Cool Holdings, Inc. (Form: 8-K, Received: 09/17/2018 06:52:40)

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): September 14, 2018 (September 13, 2018)

_________________________________________

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.)

48 NW 25 th Street, Suite 108

Miami, FL 33127
(Address of principal executive offices, including zip code)

(786) 675-5246
(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 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 .0 1 . Entry into a Material Definitive Agreement.

On September 13, 2018, Cool Holdings, Inc., a Delaware corporation, through its subsidiary Cooltech Holding Corp. (the “Company”), entered into three (3) release agreements pursuant to which the Company agreed to exchange outstanding obligations to three (3) parties (the “Recipients”) in the aggregate amount of $1,022,567.99 for the issuance of 289,678 units at a price of $3.53 per unit. Each unit is comprised of (i) one share of common stock of the Company (“Common Stock”) and (ii) a warrant to purchase one share of Common Stock with an exercise price of $3.41 per share. The warrants are exercisable beginning six months after issuance and expire three years from the date of issuance. The form of warrant is attached hereto as Exhibit 10.4. The securities issued in connection with the transaction were issued pursuant to an exemption from registration under Section 4(a)(2). of the United States Securities Act of 1933, as amended (the “Act”). All the securities issued in the transaction are “restricted securities,” as defined in Rule 144(a)(3), promulgated under the Act.

The Recipients are as follows:

Alfredo Carrasco, who is currently the Chief Financial Officer of the Company. Mr. Carrasco will receive 62,194 units in exchange for outstanding obligations totaling $219,545.99 as set forth in the Release of Claims Agreement attached hereto as Exhibit 10.1.

Voigt Consultancy, Inc., an entity owned by Reinier Voigt, who is currently the Chief Operating Officer of the Company. Voigt Consultancy, Inc. will receive 31,869 units in exchange for outstanding obligations totaling $112,500.00 as set forth in the Mutual Release of Claims Agreement attached hereto as Exhibit 10.2.

Juan Pablo Montoya, a consultant to the Company. Mr. Montoya will receive 196,615 units in exchange for outstanding obligations totaling $690,522.00 as set forth in the Mutual Release of Claims Agreement attached hereto as Exhibit 10.3.

The foregoing information is a summary of the agreement involved in the transaction described above, is not complete, and is qualified in its entirety by reference to the full text of such agreements, which are incorporated herein by reference. Readers should review such agreements for a complete understanding of the terms and conditions associated with this transaction.

The Company noted that subsequent to the issuance of the 289,678 shares from this transaction, there will be 7,376,421 shares of its Common Stock outstanding.

Item 1.02. Termination of a Material Definitive Agreement.

In connection with the execution of the Mutual Release of Claims Agreement with Voigt Consultancy, Inc., Cooltech Holding Corp.’s arrangement with Voight Consultancy, Inc. was terminated on September 13, 2018. Pursuant to the arrangement, Voigt Consultancy, Inc. previously provided consulting services to Cooltech Holding Corp. in exchange for consulting fees. Reinier Voigt, who owns Voigt Consultancy, Inc., is currently the Chief Operating Officer of the Company, and the separate operational consulting services arrangement was no longer needed.

In connection with the execution of the Mutual Release of Claims Agreement with Juan Pablo Montoya and Monty Motorsport LLC (collectively, the “Athlete”), the Company terminated the Athlete Endorsement and Sponsor Agreement (the “Endorsement Agreement”), dated December 15, 2016, between the Cooltech Holding Corp. and the Athlete on September 13, 2018. Mr. Montoya is an internationally acclaimed race car driver whose endorsements were used to promote Cooltech Holding Corp. The Company determined that endorsement services were no longer needed. As a result of the early termination of the Endorsement Agreement by the Company, the Company was obligated to pay $300,000 to the Athlete. This early termination fee will be paid through the exchanges contemplated by the Mutual Release of Claims Agreement and as described in Item 1.01, which is incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities.

The information called for by this item is contained in Item 1.01, which is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description
10.1		Release of Claims Agreement – Alfredo Carrasco.
10.2		Mutual Release of Claims Agreement – Voigt Consultancy, Inc.
10.3		Mutual Release of Claims Agreement – Juan Pablo Montoya.
10.4		Form of Warrant.

Signature

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.

		Cool Holdings, Inc.

Date:	September 14, 2018	By:	/s/ Alfredo Carrasco
			Alfredo Carrasco
			Chief Financial Officer

Exhibit 10.1

RELEASE OF CLAIMS AGREEMENT

This Release of Claims Agreement (“Agreement”) is entered by and between Alfredo Carrasco, his marital community, heirs, and assigns (hereinafter “Employee”), and Cooltech Holding Corp., its affiliates (including, without limitation, its parent and all of its subsidiaries), its successors and assigns (hereinafter the “Company”). Mr. Carrasco and the Company are sometimes collectively referred to as the “Parties.”

WHEREAS, Employee and the Company signed the Offer Letter Agreement (hereinafter, the “Employment Agreement”) effective January 1, 2018;

WHEREAS, the Parties have reached certain agreements to amicably settle certain outstanding employment, financial and legal issues which may exist to date, arising from or relating to the Employment Agreement, and believe it is in their mutual interest to memorialize those agreements in writing in this Agreement;

WHEREAS, the Company will provide Employee certain benefits in consideration of Employee signing this Agreement; and

NOW, THEREFORE, in consideration of the benefits, mutual promises, and other good and valuable consideration set forth herein, the sufficiency of which the parties expressly acknowledge, Employee and the Company agree as follows:

1.	The Company agrees to provide Mr. Carrasco the following consideration after he executes this Agreement and all required clearances are obtained from Nasdaq:

(a)

The Company will pay Mr. Carrasco a net amount of $81,954.18;

(b)

The Company will provide an additional consideration in the amount of $219,545.99 which will be converted into 62,194 units of securities (“Exchange Units”) of Cool Holdings, Inc., the Company’s parent (“Parent”) at an exchange rate per Exchange Unit of $3.53. Each Exchange Unit will be comprised of (a) one share of common stock of Parent, par value $0.001 (the “Exchange Common Shares”), and (b) a warrant, in the form attached hereto as Exhibit A, which would permit the holder to purchase up to 100% of the number of Exchange Common Shares, at an exercise price of $3.41 per share beginning after a six-month waiting period (the “Exchange Warrants”);

(c)

No factional Exchange Units will be issued. Instead, the number of Exchange Units to be issued to Mr. Carrasco will be the number of Exchange Units as would otherwise be issued pursuant to the Exchange rounded down to the next lowest whole number. The issuance of the Exchange Units will be made without registration of the offering and exchange of the Exchange Units under the Securities Act;

(d)

Parent will instruct its transfer agent, Computershare Trust Company, N.A., to electronically issue the Exchange Common Shares, in book-entry form, to the Holder and to issue the shares with the 1933 Act Legend; and

(e)

Parent will issue and deliver the Exchange Warrants .

Employee specifically acknowledges and agrees that the Company has made no representations to him regarding the tax consequences of any amounts received by Employee or for Employee’s benefit pursuant to this Agreement. Employee agrees to pay all taxes and/or tax assessments due to be paid by Employee, and to indemnify the Company for any claims, costs and/or penalties caused by Employee’s failure to pay such taxes and/or tax assessments.

Employee agrees to release the Company, its Board of Directors, officers, employees, agents and assigns, from any and all claims under any federal, state or local statute or regulation for non-payment of wages or other compensation, including, but not limited to, expense reimbursements, bonuses, stock grants or stock options, arising from or relating to Employee’s employment with the Company through the Effective Date of this Agreement. This release specifically excludes claims, charges, complaints, causes of action or demand that post‑date the Effective Date of this Agreement.

Employee warrants that no promise or inducement has been offered for this Agreement other than as set forth herein and that this Agreement is executed without reliance upon any other promises or representations, oral or written. A ny modification of this Agreement must be made in writing and be signed by Employee and the Company. This Agreement supersedes all prior understandings between the Parties and represents the entire Agreement between the Parties with respect to all matters involving the payment of wages or other compensation to Employee by the Company through the Effective Date of this Agreement.

If any provision of this Agreement or compliance by Employee or the Company with any provision of this Agreement constitutes a violation of any law, or is or becomes unenforceable or void, then such provision, to the extent only that it is in violation of law, unenforceable or void, will be deemed modified to the extent necessary so that it is no longer in violation of law, unenforceable or void, and such provision will be enforced to the fullest extent permitted by law. If such modification is not possible, said provision, to the extent that it is in violation of law, unenforceable or void, will be deemed severable from the remaining provisions of this Agreement, which provisions will remain binding on both Employee and the Company. This Agreement is governed by the laws of the State of Florida.

A court of competent jurisdiction in the State of Florida shall have exclusive jurisdiction of any lawsuit arising from or relating to this Agreement. Employee consents to such venue and personal jurisdiction. The prevailing party in any such lawsuit will be entitled to an award of attorney’s fees and reasonable litigation costs. The Company will assert this Agreement as a defense to any claims the Employee might bring. Employee agrees that he will indemnify and hold the Company harmless from any breach of this Agreement by him. Employee further agrees that in the event of any breach of this Agreement by him, he will no longer be entitled to payments or other benefits provided herein, and will return all consideration provided to him by the Company pursuant to this Agreement.

6.	This Agreement may be executed via facsimile or electronic mail and in one or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument, binding on the parties.

EMPLOYEE ACKNOWLEDGES AND AGREES THAT he HAS CAREFULLY READ AND VOLUNTARILY SIGNED THIS AGREEMENT, THAT he HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY OF his CHOICE , AND THAT he SIGNS THIS AGREEMENT WITH THE INTENT OF RELEASING THE COMPANY AND ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FROM ANY AND ALL CLAIMS.

ACCEPTED AND AGREED TO:

Cooltech Holding Corp.:

/s/ Mauricio Diaz /s/ Alfredo Ca rrasco

By: Mauricio Diaz Alfredo Carrasco

Its: Chief Executive Officer

Dated: September 13, 2018 Dated: September 13, 2018

Exhibit 10.2

MUTUAL RELEASE OF CLAIMS AGREEMENT

This Mutual Release of Claims Agreement (“Agreement”) is entered by and between Cooltech Holding Corp., its affiliates (including, without limitation, its parent and all of its subsidiaries), its successors and assigns (hereinafter the “Company”) and Voigt Consultancy, Inc. (“Voigt Consultancy”). Voigt Consultancy and the Company are sometimes collectively referred to as the “Parties.”

WHEREAS, Voigt Consultancy and the Company entered into an arrangement whereby Voigt Consultancy has been providing services to the Company (hereinafter, the “Arrangement”);

WHEREAS, the Parties desire to terminate the Arrangement and amicably settle all outstanding financial and legal issues which may exist arising from or relating to the Arrangement;

NOW, THEREFORE, in consideration of the benefits, mutual promises, and other good and valuable consideration set forth herein, the sufficiency of which the Parties expressly acknowledge, Voigt Consultancy and the Company agree as follows:

1.	The Company agrees to provide Voigt Consultancy the following consideration after Voigt Consultancy executes this Agreement and all required clearances are obtained from Nasdaq:

(a)

The Company owes Voigt Consultancy total compensation of $112,500.00. This amount will be converted into 31,869 units of securities (“Exchange Units”) of Cool Holdings, Inc., the Company’s parent (“Parent”) at an exchange rate per Exchange Unit of $3.53. Each Exchange Unit will be comprised of (a) one share of common stock of Parent, par value $0.001 (the “Exchange Common Shares”), and (b) a warrant, in the form attached hereto as Exhibit A, which would permit the holder to purchase up to 100% of the number of Exchange Common Shares, at an exercise price of $3.41 per share beginning after a six-month waiting period (the “Exchange Warrants”);

(b)

No factional Exchange Units will be issued. Instead, the number of Exchange Units to be issued to Voigt Consultancy will be the number of Exchange Units as would otherwise be issued pursuant to the Exchange rounded down to the next lowest whole number. The issuance of the Exchange Units will be made without registration of the offering and exchange of the Exchange Units under the Securities Act;

(c)

(d)

Parent will issue and deliver the Exchange Warrants.

Effective upon timely delivery of the consideration as provided in Section 1 above, each of the Parties, on behalf of themselves, and all persons or entities claiming by, through or under them, and their respective heirs, successors and assigns, hereby fully, completely and finally waive, release, remise, acquit, and forever discharge and covenant not to sue the other

Party, as well as the other Party’s respective officers, directors, shareholders, trustees, parent companies, sister companies, affiliates, subsidiaries, employers, attorneys, accountants, predecessors, successors, insurers, representatives, and agents with respect to any and all claims, demands, suits, manner of obligation, debt, liability, tort, covenant, contract, or causes of action of any kind whatsoever, at law or in equity, including without limitation, all claims and causes of action arising out of or in any way relating to any dealings between the Parties prior to the date hereof relating to the Arrangement. The Parties warrant and represent that they have not assigned or otherwise transferred any claim or cause of action released by this Agreement. The Parties specifically do not, however, waive or release any claim that may arise for breach of this Agreement.

3.	The execution of this Agreement shall not be construed as an admission of liability or fault by any Party. Any and all liability is expressly denied by all Parties.

The Parties represent and agree that no promise, inducement, or agreement other than as expressed herein has been made to them and that this Agreement is fully integrated, supersedes all prior agreements and understandings, and any other agreement between the Parties, and contains the entire agreement between the Parties.

5.	The Parties represent and agree that they each have read and fully understand this Agreement, that they are fully competent to enter into and sign this Agreement, and that they are executing this Agreement voluntarily, free of any duress or coercion.

If any provision of this Agreement constitutes a violation of any law, or is or becomes unenforceable or void, then such provision, to the extent only that it is in violation of law, unenforceable or void, will be deemed modified to the extent necessary so that it is no longer in violation of law, unenforceable or void, and such provision will be enforced to the fullest extent permitted by law. If such modification is not possible, said provision, to the extent that it is in violation of law, unenforceable or void, will be deemed severable from the remaining provisions of this Agreement, which provisions will remain binding on both Parties. This Agreement is governed by the laws of the State of Florida.

7.	A court of competent jurisdiction in the State of Florida shall have exclusive jurisdiction of any lawsuit arising from or relating to this Agreement. The prevailing party in any such lawsuit will be entitled to an award of attorney’s fees and reasonable litigation costs.

8.	This Agreement may be executed via facsimile or electronic mail and in one or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument, binding on the parties.

ACCEPTED AND AGREED TO:

Cooltech Holding Corp.: Voigt Consultancy, Inc.:

/s/ Mauricio Diaz /s/ Reinier Vo igt

By: Mauricio Diaz Rein ier Voigt

Its: Chief Executive Officer President

Dated: September 13, 2018 Dated: September 13, 2018

Exhibit 10.3

MUTUAL RELEASE OF CLAIMS AGREEMENT

This Mutual Release of Claims Agreement (“Agreement”) is entered by and between Cooltech Holding Corp., its affiliates (including, without limitation, its parent and all of its subsidiaries), its successors and assigns (hereinafter the “Company”), on the one hand, and Juan Pablo Montoya and Monty Motorsport LLC (collectively, the Athlete”), on the other hand. Athlete and the Company are sometimes collectively referred to as the “Parties.”

WHEREAS, Athlete and the Company entered into an Athlete Endorsement and Sponsor Agreement (hereinafter the “Endorsement Agreement”) dated December 15, 2016;

WHEREAS, the Parties desire to terminate the Endorsement Agreement and amicably settle all outstanding financial and legal issues which may exist arising from or relating to the Endorsement Agreement;

1.	The Company agrees to provide Juan Pablo Montoya the following consideration after Athlete executes this Agreement:

(a)

The Company owes Athlete total compensation of $690,522.00. This amount will be converted into 195,615 units of securities (“Exchange Units”) of Cool Holdings, Inc., the Company’s parent (“Parent”) at an exchange rate per Exchange Unit of $3.53. Each Exchange Unit will be comprised of (a) one share of common stock of Parent, par value $0.001 (the “Exchange Common Shares”), and (b) a warrant, in the form attached hereto as Exhibit A, which would permit the holder to purchase up to 100% of the number of Exchange Common Shares, at an exercise price of $3.41 per share beginning after a six-month waiting period (the “Exchange Warrants”);

(b)

No factional Exchange Units will be issued. Instead, the number of Exchange Units to be issued to Juan Pablo Montoya will be the number of Exchange Units as would otherwise be issued pursuant to the Exchange rounded down to the next lowest whole number. The issuance of the Exchange Units will be made without registration of the offering and exchange of the Exchange Units under the Securities Act;

(c)

Parent will instruct its transfer agent, Computershare Trust Company, N.A., to electronically issue the Exchange Common Shares, in book-entry form, and to issue the shares with the 1933 Act Legend; and

(d)

Parent will issue and deliver the Exchange Warrants.

Party, as well as the other Party’s respective officers, directors, shareholders, trustees, parent companies, sister companies, affiliates, subsidiaries, employers, attorneys, accountants, predecessors, successors, insurers, representatives, and agents with respect to any and all claims, demands, suits, manner of obligation, debt, liability, tort, covenant, contract, or causes of action of any kind whatsoever, at law or in equity, including without limitation, all claims and causes of action arising out of or in any way relating to any dealings between the Parties prior to the date hereof relating to the Endorsement Agreement. The Parties warrant and represent that they have not assigned or otherwise transferred any claim or cause of action released by this Agreement. The Parties specifically do not, however, waive or release any claim that may arise for breach of this Agreement.

3.	The execution of this Agreement shall not be construed as an admission of liability or fault by any Party. Any and all liability is expressly denied by all Parties.

5.	The Parties represent and agree that they each have read and fully understand this Agreement, that they are fully competent to enter into and sign this Agreement, and that they are executing this Agreement voluntarily, free of any duress or coercion.

7.	A court of competent jurisdiction in the State of New York shall have exclusive jurisdiction of any lawsuit arising from or relating to this Agreement. The prevailing party in any such lawsuit will be entitled to an award of attorney’s fees and reasonable litigation costs.

8.	This Agreement may be executed via facsimile or electronic mail and in one or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument, binding on the parties.

[ Remainder of Page Intentionally Left Blank ]

ACCEPTED AND AGREED TO:

Cooltech Holding Corp.: Athlete:

/s/ Mauricio Diaz /s/ Juan Pablo Montoya

By: Mauricio Diaz Juan Pablo Montoya

Its: Chief Executive Officer

Dated: September 13, 2018 Dated: September 13, 2018

Monty Motorsports LLC:

/s/ Juan Pablo Montoya

Juan Pablo Montoya

Its: Managing Member

Dated: September 13, 2018

Exhibit 10.4

COOL HOLDINGS, INC.

(A Maryland Corporation)

FORM OF WARRANT TO PURCHASE

SHARES OF COMMON STOCK

Effective: September __, 2018

THE OFFER AND SALE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), OR APPLICABLE STATE SECURITIES LAWS. THE WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS THE OFFER AND SALE THEREOF HAS BEEN REGISTERED UNDER THOSE LAWS OR UNLESS COOL HOLDINGS, INC. (THE “ COMPANY ”) HAS RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO IT, THAT SUCH DISPOSITION IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSCATIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH U.S. SECURITIES LAWS.

THIS WARRANT MAY NOT BE EXERCISED UNLESS THE WARRANT AND THE UNDERLYING SHARES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE, AND THE HOLDER HAS DELIVERED AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY TO SUCH EFFECT.

THIS CERTIFIES THAT, for value received, _______________________ , or its registered assigns (“ Holder ”), is entitled to purchase, subject to the conditions set forth below, at any time or from time to time during the Exercise Period (as defined in Section 1.2 below), _____________ (_____) shares (“ Shares ”) of fully paid and non‑assessable common stock, par value $0.001 per share (the “ Common Stock ”), of Cool Holdings, Inc., a Maryland corporation, at the per share purchase price (the “ Warrant Price ”) set forth in Section 1.1 below, subject to the further provisions of this Warrant.

EXERCISE OF WARRANT

The terms and conditions upon which this Warrant may be exercised, and the Shares subject hereto may be purchased, are as follows:

Section 1.1 Warrant Price . The Warrant Price shall be $3. 41 per Share, subject to adjustment as provided in Article IV below.

Section 1.2 Method of Exercise . Subject to the limitations in Section 1.3 below, Holder may at any time beginning on the date which is six (6) months from the effective date of this Warrant and for three (3) years from such date of effectiveness, or such later date as the Company may in its sole discretion determine (the “Exercise Period”), exercise in whole or in part the purchase rights evidenced by this Warrant. Such exercise shall be effected by:

the surrender of this Warrant, together with a duly executed copy of the form of notice of exercise attached hereto as Exhibit A , to the Secretary of the Company at its principal office;

the payment to the Company, by cash, certified or cashier’s check payable to Company’s order or wire transfer to the Company’s account, of an amount equal to the aggregate Warrant Price for the number of Shares for which the purchase rights hereunder are being exercised. Alternatively if then permitted under applicable securities laws, Holder may exercise this Warrant by delivering to the Company: (i) a properly executed notice of exercise together with a copy of irrevocable instructions (“ Broker Instructions ”) to a FINRA-member securities broker-dealer to promptly deliver to the Company cash or a check payable to the Company in the full amount of the Warrant Price for the total number of Shares being purchased against the Company’s delivery of the Shares for which this Warrant is exercised (if Holder and the securities broker comply with such procedures and enter into such agreements of indemnity and other agreements as the Company may reasonably prescribe as a condition of that payment procedure) or (ii) shares of Common Stock, free and clear of any and all liens, claims and encumbrances, having an aggregate Fair Market Value (as defined herein below) equal to the full amount of the Warrant Price for the total number of Shares being purchased. Holder may also make payment in any combination of the permissible forms of payment described in the preceding sentence. Additionally, if then permitted under applicable securities laws, if the Fair Market Value of the Shares at time of exercise is greater than the Warrant Price, Holder may exercise this Warrant or any portion hereof by indicating on the notice of exercise that Holder elects to exercise this Warrant on a net exercise basis (“ Net Exercise Basis ”). The Company shall then issue to Holder a number of Shares determined using the following formula:

X = Y (A-B)

where

X =

the number of Shares to be issued to Holder.

Y =

the number of Shares covered by this Warrant in respect of which the net exercise election is made pursuant to this Section.

A =

the Fair Market Value of one Share, as determined in accordance with the provisions hereof, as of the date this Warrant is exercised.

B =

the Warrant Price in effect as of the date this Warrant is exercised.

“ Fair Market Value ” of a share of Common Stock (for purposes of this section) means (a) if the Shares are traded on a national securities exchange, the average of the closing prices for the twenty (20) trading days prior to the date this Warrant is exercised; (b) if the Shares are traded on the OTC Bulletin Board or another market or quotation system, or the prices for the shares are published on the “Pink Sheets”, the average of the closing bid and ask prices posted for the Shares during the twenty (20)

trading days prior to the date this Warrant is exercised; or (c) if the primary market for such Shares is not an exchange or quotation system, the fair market value thereof as shall be determined in good faith using appropriate valuation methods by the Board of Directors of the Company as of the date this Warrant is exercised; and

(c) the delivery to the Company, if necessary in the discretion of counsel for the Company, to assure compliance with the Securities Act of 1933, and applicable state securities laws, of an instrument executed by Holder certifying that the Shares are being purchased solely for the account of Holder and not with a view to any resale or distribution in violation of the Securities Act or applicable state securities laws.

Section 1.3 Exercise Limitations . Holder shall not have the right to exercise any portion of this Warrant to the extent that after giving effect to the issuance of Shares upon such exercise, Holder (together with Holders’s affiliates, and any other persons acting as a group together with Holder or any of Holders’s affiliates) would beneficially own in excess of 9.99% of the outstanding shares of Common Stock of the Company.

Section 1.4 Issuance of Shares and New Warrant . If the purchase rights evidenced by this Warrant are exercised in whole or in part, one or more certificates for the purchased Shares shall be issued as soon as practicable thereafter to Holder. If the purchase rights evidenced by this Warrant are exercised only in part, the Company shall also deliver to Holder at such time a new Warrant evidencing the purchase rights regarding the number of Shares (if any) for which the purchase rights under this Warrant remain unexercised and continue in force and effect. All new Warrants issued in connection with the provisions of this Section 1.4 shall bear the same date as this Warrant and shall be substantially identical in form and provisions to this Warrant except for the number of Shares purchasable thereunder. Each person in whose name any certificate for Shares is to be issued shall for all purposes be deemed to have become the holder of record of such Shares on the date on which this Warrant was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such stock certificate, except that if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such Shares at the close of business on the next succeeding date on which the stock transfer books are open.

TRANSFERS

Section 2.1 Transfers . This Warrant and all rights hereunder are transferable in whole or in part by Holder subject to the provisions of Article VII below. The transfer shall be recorded on the books of the Company upon (i) the surrender of this Warrant (together with a duly executed and endorsed copy of the form of transfer certificate attached hereto as Exhibit B ) to the Secretary of the Company at its principal offices, and (ii) the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. In the event of a partial transfer, the Company shall issue to the several holders one or more appropriate new Warrants.

Section 2.2 Registered Holder . Each holder of this Warrant agrees that until such time as any transfer pursuant to Section 2.1 above is recorded on the books of the Company, the Company may treat the registered Holder of this Warrant as the absolute owner.

Section 2.3 Form of New Warrants . All new Warrants issued in connection with transfers of this Warrant shall bear the same date as this Warrant and shall be substantially identical in form and provisions to this Warrant except for the number of Shares purchasable thereunder.

NO FRACTIONAL SHARES

Notwithstanding any adjustment (as required hereby) to the number of Shares purchasable upon the exercise of this Warrant, the Company shall not be required to issue any fraction of a Share upon exercise of this Warrant. If, by reason of any change made pursuant to Article IV below, Holder would be entitled, upon the exercise of any rights evidenced hereby, to receive a fractional interest in a Share, the Company shall, at its election, upon such proper exercise of this Warrant, purchase such fractional interest for an amount in cash equal to the Fair Market Value of such fractional interest, determined as of the date of such exercise of this Warrant, or round up to the next whole share.

ANTIDILUTION PROVISIONS

Section 4.1 Stock Splits and Combinations . If the Common Stock shall at any time be subdivided into a greater number of shares, then the number of Shares purchasable upon exercise of this Warrant shall be proportionately increased and the Warrant Price shall be proportionately decreased; and, conversely, if the Common Stock shall at any time be combined into a smaller number of shares, then the number of Shares purchasable upon exercise of this Warrant shall be proportionately reduced and the Warrant Price shall be proportionately increased. Any adjustments under this Section 4.1 shall become effective at the close of business on the date the subdivision or combination becomes effective.

Section 4.2 Reclassification, Exchange and Substitution . If the Common Stock shall be changed into shares of any other class or classes of stock or other securities of the Company, whether by capital reorganization, reclassification, or otherwise, Holder shall, upon exercise of this Warrant, be entitled to purchase for the same aggregate consideration, in lieu of the Shares that Holder would have become entitled to purchase but for such change, such number, class and series of securities of the Company as would have been issuable in connection with such event to a holder of that number of shares of Common Stock purchasable upon exercise of this Warrant immediately prior to such reorganization, reclassification or other change. The Warrant Price shall be appropriately adjusted to reflect that reorganization, reclassification or other change. Any adjustments under this Section 4.2 shall become effective at the close of business on the date such change of the Common Stock into shares of any other class or classes of stock or other securities of the Company becomes effective.

Section 4.3 Reorganizations, Mergers, Consolidations or Sale of Assets . If at any time there shall be a reorganization involving the Common Stock (other than a stock split, combination, reclassification, exchange, or subdivision of shares provided for in Sections 4.1 and 4.2 above) or a merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all of the Company’s assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, lawful provision shall be made so that Holder shall thereafter be entitled to receive upon exercise of this Warrant, in accordance with the terms hereof, in lieu of the Shares that Holder would have become entitled to purchase but for such event, such other securities or property of the Company, or of the successor corporation resulting from such event, to which Holder would have been entitled in such reorganization, merger, consolidation or sale if this Warrant had been exercised immediately before that reorganization, merger, consolidation or sale. In any such case, appropriate adjustment (as determined in good faith by the Company’s Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of Holder after the reorganization, merger, consolidation, or sale to the end that the provisions of this Warrant (including adjustment of the Warrant Price then in effect and number of Shares purchasable upon exercise of this Warrant) shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant. The Company shall provide Holder with at least twenty (20) days’ prior written notice of any of the events described in the first sentence of this Section 4.3 .

Section 4.4 Certificate as to Adjustments . In the case of each adjustment (including a readjustment) under this Article IV , the Company will promptly, and in any event within thirty (30) days after the event requiring the adjustment, compute such adjustment in accordance with the terms hereof and deliver or cause to be delivered to Holder a certificate describing in reasonable detail the event requiring the adjustment and setting forth such adjustment and the calculations and results of such adjustment.

Section 4.5 Reservation of Stock Issuable Upon Exercise . The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock such number of shares of Common Stock as shall from time to time be sufficient to effect the exercise of this Warrant. If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

Section 4.6 Method of Calculation . All calculations under this Article IV shall be made to the nearest one hundredth of a share.

RIGHTS PRIOR TO EXERCISE OF WARRANT

This Warrant does not entitle Holder to any of the rights of a stockholder of the Company, including (without limitation) the right to receive dividends or other distributions, to vote or consent, or to receive notice as a stockholder of the Company. If, however, at any time prior to the expiration of this Warrant and prior to its exercise,

the Company shall declare any dividend payable in any securities upon outstanding shares of Common Stock or make any other distribution (other than a regular cash dividend) to the holders of shares of Common Stock;

the Company shall offer to the holders of shares of Common Stock any additional shares of Common Stock or securities convertible into or exchangeable for shares of Common Stock or any right to subscribe for or purchase any thereof; or

a dissolution, liquidation or winding-up of the Company (other than in connection with a reorganization, consolidation, merger, or sale of all or substantially all of its assets as an entirety) shall be approved by the Company’s Board of Directors,

then, in any one or more of such events the Company shall give notice in writing of such event to Holder, at its address as it shall then appear on the Company’s records, at least twenty (20) days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled to such dividends, distribution, or subscription rights, or for the determination of stockholders entitled to vote on such proposed dissolution, liquidation or winding-up. Such notice shall specify such record date or the date of closing the transfer books, as the case may be.

Any failure to give such notice or any defect therein, however, shall not affect the validity of any action taken in connection with such dividend, distribution or subscription rights, or such proposed dissolution, liquidation or winding-up.

SUCCESSORS AND ASSIGNS

The terms and provisions of this Warrant shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and Holder and its successors and permitted assigns.

RESTRICTED SECURITIES

Section 7.1 By acceptance of this Warrant, Holder hereby represents to the Company that this Warrant is being acquired for investment for Holder’s own account, not as a nominee or agent, and not with a view to the resale or distribution thereof, and that Holder has no present intention of selling, granting any participation in, or otherwise distributing this Warrant or the Common Stock issuable upon exercise of this Warrant. By acceptance of this Warrant, Holder further represents that Holder does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to this Warrant or the Common Stock issuable upon exercise of this Warrant. Holder is an “accredited investor” as the term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act and has sufficient knowledge and experience in finance and business that it is capable of evaluating the risks and merits of its investment in the shares subject to this Warrant and Holder is able financially to bear the risks thereof. Holder understands that the offer and sale of this Warrant and the offer and sale of the Common Stock issuable upon exercise of this Warrant have not been registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Holder’s representations as expressed herein. Holder further recognizes and acknowledges that because the offer and sale of this Warrant and the offer and sale of the Common Stock issuable upon exercise of this Warrant are unregistered, they may not be eligible for resale, and may only be resold in the future pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or pursuant to a valid exemption from such registration requirements and that Holder must, therefore, bear the economic risk of such investment indefinitely.

Section 7. 2 Holder acknowledges that this Warrant is, and each of the Shares issuable upon the exercise hereof will be, a restricted security, and that the certificate or certificates evidencing such Shares will bear a legend substantially similar to the following legend:

THE OFFER AND SALE OF THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), OR ANY APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE RESOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE OFFER AND SALE OF THE SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH DISPOSITION IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH U.S. SECURITIES LAWS.

LOSS OR MUTILATION

Upon receipt by the Company of satisfactory evidence of the ownership of and the loss, theft, destruction, or mutilation of this Warrant, and (i) in the case of loss, theft, or destruction, upon receipt by the Company of indemnity satisfactory to it, or (ii) in the case of mutilation, upon receipt of this Warrant and upon surrender and cancellation of this Warrant, the Company shall execute and deliver in lieu thereof a new Warrant representing the right to purchase an equal number of Shares.

NOTICES

All notices, requests, demands and other communications under this Warrant shall be in writing and shall be deemed to have been duly given on the date of receipt (or refusal of receipt) if delivered personally or by courier by the party to whom notice is to be given, or on the earlier of the third business day after the date of mailing or receipt if mailed to the party to whom notice is to be given by first class mail, registered or certified, postage prepaid, and properly addressed as follows: if to Holder, at its address as shown in the Company’s records; and if to the Company, at its principal office. Either party may change its address for purposes of this Article IX by giving the other party written notice of the new address in the manner set forth above.

GOVERNING LAW; JURISDICTION

This Warrant shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant and all disputes arising hereunder shall be governed by, the laws of the State of Florida, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Florida or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Florida. Any suit, action or proceeding seeking to enforce any provision of, or based on any dispute or matter arising out of or in connection with, this Warrant must be brought in the state and federal courts located in Miami, Florida. The Company and Holder each (a) consent to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding, (b) irrevocably waive, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum, (c) will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, and (d) will not bring any action relating to this Warrant in any other court.

ARTICLE XI

Miscellaneous

This Warrant and any terms hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed on its behalf by one of its officers thereunto duly authorized as of the date first set forth above.


	COOL HOLDINGS, INC.
	By: Name: Vernon A. LoForti Title: Vice President & Secretary

Signature Page to Warrant

EXHIBIT A

NOTICE OF EXERCISE

Cool Holdings, Inc.
4435 Eastgate Mall, Suite 320

San Diego, California

Attention: Vernon A. LoForti

Gentlemen:

The undersigned, _______________________, subject to the limitations set forth in Section 1.3 of the Warrant, hereby elects to purchase, pursuant to the provisions to the foregoing Warrant held by the undersigned, ____________ shares of the Common Stock of the Company.

The undersigned (check one and complete):

______ herewith encloses the Warrant and (i) cash, (ii) a certified or cashier’s check (drawn in favor of the Company), or (iii) has made a wire transfer to the Company’s account in the amount of $__________ in payment of the Warrant Price.

______ herewith encloses the Warrant and a copy of the applicable Broker Instructions, as defined in Section 1.2 of the Warrant.

______ herewith encloses the Warrant and hereby elects to exercise the Warrant on a Net Exercise Basis in accordance with the provisions of Section 1.2 of the Warrant.

The undersigned hereby represents and warrants as follows:

(a) the undersigned is acquiring such shares of the Common Stock for his own account for investment and not for resale or with a view to distribution thereof in violation of the Securities Act and the regulations promulgated thereunder; and

(b) the undersigned is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act and, if an entity, was not organized for the purpose of acquiring the Warrant or such shares of the Common Stock. The undersigned’s financial condition is such that he is able to bear the risk of holding such securities for an indefinite period of time and the risk of loss of his entire investment. The undersigned has sufficient knowledge and experience in investing in companies similar to the Company so as to be able to evaluate the risks and merits of his investment in the Company.

Please issue a certificate or certificates for such shares of the Common Stock in the following name or names and denominations and deliver such certificate or certificates to the person or persons listed below at their respective address set forth below:

Exhibit A

If said number of shares of the Common Stock shall not be all the shares of the Common Stock issuable upon exercise of the attached Warrant, a new Warrant is to be issued in the name of the undersigned for the remaining balance of such shares of the Common Stock less any fraction of a share of Common Stock paid in cash pursuant to Article III of the attached warrant.

Capitalized terms used herein shall have the meaning given to such terms in the Warrant.

DATED:______________, ___________.

Signature:

Address:

Exhibit A

EXHIBIT B

ASSIGNMENT FORM

FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the assignee named below all of the rights of the undersigned under this Warrant, with respect to the number of Shares of Common Stock set forth below:

Name and Address of Assignee

No. of Shares

Common Stock

_________________________________________

_____________

_________________________________________

and does hereby irrevocably constitute and appoint as Attorney ________________________________ to register such transfer on the books of _______________________________________ maintained for the purpose, with full power of substitution in the premises.

Dated: __________________________, _______.

_______________________________________

Name:

NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within Warrant in every particular, without alternation or enlargement or any change whatsoever.

Exhibit B