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DPW Holdings To Pursue IPO Of DPW Technology Group - Quick Facts

Diversified holding company DPW Holdings, Inc. (DPW) said Tuesday that its Board of Directors has authorized the company's officers to pursue a separate listing and initial public offering of its DPW Technology Group, which will include the company's Defense and Aerospace businesses as well as the Electronics and Power Solutions businesses.

DPW Holdings expects to complete the initial public offering in the first half of 2019 and expects that it will remain a majority shareholder of the new entity after the offering has been completed.

In November 2018, DPW Holdings announced the planned simplification of its organizational structure, including the formation of the DPW Technology Group, which is on track for completion by the end of 2018.

The company noted that the proposed IPO would enable investors to directly invest in DPW Technology Group, which will include Coolisys Technologies, Inc., Microphase Corporation, Enertec Systems 2001 Ltd, Digital Power Limited, and Power-Plus Technical Distributors, LLC.

DPW's management believes that this divestiture and subsequent investment will facilitate execution of the company's existing $71 million backlog and fuel future growth.

DPW Technology Group intends to hire a chief executive officer to provide leadership during the IPO and to develop and execute future growth strategies.

DPW Holdings will maintain ownership benefits while providing the opportunity for the businesses to grow, raise capital and create value as separately listed entities.

DPW Holdings said its primary investor/lender, Ault, has agreed to provide purchase order financing up to $700,000 which shall be secured by a guarantee of Ault & Company, Inc. Ault is the Chairman and CEO of Ault and also its majority shareholder.

The proceeds from the purchase order financing, if received, shall be used to deliver on the backlog of products in DPW's defense business.

The financing will not be convertible into shares of DPW Holding's common stock and will carry an annual interest rate of about 10 percent. The parties are in the process of negotiating definitive documents; however, the company also said that there is no assurance the parties will reach agreement.

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