessary or expedient to further the purposes of this Agreement and the transactions contemplated hereby.

8. The recitals set forth in this Agreement are hereby incorporated into and made a part of this Agreement for all purposes.

9. This Agreement shall be governed by, and construed and interpreted in accordance with, the substantive laws of the State of Maryland, without giving effect to any conflict‑of‑laws rule or principle that might result in the application of the laws of another jurisdiction.

EXECUTED and DELIVERED to be effective as of the date set forth above.

COMPANY:

Cool Holdings, Inc.

By:

Name: Vernon A. LoForti

Title:    SVP & CFO

NOTEHOLDER:

________________________

By:

Name:

Title:  

EX-4.3

Exhibit 4.3

SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS

THIS SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS (“Agreement”) is entered into and made effective as of the __^th day of March, 2020, by and among Delavaco Holdings, Inc. (“Delavaco”), Bliss Investments Group LLC (Bliss”), ICFR LLC (“IFCR”), Juan Pablo Montoya (“Montoya”), Torque Esports Corp. (“Torque”) and Cool Holdings, Inc. (“Cool”).

RECITALS

WHEREAS, Cool holds a receivable (the “Delavaco Receivable”) owed to it by Delavaco and related entities in the amount of $226,774.84; and

WHEREAS, Delavaco claims that Cool owes it $275,000.00 related to transaction fees (the “Delavaco Transaction Fee”) associated with a debenture transaction, and;

WHEREAS, Delavaco, Bliss, ICFR, and Montoya had discussed receiving a royalty (the “Royalty”) on gross sales of Cool, in exchange for providing financing required to close Cool’s acquisition of SimplyMac, and;

WHEREAS, the Royalty was never memorialized in writing, and;

WHERES, Delavaco, Bliss, ICFR, and Montoya have nonetheless attempted to assert their right to the Royalty, and;

WHEREAS, Each of Cool, Torque and Ideas & Cars Ltd. (“Ideas”) entered into an agreement (the “Torque Agreement”) pursuant to which, among other things, Cool owed quarterly payments to Torque of $150,000 each, of which one such payment remains outstanding, and;

WHEREAS, pursuant to the Torque Agreement Torque was required to purchase $600,000 of Apple products from Cool of which only $52,294.25 was purchased, and;

WHEREAS, each of the parties to the Torque Agreement wish to terminate its obligations to each other party.

THEREFORE, in consideration of the mutual promises and covenants contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, and with intent to be legally bound, the Parties hereby covenant and agree as follows:

AGREEMENT

1.Incorporation of Recitals. The Recitals set forth above are incorporated herein by reference.

2.Delavaco Settlement.  Cool and Delavaco will net the Delavaco Receivable and the Delavaco Transaction Fee in the amount of $48,225.16 in favor of Delavaco, and Cool will deliver

283,677 shares of common stock of Cool (at a conversion rate of $0.17) to RoyalCan Investment LP.

3.Royalty Settlement.  On or around March 31, 2020, Cool will issue to RoyalCan Investment LP 10,400,000 common shares of Cool for the benefit of Delavaco, Bliss, ICFR, and Montoya in the following amounts; Delavaco 4,100,000 common shares, Bliss 2,100,000 common shares, ICFR 2,100,000 common shares, and Montoya 2,100,000 common shares.

4.Torque Settlement. Cool, Torque and Ideas agree to terminate the Torque Agreement.

5.General Release. Except for the duties under this Agreement, each of the parties hereto, hereby generally release and forever discharge each other, as well as each of their heirs, successors, representatives, assigns, directors, officers, members, affiliates, partners (individual shareholders of corporate partners), agents, employees, and attorneys, and each of them, of and from any and all claims, debts, liabilities, demands, obligations, costs, expenses, actions and causes of action, of every nature, character and description, known or unknown, which the parties may now own or hold, or have held at any time heretofore owned or held, or may at any time own or hold, by reason of any matter, cause or thing related to the Delavaco Receivable, the Delavaco Transaction Fee, the Royalty Agreement and the Torque Agreement, or the relationship between the parties, including, without limitation, those arising out of or related to the Delavaco Receivable, the Delavaco Transaction Fee, the Royalty Agreement and the Torque Agreement. This release shall be construed as broadly as possible.  

6.Acknowledgment and Scope of Release.  The Parties to this Agreement hereby acknowledge that they are legally competent, are represented by counsel, have discussed this Agreement with their counsel, have been fully advised of all their pertinent legal rights and/or obligations, fully understand the terms of this Agreement, and have entered into this Agreement freely and voluntarily.  The Parties specifically release and renounce any right they may now or hereafter have to reform, rescind, modify, or set aside this Agreement because of mutual or unilateral mistake, such risk of mistake being hereby assumed by the Parties in return for the consideration described above.

7.Voluntary Agreement.  Each Party represents that it has read this Agreement completely and understands its contents.  Each Party further represents that it executes this Agreement freely and voluntarily and not as the result of duress or financial disadvantage.

8.Covenant Not to Sue.  The Parties hereby covenant that they shall not sue, sue further, or otherwise prosecute in any way any person or entity hereinabove released with respect to the subject matter of the Lawsuit and any and every claim released by this Agreement.

9.Amendment.  No modification, amendment, or waiver of any of the Agreement’s provisions, or any future representation, promise, or condition in connection with the subject matter of this Agreement, shall be binding upon any party to this Agreement unless made in writing and signed by both Parties or by a duly authorized officer or agent of each Party.

10.Integration Clause.  This Agreement contains the entire agreement between the Parties with regard to the matters set forth herein.  The Parties expressly acknowledge that they rely on no other representations of any sort, oral or written, that are not explicitly set forth within this Agreement.

11.Severability.  If any provision of this Agreement, or its application to any person, party or circumstance, is held invalid, the remainder of this Agreement and its application to all other persons, parties and circumstances shall not be affected adversely thereby unless the provision or provisions held invalid or inapplicable will, if not enforced, substantially impair the benefits and fairness of the remaining portions of the Agreement.

12.Governing Law and Venue.  This Agreement shall be construed and interpreted in accordance with the laws of the State of Maryland, and any action regarding this Agreement will be filed in the Superior Court of the State of Maryland.

13.Execution.  This Agreement may be executed in counterparts, and in any number of additional original signed copies, and each such copy, including facsimile copies or scanned signatures, shall for all purposes be deemed to be an original.  All such copies shall together constitute but one and the same instrument.  

IN WITNESS WHEREOF, the Parties hereto have approved and executed this Agreement on the dates specified below.

COOL HOLDINGS, INC.

______________________________________________

Name:  Vernon A. LoForti

Title:   SVP & CFO

BLISS INVESTMENTS GROUP LLC

Name:

Title:  

DELAVACO HOLDINGS, INC.

Name:  

Title:

ICFR LLC

Name:  

Title:  

JUAN PABLO MONTOYA

Name:  

TORQUE ESPORTS CORP.

_______________________________________________

Name:  

Title:  

EX-99.1

Exhibit 99.1

PRESS RELEASE

Cool Holdings Eliminates 92.5% of Debt

Inclusive of $8.2 Million Conversion into Equity

MIAMI, April 1, 2020 – Cool Holdings, Inc. (OTCQB: AWSM) (the “Company” or “Cool Holdings”), the parent company of Simply Mac, Inc., the largest Apple Premier Partner in the U.S. (“Simply Mac”), announced today that it has completed a second debt restructuring that resulted in the conversion of debt with an aggregate principal amount of $7,492,166 and accrued interest of $691,014 into common stock of the Company.  The aggregate total of $8,183,180 was converted into 48,136,344 shares of common stock at a $0.17 per share conversion price, reflecting a premium of 325% to the closing price on March 24, 2020.  The restructuring also included the settlement of other outstanding claims, that resulted in the issuance of an additional 10,683,677 common shares.  Inclusive of the restructuring of other debt announced by the Company on March 17, 2020, Cool Holdings has now eliminated $22.4 million, 92.5%, of the $24.4 million of debt it had after the Simply Mac acquisition on September 25, 2019.  After the latest restructuring, the Company now has 103,464,742 common shares outstanding and $1.8 million of unsecured debt, $1.25 million of which is not due until February 2024.

Commenting on the transaction, Reinier Voigt, President and Chief Executive Officer of Cool Holdings, stated: “We are extremely pleased with the outcome of our negotiations with the debt holders and the resulting restructuring.  It is an effort that we have been working on for the past few months, and which also resulted in the restructuring of the secured debt owed to GameStop Corp. that we announced on March 17, 2020.”

Commenting further, Mr. Voigt noted: “These two successful debt restructurings have dramatically improved our balance sheet, and provided relief from the debt service we faced.  In February we announced the sale of our Argentina operations, as part of our corporate restructuring to focus all our energies on our North American Simply Mac business.  We believe our improved balance sheet will strengthen our ability to capitalize our business, expand Simply Mac’s store and service presence around the country, take advantage of B2B opportunities and provide more resources to our growing eCommerce business.  We are excited about the future potential of our business.”

About Cool Holdings, Inc.

Cool Holdings is a Miami-based company currently comprised of Simply Mac and OneClick, two chains of retail stores and an authorized reseller under the Apple Premier Partner, APR (Apple Premium Reseller) and AAR MB (Apple Authorized Reseller Mono-Brand) programs and Cooltech Distribution, an authorized distributor to the OneClick stores and other resellers of Apple products and other high-profile consumer electronic brands.  Additional information can be found on its website at www.coolholdings.com.

Forward-looking and cautionary statements

Forward-looking statements in this press release and all other statements that are not historical facts are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements, including those related to our ability to attract new funding, expand our store presence, take advantage of B2B opportunities and grow our eCommerce business, involve factors, risks, and uncertainties that may cause actual results in future periods to differ materially from such statements. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements, including actions by third parties.  A list and description of various risk factors related to Cool Holdings, Inc. can be found and reviewed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, both of which can be accessed under the Company’s profile at www.sec.gov. These forward-looking statements speak only as of the date of this release and we undertake no obligation to publicly update any forward-looking statements to reflect new information, events or circumstances after the date of this release, except as required by law.

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Contact:

Vernon A. LoForti, CFO
vern.loforti@coolholdings.com